G.R. No.
212426 support the legality of their actions, respondents invoke the 1987 Constitution, treaties, and judicial
RENE A.V. SAGUISAG, WIGBERTO E. TAÑADA, FRANCISCO "DODONG" NEMENZO, JR.,
SR. MARY JOHN MANANZAN, PACIFICO A. AGABIN, ESTEBAN "STEVE" SALONGA, H.
HARRY L. ROQUE, JR., EVALYN G. URSUA, EDRE U. OLALIA, DR. CAROL PAGADUAN-
ARAULLO, DR. ROLAND SIMBULAN, AND TEDDY CASIÑO, Petitioners,
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., DEPARTMENT OF NATIONAL
DEFENSE SECRETARY VOLTAIRE GAZMIN, DEPARTMENT OF FOREIGN AFFAIRS
SECRETARY ALBERT DEL ROSARIO, JR., DEPARTMENT OF BUDGET AND
MANAGEMENT SECRETARY FLORENCIO ABAD, AND ARMED FORCES OF THE
PHILIPPINES CHIEF OF STAFF GENERAL EMMANUEL T. BAUTISTA, Respondents.
x-----------------------x
G.R. No. 212444
BAGONG ALYANSANG MAKABAYAN (BAYAN), REPRESENTED BY ITS SECRETARY
GENERAL RENATO M. REYES, JR., BAYAN MUNA PARTY-LIST REPRESENTATIVES NERI
J. COLMENARES AND CARLOS ZARATE, GABRIELA WOMEN'S PARTY-LIST
REPRESENTATIVES LUZ ILAGAN AND EMERENCIANA DE JESUS, ACT TEACHERS
PARTY-LIST REPRESENTATIVE ANTONIO L. TINIO, ANAKPAWIS PARTY-LIST
REPRESENTATIVE FERNANDO HICAP, KABATAAN PARTY-LIST REPRESENTATIVE
TERRY RIDON, MAKABAYANG KOALISYON NG MAMAMAYAN (MAKABAYAN),
REPRESENTED BY SATURNINO OCAMPO AND LIZA MAZA, BIENVENIDO LUMBERA,
JOEL C. LAMANGAN, RAFAEL MARIANO, SALVADOR FRANCE, ROGELIO M. SOLUTA,
AND CLEMENTE G. BAUTISTA, Petitioners,
vs.
DEPARTMENT OF NATIONAL DEFENSE (DND) SECRETARY VOLTAIRE GAZMIN,
DEPARTMENT OF FOREIGN AFFAIRS SECRETARY ALBERT DEL ROSARIO, EXECUTIVE
SECRETARY PAQUITO N. OCHOA, JR., ARMED FORCES OF THE PHILIPPINES CHIEF OF
STAFF GENERAL EMMANUEL T. BAUTISTA, DEFENSE UNDERSECRETARY PIO LORENZO
BATINO, AMBASSADOR LOURDES YPARRAGUIRRE, AMBASSADOR J. EDUARDO
MALAYA, DEPARTMENT OF JUSTICE UNDERSECRETARY FRANCISCO BARAAN III, AND
DND ASSISTANT SECRETARY FOR STRATEGIC ASSESSMENTS RAYMUND JOSE QUILOP
AS CHAIRPERSON AND MEMBERS, RESPECTIVELY, OF THE NEGOTIATING PANEL FOR
THE PHILIPPINES ON EDCA, Respondents.
x-----------------------x
KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON, ELMER LABOG,
CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT
EMPLOYEES (COURAGE), REPRESENTED BY ITS NATIONAL PRESIDENT FERDINAND
GAITE, NATIONAL FEDERATION OF LABOR UNIONS-KILUSANG MAYO UNO,
REPRESENTED BY ITS NATIONAL PRESIDENT JOSELITO USTAREZ, NENITA GONZAGA,
VIOLETA ESPIRITU, VIRGINIA FLORES, AND ARMANDO TEODORO, JR., Petitioners-in-
Intervention,
RENE A.Q. SAGUISAG, JR., Petitioner-in-Intervention.
DECISION
SERENO, J.:
The petitions1 before this Court question the constitutionality of the Enhanced Defense Cooperation
Agreement (EDCA) between the Republic of the Philippines and the United States of America (U.S.).
Petitioners allege that respondents committed grave abuse of discretion amounting to lack or excess of
jurisdiction when they entered into EDCA with the U.S., 2 claiming that the instrument violated multiple
constitutional provisions.3 In reply, respondents argue that petitioners lack standing to bring the suit. To
precedents.4
A proper analysis of the issues requires this Court to lay down at the outset the basic parameters of the
constitutional powers and roles of the President and the Senate in respect of the above issues. A more
detailed discussion of these powers and roles will be made in the latter portions.
I. BROAD CONSTITUTIONAL CONTEXT OF THE POWERS OF THE PRESIDENT: DEFENSE,
FOREIGN RELATIONS, AND EDCA
A. The Prime Duty of the State and the Consolidation of Executive Power in the President
Mataimtim kong pinanunumpaan (o pinatotohanan) na tutuparin ko nang buong katapatan at sigasig ang
aking mga tungkulin bilang Pangulo (o Pangalawang Pangulo o Nanunungkulang Pangulo) ng Pilipinas,
pangangalagaan at ipagtatanggol ang kanyang Konstitusyon, ipatutupad ang mga batas nito, magiging
makatarungan sa bawat tao, at itatalaga ang aking sarili sa paglilingkod sa Bansa. Kasihan nawa aka ng
Diyos.
- Panunumpa sa Katungkulan ng Pangulo ng Pilipinas ayon sa Saligang Batas 5
The 1987 Constitution has "vested the executive power in the President of the Republic of the
Philippines."6 While the vastness of the executive power that has been consolidated in the person of the
President cannot be expressed fully in one provision, the Constitution has stated the prime duty of the
government, of which the President is the head:
The prime duty of the Government is to serve and protect the people. The Government may call upon
the people to defend the State and, in the fulfillment thereof, all citizens may be required, under conditions
provided by law, to render personal military or civil service. 7 (Emphases supplied)
B. The duty to protect the territory and the citizens of the Philippines, the power to call upon the people to
defend the State, and the President as Commander-in-Chief
The duty to protect the State and its people must be carried out earnestly and effectively throughout the
whole territory of the Philippines in accordance with the constitutional provision on national territory.
Hence, the President of the Philippines, as the sole repository of executive power, is the guardian of the
Philippine archipelago, including all the islands and waters embraced therein and all other territories over
which it has sovereignty or jurisdiction. These territories consist of its terrestrial, fluvial, and aerial domains;
including its territorial sea, the seabed, the subsoil, the insular shelves, and other submarine areas; and the
waters around, between, and connecting the islands of the archipelago, regardless of their breadth and
dimensions.8
To carry out this important duty, the President is equipped with authority over the Armed Forces of the
Philippines (AFP),9 which is the protector of the people and the state. The AFP's role is to secure the
sovereignty of the State and the integrity of the national territory. 10 In addition, the Executive is
constitutionally empowered to maintain peace and order; protect life, liberty, and property; and promote the
general welfare.11
In recognition of these powers, Congress has specified that the President must oversee, ensure, and reinforce
our defensive capabilities against external and internal threats12 and, in the same vein, ensure that the
country is adequately prepared for all national and local emergencies arising from natural and man-made
disasters.13
To be sure, this power is limited by the Constitution itself. To illustrate, the President may call out the AFP
to prevent or suppress instances of lawless violence, invasion or rebellion, 14 but not suspend the privilege of
the writ of habeas corpus for a period exceeding 60 days, or place the Philippines or any part thereof under
martial law exceeding that same span. In the exercise of these powers, the President is also duty-bound to
submit a report to Congress, in person or in writing, within 48 hours from the proclamation of martial law or
the suspension of the privilege of the writ of habeas corpus; and Congress may in turn revoke the
proclamation or suspension. The same provision provides for the Supreme Court's review of the factual
basis for the proclamation or suspension, as well as the promulgation of the decision within 30 days from
filing.
C. The power and duty to conduct foreign relations
The President also carries the mandate of being the sole organ in the conduct of foreign relations.15 Since
every state has the capacity to interact with and engage in relations with other sovereign states, 16 it is but
logical that every state must vest in an agent the authority to represent its interests to those other sovereign
states.
The conduct of foreign relations is full of complexities and consequences, sometimes with life and death
significance to the nation especially in times of war. It can only be entrusted to that department of
government which can act on the basis of the best available information and can decide with decisiveness. x
x x It is also the President who possesses the most comprehensive and the most confidential information
about foreign countries for our diplomatic and consular officials regularly brief him on meaningful events all
over the world. He has also unlimited access to ultra-sensitive military intelligence data. In fine, the
presidential role in foreign affairs is dominant and the President is traditionally accorded a wider degree of
discretion in the conduct of foreign affairs. The regularity, nay, validity of his actions are adjudged under
less stringent standards, lest their judicial repudiation lead to breach of an international obligation, rupture of
state relations, forfeiture of confidence, national embarrassment and a plethora of other problems with
equally undesirable consequences.17
The role of the President in foreign affairs is qualified by the Constitution in that the Chief Executive must
give paramount importance to the sovereignty of the nation, the integrity of its territory, its interest, and the
right of the sovereign Filipino people to self-determination.18 In specific provisions, the President's power is
also limited, or at least shared, as in Section 2 of Article II on the conduct of war; Sections 20 and 21 of
Article VII on foreign loans, treaties, and international agreements; Sections 4(2) and 5(2)(a) of Article VIII
on the judicial review of executive acts; Sections 4 and 25 of Article XVIII on treaties and international
agreements entered into prior to the Constitution and on the presence of foreign military troops, bases, or
facilities.
D. The relationship between the two major presidential functions and the role of the Senate
Clearly, the power to defend the State and to act as its representative in the international sphere inheres in
the person of the President. This power, however, does not crystallize into absolute discretion to craft
whatever instrument the Chief Executive so desires. As previously mentioned, the Senate has a role in
ensuring that treaties or international agreements the President enters into, as contemplated in Section 21 of
Article VII of the Constitution, obtain the approval of two-thirds of its members.
Previously, treaties under the 1973 Constitution required ratification by a majority of the Batasang
Pambansa,19 except in instances wherein the President "may enter into international treaties or agreements
as the national welfare and interest may require."20 This left a large margin of discretion that the President
could use to bypass the Legislature altogether. This was a departure from the 1935 Constitution, which
explicitly gave the President the power to enter into treaties only with the concurrence of two-thirds of all
the Members of the Senate.21 The 1987 Constitution returned the Senate's power22 and, with it, the
legislative's traditional role in foreign affairs.23
The responsibility of the President when it comes to treaties and international agreements under the present
Constitution is therefore shared with the Senate. This shared role, petitioners claim, is bypassed by EDCA.
II. HISTORICAL ANTECEDENTS OF EDCA
A. U.S. takeover of Spanish colonization and its military bases, and the transition to Philippine
independence
The presence of the U.S. military forces in the country can be traced to their pivotal victory in the 1898
Battle of Manila Bay during the Spanish-American War.24 Spain relinquished its sovereignty over the
Philippine Islands in favor of the U.S. upon its formal surrender a few months later. 25 By 1899, the
Americans had consolidated a military administration in the archipelago. 26
When it became clear that the American forces intended to impose colonial control over the Philippine
Islands, General Emilio Aguinaldo immediately led the Filipinos into an all-out war against the U.S.27 The
Filipinos were ultimately defeated in the Philippine-American War, which lasted until 1902 and led to the
downfall of the first Philippine Republic.28 The Americans henceforth began to strengthen their foothold in
the country.29 They took over and expanded the former Spanish Naval Base in Subic Bay, Zambales, and put
up a cavalry post called Fort Stotsenberg in Pampanga, now known as Clark Air Base. 30
When talks of the eventual independence of the Philippine Islands gained ground, the U.S. manifested the
desire to maintain military bases and armed forces in the country. 31 The U.S. Congress later enacted the
Hare-Hawes-Cutting Act of 1933, which required that the proposed constitution of an independent
Philippines recognize the right of the U.S. to maintain the latter's armed forces and military bases. 32 The
Philippine Legislature rejected that law, as it also gave the U.S. the power to unilaterally designate any part
of Philippine territory as a permanent military or naval base of the U.S. within two years from complete
independence.33
The U.S. Legislature subsequently crafted another law called the Tydings-McDuffie Act or the Philippine
Independence Act of 1934. Compared to the old Hare-Hawes-Cutting Act, the new law provided for the
surrender to the Commonwealth Government of "all military and other reservations" of the U.S. government
in the Philippines, except "naval reservations and refueling stations."34 Furthermore, the law authorized the
U.S. President to enter into negotiations for the adjustment and settlement of all questions relating to naval
reservations and fueling stations within two years after the Philippines would have gained
independence.35 Under the Tydings-McDuffie Act, the U.S. President would proclaim the American
withdrawal and surrender of sovereignty over the islands 10 years after the inauguration of the new
government in the Philippines.36 This law eventually led to the promulgation of the 1935 Philippine
Constitution.
The original plan to surrender the military bases changed. 37 At the height of the Second World War, the
Philippine and the U.S. Legislatures each passed resolutions authorizing their respective Presidents to
negotiate the matter of retaining military bases in the country after the planned withdrawal of the
U.S.38 Subsequently, in 1946, the countries entered into the Treaty of General Relations, in which the U.S.
relinquished all control and sovereignty over the Philippine Islands, except the areas that would be covered
by the American military bases in the country.39 This treaty eventually led to the creation of the post-
colonial legal regime on which would hinge the continued presence of U.S. military forces until 1991: the
Military Bases Agreement (MBA) of 1947, the Military Assistance Agreement of 1947, and the Mutual
Defense Treaty (MDT) of 1951.40
B. Former legal regime on the presence of U.S. armed forces in the territory of an independent
Philippines (1946-1991)
Soon after the Philippines was granted independence, the two countries entered into their first military
arrangement pursuant to the Treaty of General Relations - the 1947 MBA.41 The Senate concurred on the
premise of "mutuality of security interest,"42 which provided for the presence and operation of 23 U.S.
military bases in the Philippines for 99 years or until the year 2046. 43 The treaty also obliged the Philippines
to negotiate with the U.S. to allow the latter to expand the existing bases or to acquire new ones as military
necessity might require.44
A number of significant amendments to the 1947 MBA were made. 45 With respect to its duration, the parties
entered into the Ramos-Rusk Agreement of 1966, which reduced the term of the treaty from 99 years to a
total of 44 years or until 1991.46 Concerning the number of U.S. military bases in the country, the Bohlen-
Serrano Memorandum of Agreement provided for the return to the Philippines of 17 U.S. military bases
covering a total area of 117,075 hectares.47 Twelve years later, the U.S. returned Sangley Point in Cavite
City through an exchange of notes.48 Then, through the Romulo-Murphy Exchange of Notes of 1979, the
parties agreed to the recognition of Philippine sovereignty over Clark and Subic Bases and the reduction of
the areas that could be used by the U.S. military.49 The agreement also provided for the mandatory review of
the treaty every five years.50 In 1983, the parties revised the 1947 MBA through the Romualdez-Armacost
Agreement.51 The revision pertained to the operational use of the military bases by the U.S. government
within the context of Philippine sovereignty,52 including the need for prior consultation with the Philippine
government on the former' s use of the bases for military combat operations or the establishment of long-
range missiles.53
Pursuant to the legislative authorization granted under Republic Act No. 9, 54 the President also entered into
the 1947 Military Assistance Agreement55 with the U.S. This executive agreement established the conditions
under which U.S. military assistance would be granted to the Philippines, 56 particularly the provision of
military arms, ammunitions, supplies, equipment, vessels, services, and training for the latter's defense
forces.57 An exchange of notes in 1953 made it clear that the agreement would remain in force until
terminated by any of the parties.58
To further strengthen their defense and security relationship, 59 the Philippines and the U.S. next entered into
the MDT in 1951. Concurred in by both the Philippine 60 and the U.S.61 Senates, the treaty has two main
features: first, it allowed for mutual assistance in maintaining and developing their individual and collective
capacities to resist an armed attack;62 and second, it provided for their mutual self-defense in the event of an
armed attack against the territory of either party.63 The treaty was premised on their recognition that an
armed attack on either of them would equally be a threat to the security of the other.64
C. Current legal regime on the presence of U.S. armed forces in the country
In view of the impending expiration of the 1947 MBA in 1991, the Philippines and the U.S. negotiated for a
possible renewal of their defense and security relationship. 65 Termed as the Treaty of Friendship,
Cooperation and Security, the countries sought to recast their military ties by providing a new framework for
their defense cooperation and the use of Philippine installations.66 One of the proposed provisions included
an arrangement in which U.S. forces would be granted the use of certain installations within the Philippine
naval base in Subic.67 On 16 September 1991, the Senate rejected the proposed treaty. 68
The consequent expiration of the 1947 MBA and the resulting paucity of any formal agreement dealing with
the treatment of U.S. personnel in the Philippines led to the suspension in 1995 of large-scale joint military
exercises.69 In the meantime, the respective governments of the two countries agreed70 to hold joint exercises
at a substantially reduced level.71 The military arrangements between them were revived in 1999 when they
concluded the first Visiting Forces Agreement (VFA).72
As a "reaffirm[ation] [of the] obligations under the MDT,"73 the VFA has laid down the regulatory
mechanism for the treatment of U.S. military and civilian personnel visiting the country.74 It contains
provisions on the entry and departure of U.S. personnel; the purpose, extent, and limitations of their
activities; criminal and disciplinary jurisdiction; the waiver of certain claims; the importation and
exportation of equipment, materials, supplies, and other pieces of property owned by the U.S. government;
and the movement of U.S. military vehicles, vessels, and aircraft into and within the country.75 The
Philippines and the U.S. also entered into a second counterpart agreement (VFA II), which in turn regulated
the treatment of Philippine military and civilian personnel visiting the U.S.76 The Philippine Senate
concurred in the first VFA on 27 May 1999. 77
Beginning in January 2002, U.S. military and civilian personnel started arriving in Mindanao to take part in
joint military exercises with their Filipino counterparts.78 Called Balikatan, these exercises involved
trainings aimed at simulating joint military maneuvers pursuant to the MDT. 79
In the same year, the Philippines and the U.S. entered into the Mutual Logistics Support Agreement to
"further the interoperability, readiness, and effectiveness of their respective military forces" 80 in accordance
with the MDT, the Military Assistance Agreement of 1953, and the VFA. 81 The new agreement outlined the
basic terms, conditions, and procedures for facilitating the reciprocal provision of logistics support, supplies,
and services between the military forces of the two countries. 82 The phrase "logistics support and services"
includes billeting, operations support, construction and use of temporary structures, and storage services
during an approved activity under the existing military arrangements. 83 Already extended twice, the
agreement will last until 2017.84
D. The Enhanced Defense Cooperation Agreement
EDCA authorizes the U.S. military forces to have access to and conduct activities within certain "Agreed
Locations" in the country. It was not transmitted to the Senate on the executive's understanding that to do so
was no longer necessary.85 Accordingly, in June 2014, the Department of Foreign Affairs (DFA) and the
U.S. Embassy exchanged diplomatic notes confirming the completion of all necessary internal requirements
for the agreement to enter into force in the two countries.86
According to the Philippine government, the conclusion of EDCA was the result of intensive and
comprehensive negotiations in the course of almost two years. 87 After eight rounds of negotiations, the
Secretary of National Defense and the U.S. Ambassador to the Philippines signed the agreement on 28 April
2014.88 President Benigno S. Aquino III ratified EDCA on 6 June 2014. 89 The OSG clarified during the oral
arguments90 that the Philippine and the U.S. governments had yet to agree formally on the specific sites of
the Agreed Locations mentioned in the agreement.
Two petitions for certiorari were thereafter filed before us assailing the constitutionality of EDCA. They
primarily argue that it should have been in the form of a treaty concurred in by the Senate, not an executive
agreement.
On 10 November 2015, months after the oral arguments were concluded and the parties ordered to file their
respective memoranda, the Senators adopted Senate Resolution No. (SR) 105.91 The resolution expresses the
"strong sense"92 of the Senators that for EDCA to become valid and effective, it must first be transmitted to
the Senate for deliberation and concurrence.
III. ISSUES
Petitioners mainly seek a declaration that the Executive Department committed grave abuse of discretion in
entering into EDCA in the form of an executive agreement. For this reason, we cull the issues before us:
A. Whether the essential requisites for judicial review are present
B. Whether the President may enter into an executive agreement on foreign military bases, troops, or
facilities
C. Whether the provisions under EDCA are consistent with the Constitution, as well as with existing laws
and treaties
IV. DISCUSSION
A. Whether the essential requisites for judicial review have been satisfied
Petitioners are hailing this Court's power of judicial review in order to strike down EDCA for violating the
Constitution. They stress that our fundamental law is explicit in prohibiting the presence of foreign military
forces in the country, except under a treaty concurred in by the Senate. Before this Court may begin to
analyze the constitutionality or validity of an official act of a coequal branch of government, however,
petitioners must show that they have satisfied all the essential requisites for judicial review. 93
Distinguished from the general notion of judicial power, the power of judicial review specially refers to both
the authority and the duty of this Court to determine whether a branch or an instrumentality of government
has acted beyond the scope of the latter's constitutional powers.94 As articulated in Section 1, Article VIII of
the Constitution, the power of judicial review involves the power to resolve cases in which the questions
concern the constitutionality or validity of any treaty, international or executive agreement, law, presidential
decree, proclamation, order, instruction, ordinance, or regulation.95 In Angara v. Electoral Commission, this
Court exhaustively discussed this "moderating power" as part of the system of checks and balances under
the Constitution. In our fundamental law, the role of the Court is to determine whether a branch of
government has adhered to the specific restrictions and limitations of the latter's power: 96
The separation of powers is a fundamental principle in our system of government. It obtains not through
express provision but by actual division in our Constitution. Each department of the government has
exclusive cognizance of matters within its jurisdiction, and is supreme within its own sphere. But it
does not follow from the fact that the three powers are to be kept separate and distinct that the Constitution
intended them to be absolutely unrestrained and independent of each other. The Constitution has provided
for an elaborate system of checks and balances to secure coordination in the workings of the various
departments of the government. x x x. And the judiciary in turn, with the Supreme Court as the final
arbiter, effectively checks the other departments in the exercise of its power to determine the law, and
hence to declare executive and legislative acts void if violative of the Constitution.
xxxx
As any human production, our Constitution is of course lacking perfection and perfectibility, but as much
as it was within the power of our people, acting through their delegates to so provide, that instrument which
is the expression of their sovereignty however limited, has established a republican government
intended to operate and function as a harmonious whole, under a system of checks and balances, and
subject to specific limitations and restrictions provided in the said instrument. The Constitution sets
forth in no uncertain language the restrictions and limitations upon governmental powers and
agencies. If these restrictions and limitations are transcended it would be inconceivable if the
Constitution had not provided for a mechanism by which to direct the course of government along
constitutional channels, for then the distribution of powers would be mere verbiage, the bill of rights
mere expressions of sentiment, and the principles of good government mere political apothegms.
Certainly, the limitations and restrictions embodied in our Constitution are real as they should be in any
living constitution. x x x. In our case, this moderating power is granted, if not expressly, by clear implication
from section 2 of article VIII of [the 1935] Constitution.
The Constitution is a definition of the powers of government. Who is to determine the nature, scope and
extent of such powers? The Constitution itself has provided for the instrumentality of the judiciary as the
rational way. And when the judiciary mediates to allocate constitutional boundaries, it does not assert
any superiority over the other departments; it does not in reality nullify or invalidate an act of the
legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to
determine conflicting claims of authority under the Constitution and to establish for the parties in an
actual controversy the rights which that instrument secures and guarantees to them. This is in truth all
that is involved in what is termed "judicial supremacy" which properly is the power of judicial review
under the Constitution. x x x x. (Emphases supplied)
The power of judicial review has since been strengthened in the 1987 Constitution. The scope of that power
has been extended to the determination of whether in matters traditionally considered to be within the sphere
of appreciation of another branch of government, an exercise of discretion has been attended with grave
abuse.97 The expansion of this power has made the political question doctrine "no longer the insurmountable
obstacle to the exercise of judicial power or the impenetrable shield that protects executive and legislative
actions from judicial inquiry or review."98
This moderating power, however, must be exercised carefully and only if it cannot be completely avoided.
We stress that our Constitution is so incisively designed that it identifies the spheres of expertise within
which the different branches of government shall function and the questions of policy that they shall
resolve.99 Since the power of judicial review involves the delicate exercise of examining the validity or
constitutionality of an act of a coequal branch of government, this Court must continually exercise restraint
to avoid the risk of supplanting the wisdom of the constitutionally appointed actor with that of its own.100
Even as we are left with no recourse but to bare our power to check an act of a coequal branch of
government - in this case the executive - we must abide by the stringent requirements for the exercise of that
power under the Constitution. Demetria v. Alba101 and Francisco v. House of Representatives102 cite the
"pillars" of the limitations on the power of judicial review as enunciated in the concurring opinion of U.S.
Supreme Court Justice Brandeis in Ashwander v. Tennessee Valley Authority.103 Francisco104 redressed these
"pillars" under the following categories:
1. That there be absolute necessity of deciding a case
2. That rules of constitutional law shall be formulated only as required by the facts of the case
3. That judgment may not be sustained on some other ground
4. That there be actual injury sustained by the party by reason of the operation of the statute
5. That the parties are not in estoppel
6. That the Court upholds the presumption of constitutionality
(Emphases supplied)
These are the specific safeguards laid down by the Court when it exercises its power of judicial
review.105 Guided by these pillars, it may invoke the power only when the following four stringent
requirements are satisfied: (a) there is an actual case or controversy; (b) petitioners possess locus standi; (c)
the question of constitutionality is raised at the earliest opportunity; and (d) the issue of constitutionality is
the lis mota of the case.106 Of these four, the first two conditions will be the focus of our discussion.
1. Petitioners have shown the presence of an actual case or controversy.
The OSG maintains107 that there is no actual case or controversy that exists, since the Senators have not been
deprived of the opportunity to invoke the privileges of the institution they are representing. It contends that
the nonparticipation of the Senators in the present petitions only confirms that even they believe that EDCA
is a binding executive agreement that does not require their concurrence.
It must be emphasized that the Senate has already expressed its position through SR 105. 108 Through the
Resolution, the Senate has taken a position contrary to that of the OSG. As the body tasked to participate in
foreign affairs by ratifying treaties, its belief that EDCA infringes upon its constitutional role indicates that
an actual controversy - albeit brought to the Court by non-Senators, exists.
Moreover, we cannot consider the sheer abstention of the Senators from the present proceedings as basis for
finding that there is no actual case or controversy before us. We point out that the focus of this requirement
is the ripeness for adjudication of the matter at hand, as opposed to its being merely conjectural or
anticipatory.109 The case must involve a definite and concrete issue involving real parties with conflicting
legal rights and legal claims admitting of specific relief through a decree conclusive in nature. 110 It should
not equate with a mere request for an opinion or advice on what the law would be upon an abstract,
hypothetical, or contingent state of facts.111 As explained in Angara v. Electoral Commission:112
[The] power of judicial review 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. Any attempt at abstraction could only lead to dialectics and barren legal
questions and to sterile conclusions of wisdom, justice or expediency of legislation. More than that,
courts accord the presumption of constitutionality to legislative enactments, not only because the legislature
is presumed to abide by the Constitution but also because the judiciary in the determination of actual
cases and controversies must reflect the wisdom and justice of the people as expressed through their
representatives in the executive and legislative departments of the government. (Emphases supplied)
We find that the matter before us involves an actual case or controversy that is already ripe for adjudication.
The Executive Department has already sent an official confirmation to the U.S. Embassy that "all internal
requirements of the Philippines x x x have already been complied with." 113 By this exchange of diplomatic
notes, the Executive Department effectively performed the last act required under Article XII(l) of EDCA
before the agreement entered into force. Section 25, Article XVIII of the Constitution, is clear that the
presence of foreign military forces in the country shall only be allowed by virtue of a treaty concurred in by
the Senate. Hence, the performance of an official act by the Executive Department that led to the entry into
force of an executive agreement was sufficient to satisfy the actual case or controversy requirement.
2. While petitioners Saguisag et. al., do not have legal standing, they nonetheless raise issues involving
matters of transcendental importance.
The question of locus standi or legal standing focuses on the determination of whether those assailing the
governmental act have the right of appearance to bring the matter to the court for adjudication. 114 They must
show that they have a personal and substantial interest in the case, such that they have sustained or are in
immediate danger of sustaining, some direct injury as a consequence of the enforcement of the challenged
governmental act.115 Here, "interest" in the question involved must be material - an interest that is in issue
and will be affected by the official act - as distinguished from being merely incidental or general.116 Clearly,
it would be insufficient to show that the law or any governmental act is invalid, and that petitioners stand to
suffer in some indefinite way.117 They must show that they have a particular interest in bringing the suit, and
that they have been or are about to be denied some right or privilege to which they are lawfully entitled, or
that they are about to be subjected to some burden or penalty by reason of the act complained of. 118 The
reason why those who challenge the validity of a law or an international agreement are required to allege the
existence of a personal stake in the outcome of the controversy is "to assure the concrete adverseness which
sharpens the presentation of issues upon which the court so largely depends for illumination of difficult
constitutional questions."119
The present petitions cannot qualify as citizens', taxpayers', or legislators' suits; the Senate as a body has
the requisite standing, but considering that it has not formally filed a pleading to join the suit, as it merely
conveyed to the Supreme Court its sense that EDCA needs the Senate's concurrence to be valid, petitioners
continue to suffer from lack of standing.
In assailing the constitutionality of a governmental act, petitioners suing as citizens may dodge the
requirement of having to establish a direct and personal interest if they show that the act affects a public
right.120 In arguing that they have legal standing, they claim121 that the case they have filed is a concerned
citizen's suit. But aside from general statements that the petitions involve the protection of a public right,
and that their constitutional rights as citizens would be violated, they fail to make any specific assertion of a
particular public right that would be violated by the enforcement of EDCA. For their failure to do so, the
present petitions cannot be considered by the Court as citizens' suits that would justify a disregard of
the aforementioned requirements.
In claiming that they have legal standing as taxpayers, petitioners122 aver that the implementation of EDCA
would result in the unlawful use of public funds. They emphasize that Article X(1) refers to an appropriation
of funds; and that the agreement entails a waiver of the payment of taxes, fees, and rentals. During the oral
arguments, however, they admitted that the government had not yet appropriated or actually disbursed
public funds for the purpose of implementing the agreement.123 The OSG, on the other hand, maintains that
petitioners cannot sue as taxpayers.124 Respondent explains that EDCA is neither meant to be a tax measure,
nor is it directed at the disbursement of public funds.
A taxpayer's suit concerns a case in which the official act complained of directly involves the illegal
disbursement of public funds derived from taxation. 125 Here, those challenging the act must specifically
show that they have sufficient interest in preventing the illegal expenditure of public money, and that they
will sustain a direct injury as a result of the enforcement of the assailed act. 126 Applying that principle to this
case, they must establish that EDCA involves the exercise by Congress of its taxing or spending powers.127
We agree with the OSG that the petitions cannot qualify as taxpayers' suits. We emphasize that a taxpayers'
suit contemplates a situation in which there is already an appropriation or a disbursement of public
funds.128 A reading of Article X(l) of EDCA would show that there has been neither an appropriation nor an
authorization of disbursement of funds. The cited provision reads:
All obligations under this Agreement are subject to the availability of appropriated funds authorized for
these purposes. (Emphases supplied)
This provision means that if the implementation of EDCA would require the disbursement of public funds,
the money must come from appropriated funds that are specifically authorized for this purpose. Under the
agreement, before there can even be a disbursement of public funds, there must first be a legislative
action. Until and unless the Legislature appropriates funds for EDCA, or unless petitioners can
pinpoint a specific item in the current budget that allows expenditure under the agreement, we cannot
at this time rule that there is in fact an appropriation or a disbursement of funds that would justify
the filing of a taxpayers' suit.
Petitioners Bayan et al. also claim129 that their co-petitioners who are party-list representatives have the
standing to challenge the act of the Executive Department, especially if it impairs the constitutional
prerogatives, powers, and privileges of their office. While they admit that there is no incumbent Senator who
has taken part in the present petition, they nonetheless assert that they also stand to sustain a derivative but
substantial injury as legislators. They argue that under the Constitution, legislative power is vested in both
the Senate and the House of Representatives; consequently, it is the entire Legislative Department that has a
voice in determining whether or not the presence of foreign military should be allowed. They maintain that
as members of the Legislature, they have the requisite personality to bring a suit, especially when a
constitutional issue is raised.
The OSG counters130 that petitioners do not have any legal standing to file the suits concerning the lack of
Senate concurrence in EDCA. Respondent emphasizes that the power to concur in treaties and international
agreements is an "institutional prerogative" granted by the Constitution to the Senate. Accordingly, the OSG
argues that in case of an allegation of impairment of that power, the injured party would be the Senate as an
institution or any of its incumbent members, as it is the Senate's constitutional function that is allegedly
being violated.
The legal standing of an institution of the Legislature or of any of its Members has already been recognized
by this Court in a number of cases.131 What is in question here is the alleged impairment of the constitutional
duties and powers granted to, or the impermissible intrusion upon the domain of, the Legislature or an
institution thereof.132 In the case of suits initiated by the legislators themselves, this Court has recognized
their standing to question the validity of any official action that they claim infringes the prerogatives,
powers, and privileges vested by the Constitution in their office. 133 As aptly explained by Justice Perfecto
in Mabanag v. Lopez Vito:134
Being members of Congress, they are even duty bound to see that the latter act within the bounds of the
Constitution which, as representatives of the people, they should uphold, unless they are to commit a
flagrant betrayal of public trust. They are representatives of the sovereign people and it is their sacred duty
to see to it that the fundamental law embodying the will of the sovereign people is not trampled upon.
(Emphases supplied)
We emphasize that in a legislators' suit, those Members of Congress who are challenging the official act
have standing only to the extent that the alleged violation impinges on their right to participate in the
exercise of the powers of the institution of which they are members. 135 Legislators have the standing "to
maintain inviolate the prerogatives, powers, and privileges vested by the Constitution in their office and are
allowed to sue to question the validity of any official action, which they claim infringes their prerogatives as
legislators."136 As legislators, they must clearly show that there was a direct injury to their persons or the
institution to which they belong.137
As correctly argued by respondent, the power to concur in a treaty or an international agreement is an
institutional prerogative granted by the Constitution to the Senate, not to the entire Legislature. In Pimentel
v. Office of the Executive Secretary, this Court did not recognize the standing of one of the petitioners
therein who was a member of the House of Representatives. The petition in that case sought to compel the
transmission to the Senate for concurrence of the signed text of the Statute of the International Criminal
Court. Since that petition invoked the power of the Senate to grant or withhold its concurrence in a treaty
entered into by the Executive Department, only then incumbent Senator Pimentel was allowed to assert that
authority of the Senate of which he was a member.
Therefore, none of the initial petitioners in the present controversy has the standing to maintain the
suits as legislators.
Nevertheless, this Court finds that there is basis for it to review the act of the Executive for the following
reasons.
In any case, petitioners raise issues involving matters of transcendental importance.
Petitioners138 argue that the Court may set aside procedural technicalities, as the present petition tackles
issues that are of transcendental importance. They point out that the matter before us is about the proper
exercise of the Executive Department's power to enter into international agreements in relation to that of the
Senate to concur in those agreements. They also assert that EDCA would cause grave injustice, as well as
irreparable violation of the Constitution and of the Filipino people's rights.
The OSG, on the other hand, insists139 that petitioners cannot raise the mere fact that the present petitions
involve matters of transcendental importance in order to cure their inability to comply with the constitutional
requirement of standing. Respondent bewails the overuse of "transcendental importance" as an exception to
the traditional requirements of constitutional litigation. It stresses that one of the purposes of these
requirements is to protect the Supreme Court from unnecessary litigation of constitutional questions.
In a number of cases,140 this Court has indeed taken a liberal stance towards the requirement of legal
standing, especially when paramount interest is involved. Indeed, when those who challenge the official act
are able to craft an issue of transcendental significance to the people, the Court may exercise its sound
discretion and take cognizance of the suit. It may do so in spite of the inability of the petitioners to show that
they have been personally injured by the operation of a law or any other government act.
While this Court has yet to thoroughly delineate the outer limits of this doctrine, we emphasize that not
every other case, however strong public interest may be, can qualify as an issue of transcendental
importance. Before it can be impelled to brush aside the essential requisites for exercising its power of
judicial review, it must at the very least consider a number of factors: (1) the character of the funds or other
assets involved in the case; (2) the presence of a clear case of disregard of a constitutional or statutory
prohibition by the public respondent agency or instrumentality of the government; and (3) the lack of any
other party that has a more direct and specific interest in raising the present questions. 141
An exhaustive evaluation of the memoranda of the parties, together with the oral arguments, shows that
petitioners have presented serious constitutional issues that provide ample justification for the Court to set
aside the rule on standing. The transcendental importance of the issues presented here is rooted in the
Constitution itself. Section 25, Article XVIII thereof, cannot be any clearer: there is a much stricter
mechanism required before foreign military troops, facilities, or bases may be allowed in the country. The
DFA has already confirmed to the U.S. Embassy that "all internal requirements of the Philippines x x x have
already been complied with."142 It behooves the Court in this instance to take a liberal stance towards the
rule on standing and to determine forthwith whether there was grave abuse of discretion on the part of the
Executive Department.
We therefore rule that this case is a proper subject for judicial review.
B. Whether the President may enter into an executive agreement on foreign military bases, troops, or
facilities
C. Whether the provisions under EDCA are consistent with the Constitution, as well as with existing laws
and treaties
Issues B and C shall be discussed together infra.
1. The role of the President as the executor of the law includes the duty to defend the State, for which
purpose he may use that power in the conduct of foreign relations
Historically, the Philippines has mirrored the division of powers in the U.S. government. When the
Philippine government was still an agency of the Congress of the U.S., it was as an agent entrusted with
powers categorized as executive, legislative, and judicial, and divided among these three great
branches.143 By this division, the law implied that the divided powers cannot be exercised except by the
department given the power.144
This divide continued throughout the different versions of the Philippine Constitution and specifically vested
the supreme executive power in the Governor-General of the Philippines,145 a position inherited by the
President of the Philippines when the country attained independence. One of the principal functions of the
supreme executive is the responsibility for the faithful execution of the laws as embodied by the oath of
office.146 The oath of the President prescribed by the 1987 Constitution reads thus:
I do solemnly swear (or affirm) that I will faithfully and conscientiously fulfill my duties as President (or
Vice-President or Acting President) of the Philippines, preserve and defend its Constitution, execute its
laws, do justice to every man, and consecrate myself to the service of the Nation. So help me God. (In case
of affirmation, last sentence will be omitted.)147 (Emphases supplied)
This Court has interpreted the faithful execution clause as an obligation imposed on the President, and not a
separate grant of power.148 Section 1 7, Article VII of the Constitution, expresses this duty in no uncertain
terms and includes it in the provision regarding the President's power of control over the executive
department, viz:
The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that
the laws be faithfully executed.
The equivalent provisions in the next preceding Constitution did not explicitly require this oath from the
President. In the 1973 Constitution, for instance, the provision simply gives the President control over the
ministries.149 A similar language, not in the form of the President's oath, was present in the 1935
Constitution, particularly in the enumeration of executive functions.150 By 1987, executive power was
codified not only in the Constitution, but also in the Administrative Code: 151
SECTION 1. Power of Control. - The President shall have control of all the executive departments, bureaus,
and offices. He shall ensure that the laws be faithfully executed. (Emphasis supplied)
Hence, the duty to faithfully execute the laws of the land is inherent in executive power and is intimately
related to the other executive functions. These functions include the faithful execution of the law in
autonomous regions;152 the right to prosecute crimes;153 the implementation of transportation projects;154 the
duty to ensure compliance with treaties, executive agreements and executive orders; 155 the authority to
deport undesirable aliens;156 the conferment of national awards under the President's jurisdiction; 157 and the
overall administration and control of the executive department.158
These obligations are as broad as they sound, for a President cannot function with crippled hands, but must
be capable of securing the rule of law within all territories of the Philippine Islands and be empowered to do
so within constitutional limits. Congress cannot, for instance, limit or take over the President's power to
adopt implementing rules and regulations for a law it has enacted. 159
More important, this mandate is self-executory by virtue of its being inherently executive in nature.160 As
Justice Antonio T. Carpio previously wrote,161
[i]f the rules are issued by the President in implementation or execution of self-executory constitutional
powers vested in the President, the rule-making power of the President is not a delegated legislative power.
The most important self-executory constitutional power of the President is the President's constitutional duty
and mandate to "ensure that the laws be faithfully executed." The rule is that the President can execute the
law without any delegation of power from the legislature.
The import of this characteristic is that the manner of the President's execution of the law, even if not
expressly granted by the law, is justified by necessity and limited only by law, since the President must
"take necessary and proper steps to carry into execution the law."162 Justice George Malcolm states this
principle in a grand manner:163
The executive should be clothed with sufficient power to administer efficiently the affairs of state. He
should have complete control of the instrumentalities through whom his responsibility is discharged. It is
still true, as said by Hamilton, that "A feeble executive implies a feeble execution of the government. A
feeble execution is but another phrase for a bad execution; and a government ill executed, whatever it may
be in theory, must be in practice a bad government." The mistakes of State governments need not be
repeated here.
xxxx
Every other consideration to one side, this remains certain - The Congress of the United States clearly
intended that the Governor-General's power should be commensurate with his responsibility. The Congress
never intended that the Governor-General should be saddled with the responsibility of administering the
government and of executing the laws but shorn of the power to do so. The interests of the Philippines will
be best served by strict adherence to the basic principles of constitutional government.
In light of this constitutional duty, it is the President's prerogative to do whatever is legal and necessary for
Philippine defense interests. It is no coincidence that the constitutional provision on the faithful execution
clause was followed by that on the President's commander-in-chief powers,164 which are specifically granted
during extraordinary events of lawless violence, invasion, or rebellion. And this duty of defending the
country is unceasing, even in times when there is no state of lawlesss violence, invasion, or rebellion. At
such times, the President has full powers to ensure the faithful execution of the laws.
It would therefore be remiss for the President and repugnant to the faithful-execution clause of the
Constitution to do nothing when the call of the moment requires increasing the military's defensive
capabilities, which could include forging alliances with states that hold a common interest with the
Philippines or bringing an international suit against an offending state.
The context drawn in the analysis above has been termed by Justice Arturo D. Brion's Dissenting Opinion as
the beginning of a "patent misconception."165 His dissent argues that this approach taken in analyzing the
President's role as executor of the laws is preceded by the duty to preserve and defend the Constitution,
which was allegedly overlooked.166
In arguing against the approach, however, the dissent grossly failed to appreciate the nuances of the analysis,
if read holistically and in context. The concept that the President cannot function with crippled hands and
therefore can disregard the need for Senate concurrence in treaties167 was never expressed or implied.
Rather, the appropriate reading of the preceding analysis shows that the point being elucidated is the reality
that the President's duty to execute the laws and protect the Philippines is inextricably interwoven with his
foreign affairs powers, such that he must resolve issues imbued with both concerns to the full extent of his
powers, subject only to the limits supplied by law. In other words, apart from an expressly mandated limit,
or an implied limit by virtue of incompatibility, the manner of execution by the President must be given
utmost deference. This approach is not different from that taken by the Court in situations with fairly similar
contexts.
Thus, the analysis portrayed by the dissent does not give the President authority to bypass constitutional
safeguards and limits. In fact, it specifies what these limitations are, how these limitations are triggered, how
these limitations function, and what can be done within the sphere of constitutional duties and limitations of
the President.
Justice Brion's dissent likewise misinterprets the analysis proffered when it claims that the foreign relations
power of the President should not be interpreted in isolation.168 The analysis itself demonstrates how the
foreign affairs function, while mostly the President's, is shared in several instances, namely in Section 2 of
Article II on the conduct of war; Sections 20 and 21 of Article VII on foreign loans, treaties, and
international agreements; Sections 4(2) and 5(2)(a) of Article VIII on the judicial review of executive acts;
Sections 4 and 25 of Article XVIII on treaties and international agreements entered into prior to the
Constitution and on the presence of foreign military troops, bases, or facilities.
In fact, the analysis devotes a whole subheading to the relationship between the two major presidential
functions and the role of the Senate in it.
This approach of giving utmost deference to presidential initiatives in respect of foreign affairs is not novel
to the Court. The President's act of treating EDCA as an executive agreement is not the principal power
being analyzed as the Dissenting Opinion seems to suggest. Rather, the preliminary analysis is in reference
to the expansive power of foreign affairs. We have long treated this power as something the Courts must not
unduly restrict. As we stated recently in Vinuya v. Romulo:
To be sure, not all cases implicating foreign relations present political questions, and courts certainly possess
the authority to construe or invalidate treaties and executive agreements. However, the question whether the
Philippine government should espouse claims of its nationals against a foreign government is a foreign
relations matter, the authority for which is demonstrably committed by our Constitution not to the courts but
to the political branches. In this case, the Executive Department has already decided that it is to the best
interest of the country to waive all claims of its nationals for reparations against Japan in the Treaty of Peace
of 1951. The wisdom of such decision is not for the courts to question. Neither could petitioners herein
assail the said determination by the Executive Department via the instant petition for certiorari.
In the seminal case of US v. Curtiss-Wright Export Corp., the US Supreme Court held that "[t]he President
is the sole organ of the nation in its external relations, and its sole representative with foreign relations."
It is quite apparent that if, in the maintenance of our international relations, embarrassment - perhaps serious
embarrassment - is to be avoided and success for our aims achieved, congressional legislation which is to be
made effective through negotiation and inquiry within the international field must often accord to the
President a degree of discretion and freedom from statutory restriction which would not be
admissible where domestic affairs alone involved. Moreover, he, not Congress, has the better opportunity
of knowing the conditions which prevail in foreign countries, and especially is this true in time of war. He
has his confidential sources of information. He has his agents in the form of diplomatic, consular and other
officials ....
This ruling has been incorporated in our jurisprudence through Bavan v. Executive
Secretary and Pimentel v. Executive Secretary; its overreaching principle was, perhaps, best articulated in
(now Chief) Justice Puno's dissent in Secretary of Justice v. Lantion:
. . . The conduct of foreign relations is full of complexities and consequences, sometimes with life and death
significance to the nation especially in times of war. It can only be entrusted to that department of
government which can act on the basis of the best available information and can decide with decisiveness ....
It is also the President who possesses the most comprehensive and the most confidential information about
foreign countries for our diplomatic and consular officials regularly brief him on meaningful events all over
the world. He has also unlimited access to ultra-sensitive military intelligence data. In fine, the presidential
role in foreign affairs is dominant and the President is traditionally accorded a wider degree of
discretion in the conduct of foreign affairs. The regularity, nay, validity of his actions are adjudged
under less stringent standards, lest their judicial repudiation lead to breach of an international
obligation, rupture of state relations, forfeiture of confidence, national embarrassment and a plethora
of other problems with equally undesirable consequences.169 (Emphases supplied)
Understandably, this Court must view the instant case with the same perspective and understanding,
knowing full well the constitutional and legal repercussions of any judicial overreach.
2. The plain meaning of the Constitution prohibits the entry of foreign military bases, troops or
facilities, except by way of a treaty concurred in by the Senate - a clear limitation on the President's
dual role as defender of the State and as sole authority in foreign relations.
Despite the President's roles as defender of the State and sole authority in foreign relations, the 1987
Constitution expressly limits his ability in instances when it involves the entry of foreign military bases,
troops or facilities. The initial limitation is found in Section 21 of the provisions on the Executive
Department: "No treaty or international agreement shall be valid and effective unless concurred in by at least
two-thirds of all the Members of the Senate." The specific limitation is given by Section 25 of the Transitory
Provisions, the full text of which reads as follows:
SECTION 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines and
the United States of America concerning Military Bases, foreign military bases, troops, or facilities shall not
be allowed in the Philippines except under a treaty duly concurred in by the Senate and, when the Congress
so requires, ratified by a majority of the votes cast by the people in a national referendum held for that
purpose, and recognized as a treaty by the other contracting State.
It is quite plain that the Transitory Provisions of the 1987 Constitution intended to add to the basic
requirements of a treaty under Section 21 of Article VII. This means that both provisions must be read as
additional limitations to the President's overarching executive function in matters of defense and foreign
relations.
3. The President, however, may enter into an executive agreement on foreign military bases, troops, or
facilities, if (a) it is not the instrument that allows the presence of foreign military bases, troops, or
facilities; or (b) it merely aims to implement an existing law or treaty.
Again we refer to Section 25, Article XVIII of the Constitution:
SECTION 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines and
the United States of America concerning Military Bases, foreign military bases, troops, or facilities shall
not be allowed in the Philippines except under a treaty duly concurred in by the Senate and, when the
Congress so requires, ratified by a majority of the votes cast by the people in a national referendum held for
that purpose, and recognized as a treaty by the other contracting State. (Emphases supplied)
In view of this provision, petitioners argue170 that EDCA must be in the form of a "treaty" duly concurred in
by the Senate. They stress that the Constitution is unambigous in mandating the transmission to the Senate
of all international agreements concluded after the expiration of the MBA in 1991 - agreements that concern
the presence of foreign military bases, troops, or facilities in the country. Accordingly, petitioners maintain
that the Executive Department is not given the choice to conclude agreements like EDCA in the form of an
executive agreement.
This is also the view of the Senate, which, through a majority vote of 15 of its members - with 1 against and
2 abstaining - says in SR 105171 that EDCA must be submitted to the Senate in the form of a treaty for
concurrence by at least two-thirds of all its members.
The Senate cites two constitutional provisions (Article VI, Section 21 and Article XVIII, Section 25) to
support its position. Compared with the lone constitutional provision that the Office of the Solicitor General
(OSG) cites, which is Article XVIII, Section 4(2), which includes the constitutionality of "executive
agreement(s)" among the cases subject to the Supreme Court's power of judicial review, the Constitution
clearly requires submission of EDCA to the Senate. Two specific provisions versus one general provision
means that the specific provisions prevail. The term "executive agreement" is "a term wandering alone in the
Constitution, bereft of provenance and an unidentified constitutional mystery."
The author of SR 105, Senator Miriam Defensor Santiago, upon interpellation even added that the MDT,
which the Executive claims to be partly implemented through EDCA, is already obsolete.
There are two insurmountable obstacles to this Court's agreement with SR 105, as well as with the comment
on interpellation made by Senator Santiago.
First, the concept of "executive agreement" is so well-entrenched in this Court's pronouncements on the
powers of the President. When the Court validated the concept of "executive agreement," it did so with full
knowledge of the Senate's role in concurring in treaties. It was aware of the problematique of distinguishing
when an international agreement needed Senate concurrence for validity, and when it did not; and the Court
continued to validate the existence of "executive agreements" even after the 1987 Constitution.172 This
follows a long line of similar decisions upholding the power of the President to enter into an executive
agreement.173
Second, the MDT has not been rendered obsolescent, considering that as late as 2009, 174 this Court
continued to recognize its validity.
Third, to this Court, a plain textual reading of Article XIII, Section 25, inevitably leads to the conclusion
that it applies only to a proposed agreement between our government and a foreign government, whereby
military bases, troops, or facilities of such foreign government would be "allowed" or would "gain entry"
Philippine territory.
Note that the provision "shall not be allowed" is a negative injunction. This wording signifies that the
President is not authorized by law to allow foreign military bases, troops, or facilities to enter the
Philippines, except under a treaty concurred in by the Senate. Hence, the constitutionally restricted authority
pertains to the entry of the bases, troops, or facilities, and not to the activities to be done after entry.
Under the principles of constitutional construction, of paramount consideration is the plain meaning of the
language expressed in the Constitution, or the verba legis rule.175 It is presumed that the provisions have
been carefully crafted in order to express the objective it seeks to attain. 176 It is incumbent upon the Court to
refrain from going beyond the plain meaning of the words used in the Constitution. It is presumed that the
framers and the people meant what they said when they said it, and that this understanding was reflected in
the Constitution and understood by the people in the way it was meant to be understood when the
fundamental law was ordained and promulgated.177 As this Court has often said:
We look to the language of the document itself in our search for its meaning. We do not of course stop there,
but that is where we begin. It is to be assumed that the words in which constitutional provisions are couched
express the objective sought to be attained. They are to be given their ordinary meaning except where
technical terms are employed in which case the significance thus attached to them prevails. As the
Constitution is not primarily a lawyer's document, it being essential for the rule of law to obtain that it
should ever be present in the people's consciousness, its language as much as possible should be
understood in the sense they have in common use. What it says according to the text of the provision to
be construed compels acceptance and negates the power of the courts to alter it, based on the postulate that
the framers and the people mean what they say. Thus, these are the cases where the need for
construction is reduced to a minimum.178 (Emphases supplied)
It is only in those instances in which the constitutional provision is unclear, ambiguous, or silent that further
construction must be done to elicit its meaning.179 In Ang Bagong Bayani-OFW v. Commission on
Elections,180 we reiterated this guiding principle:
it [is] 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'
understanding thereof. (Emphases supplied)
The effect of this statement is surprisingly profound, for, if taken literally, the phrase "shall not be allowed
in the Philippines" plainly refers to the entry of bases, troops, or facilities in the country. The Oxford English
Dictionary defines the word "allow" as a transitive verb that means "to permit, enable"; "to give consent to
the occurrence of or relax restraint on (an action, event, or activity)"; "to consent to the presence or
attendance of (a person)"; and, when with an adverbial of place, "to permit (a person or animal) to go, come,
or be in, out, near, etc."181 Black's Law Dictionary defines the term as one that means "[t]o grant, approve, or
permit."182
The verb "allow" is followed by the word "in," which is a preposition used to indicate "place or position in
space or anything having material extension: Within the limits or bounds of, within (any place or
thing)."183 That something is the Philippines, which is the noun that follows.
It is evident that the constitutional restriction refers solely to the initial entry of the foreign military bases,
troops, or facilities. Once entry is authorized, the subsequent acts are thereafter subject only to the
limitations provided by the rest of the Constitution and Philippine law, and not to the Section 25 requirement
of validity through a treaty.
The VFA has already allowed the entry of troops in the Philippines. This Court stated in Lim v. Executive
Secretary:
After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the word
"activities" arose from accident. In our view, it was deliberately made that way to give both parties a certain
leeway in negotiation. In this manner, visiting US forces may sojourn in Philippine territory for
purposes other than military. As conceived, the joint exercises may include training on new techniques of
patrol and surveillance to protect the nation's marine resources, sea search-and-rescue operations to assist
vessels in distress, disaster relief operations, civic action projects such as the building of school houses,
medical and humanitarian missions, and the like.
Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to
assume that "Balikatan 02-1," a "mutual anti- terrorism advising, assisting and training exercise," falls under
the umbrella of sanctioned or allowable activities in the context of the agreement. Both the history and intent
of the Mutual Defense Treaty and the VFA support the conclusion that combat-related activities -as opposed
to combat itself-such as the one subject of the instant petition, are indeed authorized. 184 (Emphasis supplied)
Moreover, the Court indicated that the Constitution continues to govern the conduct of foreign military
troops in the Philippines,185 readily implying the legality of their initial entry into the country.
The OSG emphasizes that EDCA can be in the form of an executive agreement, since it merely involves
"adjustments in detail" in the implementation of the MDT and the VFA. 186 It points out that there are
existing treaties between the Philippines and the U.S. that have already been concurred in by the Philippine
Senate and have thereby met the requirements of the Constitution under Section 25. Because of the status of
these prior agreements, respondent emphasizes that EDCA need not be transmitted to the Senate.
The aforecited Dissenting Opinion of Justice Brion disagrees with the ponencia's application of verba
legis construction to the words of Article XVIII, Section 25. 187 It claims that the provision is "neither plain,
nor that simple."188 To buttress its disagreement, the dissent states that the provision refers to a historical
incident, which is the expiration of the 1947 MBA. 189 Accordingly, this position requires questioning the
circumstances that led to the historical event, and the meaning of the terms under Article XVIII, Section 25.
This objection is quite strange. The construction technique of verba legis is not inapplicable just because a
provision has a specific historical context. In fact, every provision of the Constitution has a specific
historical context. The purpose of constitutional and statutory construction is to set tiers of interpretation to
guide the Court as to how a particular provision functions. Verba legis is of paramount consideration, but it
is not the only consideration. As this Court has often said:
We look to the language of the document itself in our search for its meaning. We do not of course stop
there, but that is where we begin. It is to be assumed that the words in which constitutional provisions are
couched express the objective sought to be attained. They are to be given their ordinary meaning except
where technical terms are employed in which case the significance thus attached to them prevails. As the
Constitution is not primarily a lawyer's document, it being essential for the rule of law to obtain that it
should ever be present in the people's consciousness, its language as much as possible should be
understood in the sense they have in common use. What it says according to the text of the provision to
be construed compels acceptance and negates the power of the courts to alter it, based on the postulate that
the framers and the people mean what they say. Thus, these are the cases where the need for
construction is reduced to a minimum.190 (Emphases supplied)
As applied, verba legis aids in construing the ordinary meaning of terms. In this case, the phrase being
construed is "shall not be allowed in the Philippines" and not the preceding one referring to "the expiration
in 1991 of the Agreement between the Republic of the Philippines and the United States of America
concerning Military Bases, foreign military bases, troops, or facilities." It is explicit in the wording of the
provision itself that any interpretation goes beyond the text itself and into the discussion of the framers, the
context of the Constitutional Commission's time of drafting, and the history of the 1947 MBA. Without
reference to these factors, a reader would not understand those terms. However, for the phrase "shall not be
allowed in the Philippines," there is no need for such reference. The law is clear. No less than the Senate
understood this when it ratified the VFA.
4. The President may generally enter into executive agreements subject to limitations defined by the
Constitution and may be in furtherance of a treaty already concurred in by the Senate.
We discuss in this section why the President can enter into executive agreements.
It would be helpful to put into context the contested language found in Article XVIII, Section 25. Its more
exacting requirement was introduced because of the previous experience of the country when its
representatives felt compelled to consent to the old MBA.191 They felt constrained to agree to the MBA in
fulfilment of one of the major conditions for the country to gain independence from the U.S. 192 As a result of
that experience, a second layer of consent for agreements that allow military bases, troops and facilities in
the country is now articulated in Article XVIII of our present Constitution.
This second layer of consent, however, cannot be interpreted in such a way that we completely ignore the
intent of our constitutional framers when they provided for that additional layer, nor the vigorous statements
of this Court that affirm the continued existence of that class of international agreements called "executive
agreements."
The power of the President to enter into binding executive agreements without Senate concurrence is already
well-established in this jurisdiction.193 That power has been alluded to in our present and past
Constitutions,194 in various statutes,195 in Supreme Court decisions,196 and during the deliberations of the
Constitutional Commission.197 They cover a wide array of subjects with varying scopes and
purposes,198 including those that involve the presence of foreign military forces in the country.199
As the sole organ of our foreign relations200 and the constitutionally assigned chief architect of our foreign
policy,201 the President is vested with the exclusive power to conduct and manage the country's interface
with other states and governments. Being the principal representative of the Philippines, the Chief Executive
speaks and listens for the nation; initiates, maintains, and develops diplomatic relations with other states and
governments; negotiates and enters into international agreements; promotes trade, investments, tourism and
other economic relations; and settles international disputes with other states. 202
As previously discussed, this constitutional mandate emanates from the inherent power of the President to
enter into agreements with other states, including the prerogative to conclude binding executive agreements
that do not require further Senate concurrence. The existence of this presidential power203 is so well-
entrenched that Section 5(2)(a), Article VIII of the Constitution, even provides for a check on its exercise.
As expressed below, executive agreements are among those official governmental acts that can be the
subject of this Court's power of judicial review:
(2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of Court may
provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.
(Emphases supplied)
In Commissioner of Customs v. Eastern Sea Trading, executive agreements are defined as "international
agreements embodying adjustments of detail carrying out well-established national policies and traditions
and those involving arrangements of a more or less temporary nature." 204 In Bayan Muna v. Romulo, this
Court further clarified that executive agreements can cover a wide array of subjects that have various scopes
and purposes.205 They are no longer limited to the traditional subjects that are usually covered by executive
agreements as identified in Eastern Sea Trading. The Court thoroughly discussed this matter in the
following manner:
The categorization of subject matters that may be covered by international
agreements mentioned in Eastern Sea Trading is not cast in stone. x x x.
As may be noted, almost half a century has elapsed since the Court rendered its decision in Eastern Sea
Trading. Since then, the conduct of foreign affairs has become more complex and the domain of
international law wider, as to include such subjects as human rights, the environment, and the sea. In fact,
in the US alone, the executive agreements executed by its President from 1980 to 2000 covered subjects
such as defense, trade, scientific cooperation, aviation, atomic energy, environmental cooperation,
peace corps, arms limitation, and nuclear safety, among others. Surely, the enumeration in Eastern Sea
Trading cannot circumscribe the option of each state on the matter of which the international
agreement format would be convenient to serve its best interest. As Francis Sayre said in his work
referred to earlier:
. . . It would be useless to undertake to discuss here the large variety of executive agreements as such
concluded from time to time. Hundreds of executive agreements, other than those entered into under the
trade-agreement act, have been negotiated with foreign governments. . . . They cover such subjects as the
inspection of vessels, navigation dues, income tax on shipping profits, the admission of civil air craft,
custom matters and commercial relations generally, international claims, postal matters, the registration of
trademarks and copyrights, etc .... (Emphases Supplied)
One of the distinguishing features of executive agreements is that their validity and effectivity are not
affected by a lack of Senate concurrence.206 This distinctive feature was recognized as early as in Eastern
Sea Trading (1961), viz:
Treaties are formal documents which require ratification with the approval of two-thirds of the
Senate. Executive agreements become binding through executive action without the need of a vote by
the Senate or by Congress.
xxxx
[T]he right of the Executive to enter into binding agreements without the necessity of subsequent
Congressional approval has been confirmed by long usage. From the earliest days of our history we have
entered into executive agreements covering such subjects as commercial and consular relations, most-
favored-nation rights, patent rights, trademark and copyright protection, postal and navigation arrangements
and the settlement of claims. The validity of these has never been seriously questioned by our
courts. (Emphases Supplied)
That notion was carried over to the present Constitution. In fact, the framers specifically deliberated on
whether the general term "international agreement" included executive agreements, and whether it was
necessary to include an express proviso that would exclude executive agreements from the requirement of
Senate concurrence. After noted constitutionalist Fr. Joaquin Bernas quoted the Court's ruling in Eastern Sea
Trading, the Constitutional Commission members ultimately decided that the term "international
agreements" as contemplated in Section 21, Article VII, does not include executive agreements, and that a
proviso is no longer needed. Their discussion is reproduced below: 207
MS. AQUINO: Madam President, first I would like a clarification from the Committee. We have retained
the words "international agreement" which I think is the correct judgment on the matter because an
international agreement is different from a treaty. A treaty is a contract between parties which is in the
nature of international agreement and also a municipal law in the sense that the people are bound. So there is
a conceptual difference. However, I would like to be clarified if the international agreements include
executive agreements.
MR. CONCEPCION: That depends upon the parties. All parties to these international negotiations stipulate
the conditions which are necessary for the agreement or whatever it may be to become valid or effective as
regards the parties.
MS. AQUINO: Would that depend on the parties or would that depend on the nature of the executive
agreement? According to common usage, there are two types of executive agreement: one is purely
proceeding from an executive act which affects external relations independent of the legislative and
the other is an executive act in pursuance of legislative authorization. The first kind might take the form
of just conventions or exchanges of notes or protocol while the other, which would be pursuant to the
legislative authorization, may be in the nature of commercial agreements.
MR. CONCEPCION: Executive agreements are generally made to implement a treaty already enforced
or to determine the details for the implementation of the treaty. We are speaking of executive
agreements, not international agreements.
MS. AQUINO: I am in full agreement with that, except that it does not cover the first kind of executive
agreement which is just protocol or an exchange of notes and this would be in the nature of reinforcement of
claims of a citizen against a country, for example.
MR. CONCEPCION: The Commissioner is free to require ratification for validity insofar as the Philippines
is concerned.
MS. AQUINO: It is my humble submission that we should provide, unless the Committee explains to us
otherwise, an explicit proviso which would except executive agreements from the requirement of
concurrence of two-thirds of the Members of the Senate. Unless I am enlightened by the Committee I
propose that tentatively, the sentence should read. "No treaty or international agreement EXCEPT
EXECUTIVE AGREEMENTS shall be valid and effective."
FR. BERNAS: I wonder if a quotation from the Supreme Court decision [in Eastern Sea Trading]
might help clarify this:
The right of the executive to enter into binding agreements without the necessity of subsequent
Congressional approval has been confirmed by long usage. From the earliest days of our history, we
have entered into executive agreements covering such subjects as commercial and consular relations, most
favored nation rights, patent rights, trademark and copyright protection, postal and navigation arrangements
and the settlement of claims. The validity of this has never been seriously questioned by our Courts.
Agreements with respect to the registration of trademarks have been concluded by the executive of various
countries under the Act of Congress of March 3, 1881 (21 Stat. 502) . . . International agreements
involving political issues or changes of national policy and those involving international agreements of a
permanent character usually take the form of treaties. But international agreements
embodying adjustments of detail, carrying out well established national policies and traditions and
those involving arrangements of a more or less temporary nature usually take the form of executive
agreements.
MR. ROMULO: Is the Commissioner, therefore, excluding the executive agreements?
FR. BERNAS: What we are referring to, therefore, when we say international agreements which need
concurrence by at least two-thirds are those which are permanent in nature.
MS. AQUINO: And it may include commercial agreements which are executive agreements essentially but
which are proceeding from the authorization of Congress. If that is our understanding, then I am willing to
withdraw that amendment.
FR. BERNAS: If it is with prior authorization of Congress, then it does not need subsequent
concurrence by Congress.
MS. AQUINO: In that case, I am withdrawing my amendment.
MR. TINGSON: Madam President.
THE PRESIDENT: Is Commissioner Aquino satisfied?
MS. AQUINO: Yes. There is already an agreement among us on the definition of "executive
agreements" and that would make unnecessary any explicit proviso on the matter.
xxx
MR. GUINGONA: I am not clear as to the meaning of "executive agreements" because I heard that these
executive agreements must rely on treaties. In other words, there must first be treaties.
MR. CONCEPCION: No, I was speaking about the common use, as executive agreements being the
implementation of treaties, details of which do not affect the sovereignty of the State.
MR. GUINGONA: But what about the matter of permanence, Madam President? Would 99 years be
considered permanent? What would be the measure of permanency? I do not conceive of a treaty that is
going to be forever, so there must be some kind of a time limit.
MR. CONCEPCION: I suppose the Commissioner's question is whether this type of agreement should be
included in a provision of the Constitution requiring the concurrence of Congress.
MR. GUINGONA: It depends on the concept of the executive agreement of which I am not clear. If the
executive agreement partakes of the nature of a treaty, then it should also be included.
MR. CONCEPCION: Whether it partakes or not of the nature of a treaty, it is within the power of the
Constitutional Commission to require that.
MR. GUINGONA: Yes. That is why I am trying to clarify whether the words "international
agreements" would include executive agreements.
MR. CONCEPCION: No, not necessarily; generally no.
xxx
MR. ROMULO: I wish to be recognized first. I have only one question. Do we take it, therefore, that as far
as the Committee is concerned, the term "international agreements" does not include the term
"executive agreements" as read by the Commissioner in that text?
FR. BERNAS: Yes. (Emphases Supplied)
The inapplicability to executive agreements of the requirements under Section 21 was again recognized
in Bayan v. Zamora and in Bayan Muna v. Romulo. These cases, both decided under the aegis of the present
Constitution, quoted Eastern Sea Trading in reiterating that executive agreements are valid and binding even
without the concurrence of the Senate.
Executive agreements may dispense with the requirement of Senate concurrence because of the legal
mandate with which they are concluded. As culled from the afore-quoted deliberations of the Constitutional
Commission, past Supreme Court Decisions, and works of noted scholars, 208 executive agreements merely
involve arrangements on the implementation of existing policies, rules, laws, or agreements. They are
concluded (1) to adjust the details of a treaty;209 (2) pursuant to or upon confirmation by an act of the
Legislature;210 or (3) in the exercise of the President's independent powers under the
Constitution.211 The raison d'etre of executive agreements hinges on prior constitutional or legislative
authorizations.
The special nature of an executive agreement is not just a domestic variation in international agreements.
International practice has accepted the use of various forms and designations of international agreements,
ranging from the traditional notion of a treaty - which connotes a formal, solemn instrument - to
engagements concluded in modem, simplified forms that no longer necessitate ratification. 212 An
international agreement may take different forms: treaty, act, protocol, agreement, concordat, compromis
d'arbitrage, convention, covenant, declaration, exchange of notes, statute, pact, charter, agreed minute,
memorandum of agreement, modus vivendi, or some other form.213 Consequently, under international law,
the distinction between a treaty and an international agreement or even an executive agreement is irrelevant
for purposes of determining international rights and obligations.
However, this principle does not mean that the domestic law distinguishing treaties, international
agreements, and executive agreements is relegated to a mere variation in form, or that the constitutional
requirement of Senate concurrence is demoted to an optional constitutional directive. There remain two very
important features that distinguish treaties from executive agreements and translate them into terms of art in
the domestic setting.
First, executive agreements must remain traceable to an express or implied authorization under the
Constitution, statutes, or treaties. The absence of these precedents puts the validity and effectivity of
executive agreements under serious question for the main function of the Executive is to enforce the
Constitution and the laws enacted by the Legislature, not to defeat or interfere in the performance of these
rules.214 In turn, executive agreements cannot create new international obligations that are not expressly
allowed or reasonably implied in the law they purport to implement.
Second, treaties are, by their very nature, considered superior to executive agreements. Treaties are products
of the acts of the Executive and the Senate215 unlike executive agreements, which are solely executive
actions.216 Because of legislative participation through the Senate, a treaty is regarded as being on the same
level as a statute.217 If there is an irreconcilable conflict, a later law or treaty takes precedence over one that
is prior.218 An executive agreement is treated differently. Executive agreements that are inconsistent with
either a law or a treaty are considered ineffective.219 Both types of international agreement are nevertheless
subject to the supremacy of the Constitution.220
This rule does not imply, though, that the President is given carte blanche to exercise this discretion.
Although the Chief Executive wields the exclusive authority to conduct our foreign relations, this power
must still be exercised within the context and the parameters set by the Constitution, as well as by existing
domestic and international laws. There are constitutional provisions that restrict or limit the President's
prerogative in concluding international agreements, such as those that involve the following:
a. The policy of freedom from nuclear weapons within Philippine territory221
b. The fixing of tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or
imposts, which must be pursuant to the authority granted by Congress 222
c. The grant of any tax exemption, which must be pursuant to a law concurred in by a majority of all the
Members of Congress223
d. The contracting or guaranteeing, on behalf of the Philippines, of foreign loans that must be previously
concurred in by the Monetary Board224
e. The authorization of the presence of foreign military bases, troops, or facilities in the country must be in
the form of a treaty duly concurred in by the Senate. 225
f. For agreements that do not fall under paragraph 5, the concurrence of the Senate is required, should the
form of the government chosen be a treaty.
5. The President had the choice to enter into EDCA by way of an executive agreement or a treaty.
No court can tell the President to desist from choosing an executive agreement over a treaty to embody an
international agreement, unless the case falls squarely within Article VIII, Section 25.
As can be gleaned from the debates among the members of the Constitutional Commission, they were aware
that legally binding international agreements were being entered into by countries in forms other than a
treaty. At the same time, it is clear that they were also keen to preserve the concept of "executive
agreements" and the right of the President to enter into such agreements.
What we can glean from the discussions of the Constitutional Commissioners is that they understood the
following realities:
1. Treaties, international agreements, and executive agreements are all constitutional manifestations of the
conduct of foreign affairs with their distinct legal characteristics.
a. Treaties are formal contracts between the Philippines and other States-parties, which are in the nature of
international agreements, and also of municipal laws in the sense of their binding nature. 226
b. International agreements are similar instruments, the provisions of which may require the ratification of a
designated number of parties thereto. These agreements involving political issues or changes in national
policy, as well as those involving international agreements of a permanent character, usually take the form
of treaties. They may also include commercial agreements, which are executive agreements essentially, but
which proceed from previous authorization by Congress, thus dispensing with the requirement of
concurrence by the Senate.227
c. Executive agreements are generally intended to implement a treaty already enforced or to determine the
details of the implementation thereof that do not affect the sovereignty of the State.228
2. Treaties and international agreements that cannot be mere executive agreements must, by constitutional
decree, be concurred in by at least two-thirds of the Senate.
3. However, an agreement - the subject of which is the entry of foreign military troops, bases, or facilities -
is particularly restricted. The requirements are that it be in the form of a treaty concurred in by the Senate;
that when Congress so requires, it be ratified by a majority of the votes cast by the people in a national
referendum held for that purpose; and that it be recognized as a treaty by the other contracting State.
4. Thus, executive agreements can continue to exist as a species of international agreements.
That is why our Court has ruled the way it has in several cases.
In Bayan Muna v. Romulo, we ruled that the President acted within the scope of her constitutional authority
and discretion when she chose to enter into the RP-U.S. Non-Surrender Agreement in the form of an
executive agreement, instead of a treaty, and in ratifying the agreement without Senate concurrence. The
Court en banc discussed this intrinsic presidential prerogative as follows:
Petitioner parlays the notion that the Agreement is of dubious validity, partaking as it does of the nature of a
treaty; hence, it must be duly concurred in by the Senate. x x x x. Pressing its point, petitioner submits that
the subject of the Agreement does not fall under any of the subject-categories that xx x may be covered by
an executive agreement, such as commercial/consular relations, most-favored nation rights, patent rights,
trademark and copyright protection, postal and navigation arrangements and settlement of claims.
The categorization of subject matters that may be covered by international agreements mentioned in Eastern
Sea Trading is not cast in stone. There are no hard and fast rules on the propriety of entering, on a given
subject, into a treaty or an executive agreement as an instrument of international relations. The primary
consideration in the choice of the form of agreement is the parties' intent and desire to craft an
international agreement in the form they so wish to further their respective interests. Verily,
the matter of form takes a back seat when it comes to effectiveness and binding effect of the enforcement
of a treaty or an executive agreement, as the parties in either international agreement each labor under
the pacta sunt servanda principle.
xxxx
But over and above the foregoing considerations is the fact that - save for the situation and matters
contemplated in Sec. 25, Art. XVIII of the Constitution - when a treaty is required, the Constitution does
not classify any subject, like that involving political issues, to be in the form of, and ratified as, a
treaty. What the Constitution merely prescribes is that treaties need the concurrence of the Senate by a vote
defined therein to complete the ratification process.
xxxx
x x x. As the President wields vast powers and influence, her conduct in the external affairs of the nation is,
as Bayan would put it, "executive altogether." The right of the President to enter into or ratify binding
executive agreements has been confirmed by long practice.
In thus agreeing to conclude the Agreement thru E/N BF0-028-03, then President Gloria Macapagal-
Arroyo, represented by the Secretary of Foreign Affairs, acted within the scope of the authority and
discretion vested in her by the Constitution. At the end of the day, the President - by ratifying, thru her
deputies, the non-surrender agreement - did nothing more than discharge a constitutional duty and
exercise a prerogative that pertains to her office. (Emphases supplied)
Indeed, in the field of external affairs, the President must be given a larger measure of authority and wider
discretion, subject only to the least amount of checks and restrictions under the Constitution. 229 The rationale
behind this power and discretion was recognized by the Court in Vinuya v. Executive Secretary, cited
earlier.230
Section 9 of Executive Order No. 459, or the Guidelines in the Negotiation of International Agreements and
its Ratification, thus, correctly reflected the inherent powers of the President when it stated that the DFA
"shall determine whether an agreement is an executive agreement or a treaty."
Accordingly, in the exercise of its power of judicial review, the Court does not look into whether an
international agreement should be in the form of a treaty or an executive agreement, save in cases in which
the Constitution or a statute requires otherwise. Rather, in view of the vast constitutional powers and
prerogatives granted to the President in the field of foreign affairs, the task of the Court is to determine
whether the international agreement is consistent with the applicable limitations.
6. Executive agreements may cover the matter of foreign military forces if it merely involves detail
adjustments.
The practice of resorting to executive agreements in adjusting the details of a law or a treaty that already
deals with the presence of foreign military forces is not at all unusual in this jurisdiction. In fact, the Court
has already implicitly acknowledged this practice in Lim v. Executive Secretary.231 In that case, the Court
was asked to scrutinize the constitutionality of the Terms of Reference of the Balikatan 02-1 joint military
exercises, which sought to implement the VFA. Concluded in the form of an executive agreement, the
Terms of Reference detailed the coverage of the term "activities" mentioned in the treaty and settled the
matters pertaining to the construction of temporary structures for the U.S. troops during the activities; the
duration and location of the exercises; the number of participants; and the extent of and limitations on the
activities of the U.S. forces. The Court upheld the Terms of Reference as being consistent with the VFA. It
no longer took issue with the fact that the Balikatan Terms of Reference was not in the form of a treaty
concurred in by the Senate, even if it dealt with the regulation of the activities of foreign military forces on
Philippine territory.
In Nicolas v. Romulo,232 the Court again impliedly affirmed the use of an executive agreement in an attempt
to adjust the details of a provision of the VFA. The Philippines and the U.S. entered into the Romulo-
Kenney Agreement, which undertook to clarify the detention of a U.S. Armed Forces member, whose case
was pending appeal after his conviction by a trial court for the crime of rape. In testing the validity of the
latter agreement, the Court precisely alluded to one of the inherent limitations of an executive agreement: it
cannot go beyond the terms of the treaty it purports to implement. It was eventually ruled that the Romulo-
Kenney Agreement was "not in accord" with the VFA, since the former was squarely inconsistent with a
provision in the treaty requiring that the detention be "by Philippine authorities." Consequently, the Court
ordered the Secretary of Foreign Affairs to comply with the VFA and "forthwith negotiate with the United
States representatives for the appropriate agreement on detention facilities under Philippine authorities as
provided in Art. V, Sec. 10 of the VFA. "233
Culling from the foregoing discussions, we reiterate the following pronouncements to guide us in resolving
the present controversy:
1. Section 25, Article XVIII of the Constitution, contains stringent requirements that must be fulfilled by the
international agreement allowing the presence of foreign military bases, troops, or facilities in the
Philippines: (a) the agreement must be in the form of a treaty, and (b) it must be duly concurred in by the
Senate.
2. If the agreement is not covered by the above situation, then the President may choose the form of the
agreement (i.e., either an executive agreement or a treaty), provided that the agreement dealing with foreign
military bases, troops, or facilities is not the principal agreement that first allows their entry or presence in
the Philippines.
3. The executive agreement must not go beyond the parameters, limitations, and standards set by the law
and/or treaty that the former purports to implement; and must not unduly expand the international obligation
expressly mentioned or necessarily implied in the law or treaty.
4. The executive agreement must be consistent with the Constitution, as well as with existing laws and
treaties.
In light of the President's choice to enter into EDCA in the form of an executive agreement, respondents
carry the burden of proving that it is a mere implementation of existing laws and treaties concurred in by the
Senate. EDCA must thus be carefully dissected to ascertain if it remains within the legal parameters of a
valid executive agreement.
7. EDCA is consistent with the content, purpose, and framework of the MDT and the VFA
The starting point of our analysis is the rule that "an executive agreement xx x may not be used to amend a
treaty."234 In Lim v. Executive Secretary and in Nicolas v. Romulo, the Court approached the question of the
validity of executive agreements by comparing them with the general framework and the specific provisions
of the treaties they seek to implement.
In Lim, the Terms of Reference of the joint military exercises was scrutinized by studying "the framework of
the treaty antecedents to which the Philippines bound itself,"235 i.e., the MDT and the VFA. The Court
proceeded to examine the extent of the term "activities" as contemplated in Articles 1 236 and II237 of the
VFA. It later on found that the term "activities" was deliberately left undefined and ambiguous in order to
permit "a wide scope of undertakings subject only to the approval of the Philippine government" 238 and
thereby allow the parties "a certain leeway in negotiation."239 The Court eventually ruled that the Terms of
Reference fell within the sanctioned or allowable activities, especially in the context of the VFA and the
MDT.
The Court applied the same approach to Nicolas v. Romulo. It studied the provisions of the VFA on custody
and detention to ascertain the validity of the Romulo-Kenney Agreement.240 It eventually found that the two
international agreements were not in accord, since the Romulo-Kenney Agreement had stipulated that U.S.
military personnel shall be detained at the U.S. Embassy Compound and guarded by U.S. military personnel,
instead of by Philippine authorities. According to the Court, the parties "recognized the difference between
custody during the trial and detention after conviction."241 Pursuant to Article V(6) of the VFA, the custody
of a U.S. military personnel resides with U.S. military authorities during trial. Once there is a finding of
guilt, Article V(l0) requires that the confinement or detention be "by Philippine authorities."
Justice Marvic M.V.F. Leonen's Dissenting Opinion posits that EDCA "substantially modifies or amends the
VFA"242 and follows with an enumeration of the differences between EDCA and the VFA. While these
arguments will be rebutted more fully further on, an initial answer can already be given to each of the
concerns raised by his dissent.
The first difference emphasized is that EDCA does not only regulate visits as the VFA does, but allows
temporary stationing on a rotational basis of U.S. military personnel and their contractors in physical
locations with permanent facilities and pre-positioned military materiel.
This argument does not take into account that these permanent facilities, while built by U.S. forces, are to be
owned by the Philippines once constructed.243 Even the VFA allowed construction for the benefit of U.S.
forces during their temporary visits.
The second difference stated by the dissent is that EDCA allows the prepositioning of military materiel,
which can include various types of warships, fighter planes, bombers, and vessels, as well as land and
amphibious vehicles and their corresponding ammunition. 244
However, the VFA clearly allows the same kind of equipment, vehicles, vessels, and aircraft to be brought
into the country. Articles VII and VIII of the VFA contemplates that U.S. equipment, materials, supplies,
and other property are imported into or acquired in the Philippines by or on behalf of the U.S. Armed
Forces; as are vehicles, vessels, and aircraft operated by or for U.S. forces in connection with activities
under the VFA. These provisions likewise provide for the waiver of the specific duties, taxes, charges, and
fees that correspond to these equipment.
The third difference adverted to by the Justice Leonen's dissent is that the VFA contemplates the entry of
troops for training exercises, whereas EDCA allows the use of territory for launching military and
paramilitary operations conducted in other states. 245 The dissent of Justice Teresita J. Leonardo-De Castro
also notes that VFA was intended for non-combat activides only, whereas the entry and activities of U.S.
forces into Agreed Locations were borne of military necessity or had a martial character, and were therefore
not contemplated by the VFA.246
This Court's jurisprudence however established in no uncertain terms that combat-related activities, as
opposed to actual combat, were allowed under the MDT and VFA, viz:
Both the history and intent of the Mutual Defense Treaty and the VFA support the conclusion that combat-
related activities as opposed to combat itself such as the one subject of the instant petition, are indeed
authorized.247
Hence, even if EDCA was borne of military necessity, it cannot be said to have strayed from the intent of
the VFA since EDCA's combat-related components are allowed under the treaty.
Moreover, both the VFA and EDCA are silent on what these activities actually are. Both the VFA and
EDCA deal with the presence of U.S. forces within the Philippines, but make no mention of being platforms
for activity beyond Philippine territory. While it may be that, as applied, military operations under either the
VFA or EDCA would be carried out in the future the scope of judicial review does not cover potential
breaches of discretion but only actual occurrences or blatantly illegal provisions. Hence, we cannot
invalidate EDCA on the basis of the potentially abusive use of its provisions.
The fourth difference is that EDCA supposedly introduces a new concept not contemplated in the VFA or
the MDT: Agreed Locations, Contractors, Pre-positioning, and Operational Control.248
As previously mentioned, these points shall be addressed fully and individually in the latter analysis of
EDCA's provisions. However, it must already be clarified that the terms and details used by an
implementing agreement need not be found in the mother treaty. They must be sourced from the authority
derived from the treaty, but are not necessarily expressed word-for-word in the mother treaty. This concern
shall be further elucidated in this Decision.
The fifth difference highlighted by the Dissenting Opinion is that the VFA does not have provisions that
may be construed as a restriction on or modification of obligations found in existing statues, including the
jurisdiction of courts, local autonomy, and taxation. Implied in this argument is that EDCA contains such
restrictions or modifications.249
This last argument cannot be accepted in view of the clear provisions of EDCA. Both the VFA and EDCA
ensure Philippine jurisdiction in all instances contemplated by both agreements, with the exception of those
outlined by the VFA in Articles III-VI. In the VFA, taxes are clearly waived whereas in EDCA, taxes are
assumed by the government as will be discussed later on. This fact does not, therefore, produce a diminution
of jurisdiction on the part of the Philippines, but rather a recognition of sovereignty and the rights that attend
it, some of which may be waived as in the cases under Articles III-VI of the VFA.
Taking off from these concerns, the provisions of EDCA must be compared with those of the MDT and the
VFA, which are the two treaties from which EDCA allegedly draws its validity.
"Authorized presence" under the VFA versus "authorized activities" under EDCA: (1) U.S. personnel
and (2) U.S. contractors
The OSG argues250 that EDCA merely details existing policies under the MDT and the VFA. It explains that
EDCA articulates the principle of defensive preparation embodied in Article II of the MDT; and seeks to
enhance the defensive, strategic, and technological capabilities of both parties pursuant to the objective of
the treaty to strengthen those capabilities to prevent or resist a possible armed attack. Respondent also points
out that EDCA simply implements Article I of the VFA, which already allows the entry of U.S. troops and
personnel into the country. Respondent stresses this Court's recognition in Lim v. Executive Secretary that
U.S. troops and personnel are authorized to conduct activities that promote the goal of maintaining and
developing their defense capability.
Petitioners contest251 the assertion that the provisions of EDCA merely implement the MDT. According to
them, the treaty does not specifically authorize the entry of U.S. troops in the country in order to maintain
and develop the individual and collective capacities of both the Philippines and the U.S. to resist an armed
attack. They emphasize that the treaty was concluded at a time when there was as yet no specific
constitutional prohibition on the presence of foreign military forces in the country.
Petitioners also challenge the argument that EDCA simply implements the VFA. They assert that the
agreement covers only short-term or temporary visits of U.S. troops "from time to time" for the specific
purpose of combined military exercises with their Filipino counterparts. They stress that, in contrast, U.S.
troops are allowed under EDCA to perform activities beyond combined military exercises, such as those
enumerated in Articles 111(1) and IV(4) thereof. Furthermore, there is some degree of permanence in the
presence of U.S. troops in the country, since the effectivity of EDCA is continuous until terminated. They
proceed to argue that while troops have a "rotational" presence, this scheme in fact fosters their permanent
presence.
a. Admission of U.S. military and civilian personnel into Philippine territory is already allowed under the
VFA
We shall first deal with the recognition under EDCA of the presence in the country of three distinct classes
of individuals who will be conducting different types of activities within the Agreed Locations: (1) U.S.
military personnel; (2) U.S. civilian personnel; and (3) U.S. contractors. The agreement refers to them as
follows:
"United States personnel" means United States military and civilian personnel temporarily in the
territory of the Philippines in connection with activities approved by the Philippines, as those terms are
defined in the VFA.252
"United States forces" means the entity comprising United States personnel and all property, equipment,
and materiel of the United States Armed Forces present in the territory of the Philippines.253
"United States contractors" means companies and firms, and their employees, under contract or
subcontract to or on behalf of the United States Department of Defense. United States contractors
are not included as part of the definition of United States personnel in this Agreement, including within the
context of the VFA.254
United States forces may contract for any materiel, supplies, equipment, and services (including
construction) to be furnished or undertaken in the territory of the Philippines without restriction as to choice
of contractor, supplier, or person who provides such materiel, supplies, equipment, or services. Such
contracts shall be solicited, awarded, and administered in accordance with the laws and regulations of the
United States.255 (Emphases Supplied)
A thorough evaluation of how EDCA is phrased clarities that the agreement does not deal with the
entry into the country of U.S. personnel and contractors per se. While Articles I(l)(b)256 and
II(4)257 speak of "the right to access and use" the Agreed Locations, their wordings indicate the presumption
that these groups have already been allowed entry into Philippine territory, for which, unlike the VFA,
EDCA has no specific provision. Instead, Article II of the latter simply alludes to the VFA in
describing U.S. personnel, a term defined under Article I of the treaty as follows:
As used in this Agreement, "United States personnel" means United States military and civilian personnel
temporarily in the Philippines in connection with activities approved by the Philippine Government.
Within this definition:
1. The term "military personnel" refers to military members of the United States Army, Navy, Marine
Corps, Air Force, and Coast Guard.
2. The term "civilian personnel" refers to individuals who are neither nationals of nor ordinarily
resident in the Philippines and who are employed by the United States armed forces or who are
accompanying the United States armed forces, such as employees of the American Red Cross and
the United Services Organization.258
Article II of EDCA must then be read with Article III of the VFA, which provides for the entry
accommodations to be accorded to U.S. military and civilian personnel:
1. The Government of the Philippines shall facilitate the admission of United States personnel and their
departure from the Philippines in connection with activities covered by this agreement.
2. United States military personnel shall be exempt from passport and visa regulations upon
entering and departing the Philippines.
3. The following documents only, which shall be required in respect of United States military personnel who
enter the Philippines; xx xx.
4. United States civilian personnel shall be exempt from visa requirements but shall present, upon
demand, valid passports upon entry and departure of the Philippines. (Emphases Supplied)
By virtue of Articles I and III of the VFA, the Philippines already allows U.S. military and civilian
personnel to be "temporarily in the Philippines," so long as their presence is "in connection with activities
approved by the Philippine Government." The Philippines, through Article III, even guarantees that it shall
facilitate the admission of U.S. personnel into the country and grant exemptions from passport and visa
regulations. The VFA does not even limit their temporary presence to specific locations.
Based on the above provisions, the admission and presence of U.S. military and civilian personnel in
Philippine territory are already allowed under the VFA, the treaty supposedly being implemented by
EDCA. What EDCA has effectively done, in fact, is merely provide the mechanism to identify the locations
in which U.S. personnel may perform allowed activities pursuant to the VFA. As the implementing
agreement, it regulates and limits the presence of U.S. personnel in the country.
b. EDCA does not provide the legal basis for admission of U.S. contractors into Philippine territory; their
entry must be sourced from extraneous Philippine statutes and regulations for the admission of alien
employees or business persons.
Of the three aforementioned classes of individuals who will be conducting certain activities within the
Agreed Locations, we note that only U.S. contractors are not explicitly mentioned in the VFA. This does not
mean, though, that the recognition of their presence under EDCA is ipso facto an amendment of the treaty,
and that there must be Senate concurrence before they are allowed to enter the country.
Nowhere in EDCA are U.S. contractors guaranteed immediate admission into the Philippines. Articles III
and IV, in fact, merely grant them the right of access to, and the authority to conduct certain activities within
the Agreed Locations. Since Article II(3) of EDCA specifically leaves out U.S. contractors from the
coverage of the VFA, they shall not be granted the same entry accommodations and privileges as those
enjoyed by U.S. military and civilian personnel under the VFA.
Consequently, it is neither mandatory nor obligatory on the part of the Philippines to admit U.S. contractors
into the country.259 We emphasize that the admission of aliens into Philippine territory is "a matter of pure
permission and simple tolerance which creates no obligation on the part of the government to permit them to
stay."260 Unlike U.S. personnel who are accorded entry accommodations, U.S. contractors are subject to
Philippine immigration laws.261 The latter must comply with our visa and passport regulations262 and prove
that they are not subject to exclusion under any provision of Philippine immigration laws. 263 The President
may also deny them entry pursuant to his absolute and unqualified power to prohibit or prevent the
admission of aliens whose presence in the country would be inimical to public interest. 264
In the same vein, the President may exercise the plenary power to expel or deport U.S. contractors 265 as may
be necessitated by national security, public safety, public health, public morals, and national interest. 266 They
may also be deported if they are found to be illegal or undesirable aliens pursuant to the Philippine
Immigration Act267 and the Data Privacy Act.268 In contrast, Article 111(5) of the VFA requires a request for
removal from the Philippine government before a member of the U.S. personnel may be "dispos[ed] xx x
outside of the Philippines."
c. Authorized activities of U.S. military and civilian personnel within Philippine territory are in furtherance
of the MDT and the VFA
We begin our analysis by quoting the relevant sections of the MDT and the VFA that pertain to the activities
in which U.S. military and civilian personnel may engage:
MUTUAL DEFENSE TREATY
Article II
In order more effectively to achieve the objective of this Treaty, the Parties separately and jointly by self-
help and mutual aid will maintain and develop their individual and collective capacity to resist armed
attack.
Article III
The Parties, through their Foreign Ministers or their deputies, will consult together from time to time
regarding the implementation of this Treaty and whenever in the opinion of either of them the territorial
integrity, political independence or security of either of the Parties is threatened by external armed attack in
the Pacific.
VISITING FORCES AGREEMENT
Preamble
xxx
Reaffirming their obligations under the Mutual Defense Treaty of August 30, 1951;
Noting that from time to time elements of the United States armed forces may visit the Republic of the
Philippines;
Considering that cooperation between the United States and the Republic of the Philippines promotes their
common security interests;
xxx
Article I - Definitions
As used in this Agreement, "United States personnel" means United States military and civilian personnel
temporarily in the Philippines in connection with activities approved by the Philippine Government.
Within this definition: xx x
Article II - Respect for Law
It is the duty of United States personnel to respect the laws of the Republic of the Philippines and to
abstain from any activity inconsistent with the spirit of this agreement, and, in particular, from any
political activity in the Philippines. The Government of the United States shall take all measures within its
authority to ensure that this is done.
Article VII - Importation and Exportation
1. United States Government equipment, materials, supplies, and other property imported into or
acquired in the Philippines by or on behalf of the United States armed forces in connection with activities
to which this agreement applies, shall be free of all Philippine duties, taxes and other similar charges. Title
to such property shall remain with the United States, which may remove such property from the Philippines
at any time, free from export duties, taxes, and other similar charges. x x x.
Article VIII - Movement of Vessels and Aircraft
1. Aircraft operated by or for the United States armed forces may enter the Philippines upon
approval of the Government of the Philippines in accordance with procedures stipulated in implementing
arrangements.
2. Vessels operated by or for the United States armed forces may enter the Philippines upon approval of
the Government of the Philippines. The movement of vessels shall be in accordance with international
custom and practice governing such vessels, and such agreed implementing arrangements as
necessary. x x x (Emphases Supplied)
Manifest in these provisions is the abundance of references to the creation of further "implementing
arrangements" including the identification of "activities [to be] approved by the Philippine Government." To
determine the parameters of these implementing arrangements and activities, we referred to the content,
purpose, and framework of the MDT and the VFA.
By its very language, the MDT contemplates a situation in which both countries shall engage
in joint activities, so that they can maintain and develop their defense capabilities. The wording itself
evidently invites a reasonable construction that the joint activities shall involve joint military trainings,
maneuvers, and exercises. Both the interpretation269 and the subsequent practice270 of the parties show that
the MDT independently allows joint military exercises in the country. Lim v. Executive
Secretary271 and Nicolas v. Romulo272 recognized that Balikatan exercises, which are activities that seek to
enhance and develop the strategic and technological capabilities of the parties to resist an armed attack, "fall
squarely under the provisions of the RP-US MDT."273 In Lim, the Court especially noted that the Philippines
and the U.S. continued to conduct joint military exercises even after the expiration of the MBA and even
before the conclusion of the VFA.274 These activities presumably related to the Status of Forces Agreement,
in which the parties agreed on the status to be accorded to U.S. military and civilian personnel while
conducting activities in the Philippines in relation to the MDT.275
Further, it can be logically inferred from Article V of the MDT that these joint activities may be conducted
on Philippine or on U.S. soil. The article expressly provides that the term armed attack includes "an armed
attack on the metropolitan territory of either of the Parties, or on the island territories under its
jurisdiction in the Pacific or on its armed forces, public vessels or aircraft in the Pacific." Surely, in
maintaining and developing our defense capabilities, an assessment or training will need to be performed,
separately and jointly by self-help and mutual aid, in the territories of the contracting parties. It is reasonable
to conclude that the assessment of defense capabilities would entail understanding the terrain, wind flow
patterns, and other environmental factors unique to the Philippines.
It would also be reasonable to conclude that a simulation of how to respond to attacks in vulnerable areas
would be part of the training of the parties to maintain and develop their capacity to resist an actual armed
attack and to test and validate the defense plan of the Philippines. It is likewise reasonable to imagine that
part of the training would involve an analysis of the effect of the weapons that may be used and how to be
prepared for the eventuality. This Court recognizes that all of this may require training in the area where an
armed attack might be directed at the Philippine territory.
The provisions of the MDT must then be read in conjunction with those of the VFA.
Article I of the VFA indicates that the presence of U.S. military and civilian personnel in the Philippines is
"in connection with activities approved by the Philippine Government." While the treaty does not expressly
enumerate or detail the nature of activities of U.S. troops in the country, its Preamble makes explicit
references to the reaffirmation of the obligations of both countries under the MDT. These obligations
include the strengthening of international and regional security in the Pacific area and the promotion of
common security interests.
The Court has already settled in Lim v. Executive Secretary that the phrase "activities approved by the
Philippine Government" under Article I of the VFA was intended to be ambiguous in order to afford the
parties flexibility to adjust the details of the purpose of the visit of U.S. personnel. 276 In ruling that the Terms
of Reference for the Balikatan Exercises in 2002 fell within the context of the treaty, this Court explained:
After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the word
"activities" arose from accident. In our view, it was deliberately made that way to give both parties a
certain leeway in negotiation. In this manner, visiting US forces may sojourn in Philippine territory for
purposes other than military. As conceived, the joint exercises may include training on new techniques of
patrol and surveillance to protect the nation's marine resources, sea search-and-rescue operations to assist
vessels in distress, disaster relief operations, civic action projects such as the building of school houses,
medical and humanitarian missions, and the like.
Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only logical to
assume that "Balikatan 02-1," a "mutual anti-terrorism advising, assisting and training exercise,"
falls under the umbrella of sanctioned or allowable activities in the context of the agreement. Both the
history and intent of the Mutual Defense Treaty and the VFA support the conclusion that combat-related
activities - as opposed to combat itself- such as the one subject of the instant petition, are indeed authorized.
(Emphases Supplied)
The joint report of the Senate committees on foreign relations and on national defense and security further
explains the wide range and variety of activities contemplated in the VFA, and how these activities shall be
identified:277
These joint exercises envisioned in the VFA are not limited to combat-related activities; they have a wide
range and variety. They include exercises that will reinforce the AFP's ability to acquire new techniques
of patrol and surveillance to protect the country's maritime resources; sea-search and rescue
operations to assist ships in distress; and disaster-relief operations to aid the civilian victims of natural
calamities, such as earthquakes, typhoons and tidal waves.
xxxx
Joint activities under the VFA will include combat maneuvers; training in aircraft maintenance and
equipment repair; civic-action projects; and consultations and meetings of the Philippine-U.S. Mutual
Defense Board. It is at the level of the Mutual Defense Board-which is headed jointly by the Chief of
Staff of the AFP and the Commander in Chief of the U.S. Pacific Command-that the VFA exercises are
planned. Final approval of any activity involving U.S. forces is, however, invariably given by the
Philippine Government.
xxxx
Siazon clarified that it is not the VFA by itself that determines what activities will be conducted between
the armed forces of the U.S. and the Philippines. The VFA regulates and provides the legal framework
for the presence, conduct and legal status of U.S. personnel while they are in the country for visits, joint
exercises and other related activities. (Emphases Supplied)
What can be gleaned from the provisions of the VFA, the joint report of the Senate committees on
foreign relations and on national defense and security, and the ruling of this Court in Lim is that the
"activities" referred to in the treaty are meant to be specified and identified infurther agreements.
EDCA is one such agreement.
EDCA seeks to be an instrument that enumerates the Philippine-approved activities of U.S. personnel
referred to in the VFA. EDCA allows U.S. military and civilian personnel to perform "activities approved by
the Philippines, as those terms are defined in the VFA"278 and clarifies that these activities include those
conducted within the Agreed Locations:
1. Security cooperation exercises; joint and combined training activities; humanitarian assistance and
disaster relief activities; and such other activities as may be agreed upon by the Parties 279
2. Training; transit; support and related activities; refueling of aircraft; bunkering of vessels; temporary
maintenance of vehicles, vessels, and aircraft; temporary accommodation of personnel; communications;
prepositioning of equipment, supplies, and materiel; deployment of forces and materiel; and such other
activities as the Parties may agree280
3. Exercise of operational control over the Agreed Locations for construction activities and other types of
activity, including alterations and improvements thereof 281
4. Exercise of all rights and authorities within the Agreed Locations that are necessary for their operational
control or defense, including the adoption of apfropriate measures to protect U.S. forces and contractors282
5. Use of water, electricity, and other public utilities 283
6. Operation of their own telecommunication systems, including the utilization of such means and services
as are required to ensure the full ability to operate telecommunication systems, as well as the use of the
necessary radio spectrum allocated for this purpose284
According to Article I of EDCA, one of the purposes of these activities is to maintain and develop, jointly
and by mutual aid, the individual and collective capacities of both countries to resist an armed attack. It
further states that the activities are in furtherance of the MDT and within the context of the VFA.
We note that these planned activities are very similar to those under the Terms of Reference 285 mentioned
in Lim. Both EDCA and the Terms of Reference authorize the U.S. to perform the following: (a) participate
in training exercises; (b) retain command over their forces; (c) establish temporary structures in the country;
(d) share in the use of their respective resources, equipment and other assets; and (e) exercise their right to
self-defense. We quote the relevant portion of the Terms and Conditions as follows: 286
I. POLICY LEVEL
xxxx
No permanent US basing and support facilities shall be established. Temporary structures such as those
for troop billeting, classroom instruction and messing may be set up for use by RP and US Forces
during the Exercise.
The Exercise shall be implemented jointly by RP and US Exercise Co-Directors under the authority of the
Chief of Staff, AFP. In no instance will US Forces operate independently during field training exercises
(FTX). AFP and US Unit Commanders will retain command over their respective forces under the
overall authority of the Exercise Co-Directors. RP and US participants shall comply with operational
instructions of the AFP during the FTX.
The exercise shall be conducted and completed within a period of not more than six months, with the
projected participation of 660 US personnel and 3,800 RP Forces. The Chief of Staff, AFP shall direct the
Exercise Co-Directors to wind up and terminate the Exercise and other activities within the six month
Exercise period.
The Exercise is a mutual counter-terrorism advising, assisting and training Exercise relative to
Philippine efforts against the ASG, and will be conducted on the Island of Basilan. Further advising,
assisting and training exercises shall be conducted in Malagutay and the Zamboanga area. Related activities
in Cebu will be for support of the Exercise.
xx xx.
US exercise participants shall not engage in combat, without prejudice to their right of self-defense.
These terms of Reference are for purposes of this Exercise only and do not create additional legal
obligations between the US Government and the Republic of the Philippines.
II. EXERCISE LEVEL
1. TRAINING
a. The Exercise shall involve the conduct of mutual military assisting, advising and training of RP and
US Forces with the primary objective of enhancing the operational capabilities of both forces to combat
terrorism.
b. At no time shall US Forces operate independently within RP territory.
c. Flight plans of all aircraft involved in the exercise will comply with the local air traffic regulations.
2. ADMINISTRATION & LOGISTICS
xxxx
a. RP and US participating forces may share, in accordance with their respective laws and regulations,
in the use of their resources, equipment and other assets. They will use their respective logistics
channels. x x x. (Emphases Supplied)
After a thorough examination of the content, purpose, and framework of the MDT and the VFA, we find that
EDCA has remained within the parameters set in these two treaties. Just like the Terms of Reference
mentioned in Lim, mere adjustments in detail to implement the MDT and the VFA can be in the form of
executive agreements.
Petitioners assert287 that the duration of the activities mentioned in EDCA is no longer consistent with the
temporary nature of the visits as contemplated in the VFA. They point out that Article XII(4) of EDCA has
an initial term of 10 years, a term automatically renewed unless the Philippines or the U.S. terminates the
agreement. According to petitioners, such length of time already has a badge of permanency.
In connection with this, Justice Teresita J. Leonardo-De Castro likewise argues in her Concurring and
Dissenting Opinion that the VFA contemplated mere temporary visits from U.S. forces, whereas EDCA
allows an unlimited period for U.S. forces to stay in the Philippines. 288
However, the provisions of EDCA directly contradict this argument by limiting itself to 10 years of
effectivity. Although this term is automatically renewed, the process for terminating the agreement is
unilateral and the right to do so automatically accrues at the end of the 10 year period. Clearly, this method
does not create a permanent obligation.
Drawing on the reasoning in Lim, we also believe that it could not have been by chance that the VFA does
not include a maximum time limit with respect to the presence of U.S. personnel in the country. We construe
this lack of specificity as a deliberate effort on the part of the Philippine and the U.S. governments to leave
out this aspect and reserve it for the "adjustment in detail" stage of the implementation of the treaty. We
interpret the subsequent, unconditional concurrence of the Senate in the entire text of the VFA as an implicit
grant to the President of a margin of appreciation in determining the duration of the "temporary" presence of
U.S. personnel in the country.
Justice Brion's dissent argues that the presence of U.S. forces under EDCA is "more permanent" in
nature.289 However, this argument has not taken root by virtue of a simple glance at its provisions on the
effectivity period. EDCA does not grant permanent bases, but rather temporary rotational access to facilities
for efficiency. As Professor Aileen S.P. Baviera notes:
The new EDCA would grant American troops, ships and planes rotational access to facilities of the Armed
Forces of the Philippines – but not permanent bases which are prohibited under the Philippine Constitution -
with the result of reducing response time should an external threat from a common adversary crystallize. 290
EDCA is far from being permanent in nature compared to the practice of states as shown in other defense
cooperation agreements. For example, Article XIV(l) of the U.S.-Romania defense agreement provides the
following:
This Agreement is concluded for an indefinite period and shall enter into force in accordance with the
internal laws of each Party x x x. (emphasis supplied)
Likewise, Article 36(2) of the US-Poland Status of Forces Agreement reads:
This Agreement has been concluded for an indefinite period of time. It may be terminated by written
notification by either Party and in that event it terminates 2 years after the receipt of the notification.
(emphasis supplied)
Section VIII of US.-Denmark Mutual Support Agreement similarly provides:
8.1 This Agreement, which consists of a Preamble, SECTIONs I-VIII, and Annexes A and B, shall become
effective on the date of the last signature affixed below and shall remain in force until terminated by the
Parties, provided that it may be terminated by either Party upon 180 days written notice of its intention to
do so to the other Party. (emphasis supplied)
On the other hand, Article XXI(3) of the US.-Australia Force Posture Agreement provides a longer initial
term:
3. This Agreement shall have an initial term of 25 years and thereafter shall continue in force, but may
be terminated by either Party at any time upon one year's written notice to the other Party through
diplomatic channels. (emphasis supplied)
The phrasing in EDCA is similar to that in the U.S.-Australia treaty but with a term less than half of that is
provided in the latter agreement. This means that EDCA merely follows the practice of other states in not
specifying a non-extendible maximum term. This practice, however, does not automatically grant a badge of
permanency to its terms. Article XII(4) of EDCA provides very clearly, in fact, that its effectivity is for an
initial term of 10 years, which is far shorter than the terms of effectivity between the U.S. and other states. It
is simply illogical to conclude that the initial, extendible term of 10 years somehow gives EDCA provisions
a permanent character.
The reasoning behind this interpretation is rooted in the constitutional role of the President who, as
Commander-in-Chief of our armed forces, is the principal strategist of the nation and, as such, duty-bound to
defend our national sovereignty and territorial integrity;291 who, as chief architect of our foreign relations, is
the head policymaker tasked to assess, ensure, and protect our national security and interests; 292 who holds
the most comprehensive and most confidential information about foreign countries 293 that may affect how
we conduct our external affairs; and who has unrestricted access to highly classified military intelligence
data294 that may threaten the life of the nation. Thus, if after a geopolitical prognosis of situations affecting
the country, a belief is engendered that a much longer period of military training is needed, the President
must be given ample discretion to adopt necessary measures including the flexibility to set an extended
timetable.
Due to the sensitivity and often strict confidentiality of these concerns, we acknowledge that the President
may not always be able to candidly and openly discuss the complete situation being faced by the nation. The
Chief Executive's hands must not be unduly tied, especially if the situation calls for crafting programs and
setting timelines for approved activities. These activities may be necessary for maintaining and developing
our capacity to resist an armed attack, ensuring our national sovereignty and territorial integrity, and
securing our national interests. If the Senate decides that the President is in the best position to define in
operational terms the meaning of temporary in relation to the visits, considered individually or in their
totality, the Court must respect that policy decision. If the Senate feels that there is no need to set a time
limit to these visits, neither should we.
Evidently, the fact that the VFA does not provide specificity in regard to the extent of the "temporary"
nature of the visits of U.S. personnel does not suggest that the duration to which the President may agree is
unlimited. Instead, the boundaries of the meaning of the term temporary in Article I of the treaty must be
measured depending on the purpose of each visit or activity. 295 That purpose must be analyzed on a case-by-
case basis depending on the factual circumstances surrounding the conclusion of the implementing
agreement. While the validity of the President's actions will be judged under less stringent standards, the
power of this Court to determine whether there was grave abuse of discretion remains unimpaired.
d. Authorized activities performed by US. contractors within Philippine territory - who were legitimately
permitted to enter the country independent of EDCA - are subject to relevant Philippine statutes and
regulations and must be consistent with the MDT and the VFA
Petitioners also raise296 concerns about the U.S. government's purported practice of hiring private security
contractors in other countries. They claim that these contractors - one of which has already been operating in
Mindanao since 2004 - have been implicated in incidents or scandals in other parts of the globe involving
rendition, torture and other human rights violations. They also assert that these contractors employ
paramilitary forces in other countries where they are operating.
Under Articles III and IV of EDCA, U.S. contractors are authorized to perform only the following activities:
1. Training; transit; support and related activities; refueling of aircraft; bunkering of vessels; temporary
maintenance of vehicles, vessels, and aircraft; temporary accommodation of personnel; communications;
prepositioning of equipment, supplies, and materiel; deployment of forces and materiel; and such other
activities as the Parties may agree297
2. Prepositioning and storage of defense equipment, supplies, and materiel, including delivery, management,
inspection, use, maintenance, and removal of such equipment, supplies and materiel 298
3. Carrying out of matters in accordance with, and to the extent permissible under, U.S. laws, regulations,
and policies299
EDCA requires that all activities within Philippine territory be in accordance with Philippine law. This
means that certain privileges denied to aliens are likewise denied to foreign military contractors. Relevantly,
providing security300 and carrying, owning, and possessing firearms 301 are illegal for foreign civilians.
The laws in place already address issues regarding the regulation of contractors. In the 2015 Foreign
Investment Negative list,302 the Executive Department has already identified corporations that have equity
restrictions in Philippine jurisdiction. Of note is No. 5 on the list - private security agencies that cannot have
any foreign equity by virtue of Section 4 of Republic Act No. 5487; 303 and No. 15, which regulates contracts
for the construction of defense-related structures based on Commonwealth Act No. 541.
Hence, any other entity brought into the Philippines by virtue of EDCA must subscribe to corporate and
civil requirements imposed by the law, depending on the entity's corporate structure and the nature of its
business.
That Philippine laws extraneous to EDCA shall govern the regulation of the activities of U.S. contractors
has been clear even to some of the present members of the Senate.
For instance, in 2012, a U.S. Navy contractor, the Glenn Marine, was accused of spilling fuel in the waters
off Manila Bay.304 The Senate Committee on Foreign Relations and the Senate Committee on Environment
and Natural Resources chairperson claimed environmental and procedural violations by the
contractor.305 The U.S. Navy investigated the contractor and promised stricter guidelines to be imposed upon
its contractors.306 The statement attributed to Commander Ron Steiner of the public affairs office of the U.S.
Navy's 7th Fleet - that U.S. Navy contractors are bound by Philippine laws - is of particular relevance. The
statement acknowledges not just the presence of the contractors, but also the U.S. position that these
contractors are bound by the local laws of their host state. This stance was echoed by other U.S. Navy
representatives.307
This incident simply shows that the Senate was well aware of the presence of U.S. contractors for the
purpose of fulfilling the terms of the VFA. That they are bound by Philippine law is clear to all, even to the
U.S.
As applied to EDCA, even when U.S. contractors are granted access to the Agreed Locations, all their
activities must be consistent with Philippine laws and regulations and pursuant to the MDT and the VFA.
While we recognize the concerns of petitioners, they do not give the Court enough justification to strike
down EDCA. In Lim v. Executive Secretary, we have already explained that we cannot take judicial notice
of claims aired in news reports, "not because of any issue as to their truth, accuracy, or impartiality, but for
the simple reason that facts must be established in accordance with the rules of evidence." 308 What is more,
we cannot move one step ahead and speculate that the alleged illegal activities of these contractors in other
countries would take place in the Philippines with certainty. As can be seen from the above discussion,
making sure that U.S. contractors comply with Philippine laws is a function of law enforcement. EDCA
does not stand in the way of law enforcement.
Nevertheless, we emphasize that U.S. contractors are explicitly excluded from the coverage of the VFA. As
visiting aliens, their entry, presence, and activities are subject to all laws and treaties applicable within the
Philippine territory. They may be refused entry or expelled from the country if they engage in illegal or
undesirable activities. There is nothing that prevents them from being detained in the country or being
subject to the jurisdiction of our courts. Our penal laws,309 labor laws,310 and immigrations laws311 apply to
them and therefore limit their activities here. Until and unless there is another law or treaty that specifically
deals with their entry and activities, their presence in the country is subject to unqualified Philippine
jurisdiction.
EDCA does not allow the presence of U.S.-owned or -controlled military facilities and bases in the
Philippines
Petitioners Saguisag et al. claim that EDCA permits the establishment of U.S. military bases through the
"euphemistically" termed "Agreed Locations. "312 Alluding to the definition of this term in Article II(4) of
EDCA, they point out that these locations are actually military bases, as the definition refers to facilities and
areas to which U.S. military forces have access for a variety of purposes. Petitioners claim that there are
several badges of exclusivity in the use of the Agreed Locations by U.S. forces. First, Article V(2) of EDCA
alludes to a "return" of these areas once they are no longer needed by U.S. forces, indicating that there
would be some transfer of use. Second, Article IV(4) ofEDCA talks about American forces' unimpeded
access to the Agreed Locations for all matters relating to the prepositioning and storage of U.S. military
equipment, supplies, and materiel. Third, Article VII of EDCA authorizes U.S. forces to use public utilities
and to operate their own telecommunications system.
a. Preliminary point on badges of exclusivity including construction, by giving the MDB and the SEB the power to determine the details of all activities
As a preliminary observation, petitioners have cherry-picked provisions of EDCA by presenting so-called such as, but not limited to, operation, maintenance, utility, occupancy, garrisoning, and control. 322
"badges of exclusivity," despite the presence of contrary provisions within the text of the agreement itself. The "species of ownership" on the other hand, is distinguished by the nature of the property. For immovable
First, they clarify the word "return" in Article V(2) of EDCA. However, the use of the word "return" is property constructed or developed by the U.S., EDCA expresses that ownership will automatically be vested
within the context of a lengthy provision. The provision as a whole reads as follows: to the Philippines.323 On the other hand, for movable properties brought into the Philippines by the U.S.,
The United States shall return to the Philippines any Agreed Locations, or any portion thereof, including EDCA provides that ownership is retained by the latter. In contrast, the MBA dictates that the U.S. retains
non-relocatable structures and assemblies constructed, modified, or improved by the United States, once no ownership over immovable and movable properties.
longer required by United States forces for activities under this Agreement. The Parties or the Designated To our mind, both EDCA and the MBA simply incorporate what is already the law of the land in the
Authorities shall consult regarding the terms of return of any Agreed Locations, including possible Philippines. The Civil Code's provisions on ownership, as applied, grant the owner of a movable property
compensation for improvements or construction. full rights over that property, even if located in another person's property. 324
The context of use is "required by United States forces for activities under this Agreement." Therefore, the The parallelism, however, ends when the situation involves facilities that can be considered immovable.
return of an Agreed Location would be within the parameters of an activity that the Mutual Defense Board Under the MBA, the U.S. retains ownership if it paid for the facility. 325 Under EDCA, an immovable is
(MDB) and the Security Engagement Board (SEB) would authorize. Thus, possession by the U.S. prior to its owned by the Philippines, even if built completely on the back of U.S. funding. 326 This is consistent with the
return of the Agreed Location would be based on the authority given to it by a joint body co-chaired by the constitutional prohibition on foreign land ownership. 327
"AFP Chief of Staff and Commander, U.S. PACOM with representatives from the Philippines' Department Despite the apparent similarity, the ownership of property is but a part of a larger whole that must be
of National Defense and Department of Foreign Affairs sitting as members."313 The terms shall be considered before the constitutional restriction is violated. Thus, petitioners' points on operational control
negotiated by both the Philippines and the U.S., or through their Designated Authorities. This provision, will be given more attention in the discussion below. The arguments on policy are, however, outside the
seen as a whole, contradicts petitioners' interpretation of the return as a "badge of exclusivity." In fact, it scope of judicial review and will not be discussed
shows the cooperation and partnership aspect of EDCA in full bloom. Moreover, a direct comparison of the MBA and EDCA will result in several important distinctions that
Second, the term "unimpeded access" must likewise be viewed from a contextual perspective. Article IV(4) would allay suspicion that EDCA is but a disguised version of the MBA.
states that U.S. forces and U.S. contractors shall have "unimpeded access to Agreed Locations for all matters b. There are substantial matters that the US. cannot do under EDCA, but which it was authorized to do
relating to the prepositioning and storage of defense equipment, supplies, and materiel, including delivery, under the 1947 MBA
management, inspection, use, maintenance, and removal of such equipment, supplies and materiel." The Philippine experience with U.S. military bases under the 1947 MBA is simply not possible under
At the beginning of Article IV, EDCA states that the Philippines gives the U.S. the authority to bring in EDCA for a number of important reasons.
these equipment, supplies, and materiel through the MDB and SEB security mechanism. These items are First, in the 1947 MBA, the U.S. retained all rights of jurisdiction in and over Philippine territory occupied
owned by the U.S.,314 are exclusively for the use of the U.S.315 and, after going through the joint consent by American bases. In contrast, the U.S. under EDCA does not enjoy any such right over any part of the
mechanisms of the MDB and the SEB, are within the control of the U.S. 316 More importantly, before these Philippines in which its forces or equipment may be found. Below is a comparative table between the old
items are considered prepositioned, they must have gone through the process of prior authorization by the treaty and EDCA:
MDB and the SEB and given proper notification to the AFP. 317
1947 MBA/ 1946 Treaty of General Relations EDCA
Therefore, this "unimpeded access" to the Agreed Locations is a necessary adjunct to the ownership, use,
and control of the U.S. over its own equipment, supplies, and materiel and must have first been allowed by 1947 MBA, Art. I(1): EDCA, preamble:
the joint mechanisms in play between the two states since the time of the MDT and the VFA. It is not the The Government of the Republic of Affirming that the Parties share an understanding for the
use of the Agreed Locations that is exclusive per se; it is mere access to items in order to exercise the rights the Philippines (hereinafter referred to as the United States not to establish a permanent military
of ownership granted by virtue of the Philippine Civil Code.318 Philippines) grants to the Government of the United presence or base in the territory of the Philippines;
As for the view that EDCA authorizes U.S. forces to use public utilities and to operate their own States of America (hereinafter referred to as the United xxxx
telecommunications system, it will be met and answered in part D, infra. States) the right to retain the use of the bases in the Recognizing that all United States access to and use of
Petitioners also point out319 that EDCA is strongly reminiscent of and in fact bears a one-to-one Philippines listed in Annex A attached hereto. facilities and areas will be at the invitation of the
correspondence with the provisions of the 1947 MBA. They assert that both agreements (a) allow similar 1947 MBA, Art. XVII(2): Philippines and with full respect for the Philippine
activities within the area; (b) provide for the same "species of ownership" over facilities; and (c) grant All buildings and structures which are erected by the Constitution and Philippine laws;
operational control over the entire area. Finally, they argue320 that EDCA is in fact an implementation of the United States in the bases shall be the property of the xxxx
new defense policy of the U.S. According to them, this policy was not what was originally intended either United States and may be removed by it before the EDCA, Art. II(4):
by the MDT or by the VFA. expiration of this Agreement or the earlier "Agreed Locations" means facilities and areas that
On these points, the Court is not persuaded. relinquishment of the base on which the structures are are provided by the Government of the
The similar activities cited by petitioners321 simply show that under the MBA, the U.S. had the right to situated. There shall be no obligation on the part of the Philippines through the AFP and that United States
construct, operate, maintain, utilize, occupy, garrison, and control the bases. The so-called parallel Philippines or of the United States to rebuild or repair forces, United States contractors, and others as mutually
provisions of EDCA allow only operational control over the Agreed Locations specifically for construction any destruction or damage inflicted from any cause agreed, shall have the right to access and use pursuant to
activities. They do not allow the overarching power to operate, maintain, utilize, occupy, garrison, and whatsoever on any of the said buildings or structures this Agreement. Such Agreed Locations may be listed in
control a base with full discretion. EDCA in fact limits the rights of the U.S. in respect of every activity, owned or used by the United States in the bases. x x x x. an annex to be appended to this Agreement, and may be
1946 Treaty of Gen. Relations, Art. I: further described in implementing arrangements. No equivalent provision. EDCA, Art. III(5):
The United States of America agrees to withdraw and EDCA, Art. V: The Philippine Designated Authority and its
surrender, and does hereby withdraw and surrender, all 1. The Philippines shall retain ownership of and authorized representative shall have access to the
rights of possession, supervision, jurisdiction, control title to Agreed Locations. entire area of the Agreed Locations. Such access shall
or sovereignty existing and exercised by the United xxxx be provided promptly consistent with operational safety
States of America in and over the territory and the 4. All buildings, non-relocatable structures, and and security requirements in accordance with agreed
people of the Philippine Islands, except the use of assemblies affixed to the land in the Agreed procedures developed by the Parties.
such bases, necessary appurtenances to such bases, Locations, including ones altered or improved by
Fourth, in the bases agreement, the U.S. retained the right, power, and authority over the establishment, use,
and the rights incident thereto, as the United States of United States forces, remain the property of the
operation, defense, and control of military bases, including the limits of territorial waters and air space
America, by agreement with the Republic of the Philippines. Permanent buildings constructed by United
adjacent to or in the vicinity of those bases. The only standard used in determining the extent of its control
Philippines may deem necessary to retain for the mutual States forces become the property of the Philippines,
was military necessity. On the other hand, there is no such grant of power or authority under EDCA. It
protection of the Republic of the Philippines and of the once constructed, but shall be used by United States
merely allows the U.S. to exercise operational control over the construction of Philippine-owned structures
United States of America. x x x. forces until no longer required by United States forces.
and facilities:
1947 MBA EDCA
Second, in the bases agreement, the U.S. and the Philippines were visibly not on equal footing when it came
to deciding whether to expand or to increase the number of bases, as the Philippines may be compelled to 1947 MBA, Art.I(2): EDCA, Art. III(4):
negotiate with the U.S. the moment the latter requested an expansion of the existing bases or to acquire The Philippines agrees to permit the United States, The Philippines hereby grants to the United
additional bases. In EDCA, U.S. access is purely at the invitation of the Philippines. upon notice to the Philippines, to use such of those States, through bilateral security mechanisms, such
1947 MBA/ 1946 Treaty of General Relations EDCA bases listed in Annex B as the United States as the MDB and SEB, operational control of Agreed
determines to be required by military necessity. Locations for construction
1947 MBA, Art.I(3): EDCA, preamble: 1947 MBA, Art. III(1): activities and authority to undertake such
The Philippines agree to enter into negotiations with Recognizing that all United States access to and use of It is mutually agreed that the United States shall have activities on, and make alterations and improvements
the United States at the latter's request, to permit the facilities and areas will be at the invitation of the the rights, power and authority within the to, Agreed Locations. United States forces shall
United States to expand such bases, to exchange such Philippines and with full respect for the Philippine bases which are necessary for the establishment, use, consult on issues regarding such construction,
bases for other bases, to acquire additional bases, or Constitution and Philippine laws; operation and defense thereof or appropriate for the alterations, and improvements based on the Parties'
relinquish rights to bases, as any of such exigencies may xxxx control thereof and all the rights, power and shared intent that the technical requirements and
be required by military necessity. EDCA. Art. II(4): authority within the limits of territorial waters and construction standards of any such projects undertaken
1946 Treaty of Gen. Relations, Art. I: "Agreed Locations" means facilities and areas that air space adjacent to, or in the vicinity of, the bases by or on behalf of United States forces should be
The United States of America agrees to withdraw and are provided by the Government of the which are necessary to provide access to them, or consistent with the requirements and standards of both
surrender, and does hereby withdraw and surrender, all Philippines through the AFP and that United States appropriate for their control. Parties.
rights of possession, supervision, jurisdiction, control forces, United States contractors, and others as
Fifth, the U.S. under the bases agreement was given the authority to use Philippine territory for additional
or sovereignty existing and exercised by the United mutually agreed, shall have the right to access and use
staging areas, bombing and gunnery ranges. No such right is given under EDCA, as seen below:
States of America in and over the territory and the pursuant to this Agreement. Such Agreed Locations may
people of the Philippine Islands, except the use of be listed in an annex to be appended to this Agreement, 1947 MBA EDCA
such bases, necessary appurtenances to such bases, and and may be further described in implementing
the rights incident thereto, as the United States of arrangements. 1947 MBA, Art. VI: EDCA, Art. III(1):
America, by agreement with the Republic of the The United States shall, subject to previous agreement With consideration of the views of the Parties,
Philippines may deem necessary to retain for the with the Philippines, have the right to use land and the Philippines hereby authorizes and agrees that
mutual protection of the Republic of the Philippines and coastal sea areas of appropriate size and location for United States forces, United States contractors, and
of the United States of America. x x x. periodic maneuvers, for additional staging areas, vehicles, vessels, and aircraft operated by or for United
bombing and gunnery ranges, and for such States forces may conduct the following activities with
Third, in EDCA, the Philippines is- guaranteed access over the entire area of the Agreed Locations. On the intermediate airfields as may be required for safe and respect to Agreed Locations: training; transit; support
other hand, given that the U.S. had complete control over its military bases under the 1947 MBA, the treaty efficient air operations. Operations in such areas shall be and related activities; refueling of aircraft; bunkering of
did not provide for any express recognition of the right of access of Philippine authorities. Without that carried on with due regard and safeguards for the public vessels; temporary maintenance of vehicles, vessels, and
provision and in light of the retention of U.S. sovereignty over the old military bases, the U.S. could safety. aircraft; temporary accommodation of personnel;
effectively prevent Philippine authorities from entering those bases. 1947 MBA, Art.I(2): communications; prepositioning of equipment, supplies,
1947 MBA EDCA The Philippines agrees to permit the United States, and materiel; deploying forces and materiel; and such
upon notice to the Philippines, to use such of those other activities as the Parties may agree. those that may be applicable from time to time to roads, ports, and airfields).
bases listed in Annex B as the United States the military forces of the Philippines.
determines to be required by military necessity.
Ninth, under EDCA, the U.S. no longer has the right, power, and authority to construct, install, maintain,
Sixth, under the MBA, the U.S. was given the right, power, and authority to control and prohibit the and employ any type of facility, weapon, substance, device, vessel or vehicle, or system unlike in the old
movement and operation of all types of vehicles within the vicinity of the bases. The U.S. does not have any treaty. EDCA merely grants the U.S., through bilateral security mechanisms, the authority to undertake
right, power, or authority to do so under EDCA. construction, alteration, or improvements on the Philippine-owned Agreed Locations.
1947 MBA EDCA 1947 MBA EDCA

1947 MBA, Art. 111(2)(c) No equivalent provision. 1947 MBA, Art. III(2)(e): EDCA, Art. III(4):
Such rights, power and authority shall include, inter Such rights, power and authority shall include, inter The Philippines hereby grants to the United States,
alia, the right, power and authority: x x x x to alia, the right, power and authority: x x x x through bilateral security mechanisms, such as the
control (including the right to prohibit) in so far as to construct, install, maintain, and employ on any MDB and SEB, operational control of Agreed Locations
may be required for the efficient operation and safety of base any type of facilities, weapons, substance, for construction activities and authority to undertake
the bases, and within the limits of military device, vessel or vehicle on or under the ground, in the such activities on, and make alterations and
necessity, anchorages, moorings, landings, takeoffs, air or on or under the water that may be requisite or improvements to, Agreed Locations. United States
movements and operation of ships and water-borne appropriate, including meteorological systems, aerial forces shall consult on issues regarding such
craft, aircraft and other vehicles on water, in the air and water navigation lights, radio and radar apparatus construction, alterations, and improvements based on
or on land comprising and electronic devices, of any desired power, type of the Parties' shared intent that the technical requirements
emission and frequency. and construction standards of any such projects
Seventh, under EDCA, the U.S. is merely given temporary access to land and facilities (including roads,
undertaken by or on behalf of United States forces
ports, and airfields). On the other hand, the old treaty gave the U.S. the right to improve and deepen the
should be consistent with the requirements and
harbors, channels, entrances, and anchorages; and to construct or maintain necessary roads and bridges that
standards of both Parties.
would afford it access to its military bases.
Tenth, EDCA does not allow the U.S. to acquire, by condemnation or expropriation proceedings, real
1947 MBA EDCA
property belonging to any private person. The old military bases agreement gave this right to the U.S. as
1947 MBA, Art. III(2)(b): EDCA, Art. III(2): seen below:
Such rights, power and authority shall include, inter When requested, the Designated Authority of the 1947 MBA EDCA
alia, the right, power and authority: x x x x to Philippines shall assist in facilitating transit or
improve and deepen the harbors, channels, entrances temporary access by United States forces to public land 1947 MBA, Art. XXII(l): No equivalent provision.
and anchorages, and to construct or maintain and facilities (including roads, ports, and airfields), Whenever it is necessary to acquire by
necessary roads and bridges affording access to the including those owned or controlled by local condemnation or expropriation proceedings real
bases. governments, and to other land and facilities (including property belonging to any private
roads, ports, and airfields). persons, associations or corporations located in bases
named in Annex A and Annex B in order to carry out
Eighth, in the 1947 MBA, the U.S. was granted the automatic right to use any and all public utilities,
the purposes of this Agreement, the Philippines will
services and facilities, airfields, ports, harbors, roads, highways, railroads, bridges, viaducts, canals, lakes,
institute and prosecute such condemnation or
rivers, and streams in the Philippines in the same manner that Philippine military forces enjoyed that right.
expropriation proceedings in accordance with the laws
No such arrangement appears in EDCA. In fact, it merely extends to U.S. forces temporary access to public
of the Philippines. The United States agrees to
land and facilities when requested:
reimburse the Philippines for all the reasonable
1947 MBA EDCA expenses, damages and costs therebv incurred, including
the value of the property as determined by the Court. In
1947 MBA, Art. VII: EDCA, Art. III(2): addition, subject to the mutual agreement of the two
It is mutually agreed that the United States may When requested, the Designated Authority of the Governments, the United States will reimburse the
employ and use for United States military forces any Philippines shall assist in facilitating transit or Philippines for the reasonable costs of transportation
and all public utilities, other services and facilities, temporary access by United States forces to public land and removal of any occupants displaced or ejected by
airfields, ports, harbors, roads, highways, railroads, and facilities (including roads, ports, and airfields), reason of the condemnation or expropriation.
bridges, viaducts, canals, lakes, rivers and streams in the including those owned or controlled by local
Philippines under conditions no less favorable than governments, and to other land and facilities (including
 Eleventh, EDCA does not allow the U.S. to unilaterally bring into the country non-Philippine nationals who
exchanges; messes and social clubs, for the exclusive
are under its employ, together with their families, in connection with the construction, maintenance, or
use of the United States military forces and
operation of the bases. EDCA strictly adheres to the limits under the VFA.
authorized civilian personnel and their families. The
1947 MBA EDCA merchandise or services sold or dispensed by such
agencies shall be free of all taxes, duties and
1947 MBA, Art. XI(l): EDCA, Art. II: inspection by the Philippine
It is mutually agreed that the United States shall have 1. "United States personnel" means United authorities. Administrative measures shall be taken by
the right to bring into the Philippines members of the States military and civilian personnel temporarily in the appropriate authorities of the United States to
United States military forces and the United States the territory of the Philippines in connection with prevent the resale of goods which are sold under the
nationals employed by or under a contract with the activities approved by the Philippines, as those terms provisions of this Article to persons not entitled to buy
United States together with their families, and are defined in the VFA. goods at such agencies and, generally, to prevent abuse
technical personnel of other nationalities (not being x xx x of the privileges granted under this Article. There shall
persons excluded by the laws of the Philippines) in 3. "United States contractors" means companies and be cooperation between such authorities and the
connection with the construction, maintenance, or firms, and their employees, under contract or Philippines to this end.
operation of the bases. The United States shall make subcontract to or on behalf of the United States
suitable arrangements so that such persons may be Department of Defense. United States contractors In sum, EDCA is a far cry from a basing agreement as was understood by the people at the time that the
readily identified and their status established when are not included as part of the definition of United 1987 Constitution was adopted.
necessary by the Philippine authorities. Such persons, States personnel in this Agreement, including within Nevertheless, a comprehensive review of what the Constitution means by "foreign military bases" and
other than members of the United States armed forces in the context of the VFA. "facilities" is required before EDCA can be deemed to have passed judicial scrutiny.
uniform, shall present their travel documents to the c. The meaning of military facilities and bases
appropriate Philippine authorities for visas, it being An appreciation of what a military base is, as understood by the Filipino people in 1987, would be vital in
understood that no objection will be made to their determining whether EDCA breached the constitutional restriction.
travel to the Philippines as non-immigrants. Prior to the drafting of the 1987 Constitution, the last definition of "military base" was provided under
Presidential Decree No. (PD) 1227.328 Unlawful entry into a military base is punishable under the decree as
Twelfth, EDCA does not allow the U.S. to exercise jurisdiction over any offense committed by any person supported by Article 281 of the Revised Penal Code, which itself prohibits the act of trespass.
within the Agreed Locations, unlike in the former military bases: Section 2 of the law defines the term in this manner: "'[M]ilitary base' as used in this decree means any
1947 MBA EDCA military, air, naval, or coast guard reservation, base, fort, camp, arsenal, yard, station, or installation in the
Philippines."
1947 MBA, Art. XIII(l)(a): No equivalent provision. Commissioner Tadeo, in presenting his objections to U.S. presence in the Philippines before the 1986
The Philippines consents that the United Constitutional Commission, listed the areas that he considered as military bases:
States shall have the right to exercise jurisdiction over 1,000 hectares Camp O'Donnel
the following offenses: (a) Any offense committed by 20,000 hectares Crow Valley Weapon's Range
any person within any base except where the offender 55,000 hectares Clark Air Base
and offended parties are both Philippine citizens (not 150 hectares Wallace Air Station
members of the armed forces of the United States on 400 hectares John Hay Air Station
active duty) or the offense is against the security of the 15,000 hectares Subic Naval Base
Philippines. 1,000 hectares San Miguel Naval Communication
750 hectares Radio Transmitter in Capas, Tarlac
Thirteenth, EDCA does not allow the U.S. to operate military post exchange (PX) facilities, which is free of 900 hectares Radio Bigot Annex at Bamban, Tarlac329
customs duties and taxes, unlike what the expired MBA expressly allowed. Parenthetically, the PX store has The Bases Conversion and Development Act of 1992 described its coverage in its Declaration of Policies:
become the cultural icon of U.S. military presence in the country. Sec. 2. Declaration of Policies. - It is hereby declared the policy of the Government to accelerate the sound
1947 MBA EDCA and balanced conversion into alternative productive uses of the Clark and Subic military reservations and
their extensions (John Hay Station, Wallace Air Station, O'Donnell Transmitter Station, San Miguel Naval
1947 MBA, Art. XVIII(l): No equivalent provision. Communications Station and Capas Relay Station), to raise funds by the sale of portions of Metro Manila
It is mutually agreed that the United States military camps, and to apply said funds as provided herein for the development and conversion to productive
shall have the right to establish on bases, free of all civilian use of the lands covered under the 194 7 Military Bases Agreement between the Philippines and the
licenses; fees; sales, excise or other taxes, or United States of America, as amended.330
imposts; Government agencies, including concessions, The result of the debates and subsequent voting is Section 25, Article XVIII of the Constitution, which
such as sales commissaries and post specifically restricts, among others, foreign military facilities or bases. At the time of its crafting of the
Constitution, the 1986 Constitutional Commission had a clear idea of what exactly it was restricting. While
the term "facilities and bases" was left undefined, its point of reference was clearly those areas covered by
the 1947 MBA as amended.
Notably, nearly 30 years have passed since then, and the ever-evolving world of military technology and
geopolitics has surpassed the understanding of the Philippine people in 1986. The last direct military action
of the U.S. in the region was the use of Subic base as the staging ground for Desert Shield and Desert Storm
during the Gulf War.331 In 1991, the Philippine Senate rejected the successor treaty of the 1947 MBA that
would have allowed the continuation of U.S. bases in the Philippines.
Henceforth, any proposed entry of U.S. forces into the Philippines had to evolve likewise, taking into
consideration the subsisting agreements between both parties, the rejection of the 1991 proposal, and a
concrete understanding of what was constitutionally restricted. This trend birthed the VFA which, as
discussed, has already been upheld by this Court.
The latest agreement is EDCA, which proposes a novel concept termed "Agreed Locations."
By definition, Agreed Locations are
facilities and areas that are provided by the Government of the Philippines through the AFP and that United
States forces, United States contractors, and others as mutually agreed, shall have the right to access and use
pursuant to this Agreement. Such Agreed Locations may be listed in an annex to be appended to this
Agreement, and may be further described in implementing arrangements. 332
Preliminarily, respondent already claims that the proviso that the Philippines shall retain ownership of and
title to the Agreed Locations means that EDCA is "consistent with Article II of the VFA which recognizes
Philippine sovereignty and jurisdiction over locations within Philippine territory.333
By this interpretation, respondent acknowledges that the contention of petitioners springs from an
understanding that the Agreed Locations merely circumvent the constitutional restrictions. Framed
differently, the bone of contention is whether the Agreed Locations are, from a legal perspective, foreign
military facilities or bases. This legal framework triggers Section 25, Article XVIII, and makes Senate
concurrence a sine qua non.
Article III of EDCA provides for Agreed Locations, in which the U.S. is authorized by the Philippines to
"conduct the following activities: "training; transit; support and related activities; refueling of aircraft;
bunkering of vessels; temporary maintenance of vehicles, vessels and aircraft; temporary accommodation of
personnel; communications; prepositioning of equipment, supplies and materiel; deploying forces and
materiel; and such other activities as the Parties may agree."
This creation of EDCA must then be tested against a proper interpretation of the Section 25 restriction.
d. Reasons for the constitutional requirements and legal standards for constitutionally compatible military
bases and facilities
Section 25 does not define what is meant by a "foreign military facility or base." While it specifically
alludes to U.S. military facilities and bases that existed during the framing of the Constitution, the provision
was clearly meant to apply to those bases existing at the time and to any future facility or base. The basis for
the restriction must first be deduced from the spirit of the law, in order to set a standard for the application
of its text, given the particular historical events preceding the agreement.
Once more, we must look to the 1986 Constitutional Commissioners to glean, from their collective wisdom,
the intent of Section 25. Their speeches are rich with history and wisdom and present a clear picture of what
they considered in the crafting the provision.
SPEECH OF COMMISSIONER REGALADO334
xxxx
We have been regaled here by those who favor the adoption of the anti-bases provisions with what purports
to be an objective presentation of the historical background of the military bases in the Philippines. Care
appears, however, to have been taken to underscore the inequity in their inception as well as their
implementation, as to seriously reflect on the supposed objectivity of the report. Pronouncements of
military and civilian officials shortly after World War II are quoted in support of the proposition
on neutrality; regrettably, the implication is that the same remains valid today, as if the world and
international activity stood still for the last 40 years.
We have been given inspired lectures on the effect of the presence of the military bases on our
sovereignty - whether in its legal or political sense is not clear - and the theory that any country with
foreign bases in its territory cannot claim to be fully sovereign or completely independent. I was not
aware that the concepts of sovereignty and independence have now assumed the totality principle, such that
a willing assumption of some delimitations in the exercise of some aspects thereof would put that State in a
lower bracket of nationhood.
xxxx
We have been receiving a continuous influx of materials on the pros and cons on the advisability of having
military bases within our shores. Most of us who, only about three months ago, were just mulling the
prospects of these varying contentions are now expected, like armchair generals, to decide not only on the
geopolitical aspects and contingent implications of the military bases but also on their political, social,
economic and cultural impact on our national life. We are asked to answer a plethora of questions, such as:
1) whether the bases are magnets of nuclear attack or are deterrents to such attack; 2) whether an alliance or
mutual defense treaty is a derogation of our national sovereignty; 3) whether criticism of us by Russia,
Vietnam and North Korea is outweighed by the support for us of the ASEAN countries, the United States,
South Korea, Taiwan, Australia and New Zealand; and 4) whether the social, moral and legal problems
spawned by the military bases and their operations can be compensated by the economic benefits outlined in
papers which have been furnished recently to all of us. 335
xxxx
Of course, one side of persuasion has submitted categorical, unequivocal and forceful assertions of their
positions. They are entitled to the luxury of the absolutes. We are urged now to adopt the proposed
declaration as a "golden," "unique" and "last" opportunity for Filipinos to assert their sovereign
rights. Unfortunately, I have never been enchanted by superlatives, much less for the applause of the
moment or the ovation of the hour. Nor do I look forward to any glorious summer after a winter of political
discontent. Hence, if I may join Commissioner Laurel, I also invoke a caveat not only against the tyranny of
labels but also the tyranny of slogans.336
xxxx
SPEECH OF COMMISSIONER SUAREZ337
MR. SUAREZ: Thank you, Madam President.
I am quite satisfied that the crucial issues involved in the resolution of the problem of the removal of foreign
bases from the Philippines have been adequately treated by previous speakers. Let me, therefore, just
recapitulate the arguments adduced in favor of a foreign bases-free Philippines:
1. That every nation should be free to shape its own destiny without outside interference;
2. That no lasting peace and no true sovereignty would ever be achieved so long as there are foreign
military forces in our country;
3. That the presence of foreign military bases deprives us of the very substance of national
sovereignty and this is a constant source of national embarrassment and an insult to our national dignity and
selfrespect as a nation;
4. That these foreign military bases unnecessarily expose our country to devastating nuclear attacks;
5. That these foreign military bases create social problems and are designed to perpetuate the strangle-hold
of United States interests in our national economy and development;
6. That the extraterritorial rights enjoyed by these foreign bases operate to deprive our country of
jurisdiction over civil and criminal offenses committed within our own national territory and against
Filipinos;
7. That the bases agreements are colonial impositions and dictations upon our helpless country; and
8. That on the legal viewpoint and in the ultimate analysis, all the bases agreements are null and void ab
initio, especially because they did not count the sovereign consent and will of the Filipino people. 338
xxxx
In the real sense, Madam President, if we in the Commission could accommodate the provisions I have
cited, what is our objection to include in our Constitution a matter as priceless as the nationalist values we
cherish? A matter of the gravest concern for the safety and survival of this nation indeed deserves a
place in our Constitution.
xxxx
x x x Why should we bargain away our dignity and our self-respect as a nation and the future of
generations to come with thirty pieces of silver? 339
SPEECH OF COMMISSIONER BENNAGEN340
xxxx
The underlying principle of military bases and nuclear weapons wherever they are found and whoever
owns them is that those are for killing people or for terrorizing humanity. This objective by itself at any
point in history is morally repugnant. This alone is reason enough for us to constitutionalize the ban on
foreign military bases and on nuclear weapons.341
SPEECH OF COMMISSIONER BACANI342
xxxx
x x x Hence, the remedy to prostitution does not seem to be primarily to remove the bases because even
if the bases are removed, the girls mired in poverty will look for their clientele elsewhere. The remedy to the
problem of prostitution lies primarily elsewhere - in an alert and concerned citizenry, a healthy economy and
a sound education in values.343
SPEECH OF COMMISSIONER JAMIR344
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One of the reasons advanced against the maintenance of foreign military bases here is that they
impair portions of our sovereignty. While I agree that our country's sovereignty should not be impaired, I
also hold the view that there are times when it is necessary to do so according to the imperatives of national
interest. There are precedents to this effect. Thus, during World War II, England leased its bases in the West
Indies and in Bermuda for 99 years to the United States for its use as naval and air bases. It was done in
consideration of 50 overaged destroyers which the United States gave to England for its use in the Battle of
the Atlantic.
A few years ago, England gave the Island of Diego Garcia to the United States for the latter's use as a naval
base in the Indian Ocean. About the same time, the United States obtained bases in Spain, Egypt and Israel.
In doing so, these countries, in effect, contributed to the launching of a preventive defense posture against
possible trouble in the Middle East and in the Indian Ocean for their own protection. 345
SPEECH OF COMMISSIONER TINGSON346
xxxx
In the case of the Philippines and the other Southeast Asian nations, the presence of American troops in the
country is a projection of America's security interest. Enrile said that nonetheless, they also serve, although
in an incidental and secondary way, the security interest of the Republic of the Philippines and the region.
Yes, of course, Mr. Enrile also echoes the sentiments of most of us in this Commission, namely: It is ideal
for us as an independent and sovereign nation to ultimately abrogate the RP-US military treaty and,
at the right time, build our own air and naval might.347
xxxx
Allow me to say in summation that I am for the retention of American military bases in the
Philippines provided that such an extension from one period to another shall be concluded upon
concurrence of the parties, and such extension shall be based on justice, the historical amity of the
people of the Philippines and the United States and their common defense interest.348
SPEECH OF COMMISSIONER ALONTO349
xxxx
Madam President, sometime ago after this Commission started with this task of framing a constitution, I
read a statement of President Aquino to the effect that she is for the removal of the U.S. military bases in
this country but that the removal of the U.S. military bases should not be done just to give way to other
foreign bases. Today, there are two world superpowers, both vying to control any and all countries which
have importance to their strategy for world domination. The Philippines is one such country.
Madam President, I submit that I am one of those ready to completely remove any vestiges of the days
of enslavement, but not prepared to erase them if to do so would merely leave a vacuum to be occupied by a
far worse type.350
SPEECH OF COMMISSIONER GASCON351
xxxx
Let us consider the situation of peace in our world today. Consider our brethren in the Middle East, in Indo-
China, Central America, in South Africa - there has been escalation of war in some of these areas because of
foreign intervention which views these conflicts through the narrow prism of the East-West conflict. The
United States bases have been used as springboards for intervention in some of these conflicts. We
should not allow ourselves to be party to the warlike mentality of these foreign interventionists. We
must always be on the side of peace – this means that we should not always rely on military solution.352
xxxx
x x x The United States bases, therefore, are springboards for intervention in our own internal affairs
and in the affairs of other nations in this region.
xxxx
Thus, I firmly believe that a self-respecting nation should safeguard its fundamental freedoms which should
logically be declared in black and white in our fundamental law of the land - the Constitution. Let us
express our desire for national sovereignty so we may be able to achieve national self-
determination. Let us express our desire for neutrality so that we may be able to follow active nonaligned
independent foreign policies. Let us express our desire for peace and a nuclear-free zone so we may be able
to pursue a healthy and tranquil existence, to have peace that is autonomous and not imposed. 353
xxxx
SPEECH OF COMMISSIONER TADEO354
Para sa magbubukid, ano ha ang kahulugan ng U.S. military bases? Para sa magbubukid, ang
kahulugan nito ay pagkaalipin. Para sa magbubukid, ang pananatili ng U.S. military bases ay tinik sa
dibdib ng sambayanang Pilipinong patuloy na nakabaon. Para sa sambayanang magbubukid, ang ibig
sabihin ng U.S. military bases ay batong pabigat na patuloy na pinapasan ng sambayanang Pilipino. Para
sa sambayanang magbubukid, ang pananatili ng U.S. military bases ay isang nagdudumilat na
katotohanan ng patuloy na paggahasa ng imperyalistang Estados Unidos sa ating Inang Bayan -
economically, politically and culturally. Para sa sambayanang magbubukid ang U.S. military
bases ay kasingkahulugan ng nuclear weapon - ang kahulugan ay magneto ng isang nuclear war. Para
sa sambayanang magbubukid, ang kahulugan ng U.S. military bases ay isang salot.355
SPEECH OF COMMISSIONER QUESADA356
xxxx
The drift in the voting on issues related to freeing ourselves from the instruments of domination and
subservience has clearly been defined these past weeks.
xxxx
So for the record, Mr. Presiding Officer, I would like to declare my support for the committee's position to
enshrine in the Constitution a fundamental principle forbidding foreign military bases, troops or facilities in
any part of the Philippine territory as a clear and concrete manifestation of our inherent right to national
self-determination, independence and sovereignty.
Mr. Presiding Officer, I would like to relate now these attributes of genuine nationhood to the social cost of
allowing foreign countries to maintain military bases in our country. Previous speakers have dwelt on this
subject, either to highlight its importance in relation to the other issues or to gloss over its significance and
!llake this a part of future negotiations.357
xxxx
Mr. Presiding Officer, I feel that banning foreign military bases is one of the solutions and is the response of
the Filipino people against this condition and other conditions that have already been clearly and
emphatically discussed in past deliberations. The deletion, therefore, of Section 3 in the Constitution we are
drafting will have the following implications:
First, the failure of the Constitutional Commission to decisively respond to the continuing violation of our
territorial integrity via the military bases agreement which permits the retention of U.S. facilities
within the Philippine soil over which our authorities have no exclusive jurisdiction contrary to the
accepted definition of the exercise of sovereignty.
Second, consent by this forum, this Constitutional Commission, to an exception in the application of a
provision in the Bill of Rights that we have just drafted regarding equal application of the laws of the land
to all inhabitants, permanent or otherwise, within its territorial boundaries.
Third, the continued exercise by the United States of extraterritoriality despite the condemnations of
such practice by the world community of nations in the light of overwhelming international approval of
eradicating all vestiges of colonialism.358
xxxx
Sixth, the deification of a new concept called pragmatic sovereignty, in the hope that such can be wielded
to force the United States government to concede to better terms and conditions concerning the military
bases agreement, including the transfer of complete control to the Philippine government of
the U.S. facilities, while in the meantime we have to suffer all existing indignities and disrespect towards
our rights as a sovereign nation.
xxxx
Eighth, the utter failure of this forum to view the issue of foreign military bases as essentially a
question of sovereignty which does not require in-depth studies or analyses and which this forum has, as a
constituent assembly drafting a constitution, the expertise and capacity to decide on except that it lacks the
political will that brought it to existence and now engages in an elaborate scheme of buck-passing.
xxxx
Without any doubt we can establish a new social order in our country, if we reclaim, restore, uphold and
defend our national sovereignty. National sovereignty is what the military bases issue is all about. It is
only the sovereign people exercising their national sovereignty who can design an independent course and
take full control of their national destiny.359
SPEECH OF COMMISSIONER P ADILLA360
xxxx
Mr. Presiding Officer, in advocating the majority committee report, specifically Sections 3 and 4 on
neutrality, nuclear and bases-free country, some views stress sovereignty of the Republic and even invoke
survival of the Filipino nation and people.361
REBUTTAL OF COMMISSIONER NOLLEDO362
xxxx
The anachronistic and ephemeral arguments against the provisions of the committee report to dismantle the
American bases after 1991 only show the urgent need to free our country from the entangling
alliance with any power bloc.363
xxxx
xx x Mr. Presiding Officer, it is not necessary for us to possess expertise to know that the so-called RP-US
Bases Agreement will expire in 1991, that it infringes on our sovereignty and jurisdiction as well as
national dignity and honor, that it goes against the UN policy of disarmament and that it constitutes unjust
intervention in our internal affairs.364 (Emphases Supplied)
The Constitutional Commission eventually agreed to allow foreign military bases, troops, or facilities,
subject to the provisions of Section 25. It is thus important to read its discussions carefully. From these
discussions, we can deduce three legal standards that were articulated by the Constitutional Commission
Members. These are characteristics of any agreement that the country, and by extension this Court, must
ensure are observed. We can thereby determine whether a military base or facility in the Philippines, which
houses or is accessed by foreign military troops, is foreign or remains a Philippine military base or facility.
The legal standards we find applicable are: independence from foreign control, sovereignty and applicable
law, and national security and territorial integrity.
i. First standard: independence from foreign control
Very clearly, much of the opposition to the U.S. bases at the time of the Constitution's drafting was aimed at
asserting Philippine independence from the U.S., as well as control over our country's territory and military.
Under the Civil Code, there are several aspects of control exercised over property.
Property is classified as private or public.365 It is public if "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[,]" or "[t]hose 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. "366
Quite clearly, the Agreed Locations are contained within a property for public use, be it within a government
military camp or property that belongs to the Philippines.1avvphi1
Once ownership is established, then the rights of ownership flow freely. Article 428 of the Civil Code
provides that "[t]he owner has the right to enjoy and dispose of a thing, without other limitations than those
established by law." Moreover, the owner "has also a right of action against the holder and possessor of the
thing in order to recover it."
Philippine civil law therefore accords very strong rights to the owner of property, even against those who
hold the property. Possession, after all, merely raises a disputable presumption of ownership, which can be
contested through normal judicial processes.367
In this case, EDCA explicitly provides that ownership of the Agreed Locations remains with the Philippine
govemment.368 What U.S. personnel have a right to, pending mutual agreement, is access to and use of these
locations.369
The right of the owner of the property to allow access and use is consistent with the Civil Code, since the
owner may dispose of the property in whatever way deemed fit, subject to the limits of the law. So long as
the right of ownership itself is not transferred, then whatever rights are transmitted by agreement does not
completely divest the owner of the rights over the property, but may only limit them in accordance with law.
Hence, even control over the property is something that an owner may transmit freely. This act does not
translate into the full transfer of ownership, but only of certain rights. In Roman Catholic Apostolic
Administrator of Davao, Inc. v. Land Registration Commission, we stated that the constitutional proscription
on property ownership is not violated despite the foreign national's control over the property.370
EDCA, in respect of its provisions on Agreed Locations, is essentially a contract of use and access. Under its
pertinent provisions, it is the Designated Authority of the Philippines that shall, when requested, assist in
facilitating transit or access to public land and facilities. 371 The activities carried out within these locations
are subject to agreement as authorized by the Philippine govemment. 372 Granting the U.S. operational
control over these locations is likewise subject to EDCA' s security mechanisms, which are bilateral
procedures involving Philippine consent and cooperation. 373 Finally, the Philippine Designated Authority or
a duly designated representative is given access to the Agreed Locations. 374
To our mind, these provisions do not raise the spectre of U.S. control, which was so feared by the
Constitutional Commission. In fact, they seem to have been the product of deliberate negotiation from the
point of view of the Philippine government, which balanced constitutional restrictions on foreign military
bases and facilities against the security needs of the country. In the 1947 MBA, the U.S. forces had "the
right, power and authority x x x to construct (including dredging and filling), operate, maintain, utilize,
occupy, garrison and control the bases."375 No similarly explicit provision is present in EDCA.
Nevertheless, the threshold for allowing the presence of foreign military facilities and bases has been raised
by the present Constitution. Section 25 is explicit that foreign military bases, troops, or facilities shall not be
allowed in the Philippines, except under a treaty duly concurred in by the Senate. Merely stating that the
Philippines would retain ownership would do violence to the constitutional requirement if the Agreed
Locations were simply to become a less obvious manifestation of the U.S. bases that were rejected in 1991.
When debates took place over the military provisions of the Constitution, the committee rejected a specific
provision proposed by Commissioner Sarmiento. The discussion illuminates and provides context to the
1986 Constitutional Commission's vision of control and independence from the U.S., to wit:
MR. SARMIENTO: Madam President, my proposed amendment reads as follows: "THE STATE SHALL
ESTABLISH AND MAINTAIN AN INDEPENDENT AND SELF-RELIANT ARMED FORCES OF THE
PHILIPPINES." Allow me to briefly explain, Madam President. The Armed Forces of the Philippines is a
vital component of Philippine society depending upon its training, orientation and support. It will either be
the people's protector or a staunch supporter of a usurper or tyrant, local and foreign interest. The Armed
Forces of the Philippines' past and recent experience shows it has never been independent and self-
reliant. Facts, data and statistics will show that it has been substantially dependent upon a foreign power. In
March 1968, Congressman Barbero, himself a member of the Armed Forces of the Philippines, revealed top
secret documents showing what he described as U.S. dictation over the affairs of the Armed Forces of the
Philippines. He showed that under existing arrangements, the United States unilaterally determines
not only the types and quantity of arms and equipments that our armed forces would have, but also
the time when these items are to be made available to us. It is clear, as he pointed out, that the
composition, capability and schedule of development of the Armed Forces of the Philippines is under
the effective control of the U.S. government.376 (Emphases supplied)
Commissioner Sarmiento proposed a motherhood statement in the 1987 Constitution that would assert
"independent" and "self-reliant" armed forces. This proposal was rejected by the committee, however. As
Commissioner De Castro asserted, the involvement of the Philippine military with the U.S. did not, by
itself, rob the Philippines of its real independence. He made reference to the context of the times: that the
limited resources of the Philippines and the current insurgency at that time necessitated a strong military
relationship with the U.S. He said that the U.S. would not in any way control the Philippine military despite
this relationship and the fact that the former would furnish military hardware or extend military assistance
and training to our military. Rather, he claimed that the proposal was in compliance with the treaties
between the two states.
MR. DE CASTRO: If the Commissioner will take note of my speech on U.S. military bases on 12
September 1986, I spoke on the selfreliance policy of the armed forces. However, due to very limited
resources, the only thing we could do is manufacture small arms ammunition. We cannot blame the armed
forces. We have to blame the whole Republic of the Philippines for failure to provide the necessary funds to
make the Philippine Armed Forces self-reliant. Indeed that is a beautiful dream. And I would like it that
way. But as of this time, fighting an insurgency case, a rebellion in our country - insurgency - and with very
limited funds and very limited number of men, it will be quite impossible for the Philippines to appropriate
the necessary funds therefor. However, if we say that the U.S. government is furnishing us the military
hardware, it is not control of our armed forces or of our government. It is in compliance with the
Mutual Defense Treaty. It is under the military assistance program that it becomes the responsibility of the
United States to furnish us the necessary hardware in connection with the military bases agreement. Please
be informed that there are three (3) treaties connected with the military bases agreement; namely: the RP-US
Military Bases Agreement, the Mutual Defense Treaty and the Military Assistance Program.
My dear Commissioner, when we enter into a treaty and we are furnished the military hardware
pursuant to that treaty, it is not in control of our armed forces nor control of our government. True
indeed, we have military officers trained in the U.S. armed forces school. This is part of our Military
Assistance Program, but it does not mean that the minds of our military officers are for the U.S. government,
no. I am one of those who took four courses in the United States schools, but I assure you, my mind is for
the Filipino people. Also, while we are sending military officers to train or to study in U.S. military schools,
we are also sending our officers to study in other military schools such as in Australia, England and in Paris.
So, it does not mean that when we send military officers to United States schools or to other military
schools, we will be under the control of that country. We also have foreign officers in our schools, we in the
Command and General Staff College in Fort Bonifacio and in our National Defense College, also in Fort
Bonifacio.377 (Emphases supplied)
This logic was accepted in Tañada v. Angara, in which the Court ruled that independence does not mean the
absence of foreign participation:
Furthermore, the constitutional policy of a "self-reliant and independent national economy" does not
necessarily rule out the entry of foreign investments, goods and services. It contemplates neither
"economic seclusion" nor "mendicancy in the international community." As explained by Constitutional
Commissioner Bernardo Villegas, sponsor of this constitutional policy:
Economic self reliance is a primary objective of a developing country that is keenly aware of
overdependence on external assistance for even its most basic needs. It does not mean autarky or economic
seclusion; rather, it means avoiding mendicancy in the international community. Independence refers to
the freedom from undue foreign control of the national economy, especially in such strategic industries as
in the development of natural resources and public utilities. 378 (Emphases supplied)
The heart of the constitutional restriction on foreign military facilities and bases is therefore the assertion of
independence from the U.S. and other foreign powers, as independence is exhibited by the degree of foreign
control exerted over these areas.1âwphi1 The essence of that independence is self-governance and self-
control.379 Independence itself is "[t]he state or condition of being free from dependence, subjection, or
control. "380
Petitioners assert that EDCA provides the U.S. extensive control and authority over Philippine facilities and
locations, such that the agreement effectively violates Section 25 of the 1987 Constitution. 381
Under Article VI(3) of EDCA, U.S. forces are authorized to act as necessary for "operational control and
defense." The term "operational control" has led petitioners to regard U.S. control over the Agreed
Locations as unqualified and, therefore, total.382 Petitioners contend that the word "their" refers to the
subject "Agreed Locations."
This argument misreads the text, which is quoted below:
United States forces are authorized to exercise all rights and authorities within Agreed Locations that are
necessary for their operational control or defense, including taking appropriate measure to protect United
States forces and United States contractors. The United States should coordinate such measures with
appropriate authorities of the Philippines.
A basic textual construction would show that the word "their," as understood above, is a possessive pronoun
for the subject "they," a third-person personal pronoun in plural form. Thus, "their" cannot be used for a
non-personal subject such as "Agreed Locations." The simple grammatical conclusion is that "their" refers
to the previous third-person plural noun, which is "United States forces." This conclusion is in line with the
definition of operational control.
a. U.S. operational control as the exercise of authority over U.S. personnel, and not over the Agreed
Locations
Operational control, as cited by both petitioner and respondents, is a military term referring to
[t]he authority to perform those functions of command over subordinate forces involving organizing and
employing commands and forces, assigning tasks, designating objective, and giving authoritative direction
necessary to accomplish the mission.383
At times, though, operational control can mean something slightly different. In JUSMAG Philippines v.
National Labor Relations Commission, the Memorandum of Agreement between the AFP and JUSMAG
Philippines defined the term as follows:384
The term "Operational Control" includes, but is not limited to, all personnel administrative actions, such as:
hiring recommendations; firing recommendations; position classification; discipline; nomination and
approval of incentive awards; and payroll computation.
Clearly, traditional standards define "operational control" as personnel control. Philippine law, for instance,
deems operational control as one exercised by police officers and civilian authorities over their subordinates
and is distinct from the administrative control that they also exercise over police subordinates. 385 Similarly, a
municipal mayor exercises operational control over the police within the municipal government, 386 just as
city mayor possesses the same power over the police within the city government.387
Thus, the legal concept of operational control involves authority over personnel in a commander-subordinate
relationship and does not include control over the Agreed Locations in this particular case. Though not
necessarily stated in EDCA provisions, this interpretation is readily implied by the reference to the taking of
"appropriate measures to protect United States forces and United States contractors."
It is but logical, even necessary, for the U.S. to have operational control over its own forces, in much the
same way that the Philippines exercises operational control over its own units.
For actual operations, EDCA is clear that any activity must be planned and pre-approved by the MDB-
SEB.388 This provision evinces the partnership aspect of EDCA, such that both stakeholders have a say on
how its provisions should be put into effect.
b. Operational control vis-à-vis effective command and control
Petitioners assert that beyond the concept of operational control over personnel, qualifying access to the
Agreed Locations by the Philippine Designated Authority with the phrase "consistent with operational safety
and security requirements in accordance with agreed procedures developed by the Parties" leads to the
conclusion that the U.S. exercises effective control over the Agreed Locations.389 They claim that if the
Philippines exercises possession of and control over a given area, its representative should not have to be
authorized by a special provision.390
For these reasons, petitioners argue that the "operational control" in EDCA is the "effective command and
control" in the 1947 MBA.391 In their Memorandum, they distinguish effective command and control from
operational control in U.S. parlance.392 Citing the Doctrine for the Armed Forces of the United States, Joint
Publication 1, "command and control (C2)" is defined as "the exercise of authority and direction by a
properly designated commander over assigned and attached forces in the accomplishment of the mission x x
x."393 Operational control, on the other hand, refers to "[t]hose functions of command over assigned forces
involving the composition of subordinate forces, the assignment of tasks, the designation of objectives, the
overall control of assigned resources, and the full authoritative direction necessary to accomplish the
mission."394
Two things demonstrate the errors in petitioners' line of argument.
Firstly, the phrase "consistent with operational safety and security requirements in accordance with agreed
procedures developed by the Parties" does not add any qualification beyond that which is already imposed
by existing treaties. To recall, EDCA is based upon prior treaties, namely the VFA and the MDT. 395 Treaties
are in themselves contracts from which rights and obligations may be claimed or waived. 396 In this particular
case, the Philippines has already agreed to abide by the security mechanisms that have long been in place
between the U.S. and the Philippines based on the implementation of their treaty relations. 397
Secondly, the full document cited by petitioners contradicts the equation of "operational control" with
"effective command and control," since it defines the terms quite differently, viz:398
Command and control encompasses the exercise of authority, responsibility, and direction by a commander
over assigned and attached forces to accomplish the mission. Command at all levels is the art of motivating
and directing people and organizations into action to accomplish missions. Control is inherent in command.
To control is to manage and direct forces and functions consistent with a commander's command authority.
Control of forces and functions helps commanders and staffs compute requirements, allocate means, and
integrate efforts. Mission command is the preferred method of exercising C2. A complete discussion of
tenets, organization, and processes for effective C2 is provided in Section B, "Command and Control of
Joint Forces," of Chapter V "Joint Command and Control."
Operational control is defined thus:399
OPCON is able to be delegated from a lesser authority than COCOM. It is the authority to perform those
functions of command over subordinate forces involving organizing and employing commands and forces,
assigning tasks, designating objectives, and giving authoritative direction over all aspects of military
operations and joint training necessary to accomplish the mission. It should be delegated to and exercised by
the commanders of subordinate organizations; normally, this authority is exercised through subordinate
JFCs, Service, and/or functional component commanders. OPCON provides authority to organize and
employ commands and forces as the commander considers necessary to accomplish assigned missions. It
does not include authoritative direction for logistics or matters of administration, discipline, internal
organization, or unit training. These elements of COCOM must be specifically delegated by the CCDR.
OPCON does include the authority to delineate functional responsibilities and operational areas of
subordinate JFCs.
Operational control is therefore the delegable aspect of combatant command, while command and control is
the overall power and responsibility exercised by the commander with reference to a mission. Operational
control is a narrower power and must be given, while command and control is plenary and vested in a
commander. Operational control does not include the planning, programming, budgeting, and execution
process input; the assignment of subordinate commanders; the building of relationships with Department of
Defense agencies; or the directive authority for logistics, whereas these factors are included in the concept of
command and control.400
This distinction, found in the same document cited by petitioners, destroys the very foundation of the
arguments they have built: that EDCA is the same as the MBA.
c. Limited operational control over the Agreed Locations only for construction activitites
As petitioners assert, EDCA indeed contains a specific provision that gives to the U.S. operational control
within the Agreed Locations during construction activities. 401 This exercise of operational control is
premised upon the approval by the MDB and the SEB of the construction activity through consultation and
mutual agreement on the requirements and standards of the construction, alteration, or improvement. 402
Despite this grant of operational control to the U.S., it must be emphasized that the grant is only for
construction activities. The narrow and limited instance wherein the U.S. is given operational control within
an Agreed Location cannot be equated with foreign military control, which is so abhorred by the
Constitution.
The clear import of the provision is that in the absence of construction activities, operational control over the
Agreed Location is vested in the Philippine authorities. This meaning is implicit in the specific grant of
operational control only during construction activities. The principle of constitutional
construction, "expressio unius est exclusio alterius," means the failure to mention the thing becomes the
ground for inferring that it was deliberately excluded.403 Following this construction, since EDCA mentions
the existence of U.S. operational control over the Agreed Locations for construction activities, then it is
quite logical to conclude that it is not exercised over other activities.
Limited control does not violate the Constitution. The fear of the commissioners was total control, to the
point that the foreign military forces might dictate the terms of their acts within the Philippines. 404 More
important, limited control does not mean an abdication or derogation of Philippine sovereignty and legal
jurisdiction over the Agreed Locations. It is more akin to the extension of diplomatic courtesies and rights to
diplomatic agents,405 which is a waiver of control on a limited scale and subject to the terms of the treaty.
This point leads us to the second standard envisioned by the framers of the Constitution: that the Philippines
must retain sovereignty and jurisdiction over its territory.
ii. Second standard: Philippine sovereignty and applicable law
EDCA states in its Preamble the "understanding for the United States not to establish a permanent military
presence or base in the territory of the Philippines." Further on, it likewise states the recognition that "all
United States access to and use of facilities and areas will be at the invitation of the Philippines and with full
respect for the Philippine Constitution and Philippine laws."
The sensitivity of EDCA provisions to the laws of the Philippines must be seen in light of Philippine
sovereignty and jurisdiction over the Agreed Locations.
Sovereignty is the possession of sovereign power,406 while jurisdiction is the conferment by law of power
and authority to apply the law.407 Article I of the 1987 Constitution states:
The national territory comprises the Philippine archipelago, with all the islands and waters embraced
therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its
terrestrial, fluvial, and aerial domains, including its territorial sea, the seabed, the subsoil, the insular
shelves, and other submarine areas. The waters around, between, and connecting the islands of the
archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines.
(Emphasis supplied)
From the text of EDCA itself, Agreed Locations are territories of the Philippines that the U.S. forces are
allowed to access and use.408 By withholding ownership of these areas and retaining unrestricted access to
them, the government asserts sovereignty over its territory. That sovereignty exists so long as the Filipino
people exist.409
Significantly, the Philippines retains primary responsibility for security with respect to the Agreed
Locations.410 Hence, Philippine law remains in force therein, and it cannot be said that jurisdiction has been
transferred to the U.S. Even the previously discussed necessary measures for operational control and defense
over U.S. forces must be coordinated with Philippine authorities.411
Jurisprudence bears out the fact that even under the former legal regime of the MBA, Philippine laws
continue to be in force within the bases.412 The difference between then and now is that EDCA retains the
primary jurisdiction of the Philippines over the security of the Agreed Locations, an important provision that
gives it actual control over those locations. Previously, it was the provost marshal of the U.S. who kept the
peace and enforced Philippine law in the bases. In this instance, Philippine forces act as peace officers, in
stark contrast to the 1947 MBA provisions on jurisdiction.413
iii. Third standard: must respect national security and territorial integrity
The last standard this Court must set is that the EDCA provisions on the Agreed Locations must not impair
or threaten the national security and territorial integrity of the Philippines.
This Court acknowledged in Bayan v. Zamora that the evolution of technology has essentially rendered the
prior notion of permanent military bases obsolete.
Moreover, military bases established within the territory of another state is no longer viable because of the
alternatives offered by new means and weapons of warfare such as nuclear weapons, guided missiles as well
as huge sea vessels that can stay afloat in the sea even for months and years without returning to their home
country. These military warships are actually used as substitutes for a land-home base not only of military
aircraft but also of military personnel and facilities. Besides, vessels are mobile as compared to a land-based
military headquarters.414
The VFA serves as the basis for the entry of U.S. troops in a limited scope. It does not allow, for instance,
the re-establishment of the Subic military base or the Clark Air Field as U.S. military reservations. In this
context, therefore, this Court has interpreted the restrictions on foreign bases, troops, or facilities as three
independent restrictions. In accord with this interpretation, each restriction must have its own qualification.
Petitioners quote from the website http://en.wikipedia.org to define what a military base is. 415 While the
source is not authoritative, petitioners make the point that the Agreed Locations, by granting access and use
to U.S. forces and contractors, are U.S. bases under a different name. 416 More important, they claim that the
Agreed Locations invite instances of attack on the Philippines from enemies of the U.S. 417
We believe that the raised fear of an attack on the Philippines is not in the realm of law, but of politics and
policy. At the very least, we can say that under international law, EDCA does not provide a legal basis for a
justified attack on the Philippines.
In the first place, international law disallows any attack on the Agreed Locations simply because of the
presence of U.S. personnel. Article 2(4) of the United Nations Charter states that "All Members shall refrain
in their international relations from the threat or use of force against the territorial integrity or political
independence of any state, or in any other manner inconsistent with the Purposes of the United
Nations."418 Any unlawful attack on the Philippines breaches the treaty, and triggers Article 51 of the same
charter, which guarantees the inherent right of individual or collective self-defence.
Moreover, even if the lawfulness of the attack were not in question, international humanitarian law standards
prevent participants in an armed conflict from targeting non-participants. International humanitarian law,
which is the branch of international law applicable to armed conflict, expressly limits allowable military
conduct exhibited by forces of a participant in an armed conflict. 419 Under this legal regime, participants to
an armed conflict are held to specific standards of conduct that require them to distinguish between
combatants and non-combatants,420 as embodied by the Geneva Conventions and their Additional
Protocols.421
Corollary to this point, Professor John Woodcliffe, professor of international law at the University of
Leicester, noted that there is no legal consensus for what constitutes a base, as opposed to other terms such
as "facilities" or "installation."422 In strategic literature, "base" is defined as an installation "over which the
user State has a right to exclusive control in an extraterritorial sense."423 Since this definition would exclude
most foreign military installations, a more important distinction must be made.
For Woodcliffe, a type of installation excluded from the definition of "base" is one that does not fulfill a
combat role. He cites an example of the use of the territory of a state for training purposes, such as to obtain
experience in local geography and climactic conditions or to carry out joint exercises. 424 Another example
given is an advanced communications technology installation for purposes of information gathering and
communication.425 Unsurprisingly, he deems these non-combat uses as borderline situations that would be
excluded from the functional understanding of military bases and installations. 426
By virtue of this ambiguity, the laws of war dictate that the status of a building or person is presumed to be
protected, unless proven otherwise.427 Moreover, the principle of distinction requires combatants in an
armed conflict to distinguish between lawful targets428 and protected targets.429 In an actual armed conflict
between the U.S. and a third state, the Agreed Locations cannot be considered U.S. territory, since
ownership of territory even in times of armed conflict does not change. 430
Hence, any armed attack by forces of a third state against an Agreed Location can only be legitimate under
international humanitarian law if it is against a bona fide U.S. military base, facility, or installation that
directly contributes to the military effort of the U.S. Moreover, the third state's forces must take all measures
to ensure that they have complied with the principle of distinction (between combatants and non-
combatants).
There is, then, ample legal protection for the Philippines under international law that would ensure its
territorial integrity and national security in the event an Agreed Location is subjected to attack. As EDCA
stands, it does not create the situation so feared by petitioners - one in which the Philippines, while not
participating in an armed conflict, would be legitimately targeted by an enemy of the U.S.431
In the second place, this is a policy question about the wisdom of allowing the presence of U.S. personnel
within our territory and is therefore outside the scope of judicial review.
Evidently, the concept of giving foreign troops access to "agreed" locations, areas, or facilities within the
military base of another sovereign state is nothing new on the international plane. In fact, this arrangement
has been used as the framework for several defense cooperation agreements, such as in the following:
1. 2006 U.S.-Bulgaria Defense Cooperation Agreement432
2. 2009 U.S.-Colombia Defense Cooperation Agreement433
3. 2009 U.S.-Poland Status of Forces Agreement434
4. 2014 U.S.-Australia Force Posture Agreement435
5. 2014 U.S.-Afghanistan Security and Defense Cooperation Agreement 436
In all of these arrangements, the host state grants U.S. forces access to their military bases. 437 That access is
without rental or similar costs to the U.S.438 Further, U.S. forces are allowed to undertake construction
activities in, and make alterations and improvements to, the agreed locations, facilities, or areas.439 As in
EDCA, the host states retain ownership and jurisdiction over the said bases. 440
In fact, some of the host states in these agreements give specific military-related rights to the U.S. For
example, under Article IV(l) of the US.-Bulgaria Defense Cooperation Agreement, "the United States forces
x x x are authorized access to and may use agreed facilities and areas x x x for staging and deploying of
forces and materiel, with the purpose of conducting x x x contingency operations and other missions,
including those undertaken in the framework of the North Atlantic Treaty." In some of these agreements,
host countries allow U.S. forces to construct facilities for the latter’s exclusive use. 441
Troop billeting, including construction of temporary structures, is nothing new. In Lim v. Executive
Secretary, the Court already upheld the Terms of Reference of Balikatan 02-1, which authorized U.S. forces
to set up "[t]emporary structures such as those for troop billeting, classroom instruction and messing x x x
during the Exercise." Similar provisions are also in the Mutual Logistics Support Agreement of 2002 and
2007, which are essentially executive agreements that implement the VFA, the MDT, and the 1953 Military
Assistance Agreement. These executive agreements similarly tackle the "reciprocal provision of logistic
support, supplies, and services,"442 which include "[b ]illeting, x x x operations support (and construction
and use of temporary structures incident to operations support), training services, x x x storage services, x x
x during an approved activity."443 These logistic supplies, support, and services include temporary use of
"nonlethal items of military equipment which are not designated as significant military equipment on the
U.S. Munitions List, during an approved activity."444 The first Mutual Logistics Support Agreement has
lapsed, while the second one has been extended until 2017 without any formal objection before this Court
from the Senate or any of its members.
The provisions in EDCA dealing with Agreed Locations are analogous to those in the aforementioned
executive agreements. Instead of authorizing the building of temporary structures as previous agreements
have done, EDCA authorizes the U.S. to build permanent structures or alter or improve existing ones for,
and to be owned by, the Philippines.445 EDCA is clear that the Philippines retains ownership of altered or
improved facilities and newly constructed permanent or non-relocatable structures.446 Under EDCA, U.S.
forces will also be allowed to use facilities and areas for "training; x x x; support and related activities; x x
x; temporary accommodation of personnel; communications" and agreed activities. 447
Concerns on national security problems that arise from foreign military equipment being present in the
Philippines must likewise be contextualized. Most significantly, the VFA already authorizes the presence
of U.S. military equipment in the country. Article VII of the VFA already authorizes the U.S. to import
into or acquire in the Philippines "equipment, materials, supplies, and other property" that will be used "in
connection with activities" contemplated therein. The same section also recognizes that "[t]itle to such
property shall remain" with the US and that they have the discretion to "remove such property from the
Philippines at any time."
There is nothing novel, either, in the EDCA provision on the prepositioning and storing of "defense
equipment, supplies, and materiel,"448 since these are sanctioned in the VFA. In fact, the two countries have
already entered into various implementing agreements in the past that are comparable to the present one.
The Balikatan 02-1 Terms of Reference mentioned in Lim v. Executive Secretary specifically recognizes that
Philippine and U.S. forces "may share x x x in the use of their resources, equipment and other assets." Both
the 2002 and 2007 Mutual Logistics Support Agreements speak of the provision of support and services,
including the "construction and use of temporary structures incident to operations support" and "storage
services" during approved activities.449 These logistic supplies, support, and services include the "temporary
use of x x x nonlethal items of military equipment which are not designated as significant military
equipment on the U.S. Munitions List, during an approved activity." 450 Those activities include "combined
exercises and training, operations and other deployments" and "cooperative efforts, such as humanitarian
assistance, disaster relief and rescue operations, and maritime anti-pollution operations" within or outside
Philippine territory.451 Under EDCA, the equipment, supplies, and materiel that will be prepositioned at
Agreed Locations include "humanitarian assistance and disaster relief equipment, supplies, and materiel.
"452 Nuclear weapons are specifically excluded from the materiel that will be prepositioned.
Therefore, there is no basis to invalidate EDCA on fears that it increases the threat to our national security.
If anything, EDCA increases the likelihood that, in an event requiring a defensive response, the Philippines
will be prepared alongside the U.S. to defend its islands and insure its territorial integrity pursuant to a
relationship built on the MDT and VFA.
8. Others issues and concerns raised
A point was raised during the oral arguments that the language of the MDT only refers to mutual help and
defense in the Pacific area.453 We believe that any discussion of the activities to be undertaken under
EDCA vis-a-vis the defense of areas beyond the Pacific is premature. We note that a proper petition on that
issue must be filed before we rule thereon. We also note that none of the petitions or memoranda has
attempted to discuss this issue, except only to theorize that the U.S. will not come to our aid in the event of
an attack outside of the Pacific. This is a matter of policy and is beyond the scope of this judicial review.
In reference to the issue on telecommunications, suffice it to say that the initial impression of the facility
adverted to does appear to be one of those that require a public franchise by way of congressional action
under Section 11, Article XII of the Constitution. As respondents submit, however, the system referred to in
the agreement does not provide telecommunications services to the public for compensation. 454 It is clear
from Article VIl(2) of EDCA that the telecommunication system is solely for the use of the U.S. and not the
public in general, and that this system will not interfere with that which local operators use. Consequently, a
public franchise is no longer necessary.
Additionally, the charge that EDCA allows nuclear weapons within Philippine territory is entirely
speculative. It is noteworthy that the agreement in fact specifies that the prepositioned materiel shall not
include nuclear weapons.455 Petitioners argue that only prepositioned nuclear weapons are prohibited by
EDCA; and that, therefore, the U.S. would insidiously bring nuclear weapons to Philippine territory.456 The
general prohibition on nuclear weapons, whether prepositioned or not, is already expressed in the 1987
Constitution.457 It would be unnecessary or superfluous to include all prohibitions already in the Constitution
or in the law through a document like EDCA.
Finally, petitioners allege that EDCA creates a tax exemption, which under the law must originate from
Congress. This allegation ignores jurisprudence on the government's assumption of tax liability. EDCA
simply states that the taxes on the use of water, electricity, and public utilities are for the account of the
Philippine Government.458 This provision creates a situation in which a contracting party assumes the tax
liability of the other.459 In National Power Corporation v. Province of Quezon, we distinguished between
enforceable and unenforceable stipulations on the assumption of tax liability. Afterwards, we concluded that
an enforceable assumption of tax liability requires the party assuming the liability to have actual interest in
the property taxed.460 This rule applies to EDCA, since the Philippine Government stands to benefit not only
from the structures to be built thereon or improved, but also from the joint training with U.S. forces, disaster
preparation, and the preferential use of Philippine suppliers. 461 Hence, the provision on the assumption of tax
liability does not constitute a tax exemption as petitioners have posited.
Additional issues were raised by petitioners, all relating principally to provisions already sufficiently
addressed above. This Court takes this occasion to emphasize that the agreement has been construed herein
as to absolutely disauthorize the violation of the Constitution or any applicable statute. On the contrary, the
applicability of Philippine law is explicit in EDCA.
EPILOGUE
The fear that EDCA is a reincarnation of the U.S. bases so zealously protested by noted personalities in
Philippine history arises not so much from xenophobia, but from a genuine desire for self-determination,
nationalism, and above all a commitment to ensure the independence of the Philippine Republic from any
foreign domination.
Mere fears, however, cannot curtail the exercise by the President of the Philippines of his Constitutional
prerogatives in respect of foreign affairs. They cannot cripple him when he deems that additional security
measures are made necessary by the times. As it stands, the Philippines through the Department of Foreign
Affairs has filed several diplomatic protests against the actions of the People's Republic of China in the
West Philippine Sea;462 initiated arbitration against that country under the United Nations Convention on the
Law of the Sea;463 is in the process of negotiations with the Moro Islamic Liberation Front for peace in
Southern Philippines,464 which is the subject of a current case before this Court; and faces increasing
incidents of kidnappings of Filipinos and foreigners allegedly by the Abu Sayyaf or the New People's
Army.465 The Philippine military is conducting reforms that seek to ensure the security and safety of the
nation in the years to come.466 In the future, the Philippines must navigate a world in which armed forces
fight with increasing sophistication in both strategy and technology, while employing asymmetric warfare
and remote weapons.
Additionally, our country is fighting a most terrifying enemy: the backlash of Mother Nature. The
Philippines is one of the countries most directly affected and damaged by climate change. It is no
coincidence that the record-setting tropical cyclone Yolanda (internationally named Haiyan), one of the
most devastating forces of nature the world has ever seen hit the Philippines on 8 November 2013 and killed
at least 6,000 people.467 This necessitated a massive rehabilitation project.468 In the aftermath, the U.S.
military was among the first to extend help and support to the Philippines.
That calamity brought out the best in the Filipinos as thousands upon thousands volunteered their help, their
wealth, and their prayers to those affected. It also brought to the fore the value of having friends in the
international community.
In order to keep the peace in its archipelago in this region of the world, and to sustain itself at the same time
against the destructive forces of nature, the Philippines will need friends. Who they are, and what form the
friendships will take, are for the President to decide. The only restriction is what the Constitution itself
expressly prohibits. It appears that this overarching concern for balancing constitutional requirements
against the dictates of necessity was what led to EDCA.
As it is, EDCA is not constitutionally infirm. As an executive agreement, it remains consistent with existing
laws and treaties that it purports to implement.
WHEREFORE, we hereby DISMISS the petitions.
SO ORDERED.
THIRD DIVISION
May 30, 2016
G.R. No. 180110
CAPITOL WIRELESS, INC., Petitioner,
vs.
THE PROVINCIAL TREASURER OF BATANGAS, THE PROVINCIAL ASSESSOR OF
BATANGAS, THE MUNICIPAL TREASURER AND ASSESSOR OF NASUGBU,
BATANGAS, Respondents.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul
and set aside the Court of Appeals’ Decision1 dated May 30, 2007 and Resolution2 dated October 8, 2007 in
CA-G.R. SP No. 82264, which both denied the appeal of petitioner against the decision of the Regional Trial
Court.
Below are the acts of the case.
Petitioner Capitol Wireless Inc. (Capwire) is a Philippine corporation in the business of providing
international telecommunications services. 3 As such provider, Capwire has signed agreements with other
local and foreign telecommunications companies covering an international network of
submarine cable systems such as the Asia Pacific Cable Network System (APCN) (which connects
Australia, Thailand, Malaysia, Singapore, Hong Kong, Taiwan, Korea, Japan, Indonesia and the
Philippines); the BruneiMalaysia-Philippines Cable Network System (BMP-CNS), the PhilippinesItaly
(SEA-ME-WE-3 CNS), and the Guam Philippines (GP-CNS) systems. 4 The agreements provide for co-
ownership and other rights among the parties over the network. 5
Petitioner Capwire claims that it is co-owner only of the so-called "Wet Segment" of the APCN, while the
landing stations or terminals and Segment E of APCN located in Nasugbu, Batangas are allegedly owned by
the Philippine Long Distance Telephone Corporation (PLDT). 6 Moreover, it alleges that the Wet Segment is
laid in inten1ational, and not Philippine, waters. 7
Capwire claims that as co-owner, it does not own any particular physical part of the cable system but,
consistent with its financial contributions, it owns the right to use a certain capacity of the said
systern. 8 This property right is allegedly reported in its financial books as "Indefeasible Rights in Cable
Systems."9
However, for loan restructuring purposes, Capwire claims that "it was required to register the value of its
right," hence, it engaged an appraiser to "assess the market value of the international submarine cable
system and the cost to Capwire." 10 On May 15, 2000, Capwire submitted a Sworn Statement of True Value
of Real Properties at the Provincial Treasurer's Office, Batangas City, Batangas Province, for the Wet
Segment of the system, stating:
System Sound Value
APCN P203,300,000.00
BMP-CNS p 65,662,000.00
SEA-ME-WE-3 CNSP P7,540,000.00
GP-CNS P1,789,000.00
Capwire claims that it also reported that the system "interconnects at the PLDT Landing Station in Nasugbu,
Batangas," which is covered by a transfer certificate of title and tax declarations in the name of PLDT. 11
As a result, the respondent Provincial Assessor of Batangas (Provincial Assessor) issued the following
Assessments of Real Property (ARP) against Capwire:
ARP Cable System Assessed Value
019-00967 BMP-CNS P52,529,600.00
019-00968 APCN P162,640,000.00
019-00969 SEA-ME-WE3-CNS P: 6,032,000.00
019-00970 GP-CNS P: 1,431,200.00
In essence, the Provincial Assessor had determined that the submarine cable systems described in Capwire's
Sworn Statement of True Value of Real Properties are taxable real property, a determination that was
contested by Capwire in an exchange of letters between the company and the public respondent. 12 The
reason cited by Capwire is that the cable system lies outside of Philippine territory, i.e., on international
waters. 13
On February 7, 2003 and March 4, 2003, Capwire received a Warrant of Levy and a Notice of Auction Sale,
respectively, from the respondent Provincial Treasurer of Batangas (Provincial Treasurer). 14
On March I 0, 2003, Capwire filed a Petition for Prohibition and Declaration of Nullity of Warrant of Levy,
Notice of Auction Sale and/or Auction Sale with the Regional Trial Court (RTC) of Batangas City. 15
After the filing of the public respondents' Comment, 16 on May 5, 2003, the RTC issued an Order dismissing
the petition for failure of the petitioner Capwire to follow the requisite of payment under protest as well as
failure to appeal to the Local Board of Assessment Appeals (LBAA), as provided for in Sections 206 and
226 of Republic Act (R.A.) No. 7160, or the Local Government Code. 17
Capwire filed a Motion for Reconsideration,18 but the same was likewise dismissed by the RTC in an
Order19 dated August 26, 2003. It then filed an appeal to the Court of Appeals. 20
On May 30, 2007, the Court of Appeals promulgated its Decision dismissing the appeal filed by Capwire
and affirming the order of the trial court.1âwphi1 The dispositive portion of the CA's decision states:
WHEREFORE, premises considered, the assailed Orders dated May 5, 2003 and August 26, 2003 of the
Regional Trial Court, Branch II of Batangas City, are AFFIRMED.
SO ORDERED.21
The appellate court held that the trial court correctly dismissed Capwire's petition because of the latter's
failure to comply with the requirements set in Sections 226 and 229 of the Local Government Code, that is,
by not availing of remedies before administrative bodies like the LBAA and the Central Board of
Assessment Appeals (CBAA). 22 Although Capwire claims that it saw no need to undergo administrative
proceedings because its petition raises purely legal questions, the appellate comi did not share this view and
noted that the case raises questions of fact, such as the extent to which parts of the submarine cable system
lie within the territorial jurisdiction of the taxing authorities, the public respondents. 23 Further, the CA noted
that Capwire failed to pay the tax assessed against it under protest, another strict requirement under Section
252 of the Local Government Code24
Hence, the instant petition for review of Capwire.
Petitioner Capwire asserts that recourse to the Local Board of Assessment Appeals, or payment of the tax
under protest, is inapplicable to the case at bar since there is no question of fact involved, or that the
question involved is not the reasonableness of the amount assessed but, rather, the authority and power of
the assessor to impose the tax and of the treasurer to collect it. 25 It contends that there is only a pure question
of law since the issue is whether its submarine cable system, which it claims lies in international waters, is
taxable.26 Capwire holds the position that the cable system is not subject to tax.27
Respondents assessors and treasurers of the Province of Batangas and Municipality of Nasugbu, Batangas
disagree with Capwire and insist that the case presents questions of fact such as the extent and portion of the
submarine cable system that lies within the jurisdiction of the said local governments, as well as the nature
of the so-called indefeasible rights as property of Capwire.28 Such questions are allegedly resolvable only
before administrative agencies like the Local Board of Assessment Appeals. 29
The Court confronts the following issues: Is the case cognizable by the administrative agencies and covered
by the requirements in Sections 226 and 229 of the Local Government Code which makes the dismissal of
Capwire's petition by the RTC proper? May submarine communications cables be classified as taxable real
property by the local governments?
The petition is denied. No error attended the ruling of the appellate court that the case involves factual
questions that should have been resolved before the appropriate administrative bodies.
In disputes involving real property taxation, the general rule is to require the taxpayer to first avail of
administrative remedies and pay the tax under protest before allowing any resort to a judicial action, except
when the assessment itself is alleged to be illegal or is made without legal authority. 30
For example, prior resort to administrative action is required when among the issues raised is an allegedly
erroneous assessment, like when the reasonableness of the amount is challenged, while direct court action is
permitted when only the legality, power, validity or authority of the; assessment itself is in question.JI Stated
differently, the general rule of a prerequisite recourse to administrative remedies applies when questions of
fact are raised, but the exception of direct court action is allowed when purely questions of law are
involved.32
This Court has previously and rather succinctly discussed the difference between a question of fact and a
question of law. In Cosmos Bottling Corporation v. Nagrama, Jr., 33 it held:
The Court has made numerous dichotomies between questions of law and fact. A reading of these
dichotomies shows that labels attached to law and fact are descriptive rather than definitive. We are not
alone in Our difficult task of clearly distinguishing questions of fact from questions of law. The United
States Supreme Court has ruled that: "we [do not] yet know of any other rule or principle that will
unerringly distinguish a factual finding from a legal conclusion."
In Ramos v. Pepsi-Cola Bottling Co. of the PI., the Court ruled:
There is a question of law in a given case when the doubt or difference arises as to what the law is on a
certain state of facts; there is a question of fact when the doubt or difference arises as to the truth or the
falsehood of alleged facts.
We shall label this the doubt dichotomy.
In Republic v. Sandiganbayan, the Court ruled:
x x x A question of law exists when the doubt or controversy concerns the correct application of law or
jurisprudence to a certain set of facts; or when the issue does not call for an examination of the probative
value of the evidence presented, the truth or falsehood of facts being admitted. In contrast, a question of fact
exists when the doubt or difference arises as to the truth or falsehood of facts or when the query invites
calibration of the whole evidence considering mainly the credibility of the witnesses, the existence and
relevancy of specific surrounding circumstances as well as their relation to each other and to the whole, and
the probability of the situation.
For the sake of brevity, We shall label this the law application and calibration dichotomy.
In contrast, the dynamic legal scholarship in the United States has birthed many commentaries on the
question of law and question of fact dichotomy. As early as 1944, the law was described as growing
downward toward "roots of fact" which grew upward to meet it. In 1950, the late Professor Louis Jaffe saw
fact and law as a spectrum, with one shade blending imperceptibly into the other. Others have defined
questions of law as those that deal with the general body of legal principles; questions of fact deal with "all
other phenomena xx x." Kenneth Culp Davis also weighed in and noted that the difference between fact and
law has been characterized as that between "ought" questions and "is" questions. 34
Guided by the quoted pronouncement, the Court sustains the CA's finding that petitioner's case is one replete
with questions of fact instead of pure questions of law, which renders its filing in a judicial forum improper
because it is instead cognizable by local administrative bodies like the Board of Assessment Appeals, which
are the proper venues for trying these factual issues. Verily, what is alleged by Capwire in its petition as "the
crux of the controversy," that is, "whether or not an indefeasible right over a submarine cable system that
lies in international waters can be subject to real property tax in the Philippines,"35 is not the genuine issue
that the case presents - as it is already obvious and fundamental that real property that lies outside of
Philippine territorial jurisdiction cannot be subjected to its domestic and sovereign power of real property
taxation - but, rather, such factual issues as the extent and status of Capwire's ownership of the system, the
actual length of the cable/s that lie in Philippine territory, and the corresponding assessment and taxes due
on the same, because the public respondents imposed and collected the assailed real property tax on the
finding that at least a portion or some portions of the submarine cable system that Capwire owns or co-owns
lies inside Philippine territory. Capwire's disagreement with such findings of the administrative bodies
presents little to no legal question that only the courts may directly resolve.
Instead, Capwire argues and makes claims on mere assumptions of certain facts as if they have been already
admitted or established, when they have not, since no evidence of such have yet been presented in the proper
agencies and even in the current petition. As such, it remains unsettled whether Capwire is a mere co-owner,
not full owner, of the subject submarine cable and, if the former, as to what extent; whether all or certain
portions of the cable are indeed submerged in water; and whether the waters wherein the cable/s is/are laid
are entirely outside of Philippine territorial or inland waters, i.e., in international waters. More simply,
Capwire argues based on mere legal conclusions, culminating on its claim of illegality of respondents' acts,
but the conclusions are yet unsupported by facts that should have been threshed out quasi-judicially before
the administrative agencies. It has been held that "a bare characterization in a petition of unlawfulness, is
merely a legal conclusion and a wish of the pleader, and such a legal conclusion unsubstantiated by facts
which could give it life, has no standing in any court where issues must be presented and determined by
facts in ordinary and concise language."36 Therefore, Capwire's resort to judicial action, premised on its
legal conclusion that its cables (the equipment being taxed) lie entirely on international waters, without first
administratively substantiating such a factual premise, is improper and was rightly denied. Its proposition
that the cables lie entirely beyond Philippine territory, and therefore, outside of Philippine sovereignty, is a
fact that is not subject to judicial notice since, on the contrary, and as will be explained later, it is in fact
certain that portions of the cable would definitely lie within Philippine waters. Jurisprudence on the Local
Government Code is clear that facts such as these must be threshed out administratively, as the courts in
these types of cases step in at the first instance only when pure questions of law are involved.
Nonetheless, We proceed to decide on whether submarine wires or cables used for communications may be
taxed like other real estate.
We hold in the affirmative.
Submarine or undersea communications cables are akin to electric transmission lines which this Court has
recently declared in Manila Electric Company v. City Assessor and City Treasurer of Lucena City, 37 as "no
longer exempted from real prope1iy tax" and may qualify as "machinery" subject to real property tax under
the Local Government Code. To the extent that the equipment's location is determinable to be within the
taxing authority's jurisdiction, the Court sees no reason to distinguish between submarine cables used for
communications and aerial or underground wires or lines used for electric transmission, so that both pieces
of property do not merit a different treatment in the aspect of real property taxation. Both electric lines and
communications cables, in the strictest sense, are not directly adhered to the soil but pass through posts,
relays or landing stations, but both may be classified under the term "machinery" as real property under
Article 415(5)38 of the Civil Code for the simple reason that such pieces of equipment serve the owner's
business or tend to meet the needs of his industry or works that are on real estate. Even objects in or on a
body of water may be classified as such, as "waters" is classified as an immovable under Article 415(8)39 of
the Code. A classic example is a boathouse which, by its nature, is a vessel and, therefore, a personal
property but, if it is tied to the shore and used as a residence, and since it floats on waters which is
immovable, is considered real property.40 Besides, the Court has already held that "it is a familiar
phenomenon to see things classed as real property for purposes of taxation which on general principle might
be considered personal property."41
Thus, absent any showing from Capwire of any express grant of an exemption for its lines and cables from
real property taxation, then this interpretation applies and Capwire's submarine cable may be held subject to
real property tax.
Having determined that Capwire is liable, and public respondents have the right to impose a real property
tax on its submarine cable, the issue that is unresolved is how much of such cable is taxable based on the
extent of Capwire's ownership or co-ownership of it and the length that is laid within respondents' taxing
jurisdiction. The matter, however, requires a factual determination that is best performed by the Local and
Central Boards of Assessment Appeals, a remedy which the petitioner did not avail of.
At any rate, given the importance of the issue, it is proper to lay down the other legal bases for the local
taxing authorities' power to tax portions of the submarine cables of petitioner. It is not in dispute that the
submarine cable system's Landing Station in Nasugbu, Batangas is owned by PLDT and not by Capwire.
Obviously, Capwire is not liable for the real property tax on this Landing Station. Nonetheless, Capwire
admits that it co-owns the submarine cable system that is subject of the tax assessed and being collected by
public respondents. As the Court takes judicial notice that Nasugbu is a coastal town and the surrounding
sea falls within what the United Nations Convention on the Law of the Sea (UN CLOS) would define as the
country's territorial sea (to the extent of 12 nautical miles outward from the nearest baseline, under Part II,
Sections 1 and 2) over which the country has sovereignty, including the seabed and subsoil, it follows that
indeed a portion of the submarine cable system lies within Philippine territory and thus falls within the
jurisdiction of the said local taxing authorities.42 It easily belies Capwire's contention that the cable system is
entirely in international waters. And even if such portion does not lie in the 12-nautical-mile vicinity of the
territorial sea but further inward, in Prof Magallona v. Hon. Ermita, et al.43 this Court held that "whether
referred to as Philippine 'internal waters' under A1iicle I of the Constitution 44 or as 'archipelagic waters'
under UNCLOS Part III, Article 49(1, 2, 4),45 the Philippines exercises sovereignty over the body of water
lying landward of (its) baselines, including the air space over it and the submarine areas underneath."
Further, under Part VI, Article 7946 of the UNCLOS, the Philippines clearly has jurisdiction with respect to
cables laid in its territory that are utilized in support of other installations and structures under its
jurisdiction.
And as far as local government units are concerned, the areas described above are to be considered
subsumed under the term "municipal waters" which, under the Local Government Code, includes "not only
streams, lakes, and tidal waters within the municipality, not being the subject of private ownership and not
comprised within the national parks, public forest, timber lands, forest reserves or fishery reserves, but also
marine waters included between two lines drawn perpendicularly to the general coastline from points where
the boundary lines of the municipality or city touch the sea at low tide and a third line parallel with the
general coastline and fifteen (15) kilometers from it."47 Although the term "municipal waters" appears in the
Code in the context of the grant of quarrying and fisheries privileges for a fee by local governments, 48 its
inclusion in the Code's Book II which covers local taxation means that it may also apply as guide in
determining the territorial extent of the local authorities' power to levy real property taxation.
Thus, the jurisdiction or authority over such part of the subject submarine cable system lying within
Philippine jurisdiction includes the authority to tax the same, for taxation is one of the three basic and
necessary attributes of sovereignty,49 and such authority has been delegated by the national legislature to the
local governments with respect to real property.50 taxation.
As earlier stated, a way for Capwire to claim that its cable system is not covered by such authority is by
showing a domestic enactment or even contract, or an international agreement or treaty exempting the same
from real property taxation. It failed to do so, however, despite the fact that the burden of proving exemption
from local taxation is upon whom the subject real property is declared. 51 Under the Local Government
Code, every person by or for whom real property is declared, who shall claim tax exemption for such
property from real property taxation "shall file with the provincial, city or municipal assessor within thirty
(30) days from the date of the declaration of real property sufficient documentary evidence in support of
such claim."52 Capwire omitted to do so. And even under Capwire's legislative franchise, RA 4387, which
amended RA 2037, where it may be derived that there was a grant of real property tax exemption for
properties that are part of its franchise, or directly meet the needs of its business, 53 such had been expressly
withdrawn by the Local Government Code, which took effect on January l, 1992, Sections 193 and 234 of
which provide:54
Section 193. Withdrawal of Tax Exemption Privileges. – Unless otherwise provided in this Code, tax
exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical,
including government-owned or controlled corporations, except local water districts, cooperatives duly
registered under R.A. No. 6938, nonstock and nonprofit hospitals and educational institutions, arc hereby
withdrawn upon the effectivity of this Code.
xxxx
Section 234. Exemptions from Real Property Tax. - The following are exempted from payment of the real
property tax:
(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when
the beneficial use thereof has been granted, for consideration of otherwise, to a taxable person;
(b) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, nonprofit or
religious cemeteries and all lands, buildings, and improvements actually, directly, and exclusively used for
religious, charitable or educational purposes;
(c) All machineries and equipment that are actually, directly and exclusively used by local water districts
and government-owned or controlled corporations engaged in the supply and distribution of water and/or
generation and transmission of electric power;
(d) All real property owned by duly registered cooperatives as provided for under R.A. No. 6938; and
(e) Machinery and equipment used for pollution control and environmental protection.
Except as provided herein, any exemption from payment of real property tax previously granted to,
or presently enjoyed by, all persons, whether natural or .iuridical, including all government-owned or
controlled corporations arc hereby withdrawn upon the cffectivity of this Code. 55
Such express withdrawal had been previously held effective upon exemptions bestowed by legislative
franchises granted prior to the effectivity of the Local Government Code. 56 Capwire fails to allege or
provide any other privilege or exemption that were granted to it by the legislature after the enactment of the
Local Government Code. Therefore, the presumption stays that it enjoys no such privilege or exemption.
Tax exemptions arc strictly construed against the taxpayer because taxes are considered the lifeblood of the
nation.57
WHEREFORE, the petition is DENIED. The Court of Appeals’ Decision dated May 30, 2007 and
Resolution dated October 8. 2007 are AFFIRMED.
SO ORDERED
FIRST DIVISION
January 31, 2018
G.R. No. 219581
PEOPLE OF THE PHILIPPINES, Plaintiff-Appellee
vs.
MAXIMO DELA PEÑA, Accused-Appellant
DECISION
DEL CASTILLO, J.:
Maximo De La Peña (appellant) filed this appeal assailing the December 16, 2014 Decision 1 of the Court of
Appeals (CA) in CA-G.R. CR-HC. No. 00834 which affirmed with modification the October 22, 2007
Decision2 of the Regional Trial Court (RTC) of Calbiga, Samar, Branch 33, in Criminal Case No. CC-2006-
1608 finding him guilty beyond reasonable doubt of the crime of piracy.
Appellant was charged, with the crime of piracy defined under Presidential Decree (PD) No. 532 allegedly
committed as follows:
That on or about the 24th day of September 2005, at about 1:00 o'clock in the morning, more or less, a1ong
the river bank of Barangay San Roque, Municipality of Villareal, Province of Samar, Philippines, and within
the jurisdiction of this Honorable Court, the above-named accused, conspiring, confederating, and mutually
helping one another, with deliberate intent to gain, by means of force and intimidation, did then and there
willfully, unlawfully and feloniously take and carry away the following items, to wit:
* 13 sacks of dried coconuts (copra) valued at ₱7,537.00[;]
* 2 pieces automatic watch (Seiko and citizen) valued at ₱6,796.00[:]
* 1 piece ([S]audi gold) valued at ₱4,731.00[;]
* 1 [N]okia cellphone 3350 valued at ₱3,615.00[;]
* 1 unit Briggs and [Stratton] 16 horse power with propeller valued at ₱26,000.00[;]
* cash money worth [₱] 1,000.00.
all in the amount of Forty Nine Thousand Six Hundred Seventy-Nine Pesos (₱49,679.00)to the damage and
prejudice of the said owner.
CONTRARY TO LAW.3
Appellant pleaded not guilty to the crime charged. His co-accused, Romy Real (Romy), Danny Real
(Danny), and Onyong Reyes (Onyong), have not been an-ested and remain fugitives from justice.
Version of the Prosecution
On September 24, 2005; at around 1:00 a.m., Julita Nacoboan (Julita), her husband, Jose Nacoboan (Jose),
and their son, Marwin Nacoboan (Marwin) were about to board their pump boat loaded with 13 sacks of
copra. These sacks of copra were supposed to be loaded and transferred to a bigger passenger boat that
would ferry the copra to Catbalogan, Samar. Their barangay is situated along a river which opens to the sea.
When the tide is low, the bigger passenger boat cannot dock along the shore so a smaller pump boat has to
be used to ferry the cargo to a bigger passenger boat.
As the Nacoboan's pump boat was about to depart, a smaller boat suddenly blocked its path. For fear of
collision, Jose stopped the engine of their pump boat Three armed men then immediately ordered the pump
boat. One of the armed men pointed a firearm at Jose arid ordered him to proceed to the aft or the rear side
of the boat. Julita identified him as the appellant. Jose's hands were tied and his head covered.
Another armed person grabbed Julita’s bag and took the following items:
1) ₱1,000.00 Cash; 2) Earrings; 3) Cellular phone; and 4) Necklace.
Another person operated the pump boat and docked it on a small island after nearly two hours of travel.
During the trip, Marwin’s shirt was taken off and used to blindfold Julita. When they arrived at the small
island, the appellant unloaded the 13 sacks of copra.
The appellant and his armed companions then brought the pump boat to another island where its engine,
prope1lertube, and tools were taken and loaded on appellant's boat. Consequently, the Nacoboan’s boat was
left without an engine and they had to paddle to safety. They discovered that they were already in Equiran,
Daram, Samar.
The following day, Julita went to the police authorities in Villareal, Samar to report the incident. She
reported that the value of the copra was then ₱15.00 per kilo and that the engine and other equipment lost
were valued at ₱30,000.00. She identified the appellant as one of the armed men who took control of their
boat and took away its engine, propeller tube, and tools since she had known him for 16 years already arid
she recognized him when he boarded their boat.
Version of the Defense
Appellant denied the accusa6on against him and testified that he was a resident of Brgy. San Roque,
Villareal, Samar for 15 years. He had been engaged in fishing for l0 years as a source of livelihood. He
claimed that from September ), 2005 up to December 5, 2005 he was fishing in Daram, Samar with Edgar
Pojas, Jose Dacletan (bacletan), Tope Dacletan, Nestor Bombay, and Esok Pojas. During the said period, he
smyed at the house of Barangay Kagawad Edgar Pojas and used the boat of Dacletan to fish.
After their fishing activity, appellant went home to Brgy. San Roque, Villareal, Samar. On December 6,
2005, four soldiers arrested and beat him up. He was brought to the Municipal Hall thereafter and was
imprisoned. He declared that he knew the complainants who were also residents of Brgy. San Roque;
Villareal, Samar but did not knew his co-accused Romy, Onyong, and Danny.
Ruling of the Regional Trial Court
On October 22, 2007, the RTC of Calbiga, Samar, Branch 33 rendered judgment finding appellant guilty of
piracy under PD 532. The RTC was convinced that the testimonies of Julita and Marwin positively
identifying the appellant as the one who boarded their boat and took away their cargo through violence or
intimidation were credible. The RTC ruled that appellant's denial and alibi could not prevail over the
positive identification made by the victims.
The dispositive portion of the RTC’s Decision reads:
WHEREFORE, AND IN VIEW OF ALL THE FOREGOING, the accused MAXIMO DE LA PEÑA is
sentenced to the penalty of imprisonment or RECLUSION PERPETUA, without [eligibility for] parole, and
to pay the victims the following:
1. ₱49,679.00, total amount lost;
2. ₱30,000.00 in exemplary damages;
3. ₱15,000.00 in moral damages;
4. ₱25,000.00 in nominal damages;
5. and to pay the costs.
Let the continued detention of the accused be transferred to the Leyte Regional Prison, as soon as possible.
Issue an alias order for the arrest of Onyong Reyes, Romy Real and Danny Real, accordingly.
Furnish copies of this decision to [the] PNP station, PNP Regional Office and its Directorate for operations. 4
Aggrieved by the RTC's Decision, appellant filed an appeal to the CA.
Ruling of the Court of Appeals
On December 16, 2014, the CA affirmed appellant’s conviction for the crime of piracy under PD 532 and
held as follows:
WHEREFORE, the appeal is hereby DENIED. The Decision dated October 22, 2007, convicting accused-
appellant for the crime of piracy penalized under PD No. 532 and sentencing him accordingly to suffer the
penalty of reclusion perpetua without (eligibility for) parole is AFFIRMED WITH MODIFICATION as
follows:
a. [₱]30,000.00 as temperate damages in lieu of actual damages;
b. the award of moral damages, nominal damages, and exemplary damages are deleted; and.
c. interest on all damages awarded at the rate of 6% per annum from the date of finality of this judgment
until such amounts shall have been fully paid.
Costs against accused-appellant.
SO ORDERED.5
Dissatisfied with the CA's Decision, and after denial of his Motion for Reconsideration, appellant filed a
Notice of Appeal.6
Issue
The issue in this case is whether appellant is guilty of piracy. According to appellant, the prosecution failed
to prove the elements of piracy under PD 532. Appellant insists that the RTC erroneously convicted him
since the prosecution failed to prove his guilt beyond reasonable doubt.
Our Ruling
The appeal lacks merit.
Section 2(d) of PD 532 defines piracy as follows:
Any attack upon or seizure of any vessel, or the taking away of the whole or part thereof or its cargo,
equipment, or the personal belongings of its complement or pa5sengers, irrespective of the value thereof, by
means of violence against or intimidation of persons or force upon things, committed by any person,
including a passenger or member of the complement of said vessel, in Philippine waters shall be considered
as piracy. x x x
In his Appellants Brief, appellant contends that the prosecution failed to prove the elements of piracy under
PD 532. He posits that the Information failed to allege the elements of the crime of piracy. Appellant
maintains that the Information did not state that the vessel in question was in Philippine waters and that its
cargo, equipment, or personal belongings of the passengers or complement were seized.
The Court disagrees.
The Information7 charged appellant of the crime of piracy to wit:
That on or about the 24th day of September 2005, at about 1:00 o'clock in the morning, more or less, along
the river bank of Barangay San Roque. Municipality of Villareal, Province of Samar, Philippines, and within
the jurisdiction of this Honorable court; the above-named accused, conspiring, confederating, and mutually
helping one another, with deliberate intent to gain, by means of force and intimidation, did then and there
willfully, unlawfully and feloniously take and carry away the following items, to wit:
* 13 sacks of dried coconuts (copra) valued at ₱7.537.00[;]
* 2 pieces automatic watch (Seiko and citizen) valued at ₱6,796.00[;]
* 1 piece ([S]audi gold] valued at ₱4,731.00[;]
* 1 [N]okia cellphone 3350 valued at ₱3,615.00[;]
* 1 unit Briggs and [Stratton] 16 horse power with propeller valued at ₱26,000.00[;]
* Cash money worth [₱]1,000.00.
all in the amount of Forty Nine Thousand Six Hundred Seventy Nine Pesos (₱49,679.00) to the damage and
prejudice of the said owner.
CONTRARY TO LAW.
The Information categorically alleged that the incident happened along the river bank of Brgy. San Roque,
Municipality of Villareal, Province of Samar. Under Section 2(a) of PD 532, "Philippine waters''' is defined
as follows:
[A]ll bodies of water, such as but not limited to, seas, gulfs, bays around, between and connecting each of
the Islands of the Philippine Archipelago, irrespective of its depth, breadth, length or dimension, and all
other waters belonging to the Philippines by historic or Iegal title, including territorial sea, the sea-bed, the
insular shelves, and other submarine areas over which the Philippines has sovereignty or jurisdiction.
(Emphasis supplied)
From this definition, it is clear that a river is considered part of Philippine waters.
The Information also clearly alleged that the vessel's cargo, equipment, and personal belongings of the
passengers were taken by the appellant and his armed companions. It stated, in no uncertain terms, that 13
sacks of copra were taken by the appellant through force and intimidation. Undoubtedly, these sacks of
copra were part of the vessel's cargo. The Information also stated that the vessel's equipment which
consisted of the engine, propeller tube, and tools were taken and carried away by the appellant. Furthermore,
the Information also stated that the personal belongings of the passengers consisting of two watches,
jewelry, cellphone, and cash money were taken by the appellant and his armed companions. The appellant
was able to seize these items when he, along with armed companions, boarded the victims' pump boat and
seized control of the same. Armed with firearms, appellant and his companions tied Jose's hands, covered
his head, and operated their pump boat. They travelled to an island in Samar where they unloaded the sacks
of copra. Thereafter, appellant and his armed companions travelled to another island where the engine,
propeller tube, and tools of the pump boat were taken out and loaded on appellant's boat.
From the foregoing, the Court finds that the prosecution was able to establish that the victims' pump boat
was in Philippine waters when appellant and his armed companions boarded the same and seized its cargo,
equipment, and the personal belongings of the passengers.
The Court finds no merit in appellant's contention that he was not positively identified by the prosecution's
witnesses. Fron1 the testimony of Julita, she positively identified the appellant as follows:
Q: Among the three (3) accused, can you recall who particularly pointed and levelled at your husband with
his knife?
A: It was Maximo De la Peña, ma'am
xxxx
Q: Who [among the three (3) accused unloaded the 13 sacks of copra]?
A: The [ones] who unloaded our [copra] were Maximo De la Peña and the person who was guarding me
with a short [fire]arm [whom] I do not know x x x. [T]he other one who was carrying a long [fire]arm [was]
in charge of the engine.8
The Court finds no reason to doubt the testimony of Julita identifying appellant as one of the assailants who
boarded their vessel and seized its cargo, equipment, and the passengers' personal belongings. Julita testified
that she was able to identify appellant because of the moonlight that illuminated the area. Further, she
testified that she then had a flashlight that allowed her to see who boarded the vessel. More importantly,
Juljta had known the appellant for 16 years since they reside in the same barangay.9 Appellant's bare denial
and alibi cannot prevail over the positive identification made by Julita. "Time and again, this Court has
consistently ruled that positive identification prevails over alibi since the latter can easily be fabricated and
is inherently unreliable."10 Since both the RTC and CA found Julita's testimony to be credible and
straightfo1ward, the Court thus finds no reason to disturb the same.
Lastly, appellant argues that the proper penalty should be reclusion temporal in its medium and maximum:
periods and not reclusion perpetua as imposed by the RTC.
Appellant's contention is incorrect, Section 3 of PD 532, provides:
Section 3. Penalties. Any person who commits piracy or highway robbery/brigandage as herein defined,
shall, upon conviction by competent court be punished by:
a. Piracy. The penalty of reclusion temporal in its medium ai.1d maximum periods shall be
imposed.1âwphi1 If physical injuries or other crimes are committed as a result or on the occasion thereof:
the penalty of reclusion perpetua shall be imposed. If rape murder or homicide is committed as a result or
on the occasion of piracy, or when the offenders abandoned the victims without means of saving themselves
or when the seizure is accomplished by firing upon or boarding a vessel, the mandatory penalty of death
shall be imposed. (Emphasis supplied)
In this case, it was established that the appellant and his armed companionsboarded the victims’ boat and
seized 13 sacks of copra, the boat's engine, propeller tube, and tools, as well as the contents of Julita’s bag.
Hence, from the provision above, the proper imposable penalty should be death. However, due to Republic
Act No. 9346, which prohibits the imposition of the death penalty, the Court thus finds. that the penalty
imposed by the RTC, which was reclusion perpetua without eligibility for parole, was correct since the
seizure of the vessel and its cargo was accomplished by boarding the vessel.
Anent the award of damages, the Court sustains the modification made by the CA in deleting the amount of
₱49,679.00 as actual damages and instead, awarding Julita temperate damages since she failed to
substantiate her losses with the necessary receipts. As we explained in Tan v. OMC Carriers. Inc.:11
Actual damages, to be recoverable, must not only be capable of proof, but must actually be proved with a
reasonable degree of certainty. Courts cannot simply rely on speculation, conjecture or guesswork in
determining the fact and amount of damages. To justify an award of actual damages there must be
competent proof of the actual amount of loss, credence can be given only to claims which are duly supported
by receipts.
The award of temperate damages is proper since under .Article 2224 of the Civil Code, temperature
damages may be recovered when the court finds that some pecuniary loss had been suffered but its amount
cannot, from the nature of the case, be proved with certainty. Likewise, the Court finds the deletion of
nominal damages proper. The CA is correct in holding that temperate and nominal damages arc
incompatible and thus, cannot be granted concurrently. Under Article 2221 of the Civil Code, nominal
damages are given in order that a right of the plafr1tift: which has been violated or invaded by the
defendant, may he vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any
loss suffered by him. Last1y, the deletion of the awards of moral and exemplary damages are also proper for
lack of factual and legal basis.
All told, based on the evidence on record, the Court finds no reason to disturb the findings of both the RTC
and the CA that appellant was guilty of piracy under PD 532.
WHEREFORE, the appeal is DISMISSED. The December 16, 2014 Decision of the Court of Appeals in
CA-G.R. CR-HC. No. 00834 finding appellant Maximo De La Peña GUILTY beyond reasonable doubt of
the crime of piracy defined and penalized under Presidential Decree No. 532 and sentencing him to suffer
the penalty of reclusion perpetua without eligibility for parole is AFFIRMED.
SO ORDERED.
[ G.R. No. 170867, December 04, 2018 ]
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY RAPHAEL P.M. LOTILLA, SECRETARY,
DEPARTMENT OF ENERGY (DOE), MARGARITO B. TEVES, SECRETARY, DEPARTMENT OF
FINANCE (DOF), AND ROMULO L. NERI, SECRETARY, DEPARTMENT OF BUDGET AND
MANAGEMENT (DBM), PETITIONERS, VS. PROVINCIAL GOVERNMENT OF
PALAWAN,REPRESENTED BY GOVERNOR ABRAHAM KAHLIL B. MITRA, RESPONDENT.
[G.R. No. 185941]
BISHOP PEDRO DULAY ARIGO, CESAR N. SARINO, DR. JOSE ANTONIO N. SOCRATES, PROF.
H. HARRY L. ROQUE, JR., PETITIONERS, VS. HON. EXECUTIVE SECRETARY EDUARDO R.
ERMITA, HON. ENERGY SECRETARY ANGELO T. REYES, HON. FINANCE SECRETARY
MARGARITO B. TEVES, HON. BUDGET AND MANAGEMENT SECRETARY ROLANDO D.
ANDAYA, JR., HON. PALAWAN GOVERNOR JOEL T. REYES, HON. REPRESENTATIVE
ANTONIO C. ALVAREZ (1ST DISTRICT), HON. REPRESENTATIVE ABRAHAM MITRA
(2ND DISTRICT), RAFAEL E. DEL PILAR, PRESIDENT AND CEO, PNOC EXPLORATION
CORPORATION, RESPONDENTS.
DECISION
TIJAM, J.:
G.R. No. 170867 is a petition for review on certiorari[1] under Rule 45 of the Rules of Court assailing the
Decision[2] dated December 16, 2005 of the Regional Trial Court (RTC) of Palawan, Branch 95 in Civil
Case No. 3779 which declared the Province of Palawan entitled to forty percent (40%) of the government's
earnings derived from the Camago-Malampaya natural gas project since October 16, 2001. The petition also
seeks ad cautelam to nullify the RTC Amended Order[3] dated January 16, 2006 which directed the
"freezing" of said 40% share under pain of contempt.
G.R. No. 185941 is a petition for review on certiorari[4] under Rule 45 of the Rules of Court assailing the
Resolution[5] dated May 29, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 102247 which dismissed
the certiorari petition questioning the constitutionality of Executive Order (E.O.) No. 683, [6] and the CA
Resolution[7] dated December 16, 2008 which denied the motion for reconsideration.
The Antecedents
The Camago-Malampaya Natural Gas Project
On December 11, 1990, the Republic of the Philippines (Republic or National Government), through the
Department of Energy (DoE), entered into Service Contract No. 38 with Shell Philippines Exploration B.V.
and Occidental Philippines, Incorporated (collectively SPEX/OXY), as Contractor, for the exclusive conduct
of petroleum operations in the area known as "Camago-Malampaya" located offshore northwest of Palawan.
Exploration of the area led to the drilling of the Camago-Malampaya natural gas reservoir about 80
kilometers from the main island of Palawan and 30 kms from the platform. [8]
The nearest point of the Camago-Malampaya production area is at a distance of 93.264 kms or 50.3585
nautical miles to the Kalayaan Island Group (Kalayaan); 55.476 kms or 29.9546 nm to mainland Palawan
(Nacpan Point, south of Patuyo Cove, Municipality of El Nido); and 48.843 kms or 26.9546 nm to the
Province of Palawan (northwest of Tapiutan Island, Municipality of El Nido). [9]
The quantity of natural gas contained in the Camago-Malampaya was estimated to be sufficient to justify the
pursuit of gas-to-power projects having an aggregate power-generating capacity of approximately 3,000
megawatts operating at baseload for 20 to 25 years.[10]
Service Contract No. 38, as clarified by the Memorandum of Clarification between the same parties dated
December 11, 1990, provides for a production sharing scheme whereby the National Government was
entitled to receive an amount equal to sixty percent (60%) of the net proceeds[11] from the sale of petroleum
(including natural gas) produced from petroleum operations while SPEX/OXY, as service contractor, was
entitled to receive an amount equal to forty percent (40%) of the net proceeds.[12]
The Contractor was subsequently composed of the consortium of SPEX, Shell Philippines LLC, Chevron
Malampaya LLC and Philippine National Oil Company-Exploration Corporation (PNOC-EC).[13]
Administrative Order No. 381
On February 17, 1998, President Fidel V. Ramos issued Administrative Order (A.O.) No. 381[14] which, in
part, stated that the Province of Palawan was expected to receive about US$2.1 Billion from the estimated
US$8.1 Billion total government share from the Camago-Malampaya natural gas project for the 20-year
contract period.[15]
On June 10, 1998, DoE Secretary Francisco L. Viray wrote Palawan Governor Salvador P. Socrates,
requesting for the deferment of payment of 50% of Palawan's share in the project for the first seven years of
operations, estimated at US$222.89 Million, which it would use to pay for the National Power Corporation's
Take-or-Pay Quantity (TOPQ) obligations under the latter's Gas Sale and Purchase Agreements with
SPEX/OXY.[16]
On October 16, 2001, the Camago-Malampaya natural gas project was inaugurated.[17]
Palawan's Claim
The Provincial Government of Palawan asserted its claim over forty percent (40%) of the National
Government's share in the proceeds of the project. It argued that since the reservoir is located within its
territorial jurisdiction, it is entitled to said share under Section 290 [18] of the Local Government Code. The
National Government disputed the claim, arguing that since the gas fields were approximately 80 k.ms from
Palawan's coastline, they are outside the territorial jurisdiction of the province and is within the national
territory of the Philippines.[19]
Negotiations took place between the National Government and the Provincial Government of Palawan on
the sharing of the proceeds from the project, with the former proposing to give Palawan 20% of said
proceeds after tax. The negotiations, however, were unsuccessful. On March 14, 2003, in a letter to the
Secretaries of the Department of Energy (DoE), the Department of Budget and Management (DBM) and the
Department of Finance (DoF), Palawan Governor Mario Joel T. Reyes (Governor Reyes) reiterated his
province's demand for the release of its 40% share. Attached to said letter was Resolution No. 5340-03[20] of
the Sangguniang Panlalawigan of Palawan calling off further negotiations with the National Government
and authorizing Governor Reyes to engage legal services to prosecute the province's claim. [21]
Civil Case No. 3779
On May 7, 2003, the Provincial Government of Palawan filed a petition [22] for declaratory relief before the
RTC of Palawan and Puerto Princesa against DoE Secretary Vicente S. Perez, Jr., DoF Secretary Jose Isidro
N. Camacho and DBM Secretary Emilia T. Boncodin (Department Secretaries), docketed as Civil Case No.
3779. It sought judicial determination of its rights under A.O. No. 381 (1998), Republic Act (R.A.) No.
7611[23] or the Strategic Environmental Plan (SEP) for Palawan Act, Section 290 of R.A. No. 7160 [24] or the
Local Government Code of 1991 (Local Government Code), and Provincial Ordinance No. 474 [25] (series of
2000). It asked the RTC to declare that the Camago-Malampaya natural gas reservoir is part of the territorial
jurisdiction of the Province of Palawan and that the Provincial Government of Palawan was entitled to
receive 40% of the National Government's share in the proceeds of the Camago-Malampaya natural gas
project.[26]
Commenting on the petition, the Republic maintained that Palawan was not entitled to the 40% share
because the Camago-Malampaya reservoir is outside its territorial jurisdiction. It postulated that Palawan's
territorial jurisdiction is limited to its land area and to the municipal waters within 15 km from its coastline.
It denied being estopped by the acts of government officials who earlier acknowledged Palawan's share in
the proceeds of the project.[27]
The Interim Agreement
On February 9, 2005, DoE Secretary Vincent S. Perez, Jr., DBM Secretary Mario L. Relampagos and DoF
Secretary Juanita D. Amatong, with authority from President Gloria Macapagal-Arroyo, executed an Interim
Agreement[28] with the Province of Palawan, represented by its Governor Reyes. The agreement provided for
the equal sharing between the National Government and the Province of Palawan of 40% of (a) the funds
already remitted to the National Government under Service Contract No. 38 and (b) the funds to be remitted
to the National Government up the earlier of (i) the effective date of the final and executory judgment on the
petition by a court of competent jurisdiction on Civil Case No. 3779, or (ii) June 30, 2010. The parties also
agreed that the amount of P600 Million, which was previously released to the Province of Palawan under
E.O. Nos. 254 and 254-A, would be deducted from the initial release of the province's 50% share.
Furthermore, the release of funds under the agreement would be without prejudice to the respective
positions of the parties . in any legal dispute regarding the territorial jurisdiction over the Camago-
Malampaya area. Should Civil Case No. 3779 be decided with finality in favor of either party, the Interim
Agreement treated the share which the prevailing party has received as financial assistance to the other. [29]
The Province of Palawan claims that the National Government failed to fulfill their commitments under the
Interim Agreement and that it has not received its stipulated share since it was signed. [30]
The RTC Rulings in Civil Case No. 3779
On December 16, 2005, the RTC decided Civil Case No. 3779 in favor of the Province of Palawan,
disposing as follows:
WHEREFORE, premises considered, the Court declares that the province of Palawan is entitled to the 40%
share of the national wealth pursuant to the provisions of Sec. 7, Article X of the 1987 Constitution and this
right is in accord with the provisions of the Enabling Act, R.A. 7160 (The Local Government Code of
1991), computed based on revenues generated from the Camago-Malampaya Natural Gas Project since
October 16, 2001.
IT IS SO ORDERED.[31]
The RTC held that it was "unthinkable" to limit Palawan's territorial jurisdiction to its landmass and
municipal waters considering that the Local Government Code empowered them to protect the environment,
and R.A. No. 7611 adopted a comprehensive framework for the sustainable development of Palawan
compatible with protecting and enhancing the natural resources and endangered environment of the
province.[32]
Applying the principles of decentralization and devolution of powers to local government units (LGUs) as
recognized in the 1987 Constitution, the RTC explained that the State's resources must be shared with the
LGUs if they were expected to deliver basic services to their constituents and to discharge their functions as
agents of the State in enforcing laws, preserving the integrity of the national territory and protecting the
environment.[33]
The RTC rejected the Department Secretaries' reliance on the cases of Tan v. COMELEC[34] and Laguna
Lake Development Authority v. CA[35] (LLDA) in arguing that territorial jurisdiction refers only to landmass.
The RTC held that the cases were inapplicable as Tan was an election controversy involving the creation of
a new province while LLDA merely highlighted the primacy of the said agency's Charter over the Local
Government Code. The 1950 case of Municipality of Paoay v. Manaois,[36] where a municipality was
declared as holding only a usufruct, not exclusive. ownership, over the municipal waters, was also held to be
inapplicable since it was rendered before the principle of local autonomy was instituted in the 1987
Constitution and the Local Government Code.[37]
The RTC further declared that the Regalian Doctrine could not be used by the Department Secretaries as a
shield to defeat the Constitutional provision giving LGUs an equitable share in the proceeds of the
utilization and development of national wealth within their respective areas. The doctrine, said the RTC, is
subject to this Constitutional limitation and the 40% LGU share set by the Local Government Code. [38]
Finally, the RTC noted that from 1992 to 1998, Palawan received a total of P116,343,197.76 from
collections derived from the West Linapacan Oil Fields, and that former President Fidel V. Ramos issued
A.O. No. 381 acknowledging Palawan's claim and share in the proceeds of the Camago-Malampaya project.
The RTC, thus, held that by its previous actions and issuances, the National Government legally
acknowledged Palawan's claim to the proceeds of the Camago-Malampaya project and it was "too late in the
day for [it] to take a 180 degree turn."[39]
On December 29, 2005, the Provincial Government of Palawan filed a motion to require the Secretaries of
the DoE, DoF and DBM to render a full accounting of actual payments made by SPEX to the Bureau of
Treasury from October 1, 2001 to December 2005, and to freeze and/or place Palawan's 40% share in an
escrow account.[40]
On January 4, 2006, the aforesaid Secretaries filed an urgent manifestation asserting that the motion was
premature and should not be heard by the RTC because the Republic still had fifteen (15) days to appeal. [41]
The Provincial Government of Palawan countered that pending finality of the December 16, 2005 Decision,
there was a need to secure its 40% share over which it had a "vested and inchoate right." [42]
The RTC subsequently issued an Order which was erroneously dated December 16, 2006 and later amended
to indicate the date as January 16, 2006.[43] The dispositive portion of the Amended Order[44] reads:
WHEREFORE, premises considered, the public respondents individually or collectively DIRECTED within
ten (10) days from receipt of this Order pursuant to a "Freeze Order" hereby granted by this Court:
a. HON. Respondent SECRETARY OF THE DEPARTMENT OF ENERGY RAPHAEL P.M. LOTILLA
To render a FULL ACCOUNTING of the total gross collections derived by the National Government from
the development and utilization of Camago-Malampaya national gas project for the period January 2002 to
December 2005, including its conversion to peso denomination and showing the 40% LGU share and
henceforth, submit MONTHLY an accounting of all succeeding collections until the finality of the decision;
b. HON. Respondent SECRETARY OF FINANCE MARGARITO TEVEZ-
To submit a full report of the actual payments made by Shell Spex from January 2002 to December 2005
deposited under Special Account 151 of the Bureau of Treasury, Department of Finance, including the dates
when the payments were made, the Official Receipts covering the same and the present status, particularly
the disputed 40% LOU share for Palawan and to make MONTHLY reports of actual payments received
during the pendency of this case;
c. HON. Respondent SECRETARY DEPARTMENT OF BUDGET [sic] ROMULO NERI
Effective immediately, NOT TO ISSUE nor CHARGE allotment release orders, disbursements and cash
allocation against the deposit/account Special Fund 151 corresponding to the 40% LOU share for the period
January 2002 to December 2005 pending the finality of the decision in this case.
d. ALL RESPONDENTS, collectively or individually, effective immediately, CEASE and DESIST from
USING/DISBURSING the 40% share of the LOU-Palawan, for any other purpose, except in compliance
with the decision of this Court dated December 16, 2005, under pain of CONTEMPT, until the finality of
the decision;
e. Furthermore, the HON. Respondent Secretary of Finance Margarito Tevez [sic] and/or his subordinate
officer Hon. Omar T. Cruz Treasurer of the Philippines, to deposit in escrow in the LAND BANK OF THE
PHILIPPINES the fund/deposit to the 40% disputed LOU share, identified as Special Account 151, and to
"freeze" said account, under pain of CONTEMPT, until finality of the decision or except as directed by this
Court pursuant to the Decision dated December 16, 2005.
IT IS SO ORDERED.[45]
The RTC held that the motion for full accounting and freezing of Palawan's claimed 40% share was actually
part of the petition for review which sought to declare the duties of the National Government and the rights
of the Provincial Government of Palawan, and that a resolution thereof would guide this Court as to the
actual amount due the local government since it is not a trier of facts.[46] The RTC also noted that the
National Government's track record in complying with the Constitutional provisions on local autonomy was
not exactly immaculate as supposedly evidenced by the case of Gov. Mandanas v. Hon. Romulo[47] where,
after sharing with the Province of Palawan collections from the West Linapacan oil fields from 1992 to
1998, the National Government "turned its back on its legal commitment to the former." The trial court
stressed that the local government of Palawan was merely preempting any possible dissipation of funds that
would render any judgment favorable to it an empty victory. [48]
On February 6, 2006, the Department Secretaries filed a motion for reconsideration [49] of the Amended
Order dated January 16, 2006.[50]
G.R. No. 170867
On February 16, 2006, the Republic, represented by DoE Secretary Raphael P.M. Lotilla, DoF Secretary
Margarita B. Teves and DBM Secretary Romulo L. Neri, challenged the RTC's December 16, 2005
Decision before this Court through a petition for review[51] docketed as G.R. No. 170867. In the same
petition, the Republic, in anticipation of the RTC's denial of its motion for reconsideration, also assailed the
January 16, 2006 Amended Order ad cautelam, ascribing grave abuse of discretion to the RTC for granting
affirmative relief in a special civil action for declaratory relief.[52]
On June 6, 2006, the RTC in its Order[53] lifted its January 16, 2006 Order, holding that:
[A] becoming sense of modesty on the part of this Court, compels it to defer to the Supreme Court's First
Division as the Movants have deviously appealed to the High Court the very issues raised in the Motion for
Reconsideration now pending before this Court.[54]
The dispositive portion of the RTC's June 6, 2006 Order, thus, reads:
WHEREFORE, premises considered, the Amended Order dated January 16, 2006 is hereby LIFTED and
SET ASIDE to await final determination thereof in view of the Petition for Review on Certiorari filed by
Movants in this case directly with the Supreme Court.
IT IS SO ORDERED.[55]
Consequently, the Republic manifested to the Court that its ad cautelam arguments relative to the Amended
Order dated January 16, 2006 need no longer be resolved unless the Provincial Government of Palawan
raised the same in its comment.[56]
The Provisional Implementation Agreement
On July 25, 2007, the duly authorized representatives of the National Government and the Province of
Palawan, with the conformity of the Representatives of the Congressional Districts of Palawan, agreed on a
Provisional Implementation Agreement (PIA) that allowed 50% of the disputed 40% of the Net Government
Share in the proceeds of Service Contract No. 38 to be utilized for the immediate and effective
implementation of development projects for the people of Palawan.[57]
E.O. No. 683
On December 1, 2007, President Gloria Macapagal-Arroyo issued E.O. No. 683 which authorized the
release of funds to the implementing agencies pursuant to the PIA, without prejudice to any ongoing
discussion or the final judicial resolution of Palawan's claim of territorial jurisdiction over the Camago-
Malampaya area. E.O. No. 683 provided:
SECTION 1. Subject to existing laws, and the usual government accounting and auditing rules and
regulations, the Department of Budget and Management (DBM) is hereby authorized to release funds to the
implementing agencies (lA) pursuant to the PIA, upon the endorsement and submission by the DOE and/or
the PNOC Exploration Corporation of the following documents:
1.1. Directive by the Office of the President or written request of the Province of Palawan, the Palawan
Congressional Districts or the Highly Urbanized City of Puerto Princes[a], for the funding of designated
projects;
1.2. A certification that the designated projects fall under the investment program of the Province of
Palawan, City of Puerto Princesa, and/or the development projects identified in the development program of
the National Government or its agencies; and
1.3. Bureau of Treasury certification on the availability of funds from the 50% of the 40% share being
claimed by the Province of Palawan from the Net Government Share under SC 38;
Provided, that the DBM shall be subject to the actual collections deposited with the National Treasury, and
shall be in accordance with the Annual Fiscal Program of the National Government.
SECTION 2. The IA to whom the DBM released the funds pursuant to Section 1 hereof shall be accountable
for the implementation of the projects and the expenditures thereon, subject to applicable laws and existing
budgeting, accounting and auditing rules and regulations. For recording purposes, the DBM may authorize
the IAs to open and maintain a special account for the amounts released pursuant to this Executive Order
(EO).
SECTION 3. The National government, with due regard to the pending judicial dispute, shall allow the
Province of Palawan, the Congressional Districts of Palawan and the City of Puerto Princesa to securitize
their respective shares in the 50% of the disputed 40% of the Net Government Share in the proceeds of SC
38 pursuant to the PIA. For the purpose, the DOE shall, in consultation with the Department of Finance, be
responsible for preparing the Net Government Revenues for the period of to June 30, 2010.
SECTION 4. The amounts released pursuant to this EO shall be without prejudice to any on-going
discussions or final judicial resolution of the legal dispute regarding the National Government's territorial
jurisdiction over the areas covered by SC 38 in relation to the claim of the Province of Palawan under Sec.
290 of RA 7160.
CA-G.R. SP No. 102247
On February 7, 2008, a petition for certiorari[58] questioning the constitutionality of E.O. No. 683 was filed
before the CA by Bishop Pedro Dulay. Arigo, Cesar N. Sarino, Dr. Jose Antonio N. Socrates and Prof. H.
Harry L. Roque, Jr. (Arigo, et al.), as citizens and taxpayers, against Executive Secretary Eduardo R. Ermita
(Executive Secretary Ermita), DoE Secretary Angelo T. Reyes (DoE Secretary Reyes), DoF Secretary
Margarito B. Teves, DBM Secretary Rolando D. Andaya, Jr., Palawan Governor Reyes, Representative
Antonio C. Alvarez (Alvarez) of the First District of Palawan, Representative Abraham Mitra (Mitra) and
Rafael E. Del Pilar, President and Chief Executive Officer, PNOC-EC. Docketed as CA-G.R. SP No.
102247, the petition also asked the CA to: (1) prohibit respondents therein from disbursing funds allocated
under E.O. No. 683; (2) direct the National Government to release the 40% allocation of the Province of
Palawan from the proceeds of the Camago-Malampaya project pursuant to the sharing formula under the
Constitution and the Local Government Code; and (3) prohibit the parties to the PIA from implementing the
same for being violative of the Constitution and the Local Government Code.[59]
In a Resolution dated March 18, 2008, the CA required Arigo, et al. to submit, within five (5) days from
notice, copies of relevant pleadings and other material documents, namely: (1) the petition for review
on certiorari, docketed as G.R. No. 170867, filed before this Court; (2) the RTC's Decision in Civil Case
No. 3779; (3) the motion for reconsideration of said RTC Decision; (4) the Service Contract No. 38; and (5)
the PIA, as required under Section 1, Rule 65, in relation to Section 3, Rule 46 of the Rules of Court.[60]
Arigo, et al. asked for additional ten (10) days to comply with the Resolution, which the CA granted. They
later submitted the required documents except for the copies of the petition in G.R. No. 170867 and the PIA.
They informed the CA that despite having made a formal request for said petition, they were unable to
secure a copy because they were not parties to the case. The Third Division's Clerk of Court also informed
them that the records of G.R. No. 170867 were unavailable as the case had already been submitted to
the ponente for resolution. Though unable to obtain a copy of the PIA, they submitted a copy of Service
Contract No. 38 which they supposedly secured from "unofficial sources." Considering the difficulty they
allegedly encountered in obtaining the documents, they asked the CA to direct DoE Secretary Reyes and
Executive Secretary Ermita to submit a copy of the petition in G.R. No. 170867 and Service Contract No.
38, respectively. They also asked the CA to require any of the respondents officials of the Province of
Palawan to submit a copy of the PIA to which they were supposed to have been signatories. [61]
Ruling of the CA
In the CA's Resolution[62] dated May 29, 2008, Arigo et al.'s petition for certiorari was denied due course
and dismissed. The CA held that the task of submitting relevant documents fell squarely on Arigo, et al. as
petitioners invoking its jurisdiction. It added that Arigo, et al. should have submitted a certification from this
Court's Third Division concerning the unavailability of the records of G.R. No. 170867 and that they could
have simply secured a copy of the PIA from the Malacañang Records Office as the official repository of all
documents related to the Executive's functions.
The CA also held that apart from its procedural defect, the petition was also prematurely filed considering
that it was anchored on the same essential facts and circumstances and raised the same issues in G.R. No.
170867. The CA likewise noted that the interim undertaking between the parties to the PIA was contingent
on the final adjudication of G.R. No. 170867. Taking judicial notice of on-going efforts of both legislative
and executive departments to arrive at a common position in redefining the country's baseline in the light of
the United Nations Convention on the Law of the Sea (UNCLOS), the appeals court further explained that
ruling on the case may be tantamount to a collateral adjudication of the archipelagic baseline which involved
a policy issue.[63]
Arigo, et al. asked the CA to reconsider its May 29, 2008 Resolution and later submitted an original
duplicate of the Resolution[64] dated June 23, 2008 of this Court's Third Division which denied their
counsel's request for certified true copies of certain documents since it was not a counsel for any party. [65]
On December 16, 2008, the CA issued a Resolution[66] denying the motion for reconsideration.
G.R. No. 185941 (Arigo, et al. petition)
On February 23, 2009, Arigo, et al. filed a petition for review on certiorari[67] over the CA's May 29, 2008
and December 16, 2008 Resolutions, arguing that the case was ripe for decision and that the documents
required by the CA were not necessary.[68] They assert anew their constitutional challenge to E.O. No. 638,
claiming that it was in violation of the mandated equitable sharing of resources between the National
Government and LGUs.[69]
Consolidation of Cases
On June 23, 2009, the Court in its Resolution[70] consolidated G.R. No. 185941 with G.R. No. 170867.
Oral Argument
On September 1, 2009[71] and November 24, 2009,[72] the cases were heard on oral argument. After the
parties presented their respective arguments, the Court heard the opinions of Atty. Henry Bensurto, Jr. (Atty.
Bensurto) of the Department of Foreign Affairs and Dean Raul Pangalangan of the University of the
Philippines as amici curiae.
Remittances under Service Contract No. 38
As of August 31, 2009, the amounts remitted to the DoE under Service Contract No. 38 are as follows: [73]
Year Total Collection
2002 646,333,100.11 The Republic

2003 1,475,334,680.12 1. An LGU's territorial jurisdiction refers only to its land area. [76]
1.1. Since Section 7 of the Local Government Code uses "population" and "land area" as indicators in the
2004 1,631,245,574.33 creation and conversion of LGUs, it follows that the territorial jurisdiction is the land where the people live
and excludes seas or marine areas.[77]
2005 2,393,400,010.73 1.2. In describing the territorial requirement for a province, Section 461(a)(i) of the Local Government Code
speaks of "a contiguous territory, as certified by the Lands Management Bureau" while Section 461(b) of the
same law provides that "the territory need not be contiguous if it comprises two (2) or more islands,"
2006 5,369,720,905.73
indicating that "territory" is limited to the landmass.[78]
1.3. "Territory" as used in Section 461 of the Local Government Code and "land area" as used in Section 7
2007 8,228,450 883.72 of the same law, must be attested to by the Lands Management Bureau which has jurisdiction only over land
areas.[79]
2008 25,498 646,553.39 1.4. In Tan,[80] the Court interpreted "territory" to refer only to the mass of land above sea water and
excludes the waters over which the political unit exercises control.[81] The RTC erred in holding that Tan is
January 1 to August 31, 2009 15,947,078,304.12 not applicable when it also involved the issue of whether the province should include the waters around it.
Tan applies whether the purpose is the creation of a province or the determination of its territorial
Total 61,190,210,012.25 jurisdiction.[82]
2. The area referred to under Section 7, Article X of the 1987 Constitution, which grants LGUs a share in the
Based on the aforesaid remittances, the Republic computed the share claimed by the Province of Palawan proceeds of the utilization and development of national wealth within their respective areas, refers .to the
(as of August 31, 2009) as follows:[74] territorial boundaries of the LGU as defined in its charter and not to its exercise of jurisdiction. [83]
2.1. As examples of such national wealth, members of the 1986 Constitutional Commission referred to
Source of Assistance to the LGUs natural resources found inland or onshore, even when offshore explorations were being conducted years
Year DoE Share[75] before the Commission was formed.[84]
Palawan's 40% Claim Total Collection 2.2. The Local Government Code provides that the territorial jurisdiction of municipalities, cities and
barangays should be identified by metes and bounds, thus confirming that "territorial jurisdiction" refers to
2002 10,113,578.87 636,219,521.24 646,333,100.11 the LOU's territorial boundaries.[85]
3. The Camago-Malampaya reservoir is outside the territorial boundaries of the Province of Palawan as
2003 1,475,334,680.12 1,475,334,680.12 defined in its Charter. Under said Charter, Palawan's territory is composed only of islands. [86]

2004 1,631,245,574.33 1,631,245,574.33 4. On municipal waters:

4.1. As argued in the petition: Assuming an LGU's territory includes the waters around its land area, the
same should refer only to the municipal waters as defined under Section 131(r) of the Local Government
2005 2,393 400,010.73 2,393,400,010.73
Code and Section 4.58[87] of R.A. No. 8550,[88] otherwise known as the Philippine Fisheries Code of 1998.[89]
4.1.1. In defining "municipal waters," Section 131(r) of the Local Government Code only includes marine
2006 5,369,720,905.73 5,369,720,905.73 waters within fifteen (15) kms from the coastline. Section 4.58 of R.A. No. 8550 gives a similar definition of
"municipal waters."[90]
2007 8,228 450,883.72 8,228,450,883.72 4.1.2. Under Sections 6 and 7 of R.A. No. 8550, it is the Department of Agriculture, through the Bureau of
Fisheries and Aquatic Resources, that has jurisdiction over Philippine waters beyond the 15-km limit of
2008 15,057,426,163.39 10,441,220,390.00 25,498,646,553.39 municipal waters, with respect to the issuance of license, charging of fees and access to fishery resources.[91]
4.1.3. Section 16 of R.A. No. 8550 provides that the jurisdiction of a municipal or city government extends
January 1 to August 31, only to the municipal waters, while Section 65 of the same law provides that the enforcement of laws and
10,600,881,085.36 5,346,197,218.76 15,947,078,304.12
2009 the formulation of rules, except in municipal waters, are vested in the National Government.[92]
4.1.4. Thus, the LGUs' authority may be enforced only within the 15-km limit of the municipal waters.
Total 25,668,420,827.62 35,521,789,184.63 61,190,210,012.25
Beyond it, jurisdiction rests with the National Government through the Philippine Navy, Philippine Coast
The Parties' Submissions Guard, Philippine National Police-Maritime Command, and the Department of Agriculture in their
respective areas of concern.[93]
Precised, the parties' respective arguments are as follows:
4.1.5. It was held in Municipality of Paoay[94] that a municipality's right over municipal waters consists
merely of usufruct. Contrary to the RIC's pronouncement, the decision in said case remains good law since
nothing in the 1987 Constitution overthrew the principle that the State owns all natural resources whether
found on land or under the sea.[95]
4.1.6. Even assuming that the LGU's territory extends 'to the municipal waters, the Camago-Malampaya
natural gas reservoir is located approximately 80 kms from mainland Palawan, thus, way beyond the 15-km
radius.[96]
4.2. As argued in the Memorandum: Under the Local Government Code, the 15-km municipal waters and
beyond, including the continental margin, do not' form part of the territory of an LGU. [97]
4.2.1. In Tan, the Court excluded from the territory of the political unit the "waters over which [it] exercises
control" or the municipal waters.[98]
4.2.3. The Local Government Code and the Philippine Fisheries Code did not redefine and extend the
territorial jurisdiction of LGUs to include the 15-km municipal waters. Instead, they merely granted
"extraterritorial" jurisdiction over the municipal waters, which is limited only to the waters, excluding the
seabed, subsoil and continental shelf; to fishery and aquatic resources, excluding other resources; and to
revenue generation and regulation of said resources.[99]
4.2.4. Other than the 15-km municipal waters, the Local Government Code did not vest jurisdiction beyond
the LGU's territorial boundaries.[100]
5. Under the Archipelagic and Regalian Doctrines enshrined in the 1987 Constitution, the maritime area
between Kalayaan and mainland Palawan belongs to the national territory and does not pertain to any local
government unit.[101]
5.1. The fact that a territorial sea belongs to the internal waters of a coastal State does not necessarily imply
that it belongs to the province or local government closest to it. R.A. No. 3046, entitled An Act to Define the
Baselines of the Territorial Sea of the Philippines, as amended by R.A. No. 5446, which defines the State's
"internal waters," does not expressly state that the internal waters should also belong to the LGU.[102]
5.2. The Archipelagic Doctrine, as enunciated in the UNCLOS and affirmed in Article I of the 1987
Constitution, pertains to the sovereign state and does not place within the territory of LGUs the waters
between and surrounding its islands. Nowhere in international or domestic law does it state that said doctrine
applies in pari materia to LGUs.[103]
5.3. The application of the Archipelagic Doctrine to a political ·subdivision will encroach on territories that
belong to the State. Section 3 of the Water Code provides that "all waters belong to the State" and Section 5
of the same law specifies that "seawater belongs to the State." So also, while the definition of Philippine
waters under the Philippine Fisheries Code acknowledges that waters may exist in political subdivisions,
nothing therein implies that such waters form part of the territory of the LGU. Furthermore, said definition
treats the waters connecting the islands as a separate group from the waters existing in the political
subdivisions, implying that waters between islands are not deemed found in LGUs. [104]
5.4. The Regalian Doctrine, as embodied in Section 2, Article XII of the 1987 Constitution, is all
encompassing; thus, it behooves the claimant to present proof of title before his right is recognized. Without
a specific and unmistakable grant by the State, the property remains to be that of the State and the LGU
cannot claim an area to be part of its territorial jurisdiction. Inclusion of any land or water as part of
Palawan's territory must be expressly provided by law and not merely inferred by vague and ambiguous
construction. Statutes in derogation of authority should be construed in favor of the State and should not be
permitted to divest it of any of its rights or prerogatives unless the legislature expressly intended
otherwise.[105]
5.5. In a number of cases involving conflicting claims of the United States Federal Government and the
coastal states over natural wealth found within the latter's adjoining maritime area, the Supreme Court of the
United States of America (U.S.), applying the Federal Paramountcy Doctrine, consistently ruled on the
fundamental right of the national government over the national wealth in maritime areas, to the exclusion of
the coastal state. The reason behind the doctrine equally applies to the conflicting claims between the
Philippine National Government and the Province of Palawan. In fact, there are more reasons to apply the
doctrine in the Philippines since unlike the individual states of the America which preexisted the U.S., the
LGUs are creations and agents of the Philippine National Government. [106]
6. The inclusion of the Kalayaan Group of Islands (Kalayaan) to the Province of Palawan under Presidential
Decree (P.D.) No. 1596[107] did not ipso facto make the waters between Kalayaan and the main island of
Palawan part of the territorial jurisdiction of Palawan.[108]
6.1. There is nothing in P.D. No. 1596, or the charter of Palawan, Act No. 1396, that states that the waters
around Kalayaan are part of Palawan's territory. P.D. No. 1596 refers to Kalayaan as a cluster of islands and
islets while Act No. 1396 identifies the islands included in the Province of Palawan. Thus, the areas referred
to are limited to the landmass. Since the Camago-Malampaya reservoir is not an island, it cannot possibly be
covered by either statute. More importantly, the reservoir is outside the geographical lines mentioned in said
laws.[109]
6.2. Absent an express grant by Congress, the Province of Palawan cannot validly claim that the area
between mainland Palawan and Kalayaan are automatically part of its territorial jurisdiction. [110]
7. Section 1, Article X of the 1987 Constitution provides that the territorial and political subdivisions of the
Republic are the provinces, cities, municipalities and barangays. It, however, does not require that every
portion of the Philippine territory be made part of the territory of an LOU. It was intended merely to
institutionalize the LGUs. And even on the supposition that the Constitution intended to apportion the
Philippine territory to the LGUs, legislation is still needed to implement said provision. However, no law
has been enacted to divide the Philippine territory, including its continental margin and exclusive . economic
zones, to all LGUs.[111]
8. Palawan's territorial boundaries do not embrace the continental shelf where the Camago-Malampaya
reservoir is located. Contrary to Dean Raul Pangalagan's view, the UNCLOS cannot be considered to have
vested the LGUs with their own continental shelf based on the doctrine of transformation. The concept of
continental shelf under the UNCLOS does not automatically apply to a province. [112]
8.1. A treaty is an agreement between states and governs the legal relations between nations. And even if the
UNCLOS were to be deemed transformed as part of municipal law after its ratification by the Batasang
Pambansa in 1984 under Resolution No. 121, it did not automatically amend the Local Government Code
and the charters of the LGUs. No such intent is manifest either in the UNCLOS nor Resolution No. 121.
Instead, the UNCLOS, as transformed into our municipal law, is to be applied verba legis.[113]
8.2. Under the express terms of the UNCLOS, the rights and duties over maritime zones and the continental
shelf pertain to the State, and no provision therein suggests any reference to an LGU. [114]
8.3. In other sovereign states such as Canada and the U.S., the maritime zones were ruled to be outside the
LGUs' territorial jurisdiction. The Federal Paramountcy Doctrine was upheld in four leading U.S. cases
where the claims of various U.S. coastal states over the marginal and coastal waters and the continental shelf
were rejected.[115]
9. The State is not estopped by the alleged mistakes of its officials or agents.[116]
9.1. On June 10, 1988, the DoE requested the Province of Palawan for a seven-year deferment of payment to
enable the National Government to pay a portion of NPC's TOPQ obligations. On February 17, 1998,
President Ramos issued A.O. No. 381 which projected US$2.1 Billion as Palawan's share from the Camago-
Malampaya project. Although they seem to acknowledge Palawan's share in the proceeds of the Camago-
Malampaya project, they cannot contravene the laws that delineate Palawan's territorial jurisdiction.
Furthermore, the President has no authority to expand the territorial jurisdiction of a province as this can
only be done by Congress.[117]
9.2. In issuing A.O. No. 381, President Ramos made no misrepresentation as to give rise to estoppel. The
statements in said A.O. were not calculated to mislead the Province of Palawan; they were not even directed
to Palawan. No estoppel can be invoked if the complaining party has not been misled to his prejudice. There
is no proof that the Province of Palawan sustained injury as a result of a misrepresentation. [118]
9.3. The doctrine of estoppel should be applied only in extraordinary circumstances and should not be given
effect beyond what is necessary to accomplish justice between the parties.[119]
9.4. The doctrine of estoppel does not preclude the correction of an erroneous construction by the officer
himself, by his successor in office, or by the court in an appropriate case. An erroneous construction creates
no vested right and cannot be taken as precedent.[120]
9.5. Accordingly, the Province of Palawan cannot rely on the fact that in 1992, they shared in the proceeds
derived from the West Linapacan oil fields located approximately 76 kms off the western coastline of
Palawan.[121]
9.6. The public funds available for various projects in other provinces would be significantly reduced if
Palawan is allowed to receive its claimed 40% share in the Camago-Malampaya project.[122]
10. Ordinance No. 474, series of 2000, enacted by the Sangguniang Panlalawigan of Palawan and
delineating the territorial jurisdiction of the province to include the Camago-Malampaya area, is ultra
vires.[123]
10.1. Ordinance No. 474 conflicts with the Charter of the Province of Palawan as it expanded the boundaries
of the province and included the area between its constituent islands. It is also in conflict with the limits of
LGUs' rights over marine areas under the Local Government Code, the Fisheries Code and other pertinent
laws.[124]
10.2. An LGU cannot fix its territorial jurisdiction, or limit or expand the same through an ordinance.
Pursuant to Section 10, Article X of the 1987 Constitution and Sections 6 and 10 of the Local Government
Code, only Congress can create, divide or merge LGUs and alter their boundaries, subject to the plebiscite
requirement. An ordinance cannot contravene the Constitution or any statute. [125]
10.3. As plotted by the National Mapping and Resource Information Authority (NAMRIA), the territorial
boundaries of Palawan under Ordinance No. 474 appear to be inconsistent with the delineation of the
Philippine territory under the Treaty of Paris.[126]
11. Section 3(1) of R.A. No. 7611 or SEP for Palawan Act contains a definition of "Palawan." The Camago-
Malampaya reservoir is undoubtedly within the area described and plotted on the map. However, R.A. No.
7611 did not redefine Palawan's territory or amend its charter. [127]
11.1. With the words "(A)s used in this Act," Section 3 of R.A. No. 7611 limited the application of the
definitions therein to said law which was enacted to promote sustainable development goals for the province
through proper conservation, utilization and development of natural resources. [128]
11.2. Just like Palawan's Charter, Section 3(1) of R.A. No. 7611 limited the territory to the islands and islets
within the area.[129]
11.3. The metes and bounds under Section 3(1) of R.A. No. 7611, when plotted on the map, excluded
portions of mainland Palawan and several islands, municipalities or portions thereof. [130]
11.4. The basis of the description of Palawan is unclear and there is no record that the alteration in Palawan's
boundaries complied with Section 10, Article X of the 1987 Constitution which requires that the alteration
be in accordance with the criteria established in the local government code and approved by a majority of
the votes cast in a plebiscite in the political unit(s) directly affected. [131]
11.5. Based on the Declaration of Policy in R.A. No. 7611, the object of the law is not to expand the
territory of Palawan but to make the province an agent of the National Government in the protection of the
environment. There is nothing in the title of the law or any of its provisions indicating that there was a
legislative intent to expand or alter the boundaries of the province or to remove certain municipalities from
its territory.[132]
11.6. If the description of Palawan under R.A. No. 7611 would be read as a new definition of its territory, it
would be unconstitutional because the title .of the law does not indicate that boundaries would be expanded,
in contravention of the Constitutional requirement that every bill must embrace only one subject to be
expressed in its title.[133]
11.7. Even if the term "territorial jurisdiction" were to be understood as including the grant of limited
extraterritorial jurisdiction, the Camago-Malampaya reservoir remains to be beyond Palawan's jurisdiction
under R.A. No. 7611. The said law did not expand the province's police or administrative jurisdiction; it did
not impose any additional function or jurisdiction on the Province of Palawan. If anything, the SEP limited
the province's governmental authority since all LGUs in the area must align their projects and budgets with
the SEP. Furthermore, tasked to implement the SEP was not the province but the Palawan Council for
Sustainable Development (PCSD), a national agency created under the law, composed of both national and
local officials. The participation of local officials did not turn PCSD into an arm of the Province of Palawan;
their inclusion is to allow a holistic view of the environmental issues and opportunities for coordination. [134]
12. A.O. No. 381 was not issued to redefine Palawan's territory; its title precisely states that it was issued to
provide for the fulfillment by the National Power Corporation of its obligations under the December 30,
1997 Agreement for Sale and Purchase of Natural Gas with SPEX/OXY and for the compliance of the
National Government's performance undertaking. Palawan was mentioned but not in the context of
redefining its territory. Only a statute can expand the territory or boundaries of an LGU. [135]
13. Sections 465 and 468 of the Local Government Code which respectively authorize the Provincial
Governor to adopt measures to safeguard marine resources of the province and the Sangguniang
Panlalawigan to impose penalties for destructive fishing, did not give the provinces government authority
over marine resources beyond the municipal waters.[136]
14. Palawan's Claim that it exercises jurisdiction over the Camago-Malampaya area is bereft of credible
proof. Absent a law which vests LGUs jurisdiction over areas outside their territorial boundaries, its acts
over the Camago-Malampaya area are ultra vires or at most an exercise of extraterritorial jurisdiction.[137]
15. The proposition of the amici curiae that the principle of equity justifies granting Palawan 40% of the
government's share in the Camago-Malampaya project, may set a dangerous precedent. Furthermore, the
principle of equity cannot be applied when there is a law applicable to the case. Applicable to the instant
case are Section 7, Article X of the 1987 Constitution and Section 290 of the Local Government Code based
on which the Province of Palawan is not entitled to share in the proceeds of the Camago-Malampaya
project.[138]
15.1. The concerns of the amici curiae appear to rest on the possible damage to the environment surrounding
Palawan. However, this eventuality is covered by the Contractor's obligations under the Environmental
Compliance Certificate (ECC) which required SPEX to ensure minimal impact on the environment and to
provide for an Environmental Guarantee Fund to cover expenses for environmental monitoring and to
compensate for whatever damage that may be caused by the project.[139]
16. The PIA and E.O. No. 683 do not constitute evidence of the Republic's admission that Palawan is
entitled to the proceeds of the Camago-Malampaya project. In civil cases, an offer of compromise is not
admissible in evidence against the offeror. Furthermore, the whereas clauses of E.O. No. 683 clearly show
that the President issued the E.O. based on a "broad perspective of the requirements to develop Palawan as a
major tourism destination" and Section 25 of the Local Government Code which authorizes the President, on
the LGU's request, to provide financial assistance to the LGU. The E.O. also expressly states that the
amounts released shall be without prejudice to the final resolution of the legal dispute between the National
Government and the Province of Palmvan regarding the latter's claimed share under the Service Contract
No. 38.[140]
17. The National Government has no intention to deprive the Province of Palawan a share in the proceeds of
the Camago-Malampaya project ifwere so entitled.[141]
18. The RTC committed grave abuse of discretion when it issued Amended Order dated January 16, 2006
because it granted affirmative relief in a special civil action for declaratory relief.[142]
18.1. While courts have the inherent power to issue interlocutory orders as may be necessary to carry its
jurisdiction into effect, such authority should be exercised as necessary in light of the jurisdiction conferred
in the main action. In this case, the main action is one for declaratory relief, which is a preventive and
anticipatory remedy designed to declare the parties' rights or to express the court's opinion on a question of
law, without ordering anything to be done.[143]
19. Arigo, et al. have no legal standing to question E.O. No. 683 either as citizens or as taxpayers since they
have not shown any actual or threatened injury or that the case involves disbursement of public funds in
contravention of law.[144]
20. G.R. No. 185941 is not ripe for judicial adjudication considering that there is still no final determination
as to whether the Province of Palawan is entitled to share in the proceeds of the Camago-Malampaya
project. Also, the interim undertaking of the parties under the PIA is contingent on the final adjudication of
G.R. No. 170867. Furthermore, the validity and manner by which the funds were realigned under E.O. No.
683 could not be questioned since they are considered as financial assistance subject to the discretion of the
President pursuant to the authority granted by Section 25(c) of the Local Government Code. [145]
Arigo, et al.
1. Their petition was not prematurely filed. While the interim undertaking between the National Government
and the Province of Palawan under the PIA was contingent on the final adjudication of G.R. No. 170867,
disbursements of public funds would ensue or were already taking place in violation of the provisions of the
Constitution and the Local Government Code on the equitable sharing of national wealth between the
National Government and the LGUs.[146]
2. Neither Governor Reyes nor Representatives Alvarez and Mitra had the authority to sign the PIA on
behalf of the cities, municipalities and barangays of Palawan. In fact, the cities, municipalities and
barangays have a bigger share that the Provincial Government in the allocation of the revenues from the
Camago-Malampaya project. Under Section 292 of the Local Government Code, the city or municipality
gets 45% and the barangay gets 35%, or a combined share of 80% as against the Province's share of only
20%. Governor Reyes and Representatives Alvarez and Mitra could not sign the PIA as if they were the sole
recipients of the proceeds of the Camago-Malampaya project.[147]
3. The PIA reduces the share of Palawan's LGUs in two ways: first, by making "net proceeds" the basis for
sharing instead of "gross collection" as provided by Section 290 of the Local Government Code; and second,
by cutting down the LGUs' equitable share in such proceeds by half, with the Province solely claiming such
allocation.[148]
4. The equitable share of LGUs in the utilization and development of national wealth is not subject to
compromise.[149]
5. The PIA requires that any fund allocation is subject to the prior approval of the DoE and/or the PNOC-EC
and to actual collections deposited with the National Treasury, in contravention of the Local Government
Code, which requires that the proceeds of the utilization of natural resources should be directly released to
each LGU without need of further action, and the Court's ruling in Pimentel, Jr. v. Hon. Aguirre[150] on the
automatic· release of the LGUs' shares in the National Internal Revenue. [151]
6. In providing that only those projects identified by the Office of the President, or the Province of Palawan,
or the Palawan Congressional Districts, or the Highly Urbanized City of Puerto Princesa, may be funded, the
PIA violates the intent of the Local Government Code to grant autonomy to LGUs. [152]
7. The PIA allows the securitization of the shares of the LGUs and the National Government in the
utilization of the Camago-Malampaya Oil and Gas resources, but the National Government cannot securitize
what it does not own legally and neither can the Province of Palawan securitize what it does not fully
own.[153]
8. E.O. No. 683 is nothing more than a realignment of funds carried out in violation of the Constitutional
provision giving LGUs an equitable share in the proceeds of the utilization of national wealth, for in usual
budgeting procedures of Congress, such share should be included in the appropriation for "Allocation to
LGUs" which is classified as a mandatory obligation of the National Government and automatically released
to the LGUs.[154]
9. E.O. No. 683 is a usurpation of the power of the purse lodged in Congress under Section 29(1) and
(3),[155] Article VI of the 1987 Constitution. Since the proceeds from the Camago-Malampaya project is the
production share of the government in a service contract, it cannot be disbursed without an appropriation
law.[156]
10. E.O. No. 683 fails to consider its implications on the country's claim to an Extended Continental Shelf
(ECS) under the UNCLOS III regime. The best way to claim an ECS is to consider the Camago-Malampaya
area and the Kalayaan tb be part of Palawan's continental shelf. One basis for the Philippine claim to
Kalayaan is that it constitutes a natural prolongation of Palawan's land territory. [157]
11. The Republic's invocation of U.S. case law to dispute the LGUs' entitlement under Section 7, Article X
of the 1987 Constitution is inappropriate and odd for a unitary state like the Philippines. Said provision in
the unitary Philippine state only means that the entitlement exists only because of a constitutional grant and
not because the LGUs have sovereignty and jurisdiction in their respective areas distinct from the
Republic's.[158]
12. The definition of "municipal waters" under applicable laws is irrelevant. The Camago-Malampaya
reservoir is located in the continental shelf which, under Article 76 of the UNCLOS, pertains to the seabed
and subsoil as the natural prolongation of the landmass. [159]
13. The constitutionality of E.O. No. 683 may be resolved without reference to the conflicting territorial
claims in G.R. No. 170867. In making reference to said case, they merely meant to provide a historical
backdrop to the issuance of E.O. No. 683. It is for this reason that they attached only a copy of E.O. No. 683
to their petition.[160]
14. R.A. No. 7611 and A.O. No. 381 both recognize that the Camago-Malampaya area falls with the
continental shelf of Palawan. As regards the Republic's contention that R.A. No. 7611 is illegal for having
redrawn the boundaries of the Province of Palawan without a plebiscite, the same ignores the fact that R.A.
No. 7611 only incorporates the continental shelf regime found in Article II of the 1987 Constitution. A
plebiscite was unnecessary because the 1987 Constitution was overwhelmingly ratified. [161]
15. The CA erred in dismissing CA-G.R. SP No. 102247 in deference to executive and legislative
deliberations on the country's baselines as it is in violation of its constitutional duty to interpret the
constitutional provisions defining the national territory. Furthermore, until revoked or amended, the
country's existing law on baselines (R.A. No. 3046 as amended by R.A. No. 5446) remains good law. [162]
16. The CA erred in dismissing their action for certiorari for failure to submit a copy of the PIA considering
that the terms of E.O. No. 683 embody all the provisions of the assailed PIA. It was also unnecessary to
submit a copy of the petition in G.R. No. 170867 as it was only tangential to the resolution of the case.
Furthermore, the alleged failure to submit said documents has been mooted by the June 23, 2008 Resolution
of the Court's Third Division indicating that non-parties could not have access to the records of G.R. No.
170867. At any rate, the records of said case are now a matter of judicial notice to this Court. [163]
The Province of Palawan
1. Section 7 of the Local Government Code, on the creation and conversion of LGUs, does not expressly
provide that an LGU's territorial jurisdiction refers only to its land area. [164]
1.1. Land area is included as one of the requisites for the creation or conversion of an LGU because
evidently, no LGU can be created out of the maritime area alone. [165]
1.2. Another requisite - population - is determined as the total number of inhabitants within the territorial
jurisdiction of the LGU. The law thus aptly uses the phrase "territorial jurisdiction" instead of territory or
land area since there are communities that live in coastal areas or low-water areas that form part of the sea.
If a local government's territorial jurisdiction is limited to its land area, then these communities will not
belong to any LGU.[166]
2. Section 461 of the Local Government Code does not define the territorial jurisdiction of a province. It
merely specifies the requisites for the creation of a province. In fact, said provision shows that territory and
population are alternative requirements for the creation of a new province, with income being the
indispensable requirement. It does not necessarily exclude the maritime area over which a province
exercises control and authority, but merely provides that to detennine whether an area is sufficient to
constitute a province, only the landmass or land territory shall be included. [167]
3. In Tan, which involves the creation of a province under the old Local Government Code, the Court held
that the word "territory" as used in said law "has reference only to the mass of land area and excludes the
waters over which the political unit exercises control." This ruling affirms that an LGU exercises control
over waters, making them part of the political unit's territorial jurisdiction. Furthermore, Tan only defines
the word "territory" as used in Section 197 of the old Local Government Code. In convoluting the words
"territory" and "territorial jurisdiction," the Republic misapplied the doctrine laid out in Tan.[168]
4. Section 7, Article X of the 1987 Constitution provides that the LGU is "entitled to an equitable share in
the proceeds of the utilization and development of the national wealth within their respective areas, in the
manner provided by law x x x." The provision does not state "within their respective land areas." The word
"area" should accordingly be construed in its ordinary meaning to mean a distinct part of the surface of
something. It, therefore, encompasses land, maritime area and the space above them.[169]
5. The delineation of the territorial jurisdiction by metes and bounds is required only for landlocked
LGUs.[170]
6. Limiting the LGU's territorial jurisdiction to its land area is inconsistent with the State's policy of local
autonomy as enshrined in Section 25, Article II of the 1987 Constitution and amplified in Section 2 of the
Local Government Code. Extending such jurisdiction to all areas where the Province of Palawan has control
or authority will give it more resources to discharge its responsibilities, particularly in the enforcement of
environmental laws in its vast marine area.[171]
7. Numerous provisions of the Local Government Code indicate that an LGU's territorial jurisdiction
includes the maritime area. Section 138 speaks of public waters within the territorial jurisdiction of the
province. Section 465(3)(v) authorizes the Provincial Governor to adopt adequate measures to safeguard and
conserve the province's marine resources. Section 468(1)(vi) empowers the Sangguniang Panlalawigan to
protect the environment and impose appropriate penalties for acts that endanger it, such as dynamite fishing.
More importantly, Section 3, which provides for the operative principles of decentralization and local
autonomy, states that the vesting of duties in the LGU shall be accompanied with provision for reasonably
adequate resources to effectively carry them out. When the same provision speaks of ecological balance
which the LGUs shall manage with the National Government, it encompasses the maritime area.[172]
7.1. The environmental impact that the Camago-Malampaya project may have on the people of Palawan
requires that the Province of Palawan must equitably share in its proceeds so it can have adequate resources
to ensure that the extraction of natural gas will not have a deleterious effect on its environment. [173]
8. The Provincial Government of Palawan exercises administrative, environmental and police jurisdiction
over public waters within its territorial jurisdiction, including the Camago-Malampaya reservoir. Local
police, under the supervision of local executives, maintain peace and order over the said area. Crimes
committed therein are filed and tried in Palawan courts. The provincial government also enforces local and
national environmental laws over this area. In fact, SPEX consistently recognized Palawan as the location of
the project, having obtained the necessary endorsement from the Sangguniang Panlalawigan of Palawan
before starting its operations, in accordance with Sections 26 and 27 of the Local Government Code.
Furthermore, the plant, equipment and platform of SPEX, situated offshore, were declared for tax purposes
with the Province of Palawan.[174]
9. Based on the Senate deliberations on the Local Government Code, it is a foregone conclusion that the
Province of Palawan has equitable share in the proceeds of the Camago-Malampaya project.[175]
10. Under Section S(a) of the Local Government Code, any question on a particular provision of law on the
power of an LGU shall be liberally construed, and any doubt shall be resolved, in favor of the LGU. [176]
11. Neither the Local Government Code nor the Philippine Fisheries Code provides that beyond the land
area, the LGU's territorial jurisdiction can extend only up to the 15-km stretch of municipal waters.[177]
11.1. The definition of "municipal waters" in Section 131(r) of the Local Government Code shall be used
only for purposes of local government taxation inasmuch as it is found under Title I of Book II on Local
Taxation and Fiscal Matters. Section 131(r) also indicates that the definition applies when the term
"municipal waters" is used in Title I which refers to Local Government Taxation. If anything, the definition
bolsters the argument that the LGU's territorial jurisdiction extends to the maritime area.[178]
11.2. The Philippine Fisheries Code did not limit or define the territorial jurisdiction of an LGU. The
definition of "municipal waters" under both this law and the Local Government Code was intended merely
to qualify the degree of governmental powers to be exercised by the coastal municipality or city over said
waters.[179]
11.3. Palawan is composed of 1,786 islands and islets. Twelve (12) out of its twenty-three (23)
municipalities are island municipalities. Between them are expansive maritime areas that exceed the 15-km
municipal water-limit. It will, thus, be inevitable for the province to exercise governmental powers over
these areas. If Palawan will be authorized to enforce laws only up to the municipal water-limit, it will be
tantamount to a duplication of functions already being performed by the component municipalities. It will
also render the province inutile in enforcing laws in maritime areas between these municipalities. It was not
the intention of the lawmakers, in enacting the Local Government Code, to create a vacuum in the
enforcement of laws in these areas or to disintegrate LGUs. [180]
12. Laws other than the Local Government Code recognize that the Province of Palawan has territorial
jurisdiction over the maritime area beyond the municipal waters.[181]
12.1. R.A. No. 7611 defines Palawan as comprising islands and islets and the surrounding sea, which
includes the entire coastline up to the open sea.[182]
12.1.1. Based on the coordinates of Palawan provided in Section 3(1) of R.A.· No. 7611, the Camago-
Malampaya reservoir is within the territorial jurisdiction of the province. [183]
12.1.2. R.A. No. 7611 did not alter the territorial jurisdiction of Palawan, as provided in Section 37 of its
charter, Act No. 2711. R.A. No. 7611 merely recognized the fact that the islands comprising Palawan are
bounded by waters that form part of its territorial jurisdiction. Palawan's area as described in said law could
be called the province's "environmental jurisdiction."[184]
12.1.3. Pursuant to R.A. No. 7611, the Palawan Council for Sustainable Development (PCSD) shall
establish a graded system of protection and development control over the whole of Palawan, including
mangroves, coral reefs, seagrass beds and the surrounding sea.[185]
12.1.4. R.A. No. 7611 encompasses the entire ecological system of Palawan, including the coastal and
marine areas which it considers a main component of the Environmentally Critical Areas Network. [186]
12.1.5. Local government officials of Palawan have representations in PCSD, the agency tasked to enforce
the integrated plan under R.A. No. 7611. Since the enforcement of environmental laws is a joint obligation
of the national and local governments, with local communities being the real stakeholders, LGUs should
benefit from the proceeds of the natural wealth found in their territorial jurisdictions. [187]
12.1.6. The Republic's attempt to remove the Camago-Malampaya area from the Province of Palawan is
contrary to the declared state policy of adopting an integrated ecological system for Palawan under R.A. No.
7611.[188]
12.2. A.O. No. 381 explicitly declared that the Camago-Malampaya reservoir is located offshore northwest
of Pal awan and that the Province of Palawan was expected to receive about US$2.1 Billion from the total
govetnment share of US$8.1 Billion out of the proceeds from the Camago-Malampaya project.[189]
12.3. P.D. No. 1596 declared Kalayaan as a distinct and separate municipality of the Province of Palawan. In
delineating Kalayaan's boundaries, P.D. No. 1596 included the seabed, subsoil, continental margin and
airspace.[190]
12.3.1. P.D. No. 1596 states that the Republic's claim to Kalayaan is foremost based on the fact that said
group of islands is part of the Philippine archipelago's continental margin which includes the continental
shelf. The continental shelf is the submerged natural prolongation of the land territory and is an integral part
of the landmass it is contiguous with. Oil and gas are found not in the waters off Palawan but in the
continental shelf which is contiguous to and a prolongation of the landmass of Palawan. [191]
13. The Province of Palawan cannot be said to be holding a mere usufruct over the municipal waters based
on the 1950 case of Municipality of Paoay. Said case is not applicable as it was decided when there was a
concentration of powers and resources in the national government, unlike the decentralized system espoused
in the Local Government Code.[192]
14. The federal paramountcy doctrine is a constitutional law doctrine followed in federal states, particularly
in the U.S. and Canada. The application of this doctrine to the Philippine setting is legally inconceivable
because the Philippines has not adopted a federal form of government. Furthermore, most of the states in the
U.S. were previously independent states who were obliged to surrender their sovereign functions over their
maritime area or marginal belt to the federal government when they joined the federal union. Contrarily, the
Philippines had a unitary system of government until it adopted the ideas of decentralization and local
autonomy as fundamental state principles. Instead of different states surrendering
their imperium and dominium over the maritime area to a federal government, the Philippine setting works
in the opposite as the National Government, which is presumed to own all resources within the Philippine
territory, is mandated to share the proceeds of the national wealth with the LGUs. [193]
15. The Republic is divided into political and territorial subdivisions. Thus, for a territory to be part of the
Republic, it must belong to a political and territorial subdivision. These subdivisions are the provinces,
cities, municipalities and barangays, and they are indispensable partners of the National Government in the
proper and efficient exercise of governmental powers and functions. The Camago-Malampaya reservoir,
which is part of the Philippines, must necessarily belong to a political and territorial subdivision. That
subdivision is the Province of Palawan which has long been exercising governmental powers and functions
over the area.[194]
15.1. Since the Camago-Malampaya reservoir is nearest to the Province of Palawan than any other LGU, it
is imperative that the province becomes the National Government's co-protector and co administrator in said
maritime area.[195]
15.2. Under Section 25(b) of the Local Government Code, national agencies are to coordinate with LGUs in
planning and implementing national projects, while under Section 3(i) of the same law, LGUs shall share
with the National Government the responsibility of maintaining ecological balance within their territorial
jurisdiction. Thus, governmental powers are not solely exercised by the National Government but are shared
with LGUs. However, they cannot be effective partners of the National Government without sufficient
resources. For this reason, the 1987 Constitution grants them an equitable share in the proceeds of the
utilization of national wealth.[196]
15.3. Numerous cases of illegal fishing, poaching and illegal entry have been committed within the waters
surrounding Palawan, particularly westward of mainland Palawan and bound by the South China Sea, along
the same area where the Camago-Malampaya project is located. These cases were prosecuted and tried
before the courts of Palawan. In Hon. Roldan, Jr. v. Judge Arca,[197] an illegal fishing case, the jurisdiction
of the Court of First Instance of Palawan was upheld given that the vessels seized were engaged in
prohibited fishing within the territorial waters of Palawan, in obedience to the rule that the place where a
criminal offense was committed not only determines the venue of the case but is also an essential element of
jurisdiction.[198]
15.4. Sections 26 and 27 of the Local Government Code require mandatory consultation with the LGUs
concerned and the approval of their respective Sanggunian before the National Government may commence
any project that will have an environmental impact. The National Government and SPEX recognized
Palawan's jurisdiction over the Camago-Malampaya area when it requested the indorsement of
the Sangguniang Panlalawigan of Palawan before commencing the Camago-Malampaya project, and when
SPEX obtained an ECC in compliance with the requirement of PCSD, an agency created by R.A. No.
7611.[199]
15.5. In the implementation of tariff and customs laws, the Province of Palawan is being referred to by the
Bureau of Customs as the place of origin of the barrels of condensate (crude oil) being exported to
Singapore from the Camago-Malampaya area. Export Declarations for said condensate, as issued by the
Department of Trade and Industry, also showed Palawan as the place of origin. [200]
15.6. In Tano v. Socrates,[201] the Court upheld the ordinances, passed by the Sangguniang Panlalawigan of
Palawan and the Sangguniang Panlungsod of the City of Puerto Princesa, which banned the transport of live
fish to protect their seawater and corals from the effects of destructive fishing, in recognition of the LGUs'
power and duty to protect the right of the people to a balanced ecology. The destructive way of catching live
fish had been conducted not just within the 15-k.m municipal waters of Palawan but also beyond said
waters.[202]
16. Palawan's claim is not inconsistent with, but upholds, the archipelagic and regalian doctrines enshrined
in the 1987 Constitution.[203]
16.1. The Province of Palawan agrees that all waters within the Philippine archipelago are owned by the
Republic. The issue in this case, however, is not the ownership of the Camago-Malampaya reservoir. The
Province of Palawan is not claiming dominion over said area. It merely contends that since the reservoir is
located in an area over which it exercises control and shares in the National Government's management
responsibility, it is only just and equitable that the Province of Palawan should share in the proceeds
generated from its utilization. Furthermore, the law does not require that the LGUs should own the area
where the national wealth is located before they can share in the proceeds of its use and development; it
merely requires that the national wealth be "found within their respective areas." It is, thus, error for the
Republic to assert that the Camago-Malampaya area is not part of Palawan's territorial jurisdiction because it
belongs to the State. Otherwise, no LGU will share in the proceeds derived from the utilization and
development of national wealth because the State owns it under the regalian doctrine. [204]
17. International law has no application in this case. While the UNCLOS establishes various maritime
regimes of archipelagos like the Philippines, nothing therein purports to govern internal matters such as the
sharing of national wealth between its national government and political subdivisions.[205]
18. The State has long recognized the fact that the Camago-Malampaya area is part of Palawan.[206]
18.1. Palawan was allotted P38,110,586.00 as its share in the national wealth based on actual 1992
collections from petroleum operations in the West Linapacan oil fields, situated offshore, about the same.
distance from mainland Palawan as the Camago-Malampaya reservoir. Furthermore, from 1993 to 1998,
DBM consistently released to Palawan its 40% share from the West Linapacan oil production. Because these
are lawful executive acts, the Republic may not invoke the rule that it cannot be placed in estoppel by the
mistakes of its agents.[207]
18.2. Jurisprudence holds that estoppels against the public, which are little favored, must be applied with
circumspection and only in special cases where the interests of justice clearly require it. To deprive Palawan
of its constitutional right to a just share in the national wealth will indisputably work injustice to its people
and generations to come. As it is, developmental projects have been adversely stunted as a result of the
National Government's withdrawal of its commitment to give Palawan its 40% share. [208]
18.3. It has been held that the contemporaneous construction of a statute· by the executive officers of the
government is entitled to great respect and unless shown to be clearly erroneous, should ordinarily control
the construction of the statute by the courts.[209]
19. Ordinance No. 474 (series of 2000), which the Sangguniang Panlalawigan of Palawan enacted to
delineate the territorial jurisdiction of the Province of Palawan, including therein the Camago-Malampaya
area, is valid. Laws, including ordinances, enjoy the presumption of constitutionality. Moreover, there is no
flaw in the Ordinance since it does not contravene Section 10, Article X of the Constitution or Sections 6
and 10 of the Local Government Code. It is likewise settled that a statute or ordinance cannot be impugned
collaterally.[210]
20. Since the RTC has deferred its ruling on the propriety of the Amended Order dated January 16, 2006 to
this Court, the Province of Palawan asks that said Order be sustained because:
20.1. Under Section 6, Rule 135 of the Rules of Court, when by law jurisdiction is conferred on a court, all
auxiliary writs and processes necessary to carry it into effect may be employed by such court. The Amended
Order merely sought to protect the subject of the litigation and to ensure that the RTC's decision may be
carried into effect when it attains finality.[211]
20.2. The Amended Order encompasses issues that were raised and passed upon by the RTC, particularly,
the issue of whether the Province of Palawan is entitled to receive 40% of the government's share in the
proceeds of the Camago-Malampaya project.[212]
20.3. In a catena of decisions, the Court has allowed affirmative and even injunctive reliefs in cases for
declaratory relief.[213]
21. The Provincial Governor's signing of the PIA was valid. [214]
21.1. Under Article 85(b)(1)(vi), Rule XV of the Implementing Rules and Regulations of the Local
Government Code, the Provincial Governor is authorized to represent the province in all its business
transactions and to sign all contracts on its behalf upon the authority of the Sangguniang Panlalawigan or
pursuant to law or ordinance. The Provincial Governor of Palawan signed the PIA with the authority of
the Sangguniang Panlalawigan, representing all of its component municipalities and its capital city of
Puerto Princesa. Palawan's two congressmen also signed the PIA to warrant that they were the duly elected
representatives of the province and to comply with the requirement under the General Appropriations Act
that implementation of the projects must be in coordination with them. [215]
21.2. The Province of Palawan is the only LGU which has territorial jurisdiction over the Camago-
Malampaya area under R.A. No. 7611.[216]
21.3. It may have been the Provincial Governor that signed the PIA, but the proposed projects thereunder
would be implemented province-wide, to include all component municipalities and barangays as well as
Puerto Princesa. This is more advantageous to the 23 municipalities of Palawan compared to Arigo, et al.'s
stand that "the sharing should be one municipality (45%) and one barangay (35%) or a total of 80%, with the
balance of 20% for the rest of Palawan's 22 municipalities including Puerto Princesa City." [217]
22. E.O. No. 683, which uses "net proceeds" of Camago-Malampaya project as the basis of sharing, does not
violate Section 290 of the Local Government Code where the share of the LGU is based on gross
collection.[218]
22.1. The allocation of funds under E.O. No. 683 is not, strictly speaking, the sharing of proceeds of national
wealth development under Section 290 of the Local Government Code considering that Palawan's claimed
40% share is still under litigation.[219]
22.2. In any case, "gross collection" under Section 290 of the Local Government Code cannot refer to gross
proceeds because under Service Contract No. 38 and A.O. No. 381, the production sharing scheme involves
deduction of exploration, development and production costs from the gross proceeds of the gas sales. Since
the net proceeds referred to in E.O. No. 683 is the same amount as the government's gross collection from
the Camago-Malampaya project, the Local Government Code was not violated.[220]
23. The Pimentel ruling cannot be applied to the release of funds under E.O. No. 683. It does not refer to the
LGU's claimed 40% share; it is in the form of financial assistance pursuant to Section 25(c) of the Local
Government Code which authorizes the President to direct the appropriate national agency to provide
financial and other forms of assistance to the LGU. The funds were appropriated in the General
Appropriations Act of 2007 and 2008 for the DoE and not under the items for allocations from national
wealth to LGUs.[221]
24. CA-G.R. SP No. 102247 was correctly dismissed by the CA. Failure to submit essential and necessary
documents is a sufficient ground to dismiss a petition under Rule 46 of the Rules of Court. Arigo, et al.
prematurely filed its petition before the CA as it was anchored on the same basic issues to be resolved in
G.R. No. 170867. Furthermore, Arigo, et al. had no legal standing either as real parties-in interest, as they
failed to establish that they would be benefitted or injured by the judgment in the suit, or as taxpayers, as
they failed to show that the E.O. No. 638 and PIA involved an illegal disbursement of public funds. [222]
Ruling of the Court
LGUs' share in national wealth
Under Section 25, Article II of the 1987 Constitution, "(t)he State shall ensure the autonomy of local
governments." In furtherance of this State policy, the 1987 Constitution conferred on LGUs the power to
create its own sources of revenue and the right to share not only in the national taxes, but also in the
proceeds of the utilization of national wealth in their respective areas. Thus, Sections 5, 6, and 7 of Article X
of the 1987 Constitution provides:
Section 5. Each local government unit shall have the power to create its own sources of revenues and to levy
'taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent
with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local
governments.
Section 6. Local government units shall have a just share, as determined by law, in the national taxes which
shall be automatically released to them.
Section 7. Local governments shall be entitled to an equitable share in the proceeds of the utilization and
development of the national wealth within their respective areas, in the manner provided by law,
including sharing the same with the inhabitants by way of direct benefits. (Emphasis ours)
At the center of this controversy is Section 7, an innovation in the 1987 Constitution aimed at giving fiscal
autonomy to local governments. Deliberations of the 1986 Constitutional Commission reveal the rationale
for this provision, thus:
MR. OPLE. x x x
Just to cite specific examples, in the case of timberland within the area of jurisdiction of the Province of
Quirino or the Province of Aurora, we feel that the local governments ought to share in whatever revenues
are generated from this particular natural resource which is also considered a national resource in a
proportion to be determined by Congress. This may mean sharing not with the local government but with the
local population. The geothermal plant in the Machan, Makiling-Banahaw area in Laguna, the Tiwi
Geothermal Plant in Albay, there is a sense in which the people in these areas, hosting the physical facility
based on the resources found under the ground in their area which are considered national wealth, should
participate in terms of reasonable rebates on the cost of power that they pay. This is true of the Maria
Cristina area in Central Mindanao, for example. May I point out that in the previous government, this has
always been a very nettlesome subject of the Cabinet debates. Are the people in the locality, where God
chose to locate His bounty, not entitled to some reasonable modest sharing of this with the national
government? Why should the national government claim all the revenues arising from them? And the
usual reply of the technocrats at that time is that there must be uniform treatment of all citizens regardless of
where God's gifts are located, whether below the ground or above the ground. This, of course, has led to
popular disenchantment. In Albay, for example, the government then promised a 20-percent rebate in power
because of the contributions of the Tiwi Plant to the Luzon grid. Although this was ordered, I remember that
the Ministry of Finance, together with the National Power Corporation, refused to implement it. There is a
bigger economic principle behind this, the principle of equity. If God chose to locate the great rivers
and sources of hydroelectric power in Iligan, in Central Mindanao, for example, or in the Cordillera,
why should the national government impose fuel adjustment taxes in order to cancel out the
comparative advantage given to the people in these localities through these resources? So, it is in that
sense that under Section 8, the local populations, if not the local governments, should have a share of
whatever national proceeds may be realized from this natural wealth of the nation located within their
jurisdictions.
xxxx
MR. NATIVIDAD. The history of local governments shows that the usual weaknesses of local governments
are: 1) fiscal inability to support itself; 2) lack of sufficient authority to carry out its duties; and 3) lack of
authority to appoint key officials.
Under this Article, are these traditional weaknesses of local governments addressed to [sic]?
MR. NOLLEDO. Yes. The first question is on fiscal inability to support itself. It will be noticed that we
widened the taxing powers if local governments. I explained that exhaustively yesterday unless the
Gentleman wants me to explain again.
MR. NATIVIDAD. No, that is all right with me.
MR. NOLLEDO. There is a right of retention of local taxes by local governments and according to the
Natividad, Ople, Maambong, de los Reyes amendment, local government units shall share in the
proceeds of the exploitation of the national wealth within the area or region, etc. x x x
xxxx
MR. OPLE. x x x
In the hinterland regions of the Philippines, most municipalities receive an annual income of only
about P200,000 so that after paying the salaries of local officials and employees, nothing is left to fund
any local development project. This is a prescription for a self-perpetuating stagnation and
backwardness, and numbing community frustrations, as well as a chronic disillusionment with the
central government. The thrust towards local autonomy in this entire Article on Local Governments may
suffer the fate of earlier heroic efforts of decentralization which, without innovative features for local
income generation, remained a pious hope and a source of discontent. To prevent this, this amendment
which Commissioner Davide and I jointly propose will open up a whole new source of local financial self-
reliance by establishing a constitutional principle of local governments, and their populations, sharing in
the proceeds of national wealth in their areas of jurisdiction. The sharing with the national government can
be in the form of shares from revenues, fees and charges levied on the exploitation or development and
utilization of natural resources such as mines, hydro electric and geothermal facilities, timber, including
rattan, fisheries, and processing industries based on indigenous raw materials.
But the sharing, Madam President, can also take the form of direct benefits to the population in terms of
price advantages to the people where, say, cheaper electric power is sourced from a local hydroelectric or
geothermal facility. For example, in the provinces reached by the power from the Maria Cristina hydro-
electric facility in Mindanao, the direct benefits to the population cited in this section can take the form of
lower prices of electricity. The same benefit can be extended to the people of Albay, for example, where
volcanic steam in Tiwi provides 55 megawatts of cheap power to the Luzon grid.
The existing policy of slapping uniform fuel adjustment taxes to equalize rates throughout the country in the
name of price standardization will have to yield to a more rational pricing policy that recognizes the
entitlement of local communities to the enjoyment of their own comparative advantage based on
resources that God has given them. And so, Madam President, I ask that the Committee consider this
proposed amendment.[223] (Emphasis ours)
The Local Government Code gave flesh to Section 7, providing that:
Section 18. Power to Generate and Apply Resources. - Local government units shall have the power and
authority to establish an organization that shall be responsible for the efficient and effective implementation
of their development plans, program objectives and priorities; to create their own sources of revenues and to
levy taxes, fees, and charges which shall accrue exclusively for their use and disposition and which shall be
retained by them; to have a just share in national taxes which shall be automatically and directly released to
them without need of any further action; to have an equitable share in the proceeds from the utilization
and development of the national wealth and resources within their respective territorial jurisdictions
including sharing the same with the inhabitants by way of direct benefits; to acquire, develop, lease,
encumber, alienate, or otherwise dispose of real or personal property held by them in their proprietary
capacity and to apply their resources and assets for productive, developmental, or welfare purposes, in the
exercise or furtherance of their governmental or proprietary powers and functions and thereby ensure their
development into self-reliant communities and active participants in the attainment of national goals.
Section 289. Share in the Proceeds from the Development and. Utilization of the National Wealth. - Local
government units shall have an equitable share in the proceeds derived from the utilization and
development of the national wealth within their respective areas, including sharing the same with the
inhabitants by way of direct benefits.

Section 290. Amount of Share of Local Government Units. - Local government units shall, in addition to the
internal revenue allotment, have a share of forty percent (40%) of the gross collection derived by the
national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery
charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its
share in any co-production, joint venture or production sharing agreement in the utilization and
development of the national wealth within their territorial jurisdiction.
Section 291. Share of the Local Governments from any Government Agency or Owned or Controlled
Corporation. - Local government units shall have a share based on the preceding fiscal year from the
proceeds derived by any government agency or government owned or controlled corporation engaged
in the utilization and development of the national wealth based on the following formula whichever will
produce a higher share for the local government unit:
(a) One percent (1%) of the gross sales or receipts of the preceding calendar year; or
(b) Forty percent (40%) of the mining taxes, royalties, forestry and fishery charges and such other taxes, fees
or charges, including related surcharges, interests, or fines the government agency or government owned or
controlled corporation would have paid if it were not otherwise exempt. (Emphasis ours)
Underlying these and other fiscal prerogatives granted to the LGUs under the Local Government Code is an
enhanced policy of local autonomy that entails not only a sharing of powers, but also of resources, between
the National Government and the LGUs. Thus, during the Senate deliberations on the proposed local
government code, it was emphasized:
Senator Gonzales. The old concept of local autonomy, Mr. President, is, we grant more powers, more
functions, more duties, more prerogatives, more responsibilities to local government units. But actually that
is not autonomy. Because autonomy, without giving them the resources or the means in order that they can
effectively carry out their enlarged duties and responsibilities, will be a sham autonomy. I understand that
the Gentleman's concept of autonomy is really centered in not merely granting them more powers and more
responsibilities, but also more means; meaning, funding, more powers to raise funds in order that they can
put into effect whatever policies, decisions and programs that the local government may approve. Is my
understanding correct, Mr. President?
Senator Pimentel. The distinguished Gentleman is correct, Mr. President, Book II of the draft bill under
consideration deals with fiscal matters.[224]
This push for both administrative and fiscal autonomy was reaffirmed during the deliberations of the
Bicameral Conference Committee on the proposed Local Government Code and the eventual signing of the
Bicameral Conference Committee Report. On these occasions, Senator Aquilino Q. Pimentel, Jr., as
Committee Chairman for the Senate panel, declared:
CHAIRMAN PIMENTEL: Mr. Chairman, in response to your opening statement, let me say in behalf of the
Senate panel that we believe the local government code is long overdue. It is time that we really empower
our people in the countryside. And to do this, the local government code version of the Senate is based upon
two premises. No. 1, we have to share power between the national government and local government. And
No. 2, we have to share resources between the national government and local government. It is the only way
by which we believe countryside development will become a reality in our nation. We can all speak out and
spew rhetoric about countryside development, but unl ss and until local governments are empowered and
given financial wherewithal to transform the countryside by the delivery of basic services, then we can never
attain such a dream of ensuring that we share the development of this nation to the countryside where most
of our people reside. x x x[225]
xxxx
CHAIRMAN PIMENTEL. x x x
Yes, we'd like to announce that finally, after three years of deliberation and hundreds of meeting not only by
the Technical Committee, but by the Bicameral Conference Committee itself, we have finally come up with
the final version of the Local· Government Code for 1991.
x x x And if there's any one thing that the Local Government Code will do for our country, it is to provide
the mechanism for the development of the countryside without additional cost to the government because
here, what we are actually doing is merely to reallocate the funds of the national government giving a
substantial portion of those funds to the Local Government Units so that they, in turn, can begin the process
of development in their own respective territories.
And to my mind, this would be a signal achievement of the Senate and the House of Representatives. And
that finally, we are placing in the hands of the local government officials their wherewithals [sic] and the
tools necessary for the development of the people in the countryside and of our Local Government Units in
particular.
x x x x[226]
None of the parties in the instant cases dispute the LGU's entitlement to an equitable share in the proceeds of
the utilization and development of national wealth within their respective areas. The question principally
raised here is whether the national wealth, in this case the Camago-Malampaya reservoir, is within the
Province of Palawan's "area" for it to be entitled to 40% of the government's share under Service Contract
No. 38. The issue, therefore, hinges on what comprises the province's "area" which the Local Government
Code has equated as its "territorial jurisdiction." While the Republic asserts that the term pertains to the
LGU's territorial boundaries, the Province of Palawan construes it as wherever the LGU exercises
jurisdiction.
Territorial jurisdiction refers to territorial boundaries as defined in the LGU's charter
The Local Government Code does not define the term "territorial jurisdiction." Provisions therein, however,
indicate that territorial jurisdiction refers to the LGU's territorial boundaries.
Under the Local Government Code, a "province" is composed of a cluster of municipalities, or
municipalities and component cities.[227] A "municipality," in turn, is described as a group of
barangays,[228] while a "city" is referred to as consisting of more urbanized and developed barangays. [229]
In the creation of municipalities, cities and barangays, the Local Government Code uniformly requires that
the territorial jurisdiction of these government units be "properly identified by metes and bounds," thus:
Section 386. Requisites for Creation. -
xxxx
(b) The territorial jurisdiction of the new barangay shall be properly identified by metes and
bounds or by more or less permanent natural boundaries. The territory need not be contiguous if it
comprises two (2) or more islands.
xxxx

Section 442. Requisites for Creation. -
xxxx
(b) The territorial jurisdiction of a newly-created municipality shall be properly identified by metes
and bounds. The requirement on land area shall not apply where the municipality proposed to be created is
composed of one (1) or more islands. The territory need not be contiguous if it comprises two (2) or more
islands.
xxxx
Section 450. Requisites for Creation.
xxxx
(b) The territorial jurisdiction of a newly-created city shall be properly identified by metes and
bounds. The requirement on land area shall not apply where the city proposed to be created is composed of
one (1) or more islands. The territory need not be contiguous if it comprises two (2) or more islands.
x x x x (Emphasis ours)
The intention, therefore, is to consider an LGU's territorial jurisdiction as pertaining to a physical location or
area as identified by its boundaries. This is also clear from other provisions of the Local Government Code,
particularly Sections 292 and 294, on the allocation of LGUs' shares from the utilization of national wealth,
which speak of the location of the natural resources:
Section 292. Allocation of Shares. - The share in the preceding
Section shall be distributed in the following manner:
(a) Where the natural resources are located in the province:
(1) Province - Twenty percent (20%);
(2) Component City/Municipality - Forty-five percent (45%); and
(3) Barangay - Thirty-five percent (35%)
Provided, however, That where the natural resources are located in two (2) or more provinces, or in two (2)
or more component cities or municipalities or in two (2) or more barangays, their respective shares shall be
computed on the basis of:
(1) Population - Seventy percent (70%); and
(2) Land area - Thirty percent (30%)
(b) Where the natural resources are located in a highly urbanized or independent component city:
(1) City - Sixty-five percent (65%); and
(2) Barangay - Thirty-five percent (35%)
Provided, however, That where the natural resources are located in such two (2) or more cities, the
allocation of shares shall be based on the formula on population and land area as specified in paragraph (a)
of this Section.
Section 294. Development and Livelihood Projects. - The proceeds from the share of local government units
pursuant to this chapter shall be appropriated by their respective sanggunian to finance local government
and livelihood projects: Provided, however, That at least eighty percent (80%) of the proceeds derived from
the development and utilization of hydrothermal, geothermal, and other sources of energy shall be applied
solely to lower the cost of electricity in the local government unit where such a source of energy is
located. (Emphasis ours)
That "territorial jurisdiction" refers to the LGU's territorial boundaries is a construction reflective of the
discussion of the framers of the 1987 Constitution who referred to the local government as the "locality" that
is "hosting" the national resources and a "place where God chose to locate His bounty." [230] It is also
consistent with the language ultimately used by the Constitutional Commission when they referred to the
national wealth as those found within (the LGU's) respective areas. By definition, "area" refers to a
particular extent of space or surface or a geographic region.[231]
Such construction is in conformity with the pronouncement in Sen. Alvarez v. Hon. Guingona, Jr.[232] where
the Court, in explaining the need for adequate resources for LGUs to undertake the responsibilities ensuing
from decentralization, made the following disquisition in which "territorial jurisdiction" was equated with
territorial boundaries:
The practical side to development through a decentralized local government system certainly concerns the
matter of financial resources. With its broadened powers and increased responsibilities, a local government
unit must now operate on a much wider scale. More extensive operations, in turn, entail more expenses.
Understandably, the vesting of duty, responsibility and accountability in every local government unit is
accompanied with a provision for reasonably adequate resources to discharge its powers and effectively
carry out its functions. Availment of such resources is effectuated through the vesting in every local
government unit of (1) the right to create and broaden its own source of revenue; (2) the right to be allocated
a just share in national taxes, such share being in the form of internal revenue allotments (IRAs); and (3) the
right to be given its equitable share in the proceeds of the utilization and development of the national
wealth, if any, within its territorial boundaries.[233] (Emphasis ours)
An LGU has been defined as a political subdivision of the State which is constituted by law and possessed
of substantial control over its own affairs.[234] LGUs, therefore, are creations of law. In this regard, Sections
6 and 7 of the Local Government Code provide:
Section 6. Authority to Create Local Government Units. - A local government unit may be created, divided,
merged, abolished, or its boundaries substantially altered either by law enacted by Congress in the case of
a province, city, municipality, or any other political subdivision, or by ordinance passed by
the sangguniang panlalawigan or sangguniang panlungsod concerned in the case of a barangay located
within its territorial jurisdiction, subject to such limitations and requirements prescribed in this Code.
Section 7. Creation and Conversion. - As a general rule, the creation of a local government unit or its
conversion from one level to another level shall be based on verifiable indicators of viability and projected
capacity to provide services, to wit:
(a) Income. - It must be sufficient, based on acceptable standards, to provide for all essential government
facilities and services and special functions commensurate with the size of its population, as expected of the
local government unit concerned;
(b) Population. - It shall be determined as the total number of inhabitants within the territorial jurisdiction of
the local government unit concerned; and
(c) Land Area. - It must be contiguous, unless it comprises two or more islands or is separated by a local
government unit independent of the others; properly identified by metes and bounds with technical
descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its
populace.
Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF), the
National Statistics Office (NSO), and the Lands Management Bureau (LMB) of the Department of
Environment and Natural Resources (DENR). (Emphasis ours)
In enacting charters of LGUs, Congress .is called upon to properly identify their territorial jurisdiction by
metes and bounds. Mariano, Jr. v. COMELEC[235] stressed the need to demarcate the territorial boundaries
of LGUs with certitude because they define the limits of the local governments' territorial jurisdiction.
Reiterating this dictum, the Court, in Municipality of Pateros v. Court of Appeals, et al.,[236] held:
[W]e reiterate what we already said about the importance and sanctity of the territorial jurisdiction of an
LGU:
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 of its territorial jurisdiction. Beyond these 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 be
avoided by the Local Government Unit in requiring that the land area of a local government unit must be
spelled out in metes and bounds, with technical descriptions.[237] (Emphasis ours)
Clearly, therefore, a local government's territorial jurisdiction cannot extend beyond the boundaries set by its
organic law.
Area as delimited by law and not exercise of jurisdiction as basis of the LGU's equitable share
The Court cannot subscribe to the argument posited by the Province of Palawan that the national wealth, the
proceeds from which the State is mandated to share with the LGUs, shall be wherever the local government
exercises any degree of jurisdiction.
An LGU's territorial jurisdiction is not necessarily co-extensive with its exercise or assertion of powers. To
hold otherwise may result in condoning acts that are clearly ultra vires. It may lead to, in the words of the
Republic, LGUs "rush[ing] to exercise its powers and functions in areas rich in natural resources (even if
outside its boundaries) with the intention of seeking a share in the proceeds of its exploration" [238] - a
situation that "would sow conflict not only among the local government units and the national government
but worse, between and among local government units."[239]
There is likewise merit in the Republic's assertion that Palawan's interpretation of what constitutes an LGU's
territorial jurisdiction may produce absurd consequences. Indeed, there are natural resources, such as forests
and mountains, which can be found within the LGU's territorial boundaries, but are, strictly speaking, under
national jurisdiction, specifically that of the Department of Environment and Natural Resources.[240] To
equate territorial jurisdiction to areas where the LGU exercises jurisdiction means that these natural
resources will have to be excluded from the sharing scheme although they are geographically within the
LGU's territoriallimits.[241] The consequential incongruity of this scenario finds no support either in the
language or in the context of the equitable sharing provisions of the 1987 Constitution and the Local
Government Code.
The Court finds it appropriate to also cite Section 150 of the Local Government Code which speaks of
the situs of local business taxes under Section 143 of the same law. Section 150 provides:
Section 150. Situs of the Tax. -
xxxx
(b) The following sales allocation shall apply to manufacturers, assemblers, contractors, producers, and
exporters with factories, project offices, plants, and plantations in the pursuit of their business:
(1) Thirty percent (30%) of all sales recorded in the principal office shall be taxable by the city or
municipality where the principal office is located; and
(2) Seventy percent (70%) of all sales recorded in the principal office shall be taxable by the city or
municipality where the factory, project office, plant, or plantation is located.
(c) In case of a plantation located at a place other than the place where the factory is located, said
seventy percent (70%) mentioned in subparagraph (b) of subsection (2) above shall be divided as
follows:
(1) Sixty percent (60%) to the city or municipality where the factory is located; and
(2) Forty percent (40%) to the city or municipality where the plantation is located.
(d) In cases where a manufacturer, assembler, producer, exporter or contractor has two (2) or more factories,
project offices, plants, or plantations located in different localities, the seventy percent (70%) sales
allocation mentioned in subparagraph (b) of subsection (2) above shall be prorated among the localities
where the factories, project offices, plants, and plantations are located in proportion to their
respective volumes of production during the period for which the tax is due.
(e) The foregoing sales allocation shall be applied irrespective of whether or not sales are made in the
locality where the factory, project office, plant, or plantation is located. (Emphasis ours)
The foregoing provision illustrates the untenability of the Province of Palawan's interpretation of "territorial
jurisdiction" based on exercise of jurisdiction. To sustain the province's construction would mean that
the territorial jurisdiction of the municipality or city where the factory, plant, project office or plantation is
situated, extends to the LGU where the principal office is located because said municipality or city can
exercise the authority to tax the sale transactions made or recorded in the principal office. This could not
have been the intent of the framers of the Local Government Code.
The Provincial Government of Palawan argues that its territorial jurisdiction extends to the Camago-
Malampaya reservoir considering that its local police maintains peace and order in the area; crimes
committed within the waters surrounding the province have been prosecuted and tried in the courts of
Palawan; and the provincial government enforces environmental laws over the same area. [242] The province
also cites Section 468 of the Local Government Code, which authorizes the Sanggunian Panlalawigan to
enact ordinances that protect the environment, as well as Sections 26 and 27 of the law, which require
consultation with the LGUs concerned and the approval of their respective sanggunian before the National
Government may commence any project that will have an environmental impact. [243] The province avers that
the Contractor, in fact, obtained the necessary endorsement from the Sangguniang Panlalawigan of Palawan
before starting its operations.[244]
The Court notes, however, that the province's claims of maintaining peace and order in the Camago-
Malampaya area and of enforcing environmental laws therein have not been substantiated by credible proof.
The province likewise failed to adduce evidence of the crimes supposedly committed in the same area or
their prosecution in Palawan's courts.
The province cites illegal fishing, poaching and illegal entry as the cases tried before the courts of Palawan.
As conceded by the parties, however, the subject gas reservoir is situated, not in the marine waters, but in
the continental shelf. The Province of Palawan has not established that it has, in fact, exercised jurisdiction
over this submerged land area.
The LGU's authority to adopt and implement measures to protect the environment does not determine the
extent of its territorial jurisdiction. The deliberations of the Bicameral Conference Committee on the
proposed Local Government Code provides the proper context for the exercise of such authority:
HON. DE PEDRO. The Senate version does not have any specific provision on this. The House's reads:
"The delegation to each local government unit of the responsibility in the management and maintenance of
environmental balance within its territorial jurisdiction."
CHAIRMAN PIMENTEL. Well, this is a matter of delegating to the local government units power to
determine environmental concerns, which is good. However, we have some reservations precisely
because environment does not know of territorial boundaries. That is our reservation there. And we
have to speak of the totality of the environment of the nation rather than the provincial or municipal
in that respect. x x x[245] (Emphasis ours)
Thus, the LGU's statutory obligation to maintain ecological balance is but part of the nation's collective
effort to preserve its environment as a whole. The extent to which local legislation or enforcement protects
the environment will not define the LGU's territory.
Sections 26 and 27 of the Local Government Code provide:
Section 26. Duty of National Government Agencies in the Maintenance of Ecological Balance. - It shall be
the duty of every national agency or government-owned or controlled corporation authorizing or involved in
the planning and implementation of any project or program that may cause pollution, climatic change,
depletion of non-renewable resources, loss of crop land, rangeland, or forest cover, and extinction of animal
or plant species, to consult with the local government units, nongovernmental organizations, and other
sectors concerned and explain the goals and objectives of the project or program, its impact upon the
people and the community in terms of environmental or ecological balance, and the measures that will
be undertaken to prevent or minimize the adverse effects thereof.
Section 27. Prior Consultations Required. - No project or program shall be implemented by government
authorities unless the consultations mentioned in Sections 2 (c) and 26 hereof are complied with, and prior
approval of the sanggunian concerned is obtained: Provided, That occupants in areas where such projects
are to be implemented shall not be evicted unless appropriate relocation sites have been provided, m
accordance with the provisions of the Constitution. (Emphasis ours)
It is clear from Sections 26 and 27 that the consideration for the required consultation
and sanggunian approval is the environmental impact of the National Government's project on the local
community. A project, however, may have an ecological impact on a locality without necessarily being
situated therein. Thus, prior consultation made pursuant to the foregoing provisions does not perforce
establish that the national wealth sought to be utilized is within the territory of the LGU consulted.
In fine, an LGU cannot claim territorial jurisdiction over an area simply because its government has
exercised a certain degree of authority over it. Territorial jurisdiction is defined, not by the local
government, but by the law that creates it; it is delimited, not by the extent of the LGU's exercise of
authority, but by physical boundaries as fixed in its charter.
Unless clearly expanded by Congress, the LGU's territorial jurisdiction refers only to its land area.
Utilization of natural resources found within the land area as delimited by law is subject to the 40%
LGU share.
Since it refers to a demarcated area, the term "territorial jurisdiction" is evidently synonymous with the term
"territory." In fact, "territorial jurisdiction" is defined as the limits or territory within which authority may be
exercised.[246]
Under the Local Government Code, particularly the provisions on the creation of municipalities, cities and
provinces, and LGUs in general, territorial jurisdiction is contextually synonymous with territory and the
term "territory" is used to refer to the land area comprising the LGU, thus:
Section 442. Requisites for Creation. -
(a) A municipality may be created if it has an average annual income, as certified by the provincial treasurer,
of at least Two million five hundred thousand pesos (P2,500,000.00) for the last two (2) consecutive years
based on the 1991 constant prices; a population of at least twenty five thousand (25,000) inhabitants as
certified by the National Statistics Office; and a contiguous territory of at least fifty (50) square
kilometers as certified by the Lands Management Bureau: Provided, That the creation thereof shall not
reduce the land area, population or income of the original municipality or municipalities at the time of said
creation to less than the minimum requirements prescribed herein.
(b) The territorial jurisdiction of a newly-created municipality shall be properly identified by metes and
bounds. The requirement on land area shall not apply where the municipality proposed to be created is
composed of one (1) or more islands. The territory need not be contiguous if it comprises two (2) or more
islands.
(c) The average annual income shall include the income accruing to the general fund of the municipality
concerned, exclusive of special funds, transfers and non-recurring income.
(d) Municipalities existing as of the date of the effectivity of this Code shall continue to exist and operate as
such. Existing municipal districts organized pursuant to presidential issuances or executive orders and which
have their respective set of elective municipal officials holding office at the time of the effectivity of this
Code shall henceforth be considered as regular municipalities.
Section 450. Requisites 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 (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:
(i) a contiguous territory of at least one hundred (100) square kilometers, as certified by the Lands
Management Bureau; or
(ii) a population of not less than one hundred fifty thousand (150,000) inhabitants, as certified by the
National Statistics Office:
Provided, That, the creation thereof shall not reduce the land area, population, and income of the original
unit or units at the time of said creation to less than the minimum requirements prescribed herein.
(b) The territorial jurisdiction of a newly-created city shall be properly identified by metes and bounds.
The requirement on land area shall not apply where the city proposed to be created is composed of one (1)
or more islands. The territory need not be contiguous if it comprises two (2) or more islands.
(c) The average annual income shall include the income accruing to the general fund, exclusive of specific
funds, transfers, and non-recurring income.
Section 461. Requisites for Creation.
(a) A province may be created if it has an average annual income, as certified by the Department of Finance,
of not less than Twenty million pesos (P20,000,000.00) based on 1991 constant prices and either of the
following requisites:
(i) a contiguous territory of at least two thousand (2,000) square kilometers, as certified by the Lands
Management Bureau; or
(ii) a population of not less than two hundred fifty thousand (250,000) inhabitants as certified by the
National Statistics Office:
Provided, That, the creation thereof shall not reduce the land area, population, and income of the original
unit or units at the time of said creation to less than the minimum requirements prescribed herein.
(b) The territory need not be contiguous if it comprise two (2) or more islands or is separated by a
chartered city or cities which do not contribute to the income of the province.
(c) The average annual income shall include the income accruing to the general fund, exclusive of special
funds, trust funds, transfers and non-recurring income.
Section 7. Creation and Conversion. - As a general rule, the creation of a local government unit or its
conversion from one level to another level shall be based on verifiable indicators of viability and projected
capacity to provide services, to wit:
(a) Income. - It must be sufficient, based on acceptable standards, to provide for all essential government
facilities and services and special functions commensurate with the size of its population, as expected of the
local government unit concerned;
(b) Population. - It shall be determined as the total number of inhabitants within the territorial jurisdiction of
the local government unit concerned; and
(c) Land Area. - It must be contiguous, unless it comprises two or more islands or is separated by a local
government unit independent of the others; properly identified by metes and bounds with technical
descriptions; and sufficient to provide for such basic services and facilities to meet the requirements of its
populace.
Compliance with the foregoing indicators shall be attested to by the Department of Finance (DOF), the
National Statistics Office (NSO), and the Lands Management Bureau (LMB) of the Department of
Environment and Natural Resources (DENR). (Emphasis ours)
That the LGUs' respective territories under the Local Government Code pertain to the land area is clear from
the fact that: (a) the law generally requires the territory to be "contiguous"; (b) the minimum area of the
contiguous territory is measured in square kilometers; (c) such minimum area must be certified by the Lands
Management Bureau; and (d) the territory should be identified by metes and bounds, with technical
descriptions.
The word "contiguous" signifies two solid masses being in actual contact. Square kilometers are units
typically used to measure large areas of land. The Land Management Bureau, a government agency that
absorbed the functions of the Bureau ofLands, recommends policies and programs for the efficient and
effective administration, management and disposition of alienable and disposable lands of the public domain
and other lands outside the responsibilities of other government agencies. [247] Finally, "metes and bounds"
are the boundaries or limits of a tract of land especially as described by reference and distances between
points on the land,[248] while "technical descriptions" are used to describe these boundaries and are
commonly found in certificates of land title.
The following pronouncement in Tan v. Comelec[249] is particularly instructive:
It is of course claimed by the respondents in their Comment to the exhibits submitted by the petitioners
(Exhs. C and D, Rollo, pp. 19 and 91), that the new province has a territory of 4,019.95 square kilometers,
more or less. This assertion is made to negate the proofs submitted, disclosing that the land area of the new
province cannot be more than 3,500 square kilometers because its land area would, at most, be only about
2,856 square kilometers, taking into account government statistics relative to the total area of the cities and
municipalities constituting Negros del Norte. Respondents insist that when Section 197 of the Local
Government Code speaks of the territory of the province to be created and requires that such
territory be at least 3,500 square kilometers, what is contemplated is not only the land area but also
the land and water over which the said province has jurisdiction and control. It is even the submission
of the respondents that in this regard the marginal sea within the three mile limit should be
considered in determining the extent of the territory of the new province. Such an interpretation is
strained, incorrect, and fallacious.
The last sentence of the first paragraph of Section 197 is most revealing. As so stated therein the "territory
need not be contiguous if it comprises two or more islands." The use of the word territory in this particular
provision of the Local Government Code and in the very last sentence thereof, clearly reflects
that "territory" as therein used, has reference only to the mass of land area and excludes the waters
over which the political unit exercises control.
Said sentence states that the "territory need not be contiguous." Contiguous means (a) in physical contact;
(b) touching along all or most of one side; (c) near, text, or adjacent. "Contiguous", when employed as
an adjective, as in the above sentence, is only used when it describes physical contact, or a touching of
sides of two solid masses of matter. The meaning of particular terms in a statute may be ascertained by
reference to words associated with or related to them in the statute. Therefore, in the context of the
sentence above, what need not be "contiguous" is the "territory" the physical mass of land area.
There would arise no need for the legislators to use the word coptiguous if they had intended that the
term "territory" embrace not only land area but also territorial waters. It can be safely concluded
that the word territory in the first paragraph of Section 197 is meant to be synonymous with "land
area" only. The words and phrases used in a statute should be given the meaning intended by the
legislature. The sense in which the words are used furnished the rule of construction.
The distinction between "territory" and "land area" which respondents make is an artificial or
strained construction of the disputed provision whereby the words of the statute are arrested from
their plain and obvious meaning and made to bear an entirely different meaning to justify an absurd
or unjust result. The plain meaning in the language in a statute is the safest guide to follow in
construing the statute. A construction based on a forced or artificial meaning of its words and out of
harmony of the statutory scheme is not to be favored.[250] (Emphasis ours and citations omitted)
Though made in reference to the previous Local Government Code or Batas Pambansa Blg. (BP) 337, the
above-cited ruling remains relevant in determining an LGU's territorial jurisdiction under the 1991 Local
Government Code. Section 197 of BP 337[251] cited the requisites for creating a province, among which was
a "territory," with a specified minimum area, which did not need to be "contiguous" if it comprised two or
more islands. Tan, therefore, is clearly relevant since it explained the significance of the word "contiguous,"
which is similarly used in the Local Government Code, in the determination of the LGU's territory. More
importantly, it appears that the framers of the Local Government Code drew inspiration from the Tan ruling
such that in lieu of the word "territory," they specified that such requisite in the creation of the LGU shall
refer to the land area. Thus, in his book on the Local Government Code, Senator Pimentel who, in former
Chief Justice Reynato S. Puno's words, "shepherded the Code through the labyrinthine process of
lawmaking," wrote:
When a law was passed in the Batasan Pambansa creating the new province of Negros del Norte, the
Supreme Court was asked to rule in Tan v. Commission on Elections, whether or not the new province
complied properly with the "territory" requirement that it must have no less then [sic] 3,500 square
kilometers.
The respondents claimed that "the new province has a territory of 4,019.95 square kilometers" by including
in that computation not only the land area, but also the "water over which said province had jurisdiction and
control," and "the marginal sea within the three mile limit."
The Supreme Court ruled that such an interpretation is strained, incorrect and fallacious. The Court added
that the use of the word "territory" in the Local Government Code clearly reflected that "territory" as therein
used had reference only to the mass of land area and excluded the waters over which the political unit
exercises control.
Inspired by this Supreme Court ruling, the Code now uses the words "land area" in lieu of
"territory" to emphasize that the area required of an LGU does not include the sea for purposes of
compliance with the requirements of the Code for its creation.[252] (Emphasis ours)
Tan, in fact, establishes that an LGU may have control over the waters but may not necessarily claim them
as part of their territory. This supports the Court's finding that the exercise of authority does not determine
the LGU's territorial jurisdiction.
It is true that under Sections 442 and 450 of the Local Government Code, "(t)he requirement on land area
shall not apply" if the municipality or city proposed to be created is composed of one or more islands. This
does not mean, however, that the territory automatically extends to the waters surrounding the islands or to
the open sea. Nowhere in said provisions is it even remotely suggested that marine waters, or for that matter
the continental shelf, are consequently to be included as part of the territory. The provisions still speak of
"islands" as constituting the LGU, and under Article 121 of the UNCLOS, an island is defined as "a
naturally formed area of land, surrounded by water, which is above water at high tide." The inapplicability
of the requirement on land area only means that where the proposed municipality or city is an island, or
comprises two or more islands, it need not be identified by metes and bounds or satisfy the required
minimum area. In that case, the island mass constitutes the area of the municipality or city and its limits are
the island's natural boundaries.
Significantly, during the Senate deliberations on the proposed Local Government Code, then Senate
President Jovito Salonga suggested an amendment that would extend the territorial jurisdiction of
municipalities abutting bodies of water to at least two kms from the shoreline. The ensuing exchange is
worth highlighting:
The President. Here is a proposed amendment: Line 17, to add the following: FOR MUNICIPALITIES
ABUTTING BODIES OF WATER THEIR TERRITORIAL JURISDICTION SHALL EXTEND TO AT
LEAST TWO KILOMETERS FROM THE SHORELINE; PROVIDED, THAT IN CASE THERE ARE
TWO OR MORE MUNICIPALITIES ON EITHER SIDE OF SUCH A BODY OF WATER MAKING
THE TWO-KILOMETER JURISDICTION INADVISABLE THE JURISDICTION OF THE AFFECTED
MUNICIPALITIES SHALL BE DETERMINED BY DRAWING A LINE AT THE MIDDLE OF SUCH
BODY OF WATER. This is only for municipalities abutting bodies of water.
Senator Pimentel. Mr. President, may we invite the attention of our Colleagues that in Book IV, page 273,
we define what constitutes municipal waters. And, the measurement is not two kilometers but three nautical
miles starting from the sea-line boundary marks at low tide. Therefore, there may be some complications
here. We are not against the amendment per se. What we are trying to make of record is the fact that we
have to consider also the provision of Section 464 which defines "MUNICIPAL WATERS". So, probably,
we can increase the extension of the territorial jurisdiction to three nautical miles instead of two kilometers
as mentioned in this proposed amendment.
In fact, Mr. President, it is also stated at the last sentence of Section 464:
Where two municipalities are so situated on the opposite shores that there is less than six nautical miles of
marine water between them, the third line shall be aligned equally distant from the opposite shores of the
respective municipalities.
So, there is an attempt here to delineate, really, the jurisdiction of the municipalities which may have a
common body of water, let us say, in between them.
The President. So, that is acceptable, provided that it is three nautical miles?
Senator Pimentel. Yes. Probably, Mr. President, what we can do is hold in abeyance this proposed
amendment and take it up when we reach Section 464. I think, it will be more appropriate in that section,
Mr. President.
The President. But, if it is a question of territorial jurisdiction, may not this be the proper place for it?
Senator Pimentel. All right, Mr. President, what we can do is, we will accept the proposed amendment,
subject to the observations that we have placed on record.
The President. All right. Subject to the three-nautical-mile limit.
Senator Saguisag. Mr. President.
The President. Senator Saguisag is recognized.
Senator Saguisag. I just would like to find out, Mr. President, if we are codifying something that may
represent the present state of the law, or are we creating a new concept here? Ang ibig po bang sabihin nita
ay mayroong magmamay-ari ng Pasig River? Kasi, I do not believe that we have ever talked about Manila
owning a river or Manila owning Manila Bay. Is that what we are introducing here? And what are its
implications? Taga-Maynila lamang ba ang maaaring gumamit niyan at sila lamang ang magpapasiya kung
ano ang dapat gawin 0 puwedeng pumasok ang coast guard? What do we intend to achieve by now saying
that...
The President. Inland waters lamang naman yata ang pinaguusapang ito.
Senator Saguisag. Opo. Pero, I am not sure whether there is an owner of the Pasig River. I am not sure.
Maybe, there is. Pero, my own recollection is that we have never talked of that idea before. I do not know
what it means. Does it mean now that the municipality owning it can exclude the rest of the population from
using it without going through licensing processes? Ano po ang gusto nating gawin dito?
Ang alam ko ho riyan, they cannot be owned in the sense that they are really owned by every Filipino. Iyon
lamang po. Kasi, capitals po ang naririto sa page 273, baka bago ito. Pero, ano po ba and ibig sabihin nito?
In my study of property before, hindi ko narinig...So, maybe, we should really reserve this as suggested by
the distinguished Chairman.
The President. All right. Why do we not defer this until we can determine which is the better place?
Senator Pimentel. Yes, Mr. President.
The President. All right. So let us defer consideration of this plus the major question that Senator Saguisag
is posing, is this something new that we are laying down?
Senator Pimentel. No. Actually the definition of "municipal waters" came about, really, because of several
complaints that our Committee has received from fisherpeople. They have complained that the municipality
is not able to help them, because the definition of "municipal waters" has not been clearly spelled out. That
is the reason why we attempted to introduce some definitions of "municipal waters" here, basically, in
answer to the demands of the fisherfolk who believe that their rights are being intruded upon by other people
coming from other places. Probably, the definition of municipal waters will also delineate the criminal
jurisdiction of, let us say, the municipal police in certain acts, like dynamite fishing in a particular locality. It
can help, Mr. President.
The President. Sa palagay ba ninyo, iyong Marikina River that goes through several municipalities we have
the Municipality of Pasig, then the Municipality of Marikina, then the Municipality of San Mateo, and then
the Municipality of Montalban how will that be apportioned?
Senator Pimentel. If a river passes through several municipalities, the boundary will be an imaginary line
drawn at the middle of this river, basically, Mr. President.
The President. Anyway, we will defer this until we reach Book IV.[253]
Based on the records of the Senate and the Bicameral Conference Committee on Local Government,
however, the Salonga amendment was not considered anew in subsequent deliberations. Neither did the
proposed amendment appear in the text of the Local Government Code as approved. By Senator Pimentel's
account, the Code deferred to the Court's ruling in Tan which excluded the marginal sea from the LGU's
territory. It can, thus, be concluded that under the Local Government Code, an LGU's territory does not
extend to the municipal waters beyond the LGU's shoreline.
The parties all agree that the Camago-Malampaya reservoir is located in the continental shelf.[254] If the
marginal sea is not included in the LGU's territory, with more reason should the continental shelf, located
miles further, be deemed excluded therefrom.
To recapitulate, an LGU's territorial jurisdiction refers to its territorial boundaries or to its territory. The
territory of LGUs, in turn, refers to their land area, unless expanded by law to include the maritime area.
Accordingly, only the utilization of natural resources found within the land area as delimited by law is
subject to the LGU's equitable share under Sections 290 and 291 of the Local Government Code. This
conclusion finds support in the deliberations of the 1986 Constitutional Commission which cited, as
examples of national wealth the proceeds from which the LGU may share, the Tiwi Geothermal Plant in
Albay, the geothermal plant in Macban, Makiling-Banahaw area in Laguna, the Maria Cristina area in
Central Mindanao, the great rivers and sources of hydroelectric power in Iligan, in Central Mindanao, the
geothermal resources in the area of Palimpiñon, Municipality of Valencia and mountainous areas, which are
all situated inland.[255] In his 2011 treatise on the Local Government Code, former Senator Pimentel cited as
examples of such national wealth, the geothermal fields of Tongonan, Leyte and Palinpinon, Negros
Oriental which are both found inland.[256]
Section 6 of the Local Government Code empowers Congress to create, divide, merge and abolish LGUs,
and to substantially alter their boundaries, subject to the plebiscite requirement under Section 10 of the law
which reads:
Section 10. Plebiscite Requirement. - No creation, division, merger, abolition or substantial alteration of
boundaries of local government units shall take effect unless approved by a majority of the votes cast in a
plebiscite called for the purpose in the political unit or units directly affected. Said plebiscite shall be
conducted by the Commission on Elections (COMELEC) within one hundred twenty (120) days from the
date of effectivity of the law or ordinance effecting such action, unless said law or ordinance fixes another
date.
Accordingly, unless Congress, with the approval of the political units directly affected, clearly extends an
LGU's territorial boundaries beyond its land area, to include marine waters, the seabed and the subsoil, it
cannot rightfully share in the proceeds of the utilization of national wealth found therein.
No law clearly granting the Province of Palawan territorial jurisdiction over the Camago-Malampaya
reservoir
The Republic has enumerated the laws defining the territory of Palawan. [257] The following table has been
culled from said enumeration:
Governing Law Territorial Limits
[258]
Act No. 422 The Province of Paragua shall consist of all that portion of the Island of Paragua north
of the tenth parallel of north latitude and the small islands adjacent thereto, including
Dumaran, and of the islands forming the Calamianes Group and the Cuyos group.
(Section 2)
Act No. 567[259] The Province of Paragua shall consist of all that portion of the Island of Paragua north
of a line beginning in the middle of the channel at the mouth of the Ulugan River in
the Ulugan Bay, thence following the main channel of the Ulugan River to the village
of Bahile, thence along the main trail leading from Bahile to the Tapul River, thence
following the course of the Tapul River to its mouth in the Honda Bay; except at the
towns of Bahile and Tapul the west boundary line shall be the arc of a circle with one
mile radius, the center of the circle being the center of the said towns of Bahile and
Tapul. There shall be included in the Province of Paragua the small islands adjacent
thereto, including Dumaran and the island forming the Calamianes group and the
Cuyos group. (Section 1)
Act No. 747[260] The Province of Paragua shall consist of the entire Island of Paragua, the Islands of
Dumaran and Balabac, the Calamianes Islands, the Cuyos Islands, the
Cagayanes Islands, and all other islands adjacent thereto and not included within the
limits of any province. (Section 1)
Act No. 1363[261] Upon the recommendation of the Philippine Committee on Geographical Names the
name of the Province and Island of Paragua is hereby changed to that of Palawan.
(Section 1)
Act No. 1396[262] The Province of Palawan shall include the entire Island of Palawan, the Islands of
Dumaran and Balabac, the Calamianes Islands, the Cuyos Islands, the
Cagayanes Islands, and all other islands adjacent to these islands and not included
 within the limits of any other province. (Section 26)
Act No. 2657[263] Article II (Situs and Major Subdivisions of Provinces Other than such as are
Contained in Department of Mindanao and Sulu)
Section 43. Situs of Provinces and Major Subdivisions. - The general location of the
provinces other than such as are contained in the Department of Mindanao and Sulu,
together with the subprovinces, municipalities, and townshlps respectively contained
in them is as follows:
xxxx
The Province of Palawan consists of the Island of Palawan, the islands of Dumaran
and Balabac, the Calamian Islands, the Cuyo Islands, the Cagayanes Islands, and all
other islands adjacent to any of them, not included in some other province. It contains
the townships of Cagayancillo, Coron, Cuyo, Puerto Princesa (the capital of the
province), and Taytay.
Act No. 2711[264] Chapter 2 (Political Grand Divisions and Subdivisions)
Article I
Grand Divisions
Section 37. Grand divisions of (Philippines Islands) Philippines. - The (Philippine
Islands) Philippines compnses the forty-two provinces named in the next succeeding
paragraph hereof, the seven provinces of the Department of Mindanao and Sulu, and
the territory of the City of Manila.
xxxx
The Province of Palawan consists of the Island of Palawan, the islands of Dumaran
and Balabac, the Calamian Islands, the Cuyo Islands, the Cagayanes Islands, and all
other islands adjacent to any of them, not included in some other province, and
comprises the following municipalities: Agutaya, Bacuit, Cagayancillo, Coron, Cuyo,
Dumaran, Puerto Princesa (the capital of the province), and Taytay.
The province also contains the following municipal districts: Aborlan, Balabac and
Brooke's Point.
As defined in its organic law, the Province of Palawan is comprised merely of islands. The continental shelf,
where the Camago-Malampaya reservoir is located, was clearly not included in its territory.
An island, as herein before-mentioned, is defined under Article 121 of the UNCLOS as "a naturally
formed area of land, surrounded by water, which is above water at high tide." The continental shelf, on the
other hand, is defined in Article 76 of the same Convention as comprising "the seabed and subsoil of the
submarine areas that extend beyond (the coastal State's) territorial sea throughout the natural prolongation of
its land territory to the outer edge of the continental margin, or to a distance of 200 nm from the baselines
from which the breadth of the territorial sea is measured where the outer edge of the continental margin does
not extend up to that distance." Where the continental shelf of the coastal state extends beyond 200 nm,
Article 76 allows the State to claim an extended continental shelf up to 350 nm from the baselines. [265]
Under Palawan's charter, therefore, the Camago-Malampaya reservoir is not located within its territorial
boundaries.
P.D. No. 1596, which constituted Kalayaan as a separate municipality of the Province of Palawan, cannot be
the basis for holding that the Camago-Malampaya reservoir forms part of Palawan's territory. Section 1 of
P.D. No. 1596 provides:
SECTION 1. The area within the following boundaries:
KALAYAAN ISLAND GROUP
From a point [on the Philippine Treaty Limits] at latitude 7°40' North and longitude 116°00' East of
Greenwich, thence due West along the parallel of 7°40' N to its intersection with the meridian of longitude
112°10' E, thence due north along the meridian of 112°10' E to its intersection with the parallel of 9°00' N,
thence northeastward to the inter section of the parallel of 12°00' N with the meridian oflongitude 114°30' E,
thence, due East along the parallel of 12°00' N to its intersection with the meridian of 118°00' E, thence, due
South along the meridian of longitude 118°00' E to its intersection with the parallel of 10°00' N, thence
Southwestwards to the point of beginning at 7°40' N, latitude and 116°00' E longitude; including the sea-
bed, sub-soil, continental margin and air space shall belong and be subject to the sovereignty of the
Philippines. Such area is hereby constituted as a distinct and separate municipality of the Province of
Palawan and shall be known as "Kalayaan." (Emphasis ours)
None of the parties assert that the Camago-Malampaya reservoir is within the territory of Kalayaan as
delimited in Section 1 of P.D. No. 1596 or as referred to in R.A. No. 9522, [266] commonly known as the
"2009 baselines law." The Province of Palawan, however, invokes P.D. No. 1596 to argue that similar to
Kalayaan, its territory extends to the seabed, the subsoil and the continental margin. The Court is not
persuaded.
The delineation of territory in P.D. No. 1596 refers to Kalayaan alone. The inclusion of the seabed, subsoil
and continental margin in Kalayaan's territory cannot, by simple analogy, be applied to the Province of
Palawan. To hold otherwise is to expand the province's territory, as presently defined by law, without the
requisite legislation and plebiscite.
The Court likewise finds no merit in the Province of Palawan's assertion that R.A. No. 7611 establishes that
the Camago-Malampaya area is within the territorial jurisdiction of Palawan. It is true that R.A. No. 7611
contains a definition of "Palawan" that states:
Section 3. Definition of Terms. - As used in this Act, the following terms are defined as follows:
(1) "Palawan" refers to the Philippine province composed of islands and islets located 7°47' and 12°'22'
north latitude and 117°'00' and 119°'51' east longitude, generally bounded by the South China Sea to the
northwest and by the Sulu Sea to the east.
xxxx
Both the Republic and the Province of Palawan agree that the above geographic coordinates, when plotted,
would show that the Camago-Malampaya reservoir is within the area described. However, no less than the
map[267] submitted by the Province of Palawan showed that substantial portions of Palawan's territory were
excluded from the area so defined.
The Republic cites, without controversion from the province, that portions of mainland Palawan and several
islands, municipalities or portions thereof, namely, the Municipalities of Balabac, Cagayancillo, Busuanga,
Coron, Agutaya, Magsaysay, Cuyo, Araceli, Linapacan and Dumaran were excluded.[268] Their exclusion
constitutes a substantial alteration of Palawan's territory which, under Section 10 of the Local Government
Code, cannot take effect without the approval of the majority of the votes cast for the purpose in a plebiscite
in the political units directly affected.
There is also no showing that the criteria for the alteration, as established in Sections 7 and 461 of the Local
Government Code, had been met. The definition, therefore, does not have the effect of redefining Palawan's
territory. In fact, R.A. No. 7611 was enacted not for such purpose but to adopt a comprehensive framework
for the sustainable development of Palawan compatible with protecting and enhancing the natural resources
and endangered environment of the province.[269]
The definitions under Section 1 of R.A. No. 7611 are also qualified by the phrase "[A]s used in this Act."
Thus, the definition of "Palawan" should be taken, not as a statement of territorial limits for purposes of
Section 7, Article X of the 1987 Constitution, but in the context of R.A. No. 7611 which is aimed at
environmental monitoring, research and education.[270]
It is true, as the Province of Palawan has pointed out, that R.A. No. 7611 includes the coastal or marine area
as one of the three components of the Environmentally Critical Areas Network designated in said law, the
other two being the terrestrial component and the tribal ancestral lands. R.A. No. 7611 refers to the coastal
or marine area as the whole coastline up to the open sea, characterized by active fisheries and tourism
activities. By all the parties' accounts, however, the Camago-Malampaya reservoir, is located not in such
coastal or marine area but in the continental shelf. Thus, even on the supposition that R.A. No. 7611
redefined Palawan's territory, it clearly did not include the seabed and subsoil comprising the continental
shelf. In fact, what it expressly declares as composing the Province of Palawan are the "islands and islets."
It is also clear that R.A. No. 7611 does not vest any additional jurisdiction on the Province of Palawan. The
PCSD, formed under said law, is composed of both provincial officials and representatives from national
government agencies. It was also established under the Office of the President. The tasks outlined by R.A.
No. 7611, which largely involve policy formulation and coordination, are carried out not by the province,
but by the council.
Thus, even if the Court were to apply the province's definition of "territorial jurisdiction" as co-extensive
with its exercise of authority, R.A. No. 7611 cannot be considered as conferring territorial jurisdiction over
the Camago-Malampaya reservoir to Palawan since the law did not grant additional power to the province.
It must be pointed out, too, that the Province of Palawan never alleged in which of its municipalities or
component cities and barangays the Camago-Malampaya reservoir is located. Under Section 292 of the
Local Government Code, the local government's share in the utilization of national wealth located in a
province shall be allocated in the following ratio:
(1) Province - Twenty percent (20%);
(2) Component City/Municipality - Forty-five percent (45%); and
(3) Barangay - Thirty-five percent (35%)
The allocation of the LGU share to the component city/municipality and the barangay cannot but indicate
that the natural resource is necessarily found . therein. This is only logical since a province is composed of
component cities and municipalities, and municipalities are in turn composed of barangays. Senate
deliberations on the proposed Local Government Code also reflect that at bottom, the natural resource is
located in the municipality or component city:
Senator Rasul. Mr. President, may I continue. Also on the same page, same section, "Share of Local
Government in the Proceeds From the Exploration", I propose that there should be a specific sharing in this
section, because this section does not speak of the sharing; how much goes to the barangay, municipality,
city, or province?
Senator Pimentel. Yes, in fact, we have Mr. President and I was about to read it into the record, so that,
there will be a new paragraph after the word Resources on page 54, and it will read as follows:
THE SHARES OF THE LOCAL GOVERNMENT UNITS IN THE PROCEEDS FROM THE
EXPLANATION [sic], DEVELOPMENT AND UTILIZATION OF NATURAL RESOURCES LOCATED
WITHIN THEIR TERRITORIAL WRISDICTIONS SHALL BE AS FOLLOWS:
1. IN THE CASE OF MUNICIPALITIES AND COMPONENT CITIES: (A) THE BARANGAY UNIT
WHERE THE NATURAL RESOURCES ARE SITUATED AN EXTRACTED, FORTY PERCENT.
The President. Is there any objection? [Silence] Hearing none, the amendment is approved.
Senator Pimentel. Then "(B)." "THE MUNICIPALITY OR COMPONENT CITY WHERE THE
BARANGAY WITH THE NATURAL RESOURCES ARE SITUATED, THIRTY PERCENT.
The President. Is there any objection? [Silence] Hearing none, the amendment is approved.
Senator Pimentel. Then we have a paragraph 2 on the same aspect of sharing; "IN THE CASE OF
HIGHLY URBANIZED CITIES, THE FOLLOWING RULES SHALL APPLY;
A) BARANGAY WHERE THE NATURAL RESOURCES ARE SITUARED AND EXTRACTED, SIXTY
(60%) PERCENT;
B) FOR THE HIGHLY URBANIZED CITY WHERE THE BARANGAY WITH THE NATURAL
RESOURCES ARE LOCATED, FORTY (40%) PERCENT".
So it is a 60:40 sharing.
The President. Before we use the word SITUATED, probably, we should make it uniform - SITUATED
AND EXTRACTED.
Senator Pimentel. AND EXTRACTED. Yes, Mr. President.
The President. Is there any objection? [Silence] Hearing one [sic], the amendment is approved. Any
more?[271] (Emphasis ours.)
During the oral argument, Dean Pangalangan, as amicus curiae, stressed that the Camago-Malampaya
reservoir is. not part of any barangay:
JUSTICE CARPIO: Following your argument counsel Malampaya would form part of one barangay in
Palawan but yet it is outside of the Philippine territorial waters, how do you reconcile that?
DEAN PANGALANGAN: Oh, no, Your Honor, Malampaya will lie within our continental shelf and that is
in fact the way by which we claim title over a resource lying out there in the seas on the seabed. It will not
be considered in itself a barangay for instance.
JUSTICE CARPIO: So, it is not part of any barangay?

DEAN PANGALANGAN: Yes, Your Honor, it is not.[272]
The Province of Palawan's failure to specify the component city or municipality, or the barangay for that
matter, in which the Camago-Malampaya reservoir is situated militates against its claim that the area forms
part of its area or territory.
The Republic endeavored to enumerate the different LGUs composing the Province of Palawan and their
respective territorial limits under applicable organic laws.[273] The following matrix has been culled from its
enumeration:
LGU Governing Law Territorial Description/Component Barangays
Cagayancillo Act No. 2657 Section 43. Situs of Provinces and Major
Coron Subdivisions. - The general location of the provinces
Cuyo other than such as are contained in the Department of
Puerto Princesa[274] Mindanao and Sulu, together with the subprovinces,
Taytay municipalities, and townships respectively contained
in them is as follows:
xxxx
The Province of Palawan consists of the Island of
Palawan, the islands of Dumaran and Balabac, the
Calamian Islands, the Cuyo Islands, the Cagayanes
Islands, and all other islands adjacent to any of them,
not included in some other province. It contains the
townships of Cagayancillo, Coron, Cuyo, Puerto
Princesa (the capital of the province), and Taytay.
Act No. 2711 Section 37. Grand divisions of (Philippines Islands)
Philippines. - The (Philippine Islands) Philippines
comprises the forty-two provinces named in the next
succeeding paragraph hereof, the seven provmces of
the Department of Mindanao and Sulu, and the
territory of the City of Manila.
xxxx
The Province of Palawan consists of the Island of
Palawan, the islands of Dumaran and Balabac, the
Calamian Islands, the Cuyo Islands, the Cagayanes
Islands, and all other islands adjacent to any of them,
not included in some other provmce, and comprises
the following municipalities: Agutaya,
Bacuit, Cagayancillo, Coron, Cuyo, Dumaran,
Puerto Princesa (the capital of the province), and
Taytay.
xxxx
Roxas R.A. No. 615[275] Section 1. The barrios of Tinitian, Caramay, Rizal,
Del Pilar, Malcampo Tumarbong, Taradufigan, Ilian,
and Capayas in the municipality of Puerto Princesa,
Province of Palawan, are hereby separated from said
municipality and constituted into a new municipality
to be known as the Municipality of Roxas. The seat
of the government of the new municipality shall be at
the sitio of Barbacan in the barrio of Del Pilar, Puerto
Princesa.
Agutaya Bacuit (now Act No. 2711 Section 37. Grand divisions (Philippines Islands)
El Nido)[276] Philippines. - x x x x
Dumaran
Aborlan The Province of Palawan consists of the Island of
Balabac Palawan, the islands of Dumaran and Balabac, the
Brooke's Point Calamian Islands, the Cuyo Islands, the Cagayanes
Islands, and all other islands adjacent to any of them,
not included in some other provmce, and comprises
the following municipalities: Agutaya, Bacuit,
Cagayancillo, Coron, Cuyo, Dumaran, Puerto
Princesa (the capital of the province), and Taytay.
The province also contains the following municipal
districts: Aborlan, Balabac and Brooke's Point.
R.A No. 1111[277] RA 1111 changed the name of the Municipality of
R.A. No. 3418[278] Dumaran to Araceli. However, under RA 3418, a
distinct and independent municipality, to be known as
the Municipality of Dumaran, was constituted from
certain barrios of the municipalities of Araceli, Roxas
and Taytay. Section 1 of RA 3418 provides "The
barrios of Dumaran, San Juan, Bacao, Calasag and
Bohol in the Municipality of Araceli; the barrios of
Ilian, Capayas, and Leguit in the Municipality of
Roxas; and the barrios of Danleg and Pangolasian in
the Municipality of Taytay, all in the province of
Palawan, are separated from the said municipalities,
and are constituted into a distinct and independent
municipality, to be known as the Municipality of
Dumaran, with the seat of government at the site of
the barrio of Dumaran."
Busuanga R.A. No. 560[279] Section 1. The barrios of Concepcion, Salvacion,
Busuanga, New Busuanga, Buluang, Quezon,
Calawit, and Cheey in the Municipality of Coron are
separated from the said municipality and constituted
into a new and regular municipality to be known as
the Municipality of Busuanga, with the present site
of the barrio of New Busuanga as the seat of the
government.
 R.A No. 5943[280] RA 5943 amended Section 1 of RA 560 to read as
follows: "The barrios of Sagrada, Maglalambay,
Bogtong, San Isidro, Pallitan, San Rafael,
Concepcion, Salvacion, Busuanga, Buluang, Quezon,
Calawit, and Cheey, in the Municipality of Coron,
Province of Palawan, are separated from said
municipality and constituted into a new Municipality
of Busuanga with the present site of the barrio of
Salvacion as the seat of the government."
Quezon R.A. No. 617[281] Section 1. The barrios of Berong and Alfonso XII in
the Municipality of Aborlan and the barrios of Iraan,
Candawaga and Canipaan m the Municipality of
Brook's Point are separated from the said
municipalities and constituted into a new and regular
municipality to be known as the Municipality of
Quezon, with the present site of the barrio of Alfonso
XIII as the seat of the government.
Linapacan R.A. No. 1020[282] Section 1. The islands of Linapacari, Cabunlaoan,
Niangalao, Decabayotot, Calibanbangan, Pical, and
Barangonan are hereby separated from the
Municipality of Coron, Province of Palawan. and
constituted into a municipality to be known as
the Municipality of Linapacan with the seat of
government in the barrio of San Miguel in the island
of Linapacan.
Araceli Act No. 2711 Comprises the original territorial jurisdiction of the
R.A. No. 1111 Municipality of Dumaran under Act No. 2711,
R.A. No. 3418 excluding the barrios of Dumaran, San Juan, Bacao,
Calasag and Bohol which were included in the newly
created Municipality of Dumaran under RA3418.
Batarasa R.A. No. 3425[283] Section 1. The barrios of Inogbong, Marangas,
Bonobono, Malihod, Bulalakaw, Tarusan, Iwahig,
Iganigang, Sarong, Akayan, Rio Tuba, Sumbiling,
Sapa, Malitub, Puring, Buliluyan and Tahod in the
Municipality of Brooke's Point, Province of Palawan,
are separated from said municipality and constituted
into a distinct and independent municipality, to be
known as the Municipality of Batarasa, same
province. The seat of government of the new
municipality shall be in the present site of the barrio
of Marangas.
Magsaysay R.A. No. 3426[284] Section 1. The barrios of Los Angeles, Rizal,
Lucbuan, Igabas, Imilod, Balaguen, Danawan,
Cocoro, Patonga, Tagawayan Island, Siparay Island
and Canipo in the Municipality of Cuyo, Province of
Palawan, are separated from said municipality and
constituted into a distinct and independent
municipality, to be known as the Municipality of
Magsaysay. The seat of government of the new
municipality shall be the present site of the barrio of
Danawan.
San Vicente R.A. No. 5821[285] Section 1. The barrios of Binga, New Canipo,
Alimanguan and New Agutaya, now in the
Municipality of Taytay and all barrios from Vicente
to Caruray in the Municipality of Puerto Princesa,
Province of Palawan, are separated from said
municipalities, and constituted into a distinct and
independent municipality, to be known as
the Municipality of San Vicente, same province.
The seat of government of the municipality shall be in
the present site of the barrio of San Vicente.
Narra R.A. No. 5642[286] Section 1. The barrios of Malatgao, Tinagong dagat,
Taritien, Antipoloan, Teresa, Panacan, Narra,
Caguisan, Batang-batang, Bato-bato, Barirao,
Malinao, Sandoval, Dumaguefia, El Vita, Calategas,
Arumay.uan, Tacras, Borirao and that part of barrio
Abo-abo now belonging to the Municipality of
Aborlan, Province of Palawan, are separated from
said municipality and constituted into a distinct and
independent municipality, to be known as
the Municipality of Narra. The seat of the new
municipality shall be in the present site of Barrio
Narra.
Kalayaan P.D. No. 1596 Section 1. The area within the following boundaries:
KALAYAAN ISLAND GROUP
From a point [on the Philippine Treaty Limits] at
latitude 7°40' North and longitude 116°00' East of
Greenwich, thence due West along the parallel of 7°
40' N to its intersection with the meridian of longitude
112°10' E, thence due north along the meridian of
112°10' E to its intersection with the parallel of 9°00'
N, thence northeastward to the inter-section of the
parallel of 12°00' N with the meridian of longitude
114° 30' thence, due East along the parallel of 12°00'
N to its intersection with the meridian of 118°00' E,
thence, due South along the meridian of longitude
118° 00' E to its intersection with the parallel of
10°00' N, thence Southwestwards to the point of
beginning at 7°40' N, latitude and 116° 00' E
longitude; including the sea-bed, sub-soil,
continental margin and air space shall belong to and
be subject to the sovereignty of the Philippines. Such
area is hereby constituted as a distinct and
separate municipality of the Province of Palawan
 and shall be known as "Kalayaan."
Marcos (now BP Blg. 386[288] Section 1. The barangays of Bunog, Iraan, Punta
Riza1)[287] Baja, Capung Ulay, Ramsang, Candawag, Culasian,
Panalingaan, Tahuin, Latud, and Canipaan are hereby
separated from the Municipality of Quezon, Province
of Palawan, and constituted into a distinct and
independent municipality to be known as the
Municipality of Marcos. The seat of government of
the new municipality will be in Barangay Punta Baja.
Section 2. The Municipality of Marcos shall be
bounded as follows:
"A parcel of land known as the proposed
Municipality of Marcos, in the Province of Palawan,
Luzon Island, bounded in the north along lines 11 and
1 in the Plan by the municipal boundary of Quezon,
on the south along lines 2 and 3 by Sulu Sea, on the
east along lines 1 and 2 by the municipal boundary of
Brooke's Point, on the west along lines 3 to 11 by the
shoreline of the South China Sea. Beginning at the
point marked 1 in the plan at latitude go 59' 10" T
north, longitude 117° 50' 32"; thence S 62-00W
80,750 meters to point 2; thence N 85-00W 5,800
meters to point 3; thence N 31-29E 20,670.35 meters
to point 4; thence N 46-13E 8,298.46 meters to point
5; thence N 52-21E 6,137.67 meters to point 6; thence
N 39-14E 9,594.37 meters to point 7; thence N 37-
45E 11,017.16 meters to point 8; thence N 53-08E
10,364.93 meters to point 9; thence N 41-12E
14,556.17 meters to point 10; thence N 76-02E
6,509.60 meters to point 11; thence S 48-10E
14,442.69 meters to point 12, containing an area of
nine hundred seventy-seven million, two hundred
sixty-one thousand two hundred square meters
(977,261,200 square meters) or ninety-seven
thousand seven hundred twenty-six and twelve
hundredth hectares (97,726.12 hectares)."
Culion R.A. No. 7193[289] as amended Section 1. The Islands of Culion Leper Colony,
by R.A. No. 9032[290] Marily, Sand, Tampel, Lamud, Galoc, Lanka,
Tambon, Dunaun, Alava, Chindonan and a small
island without a name situated directly south of
Chindonan Island in latitude 11°55'N, longitude
12°02'E, comprising the national reservation for
lepers in the Province of Palawan as described under
Executive Order No. 35, Series of 1912, are hereby
constituted into a distinct and independent
municipality to be known as the Municipality of
Culion. The seat of government of the new
municipality shall be in Barangay Balala.
Section 1-A. The barangays of Balala, Baldat,
Binudac, Culango, Galoc, Jardin, Malaking Patag,
Osmeña and Tiza Libis, Luac, which have been
existing and functioning as regular barangays before
the creation of the municipality in 1992 are hereby
declared as legally existent upon the creation of the
Municipality of Culion. These barangays shall
compnse the Municipality of Culion, subject to the
provisions of the succeeding paragraphs. The
territorial boundaries of these barangays are specified
in Annex "A" of this Act.
Subject to the provisions of Section 10, Republic Act
No. 7160, Burabod and Halsey in the Municipality of
Busuanga, Province of Palawan, are hereby separated
from said municipality and are transferred as part of
the political jurisdiction of the Municipality of
Culion.
A barangay for the indigenous cultural communities
to be known as Barangay Carabao is hereby created
to be composed of the following sitios, namely:
Bacutao, Baracuan, Binabaan, Cabungalen, Corong,
De Carabao (Lumber Camp), Igay, Layang-layang,
Marily Pula and Pinanganduyan.
Section 2. The Municipality of Culion shall be
bounded and described as follows:
The municipality shall be bounded on the north by the
Municipality of Busuanga-Coron Island with
Concepcion and Salvacion in the Calamian Island
Group; on the south by the Municipality of Bacuit-
Taytay and Linapacan area; on the east by the South
China Sea; on the west by the Cuyo West Pass.
The land contained in all the above named islands in
Section One is shown on C.G. Map No. 4717
published in Washington D.C., September, 1908, and
lies within the following limits, i.e. between the
parallels of 11°36'N and 12°03'N, and the meridians
of 119°47'E and 120°15'E.
Sofronio R.A. No. 7679[291] Section 1. Barangays Pulot Center, Pulot Shore (Pulot
Española I), Pulot Interior (Pulot II,) Iraray, Punang, Labog,
Panitian, Isumbo, and Abo-Abo in the Municipality
of Brooke's Point, Province of Palawan, are hereby 9 on the slopes of
9 118°03'49.28"
separated from the Municipality and constituted into a °11'26.26" Malanut Range
distinct and independent municipality of the province,
to be known as the Municipality of Sofronio
Española. The seat of government of the new 9 on the slopes of
municipality shall be in Barangay Pulot Center. 10 118°03'49.28"
°11'26.26" Malanut Range

Section 2. The boundary of the Municipality of

Sofronio Española is described as follows: southern side,
9
11 118°07'35.58"mouth of Abo-Abo
°08'58.93"
Corner Latitude Longitude Location River

on the southern Line Bearing Distance

8
1 118°00'20.28"side of Caramay
°53'50.23"
Bay

1-2 N. 55° 23'W 19,886.37 m.

on the slopes of
8
2 117°51'24.42"Mantalingahan 2-3 N. 68° 03'E 5,244.48 m.
°59'58.01"
Range
3-4 N. 13° 00'E 3,478.91 m.

on the slopes of 4-5 N. 28° 02'E 3,013.93 m.

9
3 117°54'03.69"Mantalingahan
°01'01.84"
Range 5-6 N. 01° 44'E 2,317.35 m.

6-7 N. 33° 33'E 4.979.17 m.

on the slopes of
9
4 117°54'29.33"Mantalingahan 7-8 N. 71° 16'E 5,892.79 m.
°02'52.18"
Range
8-9 N. 16° 10'E 4,168.24 m.

9 on the slopes of 9-10 N. 82° 50'E 6,170.26 m.

5 117°55'15.71"
°04'18.78" Mount Corumi
10-11 S. 56° 50'E 8,261.31 m.

9 on the slopes of SW, meandering mainland

6 117°55'18.00" 11-1
°05'34.18" Pulot Range coastline.
The new municipality shall include the islands of
Bintaugan, Inamukan, Arrecife, Bessie, Gardiner, and
9 on the slopes of Tagalinog.
7 117°56'48.09" Based on the foregoing territorial descriptions, the municipalities of Palawan do not include the continental
°07'49.27" Pulot Range
shelf where the Camago-Malampaya reservoir is concededly located. In fact, with the exception of
Kalayaan, which includes the seabed, the subsoil and the continental margin as part of its demarcated area,
9 on the slopes of the municipalities are either located within an island or are comprised of islands. That only Kalayaan (under
8 117°59'50.82" P.D. No. 1596), among the municipalities of Palawan, had land submerged in water as part of its area or
°09'50.88" Malanut Range
territory, was confirmed by the amicus curiae, Atty. Bensurto, during the oral argument as gleaned from the
following exchange:
JUSTICE DE CASTRO: It is not a question of belonging to Palawan, it is a question of Palawan having a
share because it is within the area of Palawan, that is the question before the Court now, it is not, the right to
govern is not in question, that is not the issue because we are very clear. The Philippines is not a Federal
Government x x x So, we are just defining the area of the Province of Palawan, if it is not included in the
polygon, what about in other islands of Palawan, is there any continental shelf in the other areas, if
there is none here in the polygon, within the polygon and which will extend up to the Camago-
Malampaya, is there any other continental shelf in the other islands comprising Palawan where there is
such a continental shelf that will extend up to the Camago-Malampaya.
ATTY. HENRY BENSURTO: x x x x
[W]ith all due respect, Your Honor, I do not think Federalism or Unitary is relevant in the issue of maritime
concepts or maritime jurisdiction the end would still be the same, Your Honor. Thank you.
JUSTICE DE CASTRO: You see that is my point, we are just here trying to analyze domestic law and if,
only P.D. 1596 refers to areas submerged in water, that is (interrupted)
ATTY. HENRY BENSURTO: Everything, Your Honor.
JUSTICE DE CASTRO: You find that only in 1596.
ATTY. HENRY BENSURTO: Yes, Your Honor.[292] (Emphasis ours)
The parties, however, agreed that the Camago-Malampaya reservoir lies outside the geographic coordinates
mentioned in P.D. No. 1596 which constituted Kalayaan as a distinct municipality of Palawan. Atty.
Bensurto also confirmed during the oral argument that "the area of Malampaya is not within the polygon
area described under P.D. [No.] 1596."[293] The succeeding exchange between Atty. Bensurto and Associate
Justice Teresita Leonardo De Castro (Justice De Castro) illumines:
JUSTICE DE CASTRO: Now, the question is - if in the other islands even assuming that there is a
continental shelf which extends up to Camago there is now that legal question of whether that belongs to
Palawan, whether Palawan, that is within the area of Palawan even if it is protruding from an island in
Palawan because there is no such law like P.D. 1596 pertaining to the other islands?
ATTY. HENRY BENSURTO: Yes, Your Honor.
JUSTICE DE CASTRO: So, if there is none and Camago is in the continental shelf protruding from
any other island in Palawan and then we cannot apply 1596?
ATTY. HENRY BENSURTO: No, Your Honor.
JUSTICE DE CASTRO: All right, so, there maybe some doubt as to whether or not Palawan should have a
bigger share in that Camago-Malampaya?
ATTY. HENRY BENSURTO: Yes, Your Honor.
JUSTICE DE CASTRO: Okay, that is clear now. Thank you. [294] (Emphasis ours)
Estoppel does not lie against the Republic
Fundamental is the rule that the State cannot be estopped by the omission, mistake or error of its officials or
agents.[295] Thus, neither the DoE's June 10, 1998 letter to the Province of Palawan nor President Ramos'
A.O. No. 381, which acknowledged Palawan's share in the Camago-Malampaya project, will place the
Republic in estoppel as they had been based on a mistaken assumption of the LGU's entitlement to said
allocation.
Erroneous application and enforcement of the law by public officers do not preclude subsequent corrective
application of the statute.[296] As the Court explained in Adasa v. Abalos:[297]
True indeed is the principle that a contemporaneous interpretation or construction by the officers charged
with the enforcement of the rules and regulations it promulgated is entitled to great weight by the court in
the latter's construction of such rules and regulations. That does not, however, make such a construction
necessarily controlling or binding. For equally settled is the rule that courts may disregard
contemporaneous construction in instances where the law or rule construed possesses no
ambiguity, where the construction is clearly erroneous, where strong reason to the contrary exists, and
where the court has previously given the statute a different interpretation.
If through misapprehension of law or a rule an executive or administrative officer called upon to
implement it has erroneously applied or executed it, the error may be corrected when the true
construction is ascertained. If a contemporaneous construction is found to be erroneous, the same must be
declared null and void. Such principle should be as it is applied in the case at bar. [298] (Emphasis ours)
Section 1, Article X of the 1987 Constitution did not apportion the entire Philippine territory among
the LGUs
Dean Pangalangan shares the Province of Palawan's claim that based on Section 1, Article X of the 1987
Constitution, the entire Philippine territory is necessarily divided into political and territorial subdivisions,
such that at any one time, a body of water or a piece of land should belong to some province or city. [299] The
Court finds this position untenable.
Section 1, Article X of the 1987 Constitution states:
Section 1. The territorial and political subdivisions of the Republic of the Philippines are the
provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao
and the Cordilleras as hereinafter provided. (Emphasis ours)
By indicating that the LGUs comprise the territorial subdivisions of the State, the Constitution did not ipso
facto make every portion of the national territory a part of an LGU's territory.
The above-quoted section is found under the General Provisions of Article X on Local Government.
Explaining this provision, the eminent author and member of the 1986 Constitutional Commission, Fr.
Joaquin G. Bernas, S.J. wrote:
The existence of "provinces" and "municipalities" was already acknowledged in the 1935 Constitution.
Section 1, however, when first enacted in 1973, went a step further than mere acknowledgment of their
existence and recognized them, together with cities and barrios, as "(t)he territorial and political subdivisions
of the Philippines." Thus, the municipalities, and barrios (now barangays) have been fixed as the
standard territorial and political subdivisions of the Philippines. To these the 1987 Constitution has
added the "autonomous regions." But the Constitution allows only two regions: one for the Cordilleras and
one for Muslim Mindanao. The creation of other autonomous regions whether by dividing the Cordilleras or
Muslim Mindanao into two or by creating others outside these two regions, can be accomplished only by
constitutional amendment.
xxxx
Neither Section 1, however, nor any part of the Constitution prescribed the actual form and structure which
individual local government units must take. These are left by Sections 3, 18 and 20 to legislation. As
constitutional precepts, therefore, they are very general. x x x
xxxx
The designation by the 1973 Constitution of provinces, cities, municipalities and barangays as the political
and territorial subdivisions of the Philippines effected a measure of institutional instability. To this extent,
it was a move in the direction of real local autonomy. The 1987 Constitution moved farther forward by
authorizing the creation of autonomous regions. These are the passive aspects of local autonomy. The
dynamic and more important aspect of local autonomy must be measured in terms of the scope of the
powers given to the local units.[300] (Emphasis ours)
There is, thus, merit in the Republic's assertion that Section 1, Article X of the 1987 Constitution was
intended merely to institutionalize the LGUs.
The Court is further inclined to agree with the Republic's argument that assuming Section 1 of Article X was
meant to divide the entire Philippine territory among the LGUs, it cannot be deemed as self-executing and
legislation will still be necessary to implement it. LGUs are constituted by law and it is through legislation
that their respective territorial boundaries are delineated. Furthermore, in the creation, division, merger and
abolition of LGUs and in the substantial alteration of their boundaries, Section 10 of Article X requires
satisfying the criteria set by the Local Government Code. It further requires the approval by the majority of
the votes cast in a plebiscite in the political units directly affected. Needless to say, apportionment of the
national territory by the LGUs, based solely on the general terms ·of Section 1 of Article X, may only sow
conflict and dissension among these political subdivisions.
As the Republic asserted, no law has been enacted dividing the Philippine territory, including its continental
margin and exclusive economic zones, among the LGUs.
The UNCLOS did not confer on LGUs their own continental shelf
Dean Pangalangan posited that since the Constitution has incorporated into Philippine law the concepts of
the UNCLOS, including the concept of the continental shelf, Palawan's "area" could be construed as
including its own continental shelf.[301] The Province of Palawan and Arigo, et al. accordingly assert that
Camago-Malampaya reservoir forms part of Palawan's continental shelf.[302]
The Court is unconvinced. The Republic was correct in arguing that the concept of continental shelf under
the UNCLOS does not, by the doctrine of transformation, automatically apply to the LGUs. We quote with
approval its disquisition on this issue:
The Batasang Pambansa ratified the UNCLOS through Resolution No. 121 adopted on February 27, 1984.
Through this process, the UNCLOS attained the force and effect of municipal law. But even if the UNCLOS
were to be considered to have been transformed to be part of the municipal law, after its ratification by the
Batasang Pambansa, the UNCLOS did not automatically amend the Local Government Code and the
charters of the local government units. No such intent is manifest either in the UNCLOS or in Resolution
No. 121. Instead, the UNCLOS, transformed into our municipal laws, should be applied as it is
worded. Verba legis.
xxxx
It must be stressed that the provisions under the UNCLOS are specific in declaring the rights and duties of a
state, not a local government unit. The UNCLOS confirms the sovereign rights of the States over the
continental shelf and the maritime zones. The UNCLOS did not confer any rights to the States' local
government units. x x x x
At the risk of being repetitive, it is respectfully emphasized that the foregoing indubitably established that
under the express terms of the UNCLOS, the rights and duties over the maritime zones and continental shelf
pertain to the State. No provision was set forth to even suggest any reference to a local government unit.
Simply put, the UNCLOS did not obligate the States to grant to, much less automatically vest upon, their
respective local government units territorial jurisdiction over the different maritime zones and the
continental shelf. Hence, contrary to the submission of Dean Pangalangan, no such application can be
made.[303]
Atty. Bensurto took a similar stand, declaring during the oral argument that:
ATTY. HENRY BENSURTO: x x x x [T]here was an assertion earlier, Your Honor, that there was a
reference in fact to the continental shelf, that there is an automatic application of the continental shelf with
respect to the municipal territories. I submit, Your Honor that this should n9t be the case, why? Because the
United Nation Convention on the Law of the Sea which is the conventional law directly applicable in
this case is an International Law. International Law by definition is a body of rules governing
relations between sovereign States or other entities which are capable of having rights and obligations
under International Law. Therefore, it is the State that is the subject oflntemational Law, the only
exception to this is with respect to individuals with respect to the issue of Humanitarian and Human Rights
Law. From there, it flows the principal [sic] therefore that International Law affects only sovereign States.
With respect to the relationship between the State and its Local Government Units this is reserved to the
sovereign right of the sovereign State. It is a dangerous proposition for us to make that there is an automatic
application because to do that would mean a violation of the sovereign right of a State and the State always
reserves the right to promulgate laws governing its domestic jurisdiction. Therefore, the United Nations
Convention of the Law of the Sea affects only the right of the Philippines vis a vis another sovereign
State. And so, when we talk of the different maritime jurisdictions enumerated, illustrated and explained
under the United Nations Convention on the Law of the Sea we are actually referring to inter state
relations not intra state relations. x x x[304] (Emphasis ours)
In fact, Arigo, et al. acknowledged during the oral argument that the UNCLOS applies to the coastal state
and not to their provinces, and that Palawan, both under constitutional and international, has no distinct and
separate continental shelf, thus:
ASSOCIATE JUSTICE VELASCO: You admit that under UNCLOS it is onlv the coastal states that
are recognized not the provinces of the coastal state.
ATTY. BAGARES: That is true, Your Honor, and we do not dispute that, Your Honor.
ASSOCIATE JUSTICE VELASCO: That's correct. And you cited that in your petition ....
ATTY. BAGARES: Yes, Your Honor. That is true, Your Honor.
ASSOCIATE JUSTIUCE VELASCO: .... that under Article 76, it is the continental shelf of the coastal
state.
ATTY. BAGARES: Yes, Your Honor.
ASSOCIATE JUSTICE VELASCO: And in our case, the Republic of the Philippines, right?
ATTY. BAGARES: Yes, Your Honor.
ASSOCIATE JUSTICE VELASCO: Okay. You also made the submission that under Republic Act 7611
and Administrative Order 381, there is a provision there that serves as basis for, what you call again the
continental shelf of Palawan. What provisions in 7611 and AO 381 are there that serves as basis, for you to
say that there is such a continental shelf of Palawan?
ATTY. BAGARES: Your Honor, I apologize that perhaps I've been like Atty. Roque very academic in the
language in which we make our presentations but our position, Your Honor, exactly just to make·it clear,
Your Honor, we're not saying that there's a separate continental shelf·of the Province of Palawan outside the
territorial bounds of the sovereign State of the Republic of the Philippines. We are only saying, Your Honor,
that that continental shelf is reckoned, Your Honor, from the Province of Palawan. We are not saying,
Your Honor, that there is a distinct and separate continental shelf that Palawan may lay acclaim [sic]
to, under the Constitutional Law and under International Law, Your Honor.
ASSOCIATE JUSTICE VELASCO: Alright. And that is only the continental shelf of the coastal State,
which is the Philippines.
ATTY. BAGARES. Yes, Your Honor. I hope that is clear, Your Honor. [305] (Emphasis ours)
The Federal Paramountcy doctrine as well as the Regalian and Archipelagic doctrines are
inapplicable
Contrary to the Republic's submission, the LGU's share under Section 7, Article X of the 1987 Constitution
cannot be denied on the basis of the archipelagic and regalian doctrines.
The archipelagic doctrine is embodied m Article I of the 1987 Constitution which provides:
The national territory comprises the Philippine archipelago, with all the islands and waters embraced
therein, and all other territories over which the Philippines has sovereignty or jurisdiction, consisting of its
terrestrial, fluvial, and aerial domains, including its territorial sea, the seabed, the subsoil, the insular
shelves, and other submarine areas. The waters around, between, and connecting the islands of the
archipelago, regardless of their breadth and dimensions, form part of the internal waters of the Philippines.
The regalian doctrine, in turn, is found in Section 2, Article XII of the 1987 Constitution which states:
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. x x x
It is at once evident that the foregoing doctrines find no application in this case which involves neither a
question of what comprises the Philippine territory or the ownership of all natural resources found therein.
There is no debate that the natural resources in the Camago-Malampaya reservoir belong to the State.
Palawan's claim is anchored not on ownership of the reservoir but on a revenue-sharing scheme, under
Section 7, Article X of the 1987 Constitution and Section 290 of the Local Government Code, that allows
LGUs to share in the proceeds of the utilization of national wealth provided they are found within their
respective areas. To deny the LGU's share on the basis of the State's ownership of all natural resources is to
render Section 7 of Article X nugatory for in such case, it will not be possible for any LGU to benefit from
the utilization of national wealth.
Accordingly, the Court cannot subscribe to Atty. Bensurto's opinion[306] that the Province of Palawan cannot
claim the 40% LGU share from the proceeds of the Camago-Malampaya project because the National
Government "remains to have full dominium" (or ownership rights) over the gas reservoir.
Atty. Bensurto's theory is ostensibly drawn from several U.S. cases, namely U.S. v. California,[307] U.S. v.
Louisiana,[308] U.S. v. Texas[309] and U.S. v. Maine,[310] which the Republic also cites in applying the federal
paramountcy doctrine to the Province of Palawan's claim. To explain this doctrine, the Republic turns to the
case of Native Village of Eyak v. Trawler Diane Marie, Inc.,[311] where the U.S. Court of Appeals for the
Ninth Circuit, in part, stated:
The "federal paramountcy doctrine" is derived, in essence, from four Supreme Court cases in which the
federal government and various coastal states disputed ownership and control of the territorial sea and the
adjacent portions of the OCS.
The first of these cases was United States v. California, 332 U.S. 19, 67 S.Ct. 1658,91 L.Ed. 1889 (1947),
in which the United States sued to enjoin the State of California from executing leases authorizing the taking
of petroleum, gas, and other mineral deposits from the Pacific Ocean. x x x
xxxx
[T]hus, the Court declared, "California is not the owner of the three-mile marginal belt along its coast."
Instead, "the Federal Government rather than the state has paramount rights in and power over that belt, an
incident to which is full dominion over the resources of the soil under that water area, including oil."
Bolstered by the favorable outcome in California, the United States brought similar actions to confirm its
title to the seabed adjacent to other coastal states. In United States v. Louisiana, 339 U.S. 699, 70 S.Ct.
914, 94 L.Ed. 1216 (1950), the United States brought suit against the State of Louisiana, which argued that it
held title to the seabed under the waters extending twenty-seven miles into the Gulf of Mexico. x x x
xxxx
The Court found that the only difference between the argument raised by Louisiana and the one raised by
California was that Louisiana's claimed boundary extended twenty-four miles beyond California's threemile
claim. This difference did not weigh in Louisiana's favor, however:
If the three-mile belt is in the domain of the Nation rather than that of the separate States, it follows a
fortiori that the ocean beyond that limit also is the ocean seaward of the marginal belt is perhaps even
more directly related to the national defense, the conduct of foreign affairs, and world commerce than is the
marginal sea. Certainly it is not less so far as the issues presented here are concerned, Louisiana's
enlargement of her boundary emphasizes the strength of the claim of the United States to this part of the
ocean and the resources of the soil under that area, including oil.
In the companion case to Louisiana, United States v. Texas, 339 U.S. 707, 70 S.Ct. 918, 94 L.Ed. 1221
(1950), the Supreme Court again reaffirmed its holding in California. The State of Texas had, by statute,
extended its boundary first to a line twenty-four miles beyond the three mile limit, and thereafter to the outer
edge of the continental shelf. Texas raised a somewhat different argument than had either California or
Louisiana, one more analogous to that asserted by the Villages here. Texas argued that, because it was a
separate republic prior to its entry into the United States, it had both dominium (ownership or proprietary
rights) and imperium (governmental powers of regulation and control) with respect to the lands, minerals,
and other products underlying the marginal sea. Upon entering the Union, Texas transferred to the federal
government its powers of sovereignty-its imperium-over the marginal sea, but retained its dominium.
The Supreme Court was not persuaded. While the Republic of Texas may have had complete sovereignty
and ownership over the marginal sea and all things of value derived therefrom, the State of Texas did not. x
x x "When Texas came into the Union, she ceased to be an independent nation. The United States then took
her place as respects foreign commerce, the waging of war, the making of treaties, defense of the shores, and
the like." As an incident to the transfer of that sovereignty, any "claim that Texas may have had to the
marginal sea was relinquished to the United States." The Court recognized that "dominion and
imperium are normally separable and separate"; however, in this instance, "property interests are so
subordinated to the rights of sovereignty as to follow sovereignty." x x x
xxxx
In the last of the paramountcy cases, United States v. Maine, 420 U.S. 515, 95 S.Ct. 1155, 43 L.Ed.2d 363
(1975), the United States brought an action against the thirteen Atlantic Coastal States asserting that the
federal government was entitled to exercise sovereign rights over the seabed and subsoil underlying the
Atlantic Ocean to the exclusion of the coastal states for the purpose of exploring the area and exploiting its
natural resources. x x x
At the urging of the coastal states, the Supreme Court reexamined the decisions in California, Louisiana, and
Texas. To the states' dismay, the Court concluded that these cases remained grounded on sound
constitutional principles. Whatever interest the states may have held in the sea prior to statehood, the Court
held, as a matter of "purely legal principle the Constitution allotted to the federal government jurisdiction
over foreign commerce, foreign affairs, and national defense and it necessarily follows, as a matter of
constitutional law, that as attributes of these external sovereign powers the federal government has
paramount rights in the marginal sea." x x x. (Emphasis ours and citations omitted)
There are several reasons why the foregoing doctrine cannot be applied to this case. First, the U.S. does not
appear to have an equitable sharing provision similar to Section 7, Article X of the 1987
Constitution. Second, the Philippines is not composed of states that were previously independent
nations. Third, the resolution of these cases does not necessitate distinguishing
between dominium and imperium since neither determines the LGU's entitlement to the equitable share
under Section 7 of Article X. Fourth, the Court is not called upon to determine who between the Province of
Palawan and the National Government has the paramount or dominant right to explore or exploit the natural
resources in the marginal sea or beyond. Fifth, adjudication of these cases does not entail upholding the
dominion of the National Government over a political subdivision since ownership of the natural resources
is concededly vested in the State. Sixth, it is settled that dominion over national wealth belongs to the State
under the regalian doctrine. Ownership of the subject reservoir, therefore, is a nonissue and what simply
needs to be determined is whether said resource is located within the area or territorial jurisdiction of the
Province of Palawan.
Justice De Castro's observation during the oral argument is thus apropos:
JUSTICE DE CASTRO: It is not a question of belonging to Palawan, it is a question of Palawan having
a share because it is within the area of Palawan, that is the question before the Court now, it is not, the
right to govern is not in question, that is not the issue because we are very clear. The Philippines is not a
Federal Government so as distinguished from a Federal Government where the sovereign authority came
from the member State and granted to the Federal Government, here we have the reverse it is the central
government giving to the local government certain powers and defining the limits of these powers. So, in
this case there is no question about the right to govern, the local government have [sic] have only such
powers granted to it by the Local Government Code. Now, the question is whether the Province of
Palawan should have a share in the proceeds in the development of the Camago-Malampaya because
it is within its area. So, we are just defining the area of the Province of Palawan x x x.[312] (Emphasis
ours)
LGU's share cannot be granted based on equity
Atty. Bensurto opined that under the existing law, the Province of Palawan is not entitled to the statutory
40% LGU share. He posited that it is only on equitable grounds that the Province of Palawan could
participate in the proceeds of the utilization of the Camago-Malampaya reservoir. He concluded that from
the perspective of the principle of equity, it may be appropriate for the Province of Palawan to be given
some share in the operation of the Camago-Malampaya gas reservoir considering: (a) its proximity to the
province which makes the latter environmentally vulnerable to any major accidents in the gas reservoir; and
(b) the gas pipes that pass through the northern part of the province.[313]
The Court finds the submission untenable. Our courts are basically courts of law, not courts of
equity.[314] Furthermore, for all its conceded merits, equity is available only in the absence of law and not as
its replacement.[315] As explained in the old case of Tupas v. Court of Appeals:[316]
Equity is described as justice outside legality, which simply means that it crumot supplant although it may,
as often happens, supplement the law. We said in an earlier case, and we repeat it now, that all abstract
arguments based only on equity should yield to positive rules, which pre empt and prevail over such
persuasions. Emotional appeals for justice, while they may wring the heart of the Court, cannot justify
disregard of the mandate of the law as long as it remains in force. The applicable maxim, which goes back to
the ancient days of the Roman jurists - and is now still reverently observed - is "aequetas nunquam
contravenit legis."[317]
In this case, there are applicable laws found in Section 7, Article X of the 1987 Constitution and in Sections
289 and 290 of the Local Government Code. They limit the LGUs' share to the utilization of national wealth
located within their respective areas or territorial jurisdiction. As herein before-discussed, however, existing
laws do not include the Camago-Malampaya reservoir within the area or territorial jurisdiction of the
Province of Palawan.
The pertinent positive rules being present here, they should preempt and prevail over all abstract arguments
based only on equity.[318]
The supposed presence of gas pipes through the northern part of Palawan cannot justify granting the
province the 40% LGU share because both the Constitution and the Local Government Code refer to the
LGU where the natural resource is situated. The 1986 Constitutional Commission referred to this area as
"the locality, where God chose to locate his bounty," while the Senate deliberations on the proposed Local
Government Code cited it as the area where the natural resource is "extracted." To hold otherwise, on the
basis of equity, will run afoul of the letter and spirit of both constitutional and statutory law. It is settled that
equity cannot supplant, overrule or transgress existing law.
Furthermore, as the Republic noted, any possible environmental damage to the province is addressed by the
contractor's undertakings, under the ECC, to ensure minimal impact on the environment and to set up an
Environmental Guarantee Fund that would cover expenses for environmental monitoring, as well as a
replenishable fund that would compensate for any damage the project may cause. [319] The ECC, in pertinent
part, provides:
This Certificate is being issued subject to the following conditions:
1. This Certificate shall cover the construction of the shallow water platform (SWP) in the Service Contract
38 (SC38) offshore northwest Palawan, a pipeline from the Malampaya wells (well drilling site) to the SWP
passing the offshore route from Mindoro to a land terminal at Shell Tabangao's refinery plant in Batangas;
2. The proponent shall consider the offshore route of the pipeline to minimize its environment socio-
economic impacts particularly to the province of Mindoro;
3. Selection of the SWP site and the final offshore pipeline route should avoid environmentally sensitive
areas such as coral reefs, sea grass, mangroves, fisheries, pearl farms, habitats of endangered wildlife,
tourism areas and areas declared as protected by the national, provincial and local government agencies. It
shall also be routed away from geologically high risk areas;
4. Proponent shall use the optimum amount of anti-corrosion anodes necessary in order to maintain pipeline
integrity and minimize impacts on water quality;
5. The design of the pipeline shall conform to the international standards that can handle extreme conditions.
The proponent shall ensure extensive monitoring (internal and external inspections) to maintain the pipeline
integrity;
xxxx
26. The proponent shall set up an Environmental Guarantee Fund (EGF) to cover expenses for
environmental monitoring and the establishment of a readily available and replenishable fund to compensate
for whatever damage may be caused by the project, for the rehabilitation and/or restoration of affected-areas,
the future abandonment/decommissioning of project facilities and other activities related to the prevention of
possible negative impacts.
The amount and mechanics of the EGF shall be determined by the DENR and the proponent taking into
consideration the concerns of the affected areas stakeholders and formalized through a MOA which shall be
submitted within ninety (90) days prior to project implementation. The absence of the EGF shall cause the
cancellation of this Certificate;
xxxx
29. In cases where pipe laying activities will adversely affect existing fishing grounds, the proponent in
coordination with the Bureau of Fisheries and Aquatic Resources (BFAR) shall identify alternative fishing
grounds and negotiate with affected fisherfolks the reasonable compensation to be paid[.][320]
There is logic in the Republic's contention that the National Government cannot be compelled to
compensate the province for damages it has not yet sustained.
the local government units although in significantly reduced degree now than under our previous
Constitutions. The power to create still includes the power to destroy. The power to grant still includes the
power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct
conferment on the local government units of the power to tax (citing Art. X, Sec. Constitution), which
cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the
principal of the local government units, which cannot defy its will or modify or violate it.
Ours is still a unitary form of government, not a federal state. Being so, any form of autonomy granted to
local governments will necessarily be limited and confined within the extent allowed by the central
authority. Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization." It does not make local governments sovereign within the state or an "imperium in
imperio."[325] (Emphasis ours)
Constitutional challenge to E.O. No. 683
The challenge to the constitutionality of E.O. No. 683, brought by Arigo, et al., is premised on the alleged
violation of Section 7, Article X of the 1987 Constitution and Sections 289 and 290 of the Local
Government Code, which is the basic issue submitted for resolution by the Republic and the Province of
Palawan in G.R. No. 170867. Considering its ruling in G.R. No. 170867, the Court resolves to deny the
Arigo petition, without need of passing upon the procedural issues therein raised. The same ruling also
renders it unnecessary to rule upon the propriety of the Amended Order dated January 16, 2006, which the
Republic raised ad cautelam in G.R. No. 170867.
WHEREFORE, the Petition in G.R. No. 170867 is GRANTED. The Decision dated December 16, 2005 of
the Regional Trial Court of the Province of Palawan, Branch 95 in Civil Case No. 3779
is REVERSED and SET ASIDE. The Court declares that under existing law, the Province of Palawan is
not entitled to share in the proceeds of the Camago-Malampaya natural gas project. The Petition in G.R. No.
185941 is DENIED.
SO ORDERED.

The foregoing considered, the Court finds that the Province of Palawan's remedy is not judicial adjudication
based on equity but legislation that clearly entitles it to share in the proceeds of the utilization of the
Camago-Malampaya reservoir. Mariano instructs that the territorial boundaries must be clearly defined
"with precise strokes." Defining those boundaries is a legislative, not a judicial function. [321] The Court
cannot, on the basis of equity, engage in judicial legislation and alter the boundaries of the Province of
Palawan to include the continental shelf where the subject natural resource lies. As conceded by Dean
Pangalangan, "territorial jurisdiction is fixed by a law, by a charter and that defines the territory of Palawan
very strictly," and it is "something that can be altered only in accordance with [the] proper procedure ending
with a plebiscite."[322]

It is true that the Local Government Code envisioned a genuine and meaningful autonomy to enable local
government units to attain their fullest development as self-reliant communities and make them effective
partners in the attainment of national goals.[323] This objective, however, must be enforced within the extent
permitted by law. As the Court held in Hon. Lina, Jr. v. Hon. Paño:[324]
Nothing in the present constitutional provision enhancing local autonomy dictates a different conclusion.
The basic relationship between the national legislature and the local government units has not been
enfeebled by the new provisions in the Constitution strengthening the policy of local
autonomy. Without meaning to detract from that policy, we here confirm that Congress retains control of