15

SOUTHERN CROSS CEMENT CORPORATION v. CEMENT MANUFACTURERS, THE HONORABLE SECRETARY

OF TRADE, et al.

FACTS:
Nowhere in the SMA does it state that the DTI Secretary may impose general safeguard measures
without a positive final determination by the Tariff Commission, or that the DTI Secretary may reverse or
even review the factual determination made by the Tariff Commission. Congress has the putative
authority to abolish the Tariff Commission or the DTI. It is similarly empowered to alter or expand its
functions through modalities which do not align with established norms in the bureaucratic structure.
The Court is bound to recognize the legislative prerogative to prescribe such modalities, no matter how
atypical they may be, in affirmation of the legislative power to restructure the executive branch of
government.

The case centers on the interpretation of the provisions of Republic Act No. 8800, the Safeguard
Measures Act (“SMA”), which was one of the laws enacted by Congress soon after the Philippines
ratified the General Agreement on Tariff and Trade (GATT) and the World Trade Organization (WTO)
Agreement. The SMA provides for the structure and mechanics for the imposition of emergency
measures, including tariffs, to protect domestic industries and producers from increased imports which
inflict or could inflict serious injury on them.

Philcemcor filed with the Department of Trade and Industry (DTI) a petition seeking for the imposition of
safeguard measures on Gray Portland cement, in accordance with the SMA. After the DTI issued a
provisional safeguard measure, the application was referred to the Tariff Commission for a formal
investigation pursuant to Section 9 of the SMA and its Implementing Rules and Regulations, in order to
determine whether or not to impose a definitive safeguard measure on imports of gray Portland
cement. After public hearings and conducting its own investigation, the Tariff Commission came out
with a negative finding. Notwithstanding such finding, the DTI sought the opinion of the Secretary of
Justice whether it could still impose a definitive safeguard measure. The Secretary of Justice opined that
the DTI could not do so under the SMA, and so the DTI Secretary then promulgated a Decision wherein
he expressed the DTI’s disagreement with the conclusions of the Tariff Commission, but at the same
time, ultimately denying Philcemcor’s application for safeguard measures on the ground that the he was
bound to do so in light of the Tariff Commission’s negative findings.

Philcemcor filed with the Court of Appeals a Petition for Certiorari, Prohibition and Mandamus seeking
to set aside the DTI Decision, as well as the Tariff Commission’s Report. Philcemcor argued that the DTI
Secretary, vested as he is under the law with the power of review, is not bound to adopt the
recommendations of the Tariff Commission; and, that the Report is void, as it is predicated on a flawed
framework, inconsistent inferences and erroneous methodology. The CA held that the DTI Secretary was
not bound by the factual findings of the Tariff Commission since such findings are merely
recommendatory and they fall within the ambit of the Secretary’s discretionary review. It determined
that the legislative intent is to grant the DTI Secretary the power to make a final decision on the Tariff
Commission’s recommendation.
Southern Cross filed the present petition, arguing that the factual findings of the Tariff Commission on
the existence or non-existence of conditions warranting the imposition of general safeguard measures
are binding upon the DTI Secretary.

ISSUE: Whether or not the factual findings of the Tariff Commission on the existence or non-existence of
conditions warranting the imposition of safeguard measures are binding upon the DTI Secretary

HELD:
Petition is granted.

The DTI Secretary is barred from imposing a general safeguard measure absent a positive final
determination rendered by the Tariff Commission. The required positive final determination of the Tariff
Commission exists as a properly enacted constitutional limitation imposed on the delegation of the
legislative power to impose tariffs and imposts to the President under Section 28(2), Article VI of the
Constitution. The provision states: “The Congress may, by law, authorize the President to fix within
specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and
export quotas, tonnage and wharfage dues, and other duties or imposts within the framework of the
national development program of the Government.”

These impositions under Section 28(2), Article VI fall within the realm of the power of taxation, a power
which is within the sole province of the legislature. But this provision is also an exceptional grant of
legislative power to the President which is why the qualifiers mandated by the Constitution on this
presidential authority attains primordial consideration. First, there must be a law, such as the SMA.
Second, there must be specified limits, a detail which would be filled in by the law. And Third, Congress
is further empowered to impose limitations and restrictions on this presidential authority.

The authority delegated to the President may be exercised by his/her alter egos, such as department
secretaries. For purposes of the President’s exercise of power to impose tariffs under the above
provision, it is generally the Secretary of Finance who acts as the alter ego of the President. The SMA
provides an exceptional instance wherein it is the DTI or Agriculture Secretary who is tasked by
Congress, in their capacities as alter egos of the President, to impose such measures.

Both the Tariff Commission and the DTI Secretary may be regarded as agents of Congress in the
implementation of the said law. Indeed, even the President may be considered as an agent of Congress
for the purpose of imposing safeguard measures since it is Congress, not the President, which possesses
inherent powers to impose tariffs and imposts.

The entire SMA provides for a limited framework under which the President, through the DTI and
Agriculture Secretaries, may impose safeguard measures in the form of tariffs and similar imposts. The
limitation most relevant to this case is contained in Section 5 of the SMA, captioned “Conditions for the
Application of General Safeguard Measures,” and stating: “The Secretary shall apply a general safeguard
measure upon a positive final determination of the [Tariff] Commission that a product is being imported
into the country in increased quantities, whether absolute or relative to the domestic production, as to
be a substantial cause of serious injury or threat thereof to the domestic industry; however, in the case
of non-agricultural products, the Secretary shall first establish that the application of such safeguard
measures will be in the public interest.
Section 5 of the SMA operates as a limitation validly imposed by Congress on the presidential authority
under the SMA to impose tariffs and imposts. The positive final

determination by the Tariff Commission is plainly required by the law and so it must be strictly complied
with.

Philcemcor raised a question as to whether such requirement run counter to our legal order since under
the said provision, a body of relative junior competence as a Tariff Commission can bind an
administrative superior and cabinet officer such as the DTI Secretary.

No provision in the SMA expressly authorizes the DTI Secretary to impose a general safeguard measure
despite the absence of a positive final recommendation of the Tariff Commission. On the other hand,
Section 5 expressly states that the DTI Secretary “shall apply a general safeguard measure upon a
positive final determination of the Tariff Commission.”

Under the SMA, it is the Tariff Commission that conducts an investigation as to whether the conditions
exist to warrant the imposition of the safeguard measures. These conditions are enumerated in Section
5, namely; that a product is being imported into the country in increased quantities, whether absolute
or relative to the domestic production, as to be a substantial cause of serious injury or threat thereof to
the domestic industry. After the investigation of the Tariff Commission, it submits a report to the DTI
Secretary, which states whether the above-stated conditions for the imposition of the general safeguard
measures exist. Upon a positive final determination that these conditions are present, the Tariff
Commission then is mandated to recommend what appropriate safeguard measures should be
undertaken by the DTI Secretary. Section 13 of the SMA gives five specific options on the type of
safeguard measures the Tariff Commission recommends to the DTI Secretary.

At the same time, nothing in the SMA obliges the DTI Secretary to adopt the recommendations made by
the Tariff Commission. In fact, the SMA requires that the DTI Secretary establish that the application of
such safeguard measures is in the public interest, notwithstanding the Tariff Commission’s
recommendation on the appropriate safeguard measure upon its positive final determination. Thus,
even if the Tariff Commission makes a positive final determination, the DTI Secretary may opt not to
impose a general safeguard measure, or choose a different type of safeguard measure other than that
recommended by the Tariff Commission.

It is evident from the text of Section 5 that there must be a positive final determination by the Tariff
Commission that a product is being imported into the country in increased quantities (whether absolute
or relative to domestic production), as to be a substantial cause of serious injury or threat to the
domestic industry. Any disputation to the contrary is, at best, the product of wishful thinking.

The Tariff Commission’s finding is not merely recommendatory. Section 5 bluntly does require a positive
final determination by the Tariff Commission before the DTI Secretary may impose a general safeguard
measure. This is a duty imposed on a public officer by the law itself which must be given a controlling
effect. In fact, the Department of Justice (DOJ) Secretary himself rendered an Opinion with the same
conclusion.
Another issue was raised as to whether the DTI Secretary, acting either as alter ego of the President or in
his capacity as head of an executive department, may review, modify or otherwise alter the final
determination of the Tariff Commission under the SMA. The Court answered in the negative. Congress in
enacting the SMA and prescribing the roles to be played therein by the Tariff Commission and the DTI
Secretary did not envision that the President, or his/her alter ego, could exercise supervisory powers
over the Tariff Commission. If

Congress intended to allow the traditional “alter ego” principle to be established by the SMA, it would
have assigned the role now played by the DTI Secretary under the law instead to the National Economic
and Development Authority (NEDA). The Tariff Commission is an attached agency of the NEDA, which in
turn is the independent planning agency of the government.

The Tariff Commission does not fall under the administrative supervision of the DTI. On the other hand,
the administrative relationship between the NEDA and the Tariff Commission is established not only by
the Administrative Code, but similarly affirmed by the Tariff and Customs Code.

At the same time, under the Tariff and Customs Code, no similar role or influence is allocated to the DTI
in the matter of imposing tariff duties. In fact, the long-standing tradition has been for the Tariff
Commission and the DTI to proceed independently in the exercise of their respective functions. Only
very recently have our statutes directed any significant interplay between the Tariff Commission and the
DTI, with the enactment in 1999 of Republic Act No. 8751 on the imposition of countervailing duties and
Republic Act No. 8752 on the imposition of anti-dumping duties, and of course the promulgation a year
later of the SMA. In all these three laws, the Tariff Commission is tasked, upon referral of the matter by
the DTI, to determine whether the factual conditions exist to warrant the imposition by the DTI of a
countervailing duty, an anti-dumping duty, or a general safeguard measure, respectively. In all three
laws, the determination by the Tariff Commission that these required factual conditions exist is
necessary before the DTI Secretary may impose the corresponding duty or safeguard measure. And in all
three laws, there is no express provision authorizing the DTI Secretary to reverse the factual
determination of the Tariff Commission.

The SMA indubitably establishes that the Tariff Commission is no mere flunky of the DTI Secretary when
it mandates that the positive final recommendation of the former be indispensable to the latter’s
imposition of a general safeguard measure. What the law indicates instead is a relationship of
interdependence between two bodies independent of each other under the Administrative Code and
the SMA alike. Indeed, even the ability of the DTI Secretary to disregard the Tariff Commission’s
recommendations as to the particular safeguard measures to be imposed evinces the independence
from each other of these two bodies. This is properly so for two reasons – the DTI and the Tariff
Commission are independent of each other under the Administrative Code; and impropriety is avoided
in cases wherein the DTI itself is the one seeking the imposition of the general safeguard measures,
pursuant to Section 6 of the SMA.

Considering that the power to impose tariffs in the first place is not inherent in the President but arises
only from congressional grant, we should affirm the congressional prerogative to impose limitations and
restrictions on such powers which do not normally belong to the executive in the first place. Nowhere in
the SMA does it state that the DTI Secretary may impose general safeguard measures without a positive
final determination by the Tariff Commission, or that the DTI Secretary may reverse or even review the
factual determination made by the Tariff Commission.
Congress can enact additional tasks or responsibilities on either the Tariff Commission or the DTI
Secretary, such as their respective roles on the imposition of general safeguard measures under the
SMA. In doing so, the same Congress, which has the putative authority to abolish the Tariff Commission
or the DTI, is similarly empowered to alter or

expand its functions through modalities which do not align with established norms in the bureaucratic
structure. The Court is bound to recognize the legislative prerogative to prescribe such modalities, no
matter how atypical they may be, in affirmation of the legislative power to restructure the executive
branch of government.

Assuming administrative review were available, it is the NEDA that may conduct such review following
the principles of administrative law, and the NEDA’s decision in turn is reviewable by the Office of the
President. The decision of the Office of the President then effectively substitutes as the determination of
the Tariff Commission, which now forms the basis of the DTI Secretary’s decision, which now would be
ripe for judicial review by the CTA under Section 29 of the SMA. This is the only way that administrative
review of the Tariff Commission’s determination may be sustained without violating the SMA and its
constitutional restrictions and limitations, as well as administrative law.

In any event, even if we concede the possibility of administrative review of the Tariff Commission’s final
determination by the NEDA, such would not deny merit to the present petition. It does not change the
fact that the Court of Appeals erred in ruling that the DTI Secretary was not bound by the negative final
determination of the Tariff Commission, or that the DTI Secretary acted without jurisdiction when he
imposed general safeguard measures despite the absence of the statutory positive final determination
of the Commission.
 30

ZAMBALES CHROMITE MINING CO., GONZALO P. NAVA, VIOLA S. NAVA, FEDERICO S. NAVA, PERLA
NAVA, HONORATO P. NAVA, ALEJANDRO S. NAVA, PURIFICACION SISON, A. TORDESILLAS, GUIDO
ADVINCULA, PEDRO ANGULO and TOMAS MARAMBA, petitioners-appellants,
vs.
COURT OF APPEALS, SECRETARY OF AGRICULTURE AND NATURAL RESOURCES, DIRECTOR OF MINES,
GREGORIO E. MARTINEZ, ALEJANDRO MENDEZ, NICANOR MARTY, VICENTE MISOLES, GUILLERMO
YABUT, ANDRES R. FIAGOY, MIGUEL A. MANIAGO, CASIMIRO N. EBIDO, ENRIQUE RIVERA, SEVERINO
MIVA, ELENITO B. MARTINEZ, LUCAS EDURAIN, FELIMON ENCIO, EMILIO ILOCO, DIOSDADO MISOLA,
ERNESTO VALVERDE, PABLO PABILONA, ARMANDO MINAS, BARTOLOME MARAVE and CECILIO
OOVILLA, respondents-appellees.

FACTS:
ZCM filed an administrative case before the Director of Mines Gozon to have them be declared the
rightful and prior locators and possessors of 69 mining claims in Sta. Cruz, Zambales. They are asserting
their claim against the group of Martinez and Pabiloňa. Gozon decided in favor of Martinez et al. ZCM
appealed the case before the Secretary of Agriculture and Natural Resources. During pendency, Gozon
was assigned as the Sec of Agri. And Natural Resources. He did not inhibit himself from deciding on the
appeal but he instead affirmed his earlier decision when he was still the director of mines. ZCM then
appealed before the CFI of Zambales. The CFI affirmed the decision of Gozon. It held that the
disqualification of a judge to review his own decision or ruling (Sec. 1, Rule 137, Rules of Court) does not
apply to administrative bodies; that there is no provision in the Mining Law, disqualifying the Secretary
of Agriculture and Natural Resources from deciding an appeal from a case which he had decided as
Director of Mines; that delicadeza is not a ground for disqualification; that the ZCM did not seasonably
seek to disqualify Gozon from deciding their appeal, and that there was no evidence that Gozon acted
arbitrarily and with bias, prejudice, animosity or hostility to ZCM. ZCM appealed the case to the CA. The
CA reversed Gozon’s finding and declared that ZCM had the rights earlier attributed to Martinez et al by
Gozon. Martinez et al appealed averring that the factual basis found by Gozon as Director of Mines be
given due weight. The CA reconsidered after realizing that Gozon cannot affirm his own decision and the
CA remanded the case to the Minister of Natural Resources. Now both parties appealed urging their
own contentions; ZCM wants the CA’s earlier decision to be reaffirmed while Martinez et al demanded
that Gozon’s finding be reinstated. The CA denied both petition.

ISSUE: Whether or not Gozon can validly affirm his earlier decision w/o disturbing due process.

HELD:
The SC annulled the decision of Gozon calling it as a mockery of justice. Gozon had acted with grave
abuse of discretion. In order that the review of the decision of a subordinate officer might not turn out
to be a farce, the reviewing officer must perforce be other than the officer whose decision is under
review; otherwise, there could be no different view or there would be no real review of the case. The
decision of the reviewing officer would be a biased view; inevitably, it would be the same view since
being human, he would not admit that he was mistaken in his first view of the case. The SC affirmed the
2nd decision of the CA.
 58

VICTOR A. AQUINO, petitioner,

vs.
CIVIL SERVICE COMMISSION and LEONARDA D. DE LA PAZ, respondents.

Facts:
Petitioner was designated as Officer-in-charge of the Division Supply Office by the DECS Regional
Director in view of the retirement of the Supply Officer I.

Two years thereafter, the Division Superintendent of City Schools issued a promotional appointment to
private respondent as Supply Officer I in the DECS division. The Civil Service Regional Office IV approved
her appointment as permanent.

Petitioner filed a protest with DECS Secretary questioning the qualification and competence of private
respondent for the position of Supply Officer I.

Finding the petitioner better qualified than the respondent, the DECS Secretary in a decision sustained
the protest and revoked the appointment of private respondent, and petitioner was issued a permanent
appointment as Supply Officer by the DECS Regional Director. Said appointment was approved by the
Civil Service Regional Office IV.

In an appeal to the CSC, public respondent CSC found the appeal meritorious, thus revoking the
appointment of petitioner and restoring private respondent to her position under her previously
approved appointment.

In the case at bar, petitioner assailing the revocation of his appointment, invokes the rulings in previous
jurisprudence that the CSC has no authority to revoke an appointment on the ground that another
person is more qualified for a particular position for that would have constituted an encroachment on
the discretion vested solely in the appointing authority.

Issue: Whether or not appointment of the respondent can be revoked.

Held:
No. It is well settled that once an appointment is issued and the moment the appointee assumes
position, he acquires a legal, not merely equitable right, which is protected not only by statute, but also
by the Constitution, and cannot be taken away from him either by revocation of the appointment, or by
removal, except for cause and with previous notice and hearing.

Said appointment cannot also be revoked on the ground that the protestant is more qualified than the
first appointee. The protest must be for a cause or predicated on those grounds provided for under Sect
19 (6) of the Civil Service Law (PD 807), namely:

1) that the appointee is not qualified;

2) that the appointee is not the next in rank; and

3) in case of appointment transfer, reinstatement, or by original appointment, that the protestant is not
satisfied with the written special reasons or reason given by the appointing authority.

Note: “for a cause” means “for reasons which the law and sound public policy recognized as sufficient
warrant for removal, that is, legal cause, and not merely causes which the appointing power in the
exercise of discretion may deem sufficient. It is implied that officers may not be removed at the mere
will of those vested with the power of removal, or without any cause. Moreover, the cause must relate
to and affect the administration of office and must be restricted to something of a substantial nature
directly affecting the rights and interests of the public.”