ERIKS PTE. LTD vs. CA, and DELFIN F. ENRIQUEZ, JR.

GR. 118843 Feb. 6, 1997

Facts of the Case:

Petitioner herein is a non resident foreign corporation duly organized under the laws of the Republic of Singapore.

It engaged in the manufacture and sale of elements sealing pumps, valves and pipes for industrial purposes.

It is not licensed to do business in the Philippines.

On various dates covering the period January 17 to August 16, 1989, Private Respondent Delfin Enriquez, Jr. doing business under
the name of Delrene EB Controls Center and/or EB Karmine Commercial , ordered and received from Petitioner various elements
used in sealing pumps, valves, pipes and control equipment, PVC pipes and fittings.

The transfers of these goods were perfected in Singapore.

Subsequently, demands were made by Petitioner upon private respondents to settle his account, but the latter failed/refused to do so.

That prompted the Petitioner-Foreign Corporation upon Private Respondent Enriquez to filed a collection suit before the RTC of
Makati for recovery of S$41,939.63 or its equivalent in the Philippine currency, plus interest and damages thereon.

Private Respondent responded with a Motion to Dismiss, contending that Petitioner had no legal capacity to sue.

The Trial Court dismissed the action on the ground that the Petitioner-Foreign Corporation doing business in the Philippines without a
license.

On appeal to CA, it affirmed the decision of the RTC on the same ground and therefore, the Petitioner-foreign corporation elevated
the case to the Honorable Supreme Court.

The aforementioned provision prohibits, not merely absence of the prescribed license, but it also bars a foreign corporation "doing
business" in the Philippines without such license access to our courts.

According to the Supreme Court , there is no definitive rule on what constitutes doing , engaging in, or transacting business, because
the corporation code does not define such terms.

Hence it adopted the concept in R.A. 7042 to wit:

Section 3 of the said law defines the phase doing business and shall include:

1. Soliciting orders;
2. Service Contracts;
3. Opening offices whether called liason offices or branches;
4. Appointing representatives or distributors domiciled in the Philippines; or
5. Who in any calendar year stay in the country for a period or periods totalling one hundred eighty (180) days or more;
6. Participating in the management, supervision or control of any domestic business, firm, entity or corporation in the Philippines;
and
7. any other act or acts that imply a continuity of commercial dealings or arrangements, and contemplate to that extent the
performance of acts or works,or the exercise of some of the functions normally incident to, and in progressive prosecution of,
commercial gain or of the purpose and object1of the business organization

ISSUE:
Whether Petitioner Corporation may maintain an action in Philippine courts considering that it has no license to do business in the country.

HELD:

BANKING NO. 9
Petition has no merit.

The Corporation Provides that:

Sec. 133. Doing business without a license. No foreign corporation transacting business in the Philippines without a license, or its
successors or assigns, shall be permitted to maintain or intervene in any actionsuit or proceeding in any court or administrative agency of
the Philippines;, but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on any valid
cause of action recognized under Philippine laws.

The resolution of the issue depends on whether Petitioners business with Private Respondent may be treated as isolated transactions.

Trial Court held that: the invoices and delivery receipts covering the period of from January 17, 1989 to August 16, 1989 cannot be treated
to a mean singular and isolated business transaction that is temporary in character. It indicates that plaintiff has the intention and desire to
repeat the said transaction in the future in pursuit of its ordinary business.

What is determinative of "doing business" is not really the number or the quantity of the transactions, but more importantly, the intention of
an entity to continue the body of its business in the country.

RATIONALE: Purpose of the law for requiring/obtaining a license to do business here in the Philippines is to subject the foreign
corporation doing business in the Philippines to the jurisdiction of our courts.

Therefore, Petitioner must be held to be incapacitated to maintain the action a quo against private respondent.

BANKING NO. 9
Eriks Pte. Ltd. vs. Court of Appeals

[GR 118843, 6 February 1997]

Facts: Eriks Pte. Ltd. is a non-resident foreign corporation engaged in the manufacture and sale of elements used in sealing pumps,
valves and pipes for industrial purposes, valves and control equipment used for industrial fluid control and PVC pipes and fittings for
industrial uses. On various dates covering the period January 17 August 16, 1989, Delfin Enriquez, Jr., doing business under the name
and style of Delrene EB Controls Center and/or EB Karmine Commercial, ordered and received from Eriks Pte. Ltd. various elements
used in sealing pumps, valves, pipes and control equipment, PVC pipes and fittings. The transfers of goods were perfected in Singapore,
for Enriquez's account, F.O.B. Singapore, with a 90-day credit term. Subsequently, demands were made by Eriks upon Enriquez to settle
his account, but the latter failed/refused to do so. On 28 August 1991, Eriks filed with the Regional Trial Court of Makati, Branch 138, Civil
Case 91-2373 for the recovery of S$41,939.63 or its equivalent in Philippine currency, plus interest thereon and damages. Enriquez
responded with a Motion to Dismiss, contending that Eriks had no legal capacity to sue. In an Order dated 8 March 1993, the trial court
dismissed the action on the ground that Eriks is a foreign corporation doing business in the Philippines without a license.

On appeal and on 25 January 1995, the appellate court (CA GR CV 41275) affirmed said order as it deemed the series of transactions
between Eriks and Enriquez not to be an "isolated or casual transaction." Thus, the appellate court likewise found Eriks to be without legal
capacity to sue. Eriks filed the petition for review.

Issue: Whether a foreign corporation which sold its products 16 times over a five-month period to the same Filipino buyer without first
obtaining a license to do business in the Philippines, is prohibited from maintaining an action to collect payment therefor in Philippine
courts.

Held: Section 133 of the Corporation Code provides that "No foreign corporation transacting business in the Philippines without a license,
or its successors or assigns, shall be permitted to maintain or intervene in any action, suit or proceeding in any court or administrative
agency of the Philippines; but such corporation may be sued or proceeded against before Philippine courts or administrative tribunals on
any valid cause of action recognized under Philippine laws." The provision prohibits, not merely absence of the prescribed license, but it
also bars a foreign corporation "doing business" in the Philippines without such license access to Philippine courts. A foreign corporation
without such license is not ipso facto incapacitated from bringing an action. A license is necessary only if it is "transacting or doing
business" in the country. However, there is no definitive rule on what constitutes "doing," "engaging in," or "transacting" business. The
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Corporation Code itself does not define such terms. To fill the gap, the evolution of its statutory definition has produced a rather all-
encompassing concept in Republic Act 7042 in this wise: "The phrase 'doing business' shall include soliciting orders, service contracts,
opening offices, whether called 'liaison' offices or branches; appointing representatives or distributors domiciled in the Philippines or who
in any calendar year stay in the country for a period or periods totaling one hundred eight(y) (180) days or more; participating in the
management, supervision or control of any domestic business, firm, entity or corporation in the Philippines; and any other act or acts that
imply a continuity of commercial dealings or arrangements, and contemplate to that extent the performance of acts or works, or the
exercise of some of the functions normally incident to, and in progressive prosecution of, commercial gain or of the purpose and object of
the business organization: Provided, however, That the phrase 'doing business' shall not be deemed to include mere investment as a
shareholder by a foreign entity in domestic corporations duly registered to do business, and/or the exercise of rights as such investor; nor

BANKING NO. 9
having a nominee director or officer to represent its interests in such corporation; nor appointing a representative or distributor domiciled
in the Philippines which transacts business in its own name and for its own account." The accepted rule in jurisprudence is that each case
must be judged in the light of its own environmental circumstances. It should be kept in mind that the purpose of the law is to subject the
foreign corporation doing business in the Philippines to the jurisdiction of Philippine courts. It is not to prevent the foreign corporation from
performing single or isolated acts, but to bar it from acquiring a domicile for the purpose of business without first taking the steps
necessary to render it amenable to suits in the local courts. Herein, more than the sheer number of transactions entered into, a clear and
unmistakable intention on the part of Eriks to continue the body of its business in the Philippines is more than apparent. As alleged in its
complaint, it is engaged in the manufacture and sale of elements used in sealing pumps, valves, and pipes for industrial purposes, valves
and control equipment used for industrial fluid control and PVC pipes and fittings for industrial use.

Thus, the sale by Eriks of the items covered by the receipts, which are part and parcel of its main product line, was actually carried out in
the progressive prosecution of commercial gain and the pursuit of the purpose and object of its business, pure and simple. Further, its
grant and extension of 90-day credit terms to Enriquez for every purchase made, unarguably shows an intention to continue transacting
with Enriquez, since in the usual course of commercial transactions, credit is extended only to customers in good standing or to those on
whom there is an intention to maintain long-term relationship. The series of transactions in question could not have been isolated or
casual transactions. What is determinative of "doing business" is not really the number or the quantity of the transactions, but more
importantly, the intention of an entity to continue the body of its business in the country. The number and quantity are merely evidence of
such intention. The phrase "isolated transaction" has a definite and fixed meaning, i.e. a transaction or series of transactions set apart
from the common business of a foreign enterprise in the sense that there is no intention to engage in a progressive pursuit of the purpose
and object of the business organization. Whether a foreign corporation is "doing business" does not necessarily depend upon the
frequency of its transactions, but more upon the nature and character of the transactions. Given the facts of the case, the Court cannot
see how Eriks' business dealings will fit the category of "isolated transactions" considering that its intention to continue and pursue the
corpus of its business in the country had been clearly established. It has not presented any convincing argument with equally convincing
evidence for the Court to rule otherwise. Accordingly and ineluctably, Eriks must be held to be incapacitated to maintain the action a quo
against Enriquez.

BANKING NO. 9
Busuego vs. CA [304 SCRA 473 (March 11 1999)]

Power of Monetary Board

Facts:

The 16th regular examination of the books and records of PAL Employees Savings and Loan Association (PESALA) was conducted by a
team of CB Examiners. Several irregularities were found to have been committed by the PESALA officers. Hence, CB sent a letter to
petitioners for them to be present at a meeting specifically for the purpose of investigating said anomalies. Petitioners did not respond.
Hence, the Monetary Board adopted a resolution including the names of the officers of PESALA in the watchlist to prevent them from
holding responsible positions in any institution under CB supervision.

Petitioners filed a petition for injunction against the MB in order to prevent their names from being added in the said watchlist. RTC issued
the TRO. The MB appealed to the CA which reversed RTC. Hence, this petition for certiorari with the SC.

Petitioners contend that the MB resolution was null and void for being violative of their right to due process by imposing administrative
sanctions where the MB is not vested with authority to disqualify persons from occupying positions in institutions under the supervision of
CB.

Issue: Whether or not the MB resolution was null and void.

Held:

NO. The CB, through the MB, is the government agency charged with the responsibility of administering the monetary, banking and credit
system of the country and is granted the power of supervision and examination over banks and non-bank financial institutions performing
quasi-banking functions of which savings and loan associations, such as PESALA, form part of.

The special law governing savings and loan associations is R.A. 3779, the Savings and Loan Association Act. Said law authorizes the
5
MB to conduct regular yearly examinations of the books and records of savings and loan associations, to suspend a savings and loan
association for violation of law, to decide any controversy over the obligations and duties of directors and officers, and to take remedial
measures. Hence, the CB, through the MB, is empowered to conduct investigations and examine the records of savings and loan
associations. If any irregularity is discovered in the process, the MB may impose appropriate sanctions, such as suspending the offender
from holding office or from being employed with the CB, or placing the names of the offenders in a watchlist.

BANKING NO. 9
ROMEO P. BUSUEGO, CATALINO F. BANEZ and RENATO F. LIM, petitioners, vs. THE HONORABLE COURT OF APPEALS and
THE MONETARY BOARD OF THE CENTRAL BANK OF THE PHILIPPINES, respondents. [G.R. No. 95326. March 11, 1999]

Supervision and examination of banks.

Capital structure of banks and quasi-banks.

Facts:

The 16th regular examination of the books and records of the PAL Employees Savings and Loan Association, Inc. ("PESALA")
was conducted by a team of CB. Following the said examination, several anomalies and irregularities committed by the herein petitioners;
PESALA's directors and officers, were uncovered, among which are:

1. Questionable investment in a multi-million peso real estate project (Pesalaville);

2. Conflict of interest in the conduct of business;

3. Unwarranted declaration and payment of dividends;

4. Commission of unsound and unsafe business practices.

Later the Central Bank ("CB") Supervision and Examination Section ("SES") Department Director sent a letter to the Board of
Directors of PESALA inviting them to a conference to discuss subject findings noted in the said 16th regular examination, but petitioners
did not attend such conference.

Petitioner then (Renato Lim) wrote the PESALA's Board of Directors explaining his side on the said examination of PESALA's
records and requesting that a copy of his letter be furnished the CB, which was forthwith made by the Board. [2]

6
PESALA's Board of Directors sent to the CB SES Department Director a letter concerning the 16th regular examination of
PESALA's records.

The Monetary Board adopted and issued MB Resolution No. 805 wherein one of the pertinent provisions is that: 5. To include the
names of Mr. Catalino Banez, Mr. Romeo Busuego and Mr. Renato Lim in the Sector's watchlist to prevent them from holding responsible
positions in any institution under Central Bank supervision; .

BANKING NO. 9
 Petitioners opine that with the issuance of Monetary Board Resolution No. 805, they are now barred from being elected or
designated as officers again of PESALA, and are likewise prevented from future engagements or employments in all institutions under the
supervision of the Central Bank thereby virtually depriving them of the opportunity to seek employments in the field which they can excel
and are best fitted. According to them, the Monetary Board is not vested with the authority to disqualify persons from occupying positions
in institutions under the supervision of the Central Bank without proper notice and hearing nor is it vested with authority to file civil and
criminal cases against its officers/directors for suspected fraudulent acts.

Petitioners filed a Petition for Injunction with Prayer for the Immediate Issuance of a Temporary Restraining Order [4] before the
Regional Trial Court. Said petition was granted.

The trial court ruled that WHEREFORE, judgment is hereby rendered declaring Monetary Board Resolution No. 805 as void
and inexistent. The writ of preliminary prohibitory injunctions issued is deemed permanent. Costs against respondent.

The Monetary Board appeal with the CA. CA ruled that WHEREFORE, the decision appealed from is hereby reversed and another
one entered dismissing the petition for injunction.

Dissatisfied with the said Decision of the Court of Appeals, petitioners have come to this Court via the present petition for review on
certiorari.

Issue: Whether or not the Monetary Board Resolution No. 805 is valid.

Ruling: YES.

Petitioners' contentions are untenable. It must be remembered that the Central Bank of the. Philippines (now Bangko
Sentral ng Pilipinas), through the Monetary Board, is the government agency charged with the responsibility of administering
the monetary, banking and credit system of the country[19] and is granted the power of supervision and examination over banks
and non-bank financial institutions performing quasi-banking functions, of which savings and loan associations, such as
PESALA, form part of[20].

7
The special law governing savings and loan association is Republic Act No. 3779, as amended, otherwise known as the
Savings and Loan Association Act. Said law authorizes the Monetary Board to conduct regular yearly examinations of the books and
records of savings and loan associations, to suspend, a savings and loan association for violation of law, to decide any controversy over
the obligations and duties of directors and officers, and to take remedial measures, among others. Section 28 of Rep. Act No. 3779,
reads:

BANKING NO. 9
SEC. 28. Supervisory powers over savings and loan associations. - In addition to whatever powers have been conferred by the foregoing
provisions, the Monetary Board shall have the power to exercise the following:

(c) To conduct at least once every year, and whenever- necessary, any inspection, examination or investigation of the books and
records, business affairs, administration, and financial condition of any savings and loan association with or without prior notice but always
with fairness and reasonable opportunity for the association or any of its officials to give their side of the case. Whenever an inspection,
examination or investigation is conducted under this grant of power, the person authorized to do so may seize books and records and
keep them under his custody after giving proper receipts therefor; may make any marking or notation on any paper, record, document or
book to show that it has been examined and verified and may padlock or seal shelves, vaults, safes, receptacles or similar containers and
prohibit the opening thereof without first securing authority therefor, for as long as may be necessary in connection with the investigation
or examination being conducted. The official of the Central Bank in charge of savings and loan associations and his deputies are hereby
authorized to administer oaths to any director, officer or employee of any association under the supervision of the Monetary Board;

(d) After proper notice and hearing, to suspend a savings and loan association for violation of law, for unsafe and unsound practices or
for reason of insolvency. The Monetary Board may likewise, upon the proof that a savings and loan association or its board or directors or
officers are conducting and managing its affairs in a manner contrary to laws, orders, instructions, rules and regulations promulgated by
the Monetary Board or in a manner substantially prejudicial to the interest of the government, depositors or creditor, take over the
management of the savings and loan association after due hearing, until a new board of directors and officers are elected and qualified
without prejudice to the prosecution of the persons responsible for such violations. The management by the Monetary Board shall be
without expense to the savings and loan association, except such as is actually necessary for its operation, pending the election and
qualification of a new board of directors and officers to take the place of those responsible for the violation or acts contrary to the interest
of the government, depositors or creditors;

(f) To decide, after appropriate notice and hearings any controversy as to the rights or obligations of the savings and loan association,
its directors, officers, stockholders and members under its charter, and, by order, to enforce the same;

(l) To conduct such investigations, take such remedial measures, exercise all powers which are now or may hereafter be conferred upon
it by Republic Act Numbered Two Hundred sixty-five in the enforcement of this legislation, and impose upon associations, whether stock
or non-stock their directors and/or officers administrative sanctions under Sections 34-A or 34-B of Republic Act Two Hundred sixty-five,
as amended.

From the foregoing, it is gleanable that the Central Bank, through the Monetary Board, is empowered to conduct investigations and
examine the records of savings and loan associations. If any irregularity is discovered in the process, the Monetary Board may impose
appropriate sanctions, such as suspending the offender from holding office or from being employed with the Central Bank, or placing the
names of the offenders in a watchlist.

The requirement of prior notice is also relaxed under Section 28 (c) of RA 3779 as investigations or examinations may be
conducted with or without prior notice but always with fairness and reasonable opportunity for the association or any of its officials to give
their side. As may be gathered from the records, the said requirement was properly complied with by the respondent Monetary Board.

We sustain the ruling of the Court of Appeals8 that petitioners' suspension was only preventive in nature and therefore, no notice
or, hearing was necessary. Until such time that the petitioners have proved their innocence, they may be preventively suspended from
holding office so as not to influence the conduct of investigation, and to prevent the commission of further irregularities.

Neither were petitioners deprived of their lawful calling as they are free to look for another employment so long as the agency or
company involved is not subject to Central Bank control and supervision. Petitioners can still practice their profession or engage in
business as long as these are not within the ambit of Monetary Board Resolution No. 805.

BANKING NO. 9
 All things studiedly considered, the court upholds the validity of Monetary Board Resolution No. 805 and affirms the decision of
the respondent court.

Central Bank Employees Association vs BSP GR 148208 15 December 2004

Facts:

The New Central Bank Act abolished the old Central Bank and created the new BSP on 1993 through RA No 7653. Central Bank
Employees Association assailed the provision of RA No 7653, Art II Sec 15(c). They contend that it makes an unconstitutional cut between
two classes of employees in the BSP, viz: (1) the BSP officers as exempt class of Salary Standardization Law (RA 6758) and (2) the rank-
and-file non-exempt class. BSP contends that the exemption of officers (SG 20 and above) from the SSL was intended to address the
BSPs lack of competitiveness in terms of attracting competent officers and executives. It was not intended to discriminate against the
rank-and-file.

BANKING NO. 9
Issue:

Whether or not Section 15(c) violates equal protection right of the BSP r&f employees?

Decision:

Sec 15(c) unconstitutional. Judicial notice that other Govt Financial Institution undertook amendment of their charters from 1995 to 2004
a blanket provision for all employees to be covered by SSL. The said subsequent enactments constitute significant changes in
circumstance that considerably alter the reasonability of the continued operation of the last proviso of Section 15(c). Legal history shows
that GFIs have long been recognized as comprising one distinct class, separate from other governmental entities. There is no substantial
distinctions so as to differentiate, the BSP rank-and-file from the other rank-and-file of the seven GFIs. The equal protection clause does
not demand absolute equality but it requires that all persons shall be treated alike, under like circumstances and conditions both as to
privileges conferred and liabilities enforced. Those that fall within a class should be treated in the same fashion; whatever restrictions cast
on some in the group is equally binding on the rest. It is clear that the enactment of the seven subsequent charters has rendered the
continued application of the challenged proviso anathema to the equal protection of the law, and the same should be declared as an
outlaw.

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BANKING NO. 9
Central Bank Employees Association Inc. vs. Bangko Sentral ng Pilipinas (GR 148208, 15 December 2004)

Central Bank Employees Association Inc. vs. Bangko Sentral ng Pilipinas

[GR 148208, 15 December 2004]

Facts: On 3 July 1993, RA 7653 (the New Central Bank Act) took effect. It abolished the old Central Bank of the Philippines, and created
a new BSP. On 8 June 2001, almost 8 years after the effectivity of RA 7653, the Central Bank (now BSP) Employees Association, Inc.,
filed a petition for prohibition against BSP and the Executive Secretary of the Office of the President, to restrain the Bangko Sentral ng
Pilipinas and the Executive Secretary from further implementing the last proviso in Section 15(c), Article II of RA 7653, on the ground that
it is unconstitutional. Article II, Section 15(c) of RA 7653 (Exercise of Authority) provides that "In the exercise of its authority, the Monetary
Board shall ... (c) establish a human resource management system which shall govern the selection, hiring, appointment, transfer,
promotion, or dismissal of all personnel. Such system shall aim to establish professionalism and excellence at all levels of the Bangko
Sentral in accordance with sound principles of management. A compensation structure, based on job evaluation studies and wage
surveys and subject to the Boards approval, shall be instituted as an integral component of the Bangko Sentrals human resource
development program: Provided, That the Monetary Board shall make its own system conform as closely as possible with the principles
provided for under Republic Act No. 6758 [Salary Standardization Act]. Provided, however, That compensation and wage structure of
employees whose positions fall under salary grade 19 and below shall be in accordance with the rates prescribed under Republic Act No.
6758." The Association alleges that the proviso makes an unconstitutional cut between two classes of employees in the BSP, viz: (1) the
BSP officers or those exempted from the coverage of the Salary Standardization Law (SSL) (exempt class); and (2) the rank-and-file
(Salary Grade [SG] 19 and below), or those not exempted from the coverage of the SSL (non-exempt class). It is contended that this
classification is a classic case of class legislation, allegedly not based on substantial distinctions which make real differences, but solely
on the SG of the BSP personnels position.

Issue: Whether the rank-and-file employees of the BSP are unduly discriminated upon by exempting BSP officers (SG 20 and above)
from the Salary Standardization Law.

Held: Congress is allowed a wide leeway in providing for a valid classification. The equal protection clause is not infringed by legislation
which applies only to those persons falling within a specified class. If the groupings are characterized by substantial distinctions that make
real differences, one class may be treated and regulated differently from another. The classification must also be germane to the purpose
of the law and must apply to all those belonging to the same class. The exemption of officers (SG 20 and above) from the SSL was
intended to address the BSPs lack of competitiveness in terms of attracting competent officers and executives. It was not intended to
discriminate against the rank-and-file. If the end-result did in fact lead to a disparity of treatment between the officers and the rank-and-file
in terms of salaries and benefits, the discrimination or distinction has a rational basis and is not palpably, purely, and entirely arbitrary in
the legislative sense. However, while RA 7653 started as a valid measure well within the legislatures power, the enactment of subsequent
laws exempting all rank-and-file employees of other Government Financial Institutions (GFIs) leeched all validity out of the last proviso of
11
Section 15(c), Article II of RA 7653. After the new BSP charter was enacted in 1993, Congress also undertook the amendment of the
charters of the Land Bank of the Philippines (LBP, with RA 7907 [1995]), Social Security System (SSS, with RA 8282 [1997]), Small
Business Guarantee and Finance Corporation (SBGFC, with RA 8289 [1997]), Government Service Insurance System (GSIS, with RA
8291 [1997]), Development Bank of the Philippines (DBP, with RA 8523 [1998]), Home Guaranty Corporation (HGC, with RA 8763 [2000]),
and Philippine Deposit Insurance Corporation (PDIC, with RA 9302 [2004]). Thus, 11 years after the amendment of the BSP charter, the
rank-and-file of 7 other GFIs were granted the exemption that was specifically denied to the rank-and-file of the BSP. Even the Securities
and Exchange Commission (SEC) was granted the same blanket exemption from the SSL in 2000. The prior view on the constitutionality
of RA 7653 was confined to an evaluation of its classification between the rank-and-file and the officers of the BSP, found reasonable
because there were substantial distinctions that made real differences between the two classes. The subsequent enactments, however,
constitute significant changes in circumstance that considerably alter the reasonability of the continued operation of the last proviso of

BANKING NO. 9
Section 15(c), Article II of RA 7653, thereby exposing the proviso to more serious scrutiny. This time, the scrutiny relates to the
constitutionality of the classification - albeit made indirectly as a consequence of the passage of eight other laws - between the rank-and-
file of the BSP and the seven other GFIs. The classification must not only be reasonable, but must also apply equally to all members of
the class. The proviso may be fair on its face and impartial in appearance but it cannot be grossly discriminatory in its operation, so as
practically to make unjust distinctions between persons who are without differences. The disparity of treatment between BSP rank-and-file
and the rank-and-file of the other seven GFIs definitely bears the unmistakable badge of invidious discrimination - no one can, with candor
and fairness, deny the discriminatory character of the subsequent blanket and total exemption of the seven other GFIs from the SSL when
such was withheld from the BSP. Alikes are being treated as unalikes without any rational basis. The equal protection clause does not
demand absolute equality but it requires that all persons shall be treated alike, under like circumstances and conditions both as to
privileges conferred and liabilities enforced. Favoritism and undue preference cannot be allowed. For the principle is that equal protection
and security shall be given to every person under circumstances which, if not identical, are analogous. If law be looked upon in terms of
burden or charges, those that fall within a class should be treated in the same fashion; whatever restrictions cast on some in the group is
equally binding on the rest. In light of the lack of real and substantial distinctions that would justify the unequal treatment between the
rank-and-file of BSP from the seven other GFIs, it is clear that the enactment of the seven subsequent charters has rendered the
continued application of the challenged proviso anathema to the equal protection of the law, and the same should be declared as an
outlaw. the two-tier analysis made in the case, and its conclusion of unconstitutionality by subsequent operation, are in cadence and in
consonance with the progressive trend of other jurisdictions and in international law. There should be no hesitation in using the equal
protection clause as a major cutting edge to eliminate every conceivable irrational discrimination in our society. Indeed, the social justice
imperatives in the Constitution, coupled with the special status and protection afforded to labor, compel this approach. Apropos the special
protection afforded to labor under our Constitution and international law, it has been held in International School Alliance of Educators v.
Quisumbing that public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy
against these evils. The Constitution in the Article on Social Justice and Human Rights exhorts Congress to give highest priority to the
enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political
inequalities. The very broad Article 19 of the Civil Code requires every person, in the exercise of his rights and in the performance of his
duties, [to] act with justice, give everyone his due, and observe honesty and good faith." International law, which springs from general
principles of law, likewise proscribes discrimination. General principles of law include principles of equity, i.e., the general principles of
fairness and justice, based on the test of what is reasonable. The Universal Declaration of Human Rights, the International Covenant on
Economic, Social, and Cultural Rights, the International Convention on the Elimination of All Forms of Racial Discrimination, the
Convention against Discrimination in Education, the Convention (No. 111) Concerning Discrimination in Respect of Employment and
Occupation - all embody the general principle against discrimination, the very antithesis of fairness and justice. The Philippines, through
its Constitution, has incorporated this principle as part of its national laws. The BSP rank-and-file employees merit greater concern from
the Supreme Court. They represent the more impotent rank-and-file government employees who, unlike employees in the private sector,
have no specific right to organize as a collective bargaining unit and negotiate for better terms and conditions of employment, nor the
power to hold a strike to protest unfair labor practices. Not only are they impotent as a labor unit, but their efficacy to lobby in Congress is
almost nil as RA 7653 effectively isolated them from the other GFI rank-and-file in compensation. These BSP rank-and-file employees
represent the politically powerless and they should not be compelled to seek a political solution to their unequal and iniquitous treatment.
Indeed, they have waited for many years for the legislature to act. They cannot be asked to wait some more for discrimination cannot be
given any waiting time. Unless the equal protection clause of the Constitution is a mere platitude, it is the Courts duty to save them from
reasonless discrimination. Thus, the continued operation and implementation of the last proviso of Section 15(c), Article II of Republic Act
7653 was declared unconstitutional.

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BANKING NO. 9