I.

Statutory Construction, Preliminaries

A. Laws, defined
Law in its jural and generic sense refers to the whole body or system of law. In its
jural and concrete sense, law means a rule of conduct formulated and made
obligatory by legitimate power of the state. It includes statutes enacted by the
legislature, presidential decrees and executive orders issued by the President in
the exercise of his legislative power, other presidential issuances in the exercise of
his ordinance power, rulings of the Supreme Court construing the law, rules and
regulations promulgated by administrative or executive officers pursuant to a
delegated power, and ordinances passed by sanggunians of local government
units.
B. Statutory Construction
Caltex v. Palomar, G.R. No. L-19650, September 29, 1996

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-19650 September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,

vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant.

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid
the groundwork for a promotional scheme calculated to drum up patronage for its oil products.
Denominated "Caltex Hooded Pump Contest", it calls for participants therein to estimate the actual
number of liters a hooded gas pump at each Caltex station will dispense during a specified period.
Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and their
immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners
and/or licensed drivers". For the privilege to participate, no fee or consideration is required to be
paid, no purchase of Caltex products required to be made. Entry forms are to be made available
upon request at each Caltex station where a sealed can will be provided for the deposit of
accomplished entry stubs.
A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest",
the contestant whose estimate is closest to the actual number of liters dispensed by the hooded
pump thereat is to be awarded the first prize; the next closest, the second; and the next, the third.
Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottle and a Ray-O-Vac
hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a screwdriver
set for third. The first-prize winner in each station will then be qualified to join in the "Regional
Contest" in seven different regions. The winning stubs of the qualified contestants in each region will
be deposited in a sealed can from which the first-prize, second-prize and third-prize winners of that
region will be drawn. The regional first-prize winners will be entitled to make a three-day all-
expenses-paid round trip to Manila, accompanied by their respective Caltex dealers, in order to take
part in the "National Contest". The regional second-prize and third-prize winners will receive cash
prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-
prize winners will be placed inside a sealed can from which the drawing for the final first-prize,
second-prize and third-prize winners will be made. Cash prizes in store for winners at this final stage
are: P3,000 for first; P2,000 for second; Pl,500 for third; and P650 as consolation prize for each of
the remaining four participants.

Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest
but also for the transmission of communications relative thereto, representations were made by
Caltex with the postal authorities for the contest to be cleared in advance for mailing, having in view
sections 1954(a), 1982 and 1983 of the Revised Administrative Code, the pertinent provisions of
which read as follows:

SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the

following classes, whether sealed as first-class matter or not, shall be imported into the
Philippines through the mails, or to be deposited in or carried by the mails of the Philippines,
or be delivered to its addressee by any officer or employee of the Bureau of Posts:

Written or printed matter in any form advertising, describing, or in any manner pertaining to,
or conveying or purporting to convey any information concerning any lottery, gift enterprise,
or similar scheme depending in whole or in part upon lot or chance, or any scheme, device,
or enterprise for obtaining any money or property of any kind by means of false or fraudulent
pretenses, representations, or promises.

"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or company is
engaged in conducting any lottery, gift enterprise, or scheme for the distribution of money, or
of any real or personal property by lot, chance, or drawing of any kind, or that any person or
company is conducting any scheme, device, or enterprise for obtaining money or property of
any kind through the mails by means of false or fraudulent pretenses, representations, or
promises, the Director of Posts may instruct any postmaster or other officer or employee of
the Bureau to return to the person, depositing the same in the mails, with the word
"fraudulent" plainly written or stamped upon the outside cover thereof, any mail matter of
whatever class mailed by or addressed to such person or company or the representative or
agent of such person or company.

SECTION 1983. Deprivation of use of money order system and telegraphic transfer
service.—The Director of Posts may, upon evidence satisfactory to him that any person or
company is engaged in conducting any lottery, gift enterprise or scheme for the distribution
of money, or of any real or personal property by lot, chance, or drawing of any kind, or that
any person or company is conducting any scheme, device, or enterprise for obtaining money
or property of any kind through the mails by means of false or fraudulent pretenses,
representations, or promise, forbid the issue or payment by any postmaster of any postal
 money order or telegraphic transfer to said person or company or to the agent of any such
person or company, whether such agent is acting as an individual or as a firm, bank,
corporation, or association of any kind, and may provide by regulation for the return to the
remitters of the sums named in money orders or telegraphic transfers drawn in favor of such
person or company or its agent.

The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in
which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to justify its
position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed,
the then Acting Postmaster General opined that the scheme falls within the purview of the provisions
aforesaid and declined to grant the requested clearance. In its counsel's letter of December 7, 1960,
Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no
consideration in the part of any contestant, the contest was not, under controlling authorities,
condemnable as a lottery. Relying, however, on an opinion rendered by the Secretary of Justice on
an unrelated case seven years before (Opinion 217, Series of 1953), the Postmaster General
maintained his view that the contest involves consideration, or that, if it does not, it is nevertheless a
"gift enterprise" which is equally banned by the Postal Law, and in his letter of December 10, 1960
not only denied the use of the mails for purposes of the proposed contest but as well threatened that
if the contest was conducted, "a fraud order will have to be issued against it (Caltex) and all its
representatives".

Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief
against Postmaster General Enrico Palomar, praying "that judgment be rendered declaring its
'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent to
allow petitioner the use of the mails to bring the contest to the attention of the public". After issues
were joined and upon the respective memoranda of the parties, the trial court rendered judgment as
follows:

In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded
Pump Contest' announced to be conducted by the petitioner under the rules marked as
Annex B of the petitioner does not violate the Postal Law and the respondent has no right to
bar the public distribution of said rules by the mails.

The respondent appealed.

The parties are now before us, arrayed against each other upon two basic issues: first, whether the
petition states a sufficient cause of action for declaratory relief; and second, whether the proposed
"Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in seriatim.

1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable
legal basis for the remedy at the time it was invoked, declaratory relief is available to any person
"whose rights are affected by a statute . . . to determine any question of construction or validity
arising under the . . . statute and for a declaration of his rights thereunder" (now section 1, Rule 64,
Revised Rules of Court). In amplification, this Court, conformably to established jurisprudence on the
matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party
seeking declaratory relief must have a legal interest in the controversy; and (4) the issue involved
must be ripe for judicial determination (Tolentino vs. The Board of Accountancy, et al., G.R. No. L-
3062, September 28, 1951; Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2, pp. 576,
578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The gravamen of the
appellant's stand being that the petition herein states no sufficient cause of action for declaratory
relief, our duty is to assay the factual bases thereof upon the foregoing crucible.
As we look in retrospect at the incidents that generated the present controversy, a number of
significant points stand out in bold relief. The appellee (Caltex), as a business enterprise of some
consequence, concededly has the unquestioned right to exploit every legitimate means, and to avail
of all appropriate media to advertise and stimulate increased patronage for its products. In contrast,
the appellant, as the authority charged with the enforcement of the Postal Law, admittedly has the
power and the duty to suppress transgressions thereof — particularly thru the issuance of fraud
orders, under Sections 1982 and 1983 of the Revised Administrative Code, against legally non-
mailable schemes. Obviously pursuing its right aforesaid, the appellee laid out plans for the sales
promotion scheme hereinbefore detailed. To forestall possible difficulties in the dissemination of
information thereon thru the mails, amongst other media, it was found expedient to request the
appellant for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the
premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation
thereof in the proposed scheme and accordingly declined the request. A point of difference as to the
correct construction to be given to the applicable statute was thus reached. Communications in
which the parties expounded on their respective theories were exchanged. The confidence with
which the appellee insisted upon its position was matched only by the obstinacy with which the
appellant stood his ground. And this impasse was climaxed by the appellant's open warning to the
appellee that if the proposed contest was "conducted, a fraud order will have to be issued against it
and all its representatives."

Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent
assertion of its claim to the use of the mails for its proposed contest, and the challenge thereto and
consequent denial by the appellant of the privilege demanded, undoubtedly spawned a live
controversy. The justiciability of the dispute cannot be gainsaid. There is an active antagonistic
assertion of a legal right on one side and a denial thereof on the other, concerning a real — not a
mere theoretical — question or issue. The contenders are as real as their interests are substantial.
To the appellee, the uncertainty occasioned by the divergence of views on the issue of construction
hampers or disturbs its freedom to enhance its business. To the appellant, the suppression of the
appellee's proposed contest believed to transgress a law he has sworn to uphold and enforce is an
unavoidable duty. With the appellee's bent to hold the contest and the appellant's threat to issue a
fraud order therefor if carried out, the contenders are confronted by the ominous shadow of an
imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing
declaration (Pablo y Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955).
And, contrary to the insinuation of the appellant, the time is long past when it can rightly be said that
merely the appellee's "desires are thwarted by its own doubts, or by the fears of others" — which
admittedly does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable
controversy when, as in the case at bar, it was translated into a positive claim of right which is
actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing:
Woodward vs. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question of
construction because the said appellant "simply applied the clear provisions of the law to a given set
of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief. The
infirmity of this pose lies in the fact that it proceeds from the assumption that, if the circumstances
here presented, the construction of the legal provisions can be divorced from the matter of their
application to the appellee's contest. This is not feasible. Construction, verily, is the art or process of
discovering and expounding the meaning and intention of the authors of the law with respect to its
application to a given case, where that intention is rendered doubtful, amongst others, by reason of
the fact that the given case is not explicitly provided for in the law (Black, Interpretation of Laws, p.
1). This is precisely the case here. Whether or not the scheme proposed by the appellee is within the
coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the
intended meaning of the words used therein. To our mind, this is as much a question of construction
or interpretation as any other.
Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can
amount to nothing more than an advisory opinion the handing down of which is anathema to a
declaratory relief action. Of course, no breach of the Postal Law has as yet been committed. Yet, the
disagreement over the construction thereof is no longer nebulous or contingent. It has taken a fixed
and final shape, presenting clearly defined legal issues susceptible of immediate resolution. With the
battle lines drawn, in a manner of speaking, the propriety — nay, the necessity — of setting the
dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a
full-blown battle which looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132
and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 59
Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny
declaratory relief to the appellee in the situation into which it has been cast, would be to force it to
choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as
to whether the anti-lottery provisions of the Postal Law apply to its proposed contest, it would be
faced with these choices: If it launches the contest and uses the mails for purposes thereof, it not
only incurs the risk, but is also actually threatened with the certain imposition, of a fraud order with
its concomitant stigma which may attach even if the appellee will eventually be vindicated; if it
abandons the contest, it becomes a self-appointed censor, or permits the appellant to put into effect
a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh these
considerations in one equation and in the spirit of liberality with which the Rules of Court are to be
interpreted in order to promote their object (section 1, Rule 1, Revised Rules of Court) — which, in
the instant case, is to settle, and afford relief from uncertainty and insecurity with respect to, rights
and duties under a law — we can see in the present case any imposition upon our jurisdiction or any
futility or prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in
this case if he believes that it will not have the final and pacifying function that a declaratory
judgment is calculated to subserve. At the very least, the appellant will be bound. But more than this,
he obviously overlooks that in this jurisdiction, "Judicial decisions applying or interpreting the law
shall form a part of the legal system" (Article 8, Civil Code of the Philippines). In effect, judicial
decisions assume the same authority as the statute itself and, until authoritatively abandoned,
necessarily become, to the extent that they are applicable, the criteria which must control the
actuations not only of those called upon to abide thereby but also of those in duty bound to enforce
obedience thereto. Accordingly, we entertain no misgivings that our resolution of this case will
terminate the controversy at hand.

It is not amiss to point out at this juncture that the conclusion we have herein just reached is not
without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a
corporation engaged in promotional advertising was advised by the county prosecutor that its
proposed sales promotion plan had the characteristics of a lottery, and that if such sales promotion
were conducted, the corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county prosecutor to
determine the legality of its sales promotion plan. In pari materia, see also: Bunis vs. Conway, 17
App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J.
Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical
terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely non-
mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny
the use of the facilities of the postal service to, any information concerning "any lottery, gift
enterprise, or scheme for the distribution of money, or of any real or personal property by lot,
chance, or drawing of any kind". Upon these words hinges the resolution of the second issue posed
in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs.
Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the postal authorities
under the abovementioned provisions of the Postal Law, this Court declared that —

While countless definitions of lottery have been attempted, the authoritative one for this
jurisdiction is that of the United States Supreme Court, in analogous cases having to do with
the power of the United States Postmaster General, viz.: The term "lottery" extends to all
schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions, prize
concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of
a lottery are: First, consideration; second, prize; and third, chance. (Horner vs. States [1892],
147 U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and
Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio
[1919], 39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too
obvious in the disputed scheme to be the subject of contention. Consequently as the appellant
himself concedes, the field of inquiry is narrowed down to the existence of the element of
consideration therein. Respecting this matter, our task is considerably lightened inasmuch as in the
same case just cited, this Court has laid down a definitive yard-stick in the following terms —

In respect to the last element of consideration, the law does not condemn the gratuitous
distribution of property by chance, if no consideration is derived directly or indirectly from the
party receiving the chance, but does condemn as criminal schemes in which a valuable
consideration of some kind is paid directly or indirectly for the chance to draw a prize.

Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which
the invitation to participate therein is couched. Thus —

No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy
anything? Simply estimate the actual number of liter the Caltex gas pump with the hood at
your favorite Caltex dealer will dispense from — to —, and win valuable prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any
service be rendered, or any value whatsoever be given for the privilege to participate. A prospective
contestant has but to go to a Caltex station, request for the entry form which is available on demand,
and accomplish and submit the same for the drawing of the winner. Viewed from all angles or turned
inside out, the contest fails to exhibit any discernible consideration which would brand it as a lottery.
Indeed, even as we head the stern injunction, "look beyond the fair exterior, to the substance, in
order to unmask the real element and pernicious tendencies which the law is seeking to prevent" ("El
Debate", Inc. vs. Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only
appear to be, but actually is, a gratuitous distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex
products simply to win a prize would actually be indirectly paying a consideration for the privilege to
join the contest. Perhaps this would be tenable if the purchase of any Caltex product or the use of
any Caltex service were a pre-requisite to participation. But it is not. A contestant, it hardly needs
reiterating, does not have to buy anything or to give anything of value. 1awphîl.nèt
Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would
naturally benefit the sponsor in the way of increased patronage by those who will be encouraged to
prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". The
required element of consideration does not consist of the benefit derived by the proponent of the
contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788,
is whether the participant pays a valuable consideration for the chance, and not whether those
conducting the enterprise receive something of value in return for the distribution of the prize.
Perspective properly oriented, the standpoint of the contestant is all that matters, not that of the
sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact does receive,
some benefit in the way of patronage or otherwise, as a result of the drawing; does not
supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98
S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest"
proposed by the appellee is not a lottery that may be administratively and adversely dealt with under
the Postal Law.

But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money, or of
any real or personal property by lot, chance, or drawing of any kind", which is equally prescribed?
Incidentally, while the appellant's brief appears to have concentrated on the issue of consideration,
this aspect of the case cannot be avoided if the remedy here invoked is to achieve its tranquilizing
effect as an instrument of both curative and preventive justice. Recalling that the appellant's action
was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice,
which opined in effect that a scheme, though not a lottery for want of consideration, may
nevertheless be a gift enterprise in which that element is not essential, the determination of whether
or not the proposed contest — wanting in consideration as we have found it to be — is a prohibited
gift enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words,
there appears to be a consensus among lexicographers and standard authorities that the term is
commonly applied to a sporting artifice of under which goods are sold for their market value but by
way of inducement each purchaser is given a chance to win a prize (54 C.J.S., 850; 34 Am. Jur.,
654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed.,
p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb.
13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed,
507, 509). As thus conceived, the term clearly cannot embrace the scheme at bar. As already noted,
there is no sale of anything to which the chance offered is attached as an inducement to the
purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the
appellee's products.

Going a step farther, however, and assuming that the appellee's contest can be encompassed within
the broadest sweep that the term "gift enterprise" is capable of being extended, we think that the
appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulings there are
indeed holding that a gift enterprise involving an award by chance, even in default of the element of
consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235 Ala 192,
178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford
vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only
one side of the coin. Equally impressive authorities declare that, like a lottery, a gift enterprise comes
within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and
consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275 P.
563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs.
Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851,
citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp.
590-594). The apparent conflict of opinions is explained by the fact that the specific statutory
provisions relied upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms
"lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the
necessity for the element of consideration or chance has been specifically eliminated by statute. (54
C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater
Corporation, supra). The lesson that we derive from this state of the pertinent jurisprudence is,
therefore, that every case must be resolved upon the particular phraseology of the applicable
statutory provision.

Taking this cue, we note that in the Postal Law, the term in question is used in association with the
word "lottery". With the meaning of lottery settled, and consonant to the well-known principle of legal
hermeneutics noscitur a sociis — which Opinion 217 aforesaid also relied upon although only insofar
as the element of chance is concerned — it is only logical that the term under a construction should
be accorded no other meaning than that which is consistent with the nature of the word associated
therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term "gift
enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to
eliminate that element of consideration from the "gift enterprise" therein included.

This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the
determination thereof being an accepted extrinsic aid in statutory construction. Mail fraud orders, it is
axiomatic, are designed to prevent the use of the mails as a medium for disseminating printed
matters which on grounds of public policy are declared non-mailable. As applied to lotteries, gift
enterprises and similar schemes, justification lies in the recognized necessity to suppress their
tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839,
143 Pa. Super. 208). Since in gambling it is inherent that something of value be hazarded for a
chance to gain a larger amount, it follows ineluctably that where no consideration is paid by the
contestant to participate, the reason behind the law can hardly be said to obtain. If, as it has been
held —

Gratuitous distribution of property by lot or chance does not constitute "lottery", if it is not
resorted to as a device to evade the law and no consideration is derived, directly or
indirectly, from the party receiving the chance, gambling spirit not being cultivated or
stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words and
Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to
hold that, under the prohibitive provisions of the Postal Law which we have heretofore examined, gift
enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration. Finding none in the contest here in question, we rule that the
appellee may not be denied the use of the mails for purposes thereof.

Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory
relief, and that the "Caltex Hooded Pump Contest" as described in the rules submitted by the
appellee does not transgress the provisions of the Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and
Sanchez, JJ., concur.
ISSUES:
1. Whether or not Caltex’s petition for declaratory relief is proper.
2. Whether or not the Caltex contest is a lottery/gift enterprise.
HELD:
1. Yes. The petition is proper. Construction of a law is in order if what is in issue is an
inquiry into the intended meaning of the words used in a certain law. As defined in Black’s
Law Dictionary: Construction is the art or process of discovering and expounding the meaning
and intention of the authors of the law with respect to its application to a given case, where
that intention is rendered doubtful, amongst others, by reason of the fact that the given case
is not explicitly provided for in the law.
2. No.
The contest is not a lottery. The contention of Caltex is well taken, i.e., the first element is
lacking (no consideration).
The contest is also not a gift enterprise. The Supreme Court went on to discuss that under
prevailing jurisprudence and legal doctrines as well as definitions provided by legal
luminaries, there is no explicit definition as to what a gift enterprise is. However, under
the Postal Law, the term “gift enterprise” was used in association with the term
“lottery”. As such, the principle of noscitur a sociis, a principle in statutory construction, is
applicable. Under this principle, it is only logical that the term under a construction should be
accorded no other meaning than that which is consistent with the nature of the word
associated therewith. Hence, applying noscitur a sociis, if lottery is prohibited only if it involves
a consideration, so also must the term “gift enterprise” be so construed. Therefore, since the
contest does not include a consideration, it is neither a lottery nor a gift enterprise. Caltex
should be allowed to avail of the Philippine postal service.

C. Legal System in the Philippines

Legal System

Nature of the Philippine Legal System

The Philippine legal system may be considered as a unique legal system because it
is a blend of civil law (Roman), common law (Anglo-American), Muslim (Islamic)
law and indigenous law. Like other legal systems, there are two main sources of
law.

D. Branches of Government

The Philippine government takes place in an organized framework of a

presidential, representative, and democratic republic whereby the president is both
the head of state and the head of government. This system revolves around three
separate and sovereign yet interdependent branches: the legislative branch (the law-
making body), the executive branch (the law-enforcing body), and the judicial branch
(the law-interpreting body). Executive power is exercised by the government under
the leadership of the president. Legislative power is vested in both the government
 and the two-chamber congress—the Senate (the upper chamber) and the House of
Representatives (the lower chamber). Judicial power is vested in the courts with the
Supreme Court of the Philippines as the highest judicial body.

Executive Branch
The executive branch is headed by the President who functions as both the head of state
and the head of government. The president is also the Commander-in-Chief of the Armed
Forces of the Philippines. The president is elected by popular vote to a term of six years. The
president, then, appoints (and may dismiss) his/her cabinet members whom he/she presides
over. The executive seat of government is administered officially from Malacañang Palace—
also the official residence of the president—in Manila. The President may no longer run for
re-election, unless he/she becomes president through constitutional succession and has
served for no more than four years as president.

The second highest official, the vice-president is first in line to succession should the
president resign, be impeached or die in office. The vice-president usually, though not
always, may be a member of the president's cabinet. If there is a vacancy in the position of
Vice President, the President will appoint any member of Congress (usually a party member)
as new Vice President. The appointment will be validated by a three-fourths vote of
Congress voting separately.

Legislative Branch
The remainder of the House seats are designated for sectoral representatives elected at
large through a complex "party list" system, hinging on the party receiving at least 2% to 6%
of the national vote total. The upper house is located in Pasay City, while the lower house is
located in Quezon City. The district and sectoral representatives are elected with a term of
three years. They can be reelected but they are no longer eligible to run for a fourth
consecutive term. The senators are elected to a term of six years. They can be reelected but
they are no longer eligible to run for a third consecutive term. The House of Representatives
may opt to pass a resolution for a vacancy of a legislative seat that will pave way for a
special election. The winner of the special election will serve the unfinished term of the
previous district representative; this will be considered as one elective term. The same rule
applies in the Senate however it only applies if the seat is vacated before a regular
legislative election.

Judiciary Branch
The judiciary branch of the government is headed by the Supreme Court, which has a Chief
Justice as its head and 14 Associate Justices, all appointed by the president on the
recommendation of the Judicial and Bar Council. Other court types of courts, of varying
jurisdiction around the archipelago, are the:

Lower Collegiate Courts

 Court of Appeals
 Court of Tax Appeals
 Sandiganbayan

Regular Courts

 Regional Trial Courts

 Metropolitan Trial Courts
 Municipal Trial Courts
 Municipal Trial Courts in Cities
 Municipal Circuit Trial Courts

Muslim Courts

 Sharia District Courts

 Sharia Circuit Courts

E. Primary Sources of Laws in the Philippines

Sources of Law
There are two primary sources of the law:

Statutes or statutory law - Statutes are defined as the written enactment of the will
of the legislative branch of the government rendered authentic by certain prescribed
forms or solemnities are more also known as enactment of congress. Generally,
they consist of two types, the Constitution and legislative enactments. In the
Philippines, statutory law includes constitutions, treaties, statutes proper or
legislative enactments, municipal charters, municipal legislation, court rules,
administrative rules and orders, legislative rules and presidential issuance.

Jurisprudence - or case law - is cases decided or written opinion by courts and by

persons performing judicial functions. Also included are all rulings in
administrative and legislative tribunals such as decisions made by the Presidential
or Senate or House Electoral Tribunals. Only decisions of the House of
Representatives Electoral Tribunal are available in print as House of
Representatives Electoral Tribunal Reports, volume 1 (January 28, 1988-October
3, 1990) to present. They will be available electronically at the Supreme Court E-
Library and as a separate CD.
 For Muslim law, the primary sources of Shariah are Quran, Sunnaqh,
Ijma and Qiyas . Jainal D. Razul in his book Commentaries and Jurisprudence on
the Muslin Law of the Philippines (1984) further stated there are new sources of
Muslim law, which some jurists rejected such as Istihsan or juristic preference; Al-
Masalih, Al Mursalah or public interest ; Istidlal (custom) and Istishab . (deduction
based on continuity or permanence).

F. Rule-Making Power

Section 1 of Article VI of the Constitution provides that “the legislative power shall be
vested in the Congress of the Philippines which shall consist of a Senate and a
House of Representatives, except to the extent reserved to the people by the
provision on initiative and referendum. “Legislative power is the power to make, alter
and repeal laws.”

Legislative power is “the authority, under the Constitution, to make laws, and to alter
and repeal them.” The Constitution, as the will of the people in the original, sovereign
and unlimited capacity, has vested this power to Congress is broad, general and
comprehensive. The legislative body possesses plenary power for all purposes of
civil government. Any power, deemed to be legislative by usage and tradition, is
necessarily possessed by Congress, unless the Constitution has lodged it elsewhere.
In fine, except as limited by the Constitution, either expressly or impliedly, legislative
power embraces all subjects and extends to matters of general concern or common
interest.

Legislative power is vested in the Congress of the Philippines, consisting of a Senate

and a House of Representatives, not in a particular chamber, but in both chambers.
While the Constitution requires that the initiative for filing revenue, tariff, or tax bills,
bills authorizing an increase of the public debt, private bills and bills of local
application must come from the House of Representatives, on the theory that,
elected as the are from the districts, the members of the House can be expected to
be more sensitive to the local needs and problems, and Senators, who are elected at
large, are expected to approach the same problem from the national perspective,
both views on any of these subjects are made to bear on the enactment of such
laws.

The Constitution has explicitly provided that legislative power is the power to enact
laws; executive power, to execute the laws, and judicial, to interpret and apply the
laws. By physical arrangement of the articles on such powers, the legislative power is
first and appears to be more extensive and broad than the executive and judicial
powers. For without a law, the executive has nothing to execute, and the judiciary
has nothing to execute, and the judiciary has nothing to interpret and apply. Thus, it
has been said that the grant of legislative power means a grant of all legislative
power.

The subjects of legislation are vast. Except as the Constitution may have excluded
specific subjects from legislation or laid down restrictions, which Congress must take
into account in the enactment of laws, the Congress may legislate or enact laws for
any of the down policies and principles and contains provisions, which are not self-
executing, as to which there is need for enabling legislation to implement them. Thus,
Sections 1 to 28 of Article II on Declaration of Principles and State Policies are not,
as a general rule, self-executing, and they require enabling laws to implement them.
 Apart from this, a number of specific provisions of the Constitution require that the
legislature enact specific laws to flesh them out, or that they state that they be
subject to legislations.

The provisions of the Constitution are either self-executing or non-self executing.

Non-self executing provisions require Congress to enact enabling legislations. But
even those which are self-executing may not prevent Congress from enacting further
laws to enforce the constitutional provisions within their confines, impose penalties
for their violation, and supply minor details.

G. Stare Decisis, defined.

Stare Decisis
Principle of Stare Decisis

The principle of stare decisis enjoins adherence by lower courts to

doctrinal rules established by this Court in its final decisions. It is based
on the principle that once a question of law has been examined and
decided, it should be deemed settled and closed to further argument.[49]
Basically, it is a bar to any attempt to relitigate the same issues,[50]
necessary for two simple reasons: economy and stability. In our
jurisdiction, the principle is entrenched in Article 8 of the Civil Code.[51]

This doctrine of adherence to precedents or stare decisis was applied by

the English courts and was later adopted by the United States. Associate
Justice (now Chief Justice) Reynato S. Puno’s discussion on the historical
development of this legal principle in his dissenting opinion in Lambino v.
Commission on Elections[52] is enlightening:

The latin phrase stare decisis et non quieta movere means “stand by the
thing and do not disturb the calm.” The doctrine started with the English
Courts. Blackstone observed that at the beginning of the 18th century, “it
is an established rule to abide by former precedents where the same
points come again in litigation.” As the rule evolved, early limits to its
application were recognized: (1) it would not be followed if it were “plainly
unreasonable”; (2) where courts of equal authority developed conflicting
decisions; and, (3) the binding force of the decision was the “actual
principle or principles necessary for the decision; not the words or
reasoning used to reach the decision.”

The doctrine migrated to theUnited States. It was recognized by the

framers of the U.S. Constitution. According toHamilton, “strict rules and
precedents” are necessary to prevent “arbitrary discretion in the
courts.”Madisonagreed but stressed that “x x x once the precedent
ventures into the realm of altering or repealing the law, it should be
rejected.” Prof. Consovoy well noted that Hamilton and Madison “disagree
about the countervailing policy considerations that would allow a judge to
abandon a precedent.” He added that their ideas “reveal a deep internal
conflict between the concreteness required by the rule of law and the
flexibility demanded in error correction. It is this internal conflict that the
Supreme Court has attempted to deal with for over two centuries.”

Indeed, two centuries of American case law will confirm Prof. Consovoy’s
observation although stare decisis developed its own life in the United
States. Two strains of stare decisis have been isolated by legal scholars.
The first, known as vertical stare decisis deals with the duty of lower
courts to apply the decisions of the higher courts to cases involving the
same facts. The second, known as horizontal stare decisis requires that
high courts must follow its own precedents. Prof. Consovoy correctly
observes that vertical stare decisis has been viewed as an obligation,
while horizontal stare decisis, has been viewed as a policy, imposing
choice but not a command. Indeed, stare decisis is not one of the precepts
set in stone in our Constitution.

It is also instructive to distinguish the two kinds of horizontal stare decisis

— constitutional stare decisis and statutory stare decisis. Constitutional
stare decisis involves judicial interpretations of the Constitution while
statutory stare decisis involves interpretations of statutes. The distinction
is important for courts enjoy more flexibility in refusing to apply stare
decisis in constitutional litigations. Justice Brandeis’ view on the binding
effect of the doctrine in constitutional litigations still holds sway today. In
soothing prose, Brandeis stated: “Stare decisis is not . . . a universal and
inexorable command. The rule of stare decisis is not inflexible. Whether it
shall be followed or departed from, is a question entirely within the
discretion of the court, which is again called upon to consider a question
once decided.” In the same vein, the venerable Justice Frankfurter opined:
“the ultimate touchstone of constitutionality is the Constitution itself and
not what we have said about it.” In contrast, the application of stare decisis
on judicial interpretation of statutes is more inflexible. As Justice Stevens
explains: “after a statute has been construed, either by this Court or by a
consistent course of decision by other federal judges and agencies, it
acquires a meaning that should be as clear as if the judicial gloss had
been drafted by the Congress itself.” This stance reflects both respect for
Congress’ role and the need to preserve the courts’ limited resources.

In general, courts follow the stare decisis rule for an ensemble of reasons,
viz.: (1) it legitimizes judicial institutions; (2) it promotes judicial economy;
and, (3) it allows for predictability. Contrariwise, courts refuse to be bound
by the stare decisis rule where (1) its application perpetuates illegitimate
and unconstitutional holdings; (2) it cannot accommodate changing social
and political understandings; (3) it leaves the power to overturn bad
constitutional law solely in the hands of Congress; and, (4) activist judges
can dictate the policy for future courts while judges that respect stare
decisis are stuck agreeing with them.
In its 200-year history, the U.S. Supreme Court has refused to follow the
stare decisis rule and reversed its decisions in 192 cases. The most
famous of these reversals is Brown v. Board of Education which junked
Plessy v. Ferguson’s “separate but equal doctrine.” Plessy upheld as
constitutional a state law requirement that races be segregated on public
transportation. In Brown, the U.S. Supreme Court, unanimously held that
“separate . . . is inherently unequal.” Thus, by freeing itself from the
shackles of stare decisis, the U.S. Supreme Court freed the colored
Americans from the chains of inequality. In the Philippine setting, this
Court has likewise refused to be straitjacketed by the stare decisis rule in
order to promote public welfare. In La Bugal-B’laan Tribal Association, Inc.
v. Ramos, we reversed our original ruling that certain provisions of the
Mining Law are unconstitutional. Similarly, in Secretary of Justice v.
Lantion, we overturned our first ruling and held, on motion for
reconsideration, that a private respondent is bereft of the right to notice
and hearing during the evaluation stage of the extradition process.

An examination of decisions on stare decisis in major countries will show

that courts are agreed on the factors that should be considered before
overturning prior rulings. These are workability, reliance, intervening
developments in the law and changes in fact. In addition, courts put in the
balance the following determinants: closeness of the voting, age of the
prior decision and its merits.

The leading case in deciding whether a court should follow the stare
decisis rule in constitutional litigations is Planned Parenthood v. Casey. It
established a 4-pronged test. The court should (1) determine whether the
rule has proved to be intolerable simply in defying practical workability; (2)
consider whether the rule is subject to a kind of reliance that would lend a
special hardship to the consequences of overruling and add inequity to the
cost of repudiation; (3) determine whether related principles of law have
so far developed as to have the old rule no more than a remnant of an
abandoned doctrine; and, (4) find out whether facts have so changed or
come to be seen differently, as to have robbed the old rule of significant
application or justification.[53]

To be forthright, respondent’s argument that the doctrinal guidelines

prescribed in Santos and Molina should not be applied retroactively for
being contrary to the principle of stare decisis is no longer new. The same
argument was also raised but was struck down in Pesca v. Pesca,[54] and
again in Antonio v. Reyes.[55] In these cases, we explained that the
interpretation or construction of a law by courts constitutes a part of the
law as of the date the statute is enacted. It is only when a prior ruling of
this Court is overruled, and a different view is adopted, that the new
doctrine may have to be applied prospectively in favor of parties who have
 relied on the old doctrine and have acted in good faith, in accordance
therewith under the familiar rule of “lex prospicit, non respicit.”

H. Domestic vs. International Laws: the Incorporation Clause

Pharmaceutical and Health Care Association of the Philippines v.
Francisco Duque III October 9, 2007

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 173034 October 9, 2007

PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE PHILIPPINES, petitioner,

vs.
HEALTH SECRETARY FRANCISCO T. DUQUE III; HEALTH UNDER SECRETARIES DR.
ETHELYN P. NIETO, DR. MARGARITA M. GALON, ATTY. ALEXANDER A. PADILLA, & DR.
JADE F. DEL MUNDO; and ASSISTANT SECRETARIES DR. MARIO C. VILLAVERDE, DR.
DAVID J. LOZADA, AND DR. NEMESIO T. GAKO,respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

The Court and all parties involved are in agreement that the best nourishment for an infant is
mother's milk. There is nothing greater than for a mother to nurture her beloved child straight from
her bosom. The ideal is, of course, for each and every Filipino child to enjoy the unequaled benefits
of breastmilk. But how should this end be attained?

Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify
Administrative Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and
Regulations of Executive Order No. 51, Otherwise Known as The "Milk Code," Relevant
International Agreements, Penalizing Violations Thereof, and for Other Purposes (RIRR).
Petitioner posits that the RIRR is not valid as it contains provisions that are not constitutional and go
beyond the law it is supposed to implement.

Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of the
Department of Health (DOH). For purposes of herein petition, the DOH is deemed impleaded as a
co-respondent since respondents issued the questioned RIRR in their capacity as officials of said
executive agency.1

Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28, 1986
by virtue of the legislative powers granted to the president under the Freedom Constitution. One of
the preambular clauses of the Milk Code states that the law seeks to give effect to Article 112 of the
International Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted by the World
Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several Resolutions to the
effect that breastfeeding should be supported, promoted and protected, hence, it should be ensured
that nutrition and health claims are not permitted for breastmilk substitutes.
In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article 24 of
said instrument provides that State Parties should take appropriate measures to diminish infant and
child mortality, and ensure that all segments of society, specially parents and children, are informed
of the advantages of breastfeeding.

On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7, 2006.

However, on June 28, 2006, petitioner, representing its members that are manufacturers of
breastmilk substitutes, filed the present Petition for Certiorari and Prohibition with Prayer for the
Issuance of a Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.

The main issue raised in the petition is whether respondents officers of the DOH acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction,
and in violation of the provisions of the Constitution in promulgating the RIRR.3

On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from
implementing the questioned RIRR.

After the Comment and Reply had been filed, the Court set the case for oral arguments on June 19,
2007. The Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to wit:

The Court hereby sets the following issues:

1. Whether or not petitioner is a real party-in-interest;

2. Whether Administrative Order No. 2006-0012 or the Revised Implementing Rules and
Regulations (RIRR) issued by the Department of Health (DOH) is not constitutional;

2.1 Whether the RIRR is in accord with the provisions of Executive Order No. 51 (Milk Code);

2.2 Whether pertinent international agreements1 entered into by the Philippines are part of
the law of the land and may be implemented by the DOH through the RIRR; If in the
affirmative, whether the RIRR is in accord with the international agreements;

2.3 Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process clause
and are in restraint of trade; and

2.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards.

_____________

1 (1) United Nations Convention on the Rights of the Child; (2) the WHO and Unicef "2002
Global Strategy on Infant and Young Child Feeding;" and (3) various World Health Assembly
(WHA) Resolutions.

The parties filed their respective memoranda.

The petition is partly imbued with merit.

On the issue of petitioner's standing

With regard to the issue of whether petitioner may prosecute this case as the real party-in-interest,
the Court adopts the view enunciated in Executive Secretary v. Court of Appeals,4 to wit:

The modern view is that an association has standing to complain of injuries to its members.
This view fuses the legal identity of an association with that of its members. An association
has standing to file suit for its workers despite its lack of direct interest if its members
are affected by the action. An organization has standing to assert the concerns of its
constituents.

xxxx

x x x We note that, under its Articles of Incorporation, the respondent was organized x x x to
act as the representative of any individual, company, entity or association on matters related
to the manpower recruitment industry, and to perform other acts and activities necessary to
accomplish the purposes embodied therein. The respondent is, thus, the appropriate
party to assert the rights of its members, because it and its members are in every
practical sense identical. x x x The respondent [association] is but the medium
through which its individual members seek to make more effective the expression of
their voices and the redress of their grievances. 5 (Emphasis supplied)

which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco,6 where the Court ruled
that an association has the legal personality to represent its members because the results of the
case will affect their vital interests.7

Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in
Executive Secretary, that the association is formed "to represent directly or through approved
representatives the pharmaceutical and health care industry before the Philippine Government and
any of its agencies, the medical professions and the general public."8 Thus, as an organization,
petitioner definitely has an interest in fulfilling its avowed purpose of representing members who are
part of the pharmaceutical and health care industry. Petitioner is duly authorized9 to take the
appropriate course of action to bring to the attention of government agencies and the courts any
grievance suffered by its members which are directly affected by the RIRR. Petitioner, which is
mandated by its Amended Articles of Incorporation to represent the entire industry, would be remiss
in its duties if it fails to act on governmental action that would affect any of its industry members, no
matter how few or numerous they are. Hence, petitioner, whose legal identity is deemed fused with
its members, should be considered as a real party-in-interest which stands to be benefited or injured
by any judgment in the present action.

On the constitutionality of the provisions of the RIRR

First, the Court will determine if pertinent international instruments adverted to by respondents are
part of the law of the land.

Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby
amending and expanding the coverage of said law. The defense of the DOH is that the RIRR
implements not only the Milk Code but also various international instruments10 regarding infant and
young child nutrition. It is respondents' position that said international instruments are deemed part
of the law of the land and therefore the DOH may implement them through the RIRR.

The Court notes that the following international instruments invoked by respondents, namely: (1) The
United Nations Convention on the Rights of the Child; (2) The International Covenant on Economic,
Social and Cultural Rights; and (3) the Convention on the Elimination of All Forms of Discrimination
Against Women, only provide in general terms that steps must be taken by State Parties to diminish
infant and child mortality and inform society of the advantages of breastfeeding, ensure the health
and well-being of families, and ensure that women are provided with services and nutrition in
connection with pregnancy and lactation. Said instruments do not contain specific provisions
regarding the use or marketing of breastmilk substitutes.

The international instruments that do have specific provisions regarding breastmilk substitutes are
the ICMBS and various WHA Resolutions.

Under the 1987 Constitution, international law can become part of the sphere of domestic law either
by transformation or incorporation.11 The transformation method requires that an international law
be transformed into a domestic law through a constitutional mechanism such as local legislation.
The incorporation method applies when, by mere constitutional declaration, international law is
deemed to have the force of domestic law.12

Treaties become part of the law of the land through transformation pursuant to Article VII, Section
21 of the Constitution which provides that "[n]o treaty or international agreement shall be valid and
effective unless concurred in by at least two-thirds of all the members of the Senate." Thus, treaties
or conventional international law must go through a process prescribed by the Constitution for it to
be transformed into municipal law that can be applied to domestic conflicts.13

The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least
two-thirds of all members of the Senate as required under Section 21, Article VII of the 1987
Constitution.

However, the ICMBS which was adopted by the WHA in 1981 had been transformed into domestic
law through local legislation, the Milk Code. Consequently, it is the Milk Code that has the force and
effect of law in this jurisdiction and not the ICMBS per se.

The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at this
point that the Code did not adopt the provision in the ICMBS absolutely prohibiting advertising or
other forms of promotion to the general public of products within the scope of the ICMBS.
Instead, the Milk Code expressly provides that advertising, promotion, or other marketing
materials may be allowed if such materials are duly authorized and approved by the Inter-
Agency Committee (IAC).

On the other hand, Section 2, Article II of the 1987 Constitution, to wit:

SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the
generally accepted principles of international law as part of the law of the land and
adheres to the policy of peace, equality, justice, freedom, cooperation and amity with all
nations. (Emphasis supplied)

embodies the incorporation method.14

In Mijares v. Ranada,15 the Court held thus:

[G]enerally accepted principles of international law, by virtue of the incorporation clause of

the Constitution, form part of the laws of the land even if they do not derive from treaty
obligations. The classical formulation in international law sees those customary rules
accepted as binding result from the combination [of] two elements: the established,
 widespread, and consistent practice on the part of States; and a psychological element
known as the opinion juris sive necessitates (opinion as to law or necessity). Implicit in the
latter element is a belief that the practice in question is rendered obligatory by the existence
of a rule of law requiring it.16 (Emphasis supplied)

"Generally accepted principles of international law" refers to norms of general or customary

international law which are binding on all states,17 i.e., renunciation of war as an instrument of
national policy, the principle of sovereign immunity,18 a person's right to life, liberty and due
process,19 and pacta sunt servanda,20 among others. The concept of "generally accepted principles
of law" has also been depicted in this wise:

Some legal scholars and judges look upon certain "general principles of law" as a primary source of
international law because they have the "character of jus rationale" and are "valid through all
kinds of human societies."(Judge Tanaka in his dissenting opinion in the 1966 South West Africa
Case, 1966 I.C.J. 296). O'Connell holds that certain priniciples are part of international law
because they are "basic to legal systems generally" and hence part of the jus gentium. These
principles, he believes, are established by a process of reasoning based on the common identity of
all legal systems. If there should be doubt or disagreement, one must look to state practice and
determine whether the municipal law principle provides a just and acceptable solution. x x
x 21 (Emphasis supplied)

Fr. Joaquin G. Bernas defines customary international law as follows:

Custom or customary international law means "a general and consistent practice of states
followed by them from a sense of legal obligation [opinio juris]." (Restatement) This
statement contains the two basic elements of custom: the material factor, that is, how
states behave, and the psychological or subjective factor, that is, why they behave the
way they do.

xxxx

The initial factor for determining the existence of custom is the actual behavior of states. This
includes several elements: duration, consistency, and generality of the practice of states.

The required duration can be either short or long. x x x

xxxx

Duration therefore is not the most important element. More important is the consistency and
the generality of the practice. x x x

xxxx

Once the existence of state practice has been established, it becomes necessary to
determine why states behave the way they do. Do states behave the way they do
because they consider it obligatory to behave thus or do they do it only as a matter of
courtesy? Opinio juris, or the belief that a certain form of behavior is obligatory, is
what makes practice an international rule. Without it, practice is not law.22(Underscoring
and Emphasis supplied)

Clearly, customary international law is deemed incorporated into our domestic system.23
WHA Resolutions have not been embodied in any local legislation. Have they attained the status of
customary law and should they then be deemed incorporated as part of the law of the land?

The World Health Organization (WHO) is one of the international specialized agencies allied with the
United Nations (UN) by virtue of Article 57,24 in relation to Article 6325 of the UN Charter. Under the
1946 WHO Constitution, it is the WHA which determines the policies of the WHO,26 and has the
power to adopt regulations concerning "advertising and labeling of biological, pharmaceutical and
similar products moving in international commerce,"27and to "make recommendations to members
with respect to any matter within the competence of the Organization."28 The legal effect of its
regulations, as opposed to recommendations, is quite different.

Regulations, along with conventions and agreements, duly adopted by the WHA bind member
states thus:

Article 19. The Health Assembly shall have authority to adopt conventions or agreements
with respect to any matter within the competence of the Organization. A two-thirds vote of
the Health Assembly shall be required for the adoption of such conventions or
agreements, which shall come into force for each Member when accepted by it in
accordance with its constitutional processes.

Article 20. Each Member undertakes that it will, within eighteen months after the adoption
by the Health Assembly of a convention or agreement, take action relative to the
acceptance of such convention or agreement. Each Member shall notify the Director-
General of the action taken, and if it does not accept such convention or agreement within
the time limit, it will furnish a statement of the reasons for non-acceptance. In case of
acceptance, each Member agrees to make an annual report to the Director-General in
accordance with Chapter XIV.

Article 21. The Health Assembly shall have authority to adopt regulations concerning: (a)
sanitary and quarantine requirements and other procedures designed to prevent the
international spread of disease; (b) nomenclatures with respect to diseases, causes of death
and public health practices; (c) standards with respect to diagnostic procedures for
international use; (d) standards with respect to the safety, purity and potency of biological,
pharmaceutical and similar products moving in international commerce; (e) advertising and
labeling of biological, pharmaceutical and similar products moving in international commerce.

Article 22. Regulations adopted pursuant to Article 21 shall come into force for all
Members after due notice has been given of their adoption by the Health Assembly except
for such Members as may notify the Director-General of rejection or reservations within the
period stated in the notice. (Emphasis supplied)

On the other hand, under Article 23, recommendations of the WHA do not come into force for
members, in the same way that conventions or agreements under Article 19 and regulations under
Article 21 come into force. Article 23 of the WHO Constitution reads:

Article 23. The Health Assembly shall have authority to make recommendations to
Members with respect to any matter within the competence of the Organization. (Emphasis
supplied)

The absence of a provision in Article 23 of any mechanism by which the recommendation would
come into force for member states is conspicuous.
The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are
generally not binding, but they "carry moral and political weight, as they constitute the judgment on a
health issue of the collective membership of the highest international body in the field of
health."29 Even the ICMBS itself was adopted as a mere recommendation, as WHA Resolution No.
34.22 states:

"The Thirty-Fourth World Health Assembly x x x adopts, in the sense of Article 23 of the
Constitution, the International Code of Marketing of Breastmilk Substitutes annexed to the
present resolution." (Emphasis supplied)

The Introduction to the ICMBS also reads as follows:

In January 1981, the Executive Board of the World Health Organization at its sixty-seventh
session, considered the fourth draft of the code, endorsed it, and unanimously recommended
to the Thirty-fourth World Health Assembly the text of a resolution by which it would adopt
the code in the form of a recommendation rather than a regulation. x x x (Emphasis
supplied)

The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the WHO
Constitution, to wit:

Art. 62. Each member shall report annually on the action taken with respect to
recommendations made to it by the Organization, and with respect to conventions,
agreements and regulations.

Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging
member states to implement the ICMBS are merely recommendatory and legally non-binding. Thus,
unlike what has been done with the ICMBS whereby the legislature enacted most of the
provisions into law which is the Milk Code, the subsequent WHA Resolutions,30 specifically
providing for exclusive breastfeeding from 0-6 months, continued breastfeeding up to 24
months, and absolutely prohibiting advertisements and promotions of breastmilk substitutes,
have not been adopted as a domestic law.

It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms, principles
and practices that influence state behavior.31

"Soft law" does not fall into any of the categories of international law set forth in Article 38, Chapter
III of the 1946 Statute of the International Court of Justice.32 It is, however, an expression of non-
binding norms, principles, and practices that influence state behavior.33 Certain declarations and
resolutions of the UN General Assembly fall under this category.34 The most notable is the UN
Declaration of Human Rights, which this Court has enforced in various cases,
specifically, Government of Hongkong Special Administrative Region v. Olalia,35 Mejoff v. Director of
Prisons,36 Mijares v. Rañada37 and Shangri-la International Hotel Management, Ltd. v. Developers
Group of Companies, Inc..38

The World Intellectual Property Organization (WIPO), a specialized agency attached to the UN with
the mandate to promote and protect intellectual property worldwide, has resorted to soft law as a
rapid means of norm creation, in order "to reflect and respond to the changing needs and demands
of its constituents."39 Other international organizations which have resorted to soft law include the
International Labor Organization and the Food and Agriculture Organization (in the form of
the Codex Alimentarius).40
WHO has resorted to soft law. This was most evident at the time of the Severe Acute Respiratory
Syndrome (SARS) and Avian flu outbreaks.

Although the IHR Resolution does not create new international law binding on WHO
member states, it provides an excellent example of the power of "soft law" in
international relations. International lawyers typically distinguish binding rules of
international law-"hard law"-from non-binding norms, principles, and practices that
influence state behavior-"soft law." WHO has during its existence generated many
soft law norms, creating a "soft law regime" in international governance for public
health.

The "soft law" SARS and IHR Resolutions represent significant steps in laying the political
groundwork for improved international cooperation on infectious diseases. These resolutions
clearly define WHO member states' normative duty to cooperate fully with other countries
and with WHO in connection with infectious disease surveillance and response to outbreaks.

This duty is neither binding nor enforceable, but, in the wake of the SARS epidemic,
the duty is powerful politically for two reasons. First, the SARS outbreak has taught the
lesson that participating in, and enhancing, international cooperation on infectious disease
controls is in a country's self-interest x x x if this warning is heeded, the "soft law" in the
SARS and IHR Resolution could inform the development of general and consistent state
practice on infectious disease surveillance and outbreak response, perhaps crystallizing
eventually into customary international law on infectious disease prevention and control.41

In the Philippines, the executive department implemented certain measures recommended by WHO
to address the outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No. 201 on April
26, 2003 and E.O. No. 280 on February 2, 2004, delegating to various departments broad powers to
close down schools/establishments, conduct health surveillance and monitoring, and ban importation
of poultry and agricultural products.

It must be emphasized that even under such an international emergency, the duty of a state to
implement the IHR Resolution was still considered not binding or enforceable, although said
resolutions had great political influence.

As previously discussed, for an international rule to be considered as customary law, it must be

established that such rule is being followed by states because they consider it obligatory to comply
with such rules (opinio juris). Respondents have not presented any evidence to prove that the WHA
Resolutions, although signed by most of the member states, were in fact enforced or practiced by at
least a majority of the member states; neither have respondents proven that any compliance by
member states with said WHA Resolutions was obligatory in nature.

Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary
international law that may be deemed part of the law of the land.

Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into
domestic law. The provisions of the WHA Resolutions cannot be considered as part of the law
of the land that can be implemented by executive agencies without the need of a law enacted
by the legislature.

Second, the Court will determine whether the DOH may implement the provisions of the WHA
Resolutions by virtue of its powers and functions under the Revised Administrative Code even in the
absence of a domestic law.
Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the DOH
shall define the national health policy and implement a national health plan within the framework
of the government's general policies and plans, and issue orders and regulations concerning the
implementation of established health policies.

It is crucial to ascertain whether the absolute prohibition on advertising and other forms of promotion
of breastmilk substitutes provided in some WHA Resolutions has been adopted as part of the
national health policy.

Respondents submit that the national policy on infant and young child feeding is embodied in A.O.
No. 2005-0014, dated May 23, 2005. Basically, the Administrative Order declared the following
policy guidelines: (1) ideal breastfeeding practices, such as early initiation of breastfeeding,
exclusive breastfeeding for the first six months, extended breastfeeding up to two years and beyond;
(2) appropriate complementary feeding, which is to start at age six months; (3) micronutrient
supplementation; (4) universal salt iodization; (5) the exercise of other feeding options; and (6)
feeding in exceptionally difficult circumstances. Indeed, the primacy of breastfeeding for children is
emphasized as a national health policy. However, nowhere in A.O. No. 2005-0014 is it declared
that as part of such health policy, the advertisement or promotion of breastmilk substitutes
should be absolutely prohibited.

The national policy of protection, promotion and support of breastfeeding cannot automatically be
equated with a total ban on advertising for breastmilk substitutes.

In view of the enactment of the Milk Code which does not contain a total ban on the advertising and
promotion of breastmilk substitutes, but instead, specifically creates an IAC which will regulate said
advertising and promotion, it follows that a total ban policy could be implemented only pursuant to a
law amending the Milk Code passed by the constitutionally authorized branch of government, the
legislature.

Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions, can
be validly implemented by the DOH through the subject RIRR.

Third, the Court will now determine whether the provisions of the RIRR are in accordance with those
of the Milk Code.

In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the
following:

1. The Milk Code limits its coverage to children 0-12 months old, but the RIRR extended its
coverage to "young children" or those from ages two years old and beyond:

MILK CODE RIRR

WHEREAS, in order to ensure that safe and
adequate nutrition for infants is provided, there
is a need to protect and promote breastfeeding
and to inform the public about the proper use
of breastmilk substitutes and supplements and
related products through adequate, consistent
and objective information and appropriate
regulation of the marketing and distribution of
Section 2. Purpose – These Revised Rules
and Regulations are hereby promulgated to
ensure the provision of safe and adequate
nutrition for infants and young children by the
promotion, protection and support of
breastfeeding and by ensuring the proper use
of breastmilk substitutes, breastmilk
supplements and related products when these
are medically indicated and only when
 the said substitutes, supplements and related necessary, on the basis of adequate
products; information and through appropriate marketing
and distribution.
SECTION 4(e). "Infant" means a person falling
within the age bracket of 0-12 months. Section 5(ff). "Young Child" means a person
from the age of more than twelve (12) months
up to the age of three (3) years (36 months).

2. The Milk Code recognizes that infant formula may be a proper and possible substitute for
breastmilk in certain instances; but the RIRR provides "exclusive breastfeeding for infants
from 0-6 months" and declares that "there is no substitute nor replacement for breastmilk":

MILK CODE RIRR

WHEREAS, in order to ensure that safe and
adequate nutrition for infants is provided, there
is a need to protect and promote breastfeeding
and to inform the public about the proper use
of breastmilk substitutes and supplements and
related products through adequate, consistent
and objective information and appropriate
regulation of the marketing and distribution of
the said substitutes, supplements and related
products;
Section 4. Declaration of Principles – The
following are the underlying principles from
which the revised rules and regulations are
premised upon:
a. Exclusive breastfeeding is for infants from 0
to six (6) months.
b. There is no substitute or replacement for
breastmilk.

3. The Milk Code only regulates and does not impose unreasonable requirements for
advertising and promotion; RIRR imposes an absolute ban on such activities for breastmilk
substitutes intended for infants from 0-24 months old or beyond, and forbids the use of
health and nutritional claims. Section 13 of the RIRR, which provides for a "total effect" in the
promotion of products within the scope of the Code, is vague:

MILK CODE RIRR

SECTION 6. The General Public and
Mothers. –
(a) No advertising, promotion or other
marketing materials, whether written, audio or
visual, for products within the scope of this
Code shall be printed, published, distributed,
exhibited and broadcast unless such materials
are duly authorized and approved by an inter-
agency committee created herein pursuant to
the applicable standards provided for in this
Code.
Section 4. Declaration of Principles – The
following are the underlying principles from
which the revised rules and regulations are
premised upon:
xxxx
f. Advertising, promotions, or sponsor-ships of
infant formula, breastmilk substitutes and other
related products are prohibited.
Section 11. Prohibition – No advertising,
promotions, sponsorships, or marketing
materials and activities for breastmilk
substitutes intended for infants and young
children up to twenty-four (24) months, shall be
allowed, because they tend to convey or give
subliminal messages or impressions that
undermine breastmilk and breastfeeding or
otherwise exaggerate breastmilk substitutes
 and/or replacements, as well as related
products covered within the scope of this
Code.

Section 13. "Total Effect" - Promotion of

products within the scope of this Code must be
objective and should not equate or make the
product appear to be as good or equal to
breastmilk or breastfeeding in the advertising
concept. It must not in any case undermine
breastmilk or breastfeeding. The "total effect"
should not directly or indirectly suggest that
buying their product would produce better
individuals, or resulting in greater love,
intelligence, ability, harmony or in any manner
bring better health to the baby or other such
exaggerated and unsubstantiated claim.

Section 15. Content of Materials. - The

following shall not be included in advertising,
promotional and marketing materials:

a. Texts, pictures, illustrations or information

which discourage or tend to undermine the
benefits or superiority of breastfeeding or
which idealize the use of breastmilk substitutes
and milk supplements. In this connection, no
pictures of babies and children together with
their mothers, fathers, siblings, grandparents,
other relatives or caregivers (or yayas) shall be
used in any advertisements for infant formula
and breastmilk supplements;

b. The term "humanized," "maternalized,"

"close to mother's milk" or similar words in
describing breastmilk substitutes or milk
supplements;

c. Pictures or texts that idealize the use of

infant and milk formula.

Section 16. All health and nutrition claims for

products within the scope of the Code are
absolutely prohibited. For this purpose, any
phrase or words that connotes to increase
emotional, intellectual abilities of the infant and
young child and other like phrases shall not be
allowed.

4. The RIRR imposes additional labeling requirements not found in the Milk Code:
 MILK CODE RIRR
SECTION 10. Containers/Label. – Section 26. Content – Each container/label
shall contain such message, in both Filipino
(a) Containers and/or labels shall be designed and English languages, and which message
to provide the necessary information about the cannot be readily separated therefrom, relative
appropriate use of the products, and in such a the following points:
way as not to discourage breastfeeding.
(a) The words or phrase "Important Notice" or
(b) Each container shall have a clear, "Government Warning" or their equivalent;
conspicuous and easily readable and
understandable message in Pilipino or English (b) A statement of the superiority of
printed on it, or on a label, which message can breastfeeding;
not readily become separated from it, and
which shall include the following points: (c) A statement that there is no substitute for
breastmilk;
(i) the words "Important Notice" or their
equivalent; (d) A statement that the product shall be used
only on the advice of a health worker as to the
(ii) a statement of the superiority of need for its use and the proper methods of
breastfeeding; use;

(iii) a statement that the product shall be used (e) Instructions for appropriate prepara-tion,
only on the advice of a health worker as to the and a warning against the health hazards of
need for its use and the proper methods of inappropriate preparation; and
use; and
(f) The health hazards of unnecessary or
(iv) instructions for appropriate preparation, improper use of infant formula and other
and a warning against the health hazards of related products including information that
inappropriate preparation. powdered infant formula may contain
pathogenic microorganisms and must be
prepared and used appropriately.

5. The Milk Code allows dissemination of information on infant formula to health

professionals; the RIRR totally prohibits such activity:

MILK CODE RIRR

SECTION 7. Health Care System. –
(b) No facility of the health care system shall
be used for the purpose of promoting infant
formula or other products within the scope of
this Code. This Code does not, however,
preclude the dissemination of information to
health professionals as provided in Section
8(b).
SECTION 8. Health Workers. -
Section 22. No manufacturer, distributor, or
representatives of products covered by the
Code shall be allowed to conduct or be
involved in any activity on breastfeeding
promotion, education and production of
Information, Education and Communication
(IEC) materials on breastfeeding, holding of or
participating as speakers in classes or
seminars for women and children activities and
to avoid the use of these venues to market
their brands or company names.

(b) Information provided by manufacturers and SECTION 16. All health and nutrition claims for
distributors to health professionals regarding products within the scope of the Code are
products within the scope of this Code shall be absolutely prohibited. For this purpose, any
 restricted to scientific and factual matters and
such information shall not imply or create a
belief that bottle-feeding is equivalent or
superior to breastfeeding. It shall also include
the information specified in Section 5(b).
6. The Milk Code permits milk manufacturers and distributors to extend assistance in
research and continuing education of health professionals; RIRR absolutely forbids the
same.
MILK CODE
SECTION 8. Health Workers –
(e) Manufacturers and distributors of products
within the scope of this Code may assist in the
research, scholarships and continuing
education, of health professionals, in
accordance with the rules and regulations
promulgated by the Ministry of Health.
7. The Milk Code regulates the giving of donations; RIRR absolutely prohibits it.
MILK CODE
SECTION 6. The General Public and
Mothers. –
phrase or words that connotes to increase
emotional, intellectual abilities of the infant and
young child and other like phrases shall not be
allowed.
RIRR
Section 4. Declaration of Principles –
The following are the underlying principles
from which the revised rules and regulations
are premised upon:
i. Milk companies, and their
representatives, should not form part of any
policymaking body or entity in relation to the
advancement of breasfeeding.
SECTION 22. No manufacturer, distributor, or
representatives of products covered by the
Code shall be allowed to conduct or be
involved in any activity on breastfeeding
promotion, education and production of
Information, Education and Communication
(IEC) materials on breastfeeding, holding of or
participating as speakers in classes or
seminars for women and children activitiesand
to avoid the use of these venues to market
their brands or company names.
SECTION 32. Primary Responsibility of
Health Workers - It is the primary
responsibility of the health workers to promote,
protect and support breastfeeding and
appropriate infant and young child feeding.
Part of this responsibility is to continuously
update their knowledge and skills on
breastfeeding. No assistance, support, logistics
or training from milk companies shall be
permitted.
RIRR
Section 51. Donations Within the Scope of
This Code - Donations of products, materials,
defined and covered under the Milk Code and
 (f) Nothing herein contained shall prevent
donations from manufacturers and distributors
of products within the scope of this Code upon
request by or with the approval of the Ministry
of Health.
8. The RIRR provides for administrative sanctions not imposed by the Milk Code.
MILK CODE
these implementing rules and regulations, shall
be strictly prohibited.
Section 52. Other Donations By Milk
Companies Not Covered by this Code. -
Donations of products, equipments, and the
like, not otherwise falling within the scope of
this Code or these Rules, given by milk
companies and their agents, representatives,
whether in kind or in cash, may only be
coursed through the Inter Agency Committee
(IAC), which shall determine whether such
donation be accepted or otherwise.
RIRR
Section 46. Administrative Sanctions. – The
following administrative sanctions shall be
imposed upon any person, juridical or natural,
found to have violated the provisions of the
Code and its implementing Rules and
Regulations:
a) 1st violation – Warning;
b) 2nd violation – Administrative fine of a
minimum of Ten Thousand (P10,000.00) to
Fifty Thousand (P50,000.00) Pesos,
depending on the gravity and extent of the
violation, including the recall of the offending
product;
c) 3rd violation – Administrative Fine of a
minimum of Sixty Thousand (P60,000.00) to
One Hundred Fifty Thousand (P150,000.00)
Pesos, depending on the gravity and extent of
the violation, and in addition thereto, the recall
of the offending product, and suspension of the
Certificate of Product Registration (CPR);
d) 4th violation –Administrative Fine of a
minimum of Two Hundred Thousand
(P200,000.00) to Five Hundred (P500,000.00)
Thousand Pesos, depending on the gravity
and extent of the violation; and in addition
thereto, the recall of the product, revocation of
the CPR, suspension of the License to
Operate (LTO) for one year;
 e) 5th and succeeding repeated violations –
Administrative Fine of One Million
(P1,000,000.00) Pesos, the recall of the
offending product, cancellation of the CPR,
revocation of the License to Operate (LTO) of
the company concerned, including the
blacklisting of the company to be furnished the
Department of Budget and Management
(DBM) and the Department of Trade and
Industry (DTI);

f) An additional penalty of Two Thou-sand Five

Hundred (P2,500.00) Pesos per day shall be
made for every day the violation continues
after having received the order from the IAC or
other such appropriate body, notifying and
penalizing the company for the infraction.

For purposes of determining whether or not

there is "repeated" violation, each product
violation belonging or owned by a company,
including those of their subsidiaries, are
deemed to be violations of the concerned milk
company and shall not be based on the
specific violating product alone.

9. The RIRR provides for repeal of existing laws to the contrary.

The Court shall resolve the merits of the allegations of petitioner seriatim.

1. Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12
months old. Section 3 of the Milk Code states:

SECTION 3. Scope of the Code – The Code applies to the marketing, and practices related
thereto, of the following products: breastmilk substitutes, including infant formula; other milk
products, foods and beverages, including bottle-fed complementary foods, when marketed or
otherwise represented to be suitable, with or without modification, for use as a partial or total
replacement of breastmilk; feeding bottles and teats. It also applies to their quality and
availability, and to information concerning their use.

Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind of
product being marketed to the public. The law treats infant formula, bottle-fed complementary food,
and breastmilk substitute as separate and distinct product categories.

Section 4(h) of the Milk Code defines infant formula as "a breastmilk substitute x x x to satisfy the
normal nutritional requirements of infants up to between four to six months of age, and adapted to
their physiological characteristics"; while under Section 4(b), bottle-fed complementary food refers to
"any food, whether manufactured or locally prepared, suitable as a complement to breastmilk or
infant formula, when either becomes insufficient to satisfy the nutritional requirements of the infant."
An infant under Section 4(e) is a person falling within the age bracket 0-12 months. It is the
nourishment of this group of infants or children aged 0-12 months that is sought to be promoted and
protected by the Milk Code.
But there is another target group. Breastmilk substitute is defined under Section 4(a) as "any food
being marketed or otherwise presented as a partial or total replacement for breastmilk, whether or
not suitable for that purpose." This section conspicuously lacks reference to any particular age-
group of children. Hence, the provision of the Milk Code cannot be considered exclusive for
children aged 0-12 months. In other words, breastmilk substitutes may also be intended for young
children more than 12 months of age. Therefore, by regulating breastmilk substitutes, the Milk Code
also intends to protect and promote the nourishment of children more than 12 months old.

Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided in
Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be used
by children aged over 12 months.

There is, therefore, nothing objectionable with Sections 242 and 5(ff)43 of the RIRR.

2. It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize that
breastmilk substitutes may be a proper and possible substitute for breastmilk.

The entirety of the RIRR, not merely truncated portions thereof, must be considered and construed
together. As held in De Luna v. Pascual,44 "[t]he particular words, clauses and phrases in the Rule
should not be studied as detached and isolated expressions, but the whole and every part thereof
must be considered in fixing the meaning of any of its parts and in order to produce a harmonious
whole."

Section 7 of the RIRR provides that "when medically indicated and only when necessary, the use of
breastmilk substitutes is proper if based on complete and updated information." Section 8 of the
RIRR also states that information and educational materials should include information on the proper
use of infant formula when the use thereof is needed.

Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of
breastmilk substitutes may be proper.

3. The Court shall ascertain the merits of allegations 345 and 446 together as they are interlinked with
each other.

To resolve the question of whether the labeling requirements and advertising regulations under the
RIRR are valid, it is important to deal first with the nature, purpose, and depth of the regulatory
powers of the DOH, as defined in general under the 1987 Administrative Code,47 and as delegated in
particular under the Milk Code.

Health is a legitimate subject matter for regulation by the DOH (and certain other administrative
agencies) in exercise of police powers delegated to it. The sheer span of jurisprudence on that
matter precludes the need to further discuss it..48 However, health information, particularly advertising
materials on apparently non-toxic products like breastmilk substitutes and supplements, is a
relatively new area for regulation by the DOH.49

As early as the 1917 Revised Administrative Code of the Philippine Islands,50 health information was
already within the ambit of the regulatory powers of the predecessor of DOH.51 Section 938 thereof
charged it with the duty to protect the health of the people, and vested it with such powers as "(g) the
dissemination of hygienic information among the people and especially the inculcation of
knowledge as to the proper care of infants and the methods of preventing and combating
dangerous communicable diseases."
Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state
policy pronounced under Section 15, Article II of the 1987 Constitution, which is "to protect and
promote the right to health of the people and instill health consciousness among them."52 To that
end, it was granted under Section 3 of the Administrative Code the power to "(6) propagate health
information and educate the population on important health, medical and environmental matters
which have health implications."53

When it comes to information regarding nutrition of infants and young children, however, the Milk
Code specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the power to
ensure that there is adequate, consistent and objective information on breastfeeding and use of
breastmilk substitutes, supplements and related products; and the power to control such
information. These are expressly provided for in Sections 12 and 5(a), to wit:

SECTION 12. Implementation and Monitoring –

xxxx

(b) The Ministry of Health shall be principally responsible for the implementation and
enforcement of the provisions of this Code. For this purpose, the Ministry of Health shall
have the following powers and functions:

(1) To promulgate such rules and regulations as are necessary or proper for the
implementation of this Code and the accomplishment of its purposes and objectives.

xxxx

(4) To exercise such other powers and functions as may be necessary for or
incidental to the attainment of the purposes and objectives of this Code.

SECTION 5. Information and Education –

(a) The government shall ensure that objective and consistent information is provided on
infant feeding, for use by families and those involved in the field of infant nutrition. This
responsibility shall cover the planning, provision, design and dissemination of information,
and the control thereof, on infant nutrition. (Emphasis supplied)

Further, DOH is authorized by the Milk Code to control the content of any information on
breastmilk vis-à-visbreastmilk substitutes, supplement and related products, in the following manner:

SECTION 5. x x x

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: (1) the benefits and superiority of
breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of
breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding; (4)
the difficulty of reversing the decision not to breastfeed; and (5) where needed, the proper
use of infant formula, whether manufactured industrially or home-prepared. When such
materials contain information about the use of infant formula, they shall include the
social and financial implications of its use; the health hazards of inappropriate foods
or feeding methods; and, in particular, the health hazards of unnecessary or improper
 use of infant formula and other breastmilk substitutes. Such materials shall not use
any picture or text which may idealize the use of breastmilk substitutes.

SECTION 8. Health Workers –

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual
matters, and such information shall not imply or create a belief that bottlefeeding is
equivalent or superior to breastfeeding. It shall also include the information specified
in Section 5(b).

SECTION 10. Containers/Label –

(a) Containers and/or labels shall be designed to provide the necessary information about
the appropriate use of the products, and in such a way as not to discourage
breastfeeding.

xxxx

(d) The term "humanized," "maternalized" or similar terms shall not be used. (Emphasis
supplied)

The DOH is also authorized to control the purpose of the information and to whom such information
may be disseminated under Sections 6 through 9 of the Milk Code54 to ensure that the information
that would reach pregnant women, mothers of infants, and health professionals and workers in the
health care system is restricted to scientific and factual matters and shall not imply or create a belief
that bottlefeeding is equivalent or superior to breastfeeding.

It bears emphasis, however, that the DOH's power under the Milk Code to control information
regarding breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control does
not encompass the power to absolutely prohibit the advertising, marketing, and promotion of
breastmilk substitutes.

The following are the provisions of the Milk Code that unequivocally indicate that the control over
information given to the DOH is not absolute and that absolute prohibition is not contemplated by the
Code:

a) Section 2 which requires adequate information and appropriate marketing and distribution
of breastmilk substitutes, to wit:

SECTION 2. Aim of the Code – The aim of the Code is to contribute to the provision
of safe and adequate nutrition for infants by the protection and promotion of
breastfeeding and by ensuring the proper use of breastmilk substitutes and
breastmilk supplements when these are necessary, on the basis of adequate
information and through appropriate marketing and distribution.

b) Section 3 which specifically states that the Code applies to the marketing of and practices
related to breastmilk substitutes, including infant formula, and to information concerning their
use;
 c) Section 5(a) which provides that the government shall ensure that objective and consistent
information is provided on infant feeding;

d) Section 5(b) which provides that written, audio or visual informational and educational
materials shall not use any picture or text which may idealize the use of breastmilk
substitutes and should include information on the health hazards of unnecessary or improper
use of said product;

e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to review
and examine advertising, promotion, and other marketing materials;

f) Section 8(b) which states that milk companies may provide information to health
professionals but such information should be restricted to factual and scientific matters and
shall not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding;
and

g) Section 10 which provides that containers or labels should not contain information that
would discourage breastfeeding and idealize the use of infant formula.

It is in this context that the Court now examines the assailed provisions of the RIRR regarding
labeling and advertising.

Sections 1355 on "total effect" and 2656 of Rule VII of the RIRR contain some labeling requirements,
specifically: a) that there be a statement that there is no substitute to breastmilk; and b) that there be
a statement that powdered infant formula may contain pathogenic microorganisms and must be
prepared and used appropriately. Section 1657of the RIRR prohibits all health and nutrition claims for
products within the scope of the Milk Code, such as claims of increased emotional and intellectual
abilities of the infant and young child.

These requirements and limitations are consistent with the provisions of Section 8 of the Milk Code,
to wit:

SECTION 8. Health workers -

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters,
and such information shall notimply or create a belief that bottlefeeding
is equivalent or superior to breastfeeding. It shall also include the information specified in
Section 5.58 (Emphasis supplied)

and Section 10(d)59 which bars the use on containers and labels of the terms "humanized,"
"maternalized," or similar terms.

These provisions of the Milk Code expressly forbid information that would imply or create a belief
that there is any milk product equivalent to breastmilk or which is humanized or maternalized, as
such information would be inconsistent with the superiority of breastfeeding.

It may be argued that Section 8 of the Milk Code refers only to information given to health workers
regarding breastmilk substitutes, not to containers and labels thereof. However, such restrictive
application of Section 8(b) will result in the absurd situation in which milk companies and distributors
are forbidden to claim to health workers that their products are substitutes or equivalents of
breastmilk, and yet be allowed to display on the containers and labels of their products the exact
opposite message. That askewed interpretation of the Milk Code is precisely what Section 5(a)
thereof seeks to avoid by mandating that all information regarding breastmilk vis-a-vis breastmilk
substitutes be consistent, at the same time giving the government control over planning, provision,
design, and dissemination of information on infant feeding.

Thus, Section 26(c) of the RIRR which requires containers and labels to state that the product
offered is not a substitute for breastmilk, is a reasonable means of enforcing Section 8(b) of the Milk
Code and deterring circumvention of the protection and promotion of breastfeeding as embodied in
Section 260 of the Milk Code.

Section 26(f)61 of the RIRR is an equally reasonable labeling requirement. It implements Section 5(b)
of the Milk Code which reads:

SECTION 5. x x x

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: x x x (5) where needed, the proper use of
infant formula, whether manufactured industrially or home-prepared. When such materials
contain information about the use of infant formula, they shall include the social and financial
implications of its use; the health hazards of inappropriate foods or feeding methods;
and, in particular, the health hazards of unnecessary or improper use of infant formula
and other breastmilk substitutes. Such materials shall not use any picture or text which
may idealize the use of breastmilk substitutes. (Emphasis supplied)

The label of a product contains information about said product intended for the buyers thereof. The
buyers of breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely adds a
fair warning about the likelihood of pathogenic microorganisms being present in infant formula and
other related products when these are prepared and used inappropriately.

Petitioner’s counsel has admitted during the hearing on June 19, 2007 that formula milk is prone to
contaminations and there is as yet no technology that allows production of powdered infant formula
that eliminates all forms of contamination.62

Ineluctably, the requirement under Section 26(f) of the RIRR for the label to contain the message
regarding health hazards including the possibility of contamination with pathogenic microorganisms
is in accordance with Section 5(b) of the Milk Code.

The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes and
supplements and related products cannot be questioned. It is its intervention into the area of
advertising, promotion, and marketing that is being assailed by petitioner.

In furtherance of Section 6(a) of the Milk Code, to wit:

SECTION 6. The General Public and Mothers. –

 (a) No advertising, promotion or other marketing materials, whether written, audio or visual,
for products within the scope of this Code shall be printed, published, distributed, exhibited
and broadcast unless such materials are duly authorized and approved by an inter-agency
committee created herein pursuant to the applicable standards provided for in this Code.

the Milk Code invested regulatory authority over advertising, promotional and marketing materials to
an IAC, thus:

SECTION 12. Implementation and Monitoring -

(a) For purposes of Section 6(a) of this Code, an inter-agency committee composed of the
following members is hereby created:

Minister of Health ------------------- Chairman

Minister of Trade and Industry ------------------- Member

Minister of Justice ------------------- Member

Minister of Social Services and Development ------------------- Member

The members may designate their duly authorized representative to every meeting of the
Committee.

The Committee shall have the following powers and functions:

(1) To review and examine all advertising. promotion or other marketing materials,
whether written, audio or visual, on products within the scope of this Code;

(2) To approve or disapprove, delete objectionable portions from and prohibit the
printing, publication, distribution, exhibition and broadcast of, all advertising
promotion or other marketing materials, whether written, audio or visual, on products
within the scope of this Code;

(3) To prescribe the internal and operational procedure for the exercise of its powers
and functions as well as the performance of its duties and responsibilities; and

(4) To promulgate such rules and regulations as are necessary or proper for
the implementation of Section 6(a) of this Code. x x x (Emphasis supplied)

However, Section 11 of the RIRR, to wit:

SECTION 11. Prohibition – No advertising, promotions, sponsorships, or marketing materials

and activities for breastmilk substitutes intended for infants and young children up to twenty-
four (24) months, shall be allowed, because they tend to convey or give subliminal messages
or impressions that undermine breastmilk and breastfeeding or otherwise exaggerate
breastmilk substitutes and/or replacements, as well as related products covered within the
scope of this Code.

prohibits advertising, promotions, sponsorships or marketing materials and activities for breastmilk
substitutes in line with the RIRR’s declaration of principle under Section 4(f), to wit:
 SECTION 4. Declaration of Principles –

xxxx

(f) Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes and

other related products are prohibited.

The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory authority
given to the IAC but also imposed absolute prohibition on advertising, promotion, and marketing.

Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in Section 6
thereof for prior approval by IAC of all advertising, marketing and promotional materials prior to
dissemination.

Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly insisted,
during the oral arguments on June 19, 2007, that the prohibition under Section 11 is not actually
operational, viz:

SOLICITOR GENERAL DEVANADERA:

xxxx

x x x Now, the crux of the matter that is being questioned by Petitioner is whether or not
there is an absolute prohibition on advertising making AO 2006-12 unconstitutional. We
maintained that what AO 2006-12 provides is not an absolute prohibition because Section 11
while it states and it is entitled prohibition it states that no advertising, promotion,
sponsorship or marketing materials and activities for breast milk substitutes intended for
infants and young children up to 24 months shall be allowed because this is the standard
they tend to convey or give subliminal messages or impression undermine that breastmilk or
breastfeeding x x x.

We have to read Section 11 together with the other Sections because the other Section,
Section 12, provides for the inter agency committee that is empowered to process and
evaluate all the advertising and promotion materials.

xxxx

What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it simply
regulates the advertisement and the promotions of breastfeeding milk substitutes.

xxxx

Now, the prohibition on advertising, Your Honor, must be taken together with the provision
on the Inter-Agency Committee that processes and evaluates because there may be some
information dissemination that are straight forward information dissemination. What the AO
2006 is trying to prevent is any material that will undermine the practice of breastfeeding,
Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

Madam Solicitor General, under the Milk Code, which body has authority or power to
promulgate Rules and Regulations regarding the Advertising, Promotion and Marketing of
Breastmilk Substitutes?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, it is provided that the Inter-Agency Committee, Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

x x x Don't you think that the Department of Health overstepped its rule making authority
when it totally banned advertising and promotion under Section 11 prescribed the total effect
rule as well as the content of materials under Section 13 and 15 of the rules and regulations?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, first we would like to stress that there is no total absolute ban. Second,
the Inter-Agency Committee is under the Department of Health, Your Honor.

xxxx

ASSOCIATE JUSTICE NAZARIO:

x x x Did I hear you correctly, Madam Solicitor, that there is no absolute ban on advertising of
breastmilk substitutes in the Revised Rules?

SOLICITOR GENERAL DEVANADERA:

Yes, your Honor.

ASSOCIATE JUSTICE NAZARIO:

But, would you nevertheless agree that there is an absolute ban on advertising of breastmilk
substitutes intended for children two (2) years old and younger?

SOLICITOR GENERAL DEVANADERA:

It's not an absolute ban, Your Honor, because we have the Inter-Agency Committee that can
evaluate some advertising and promotional materials, subject to the standards that we have
stated earlier, which are- they should not undermine breastfeeding, Your Honor.

xxxx

x x x Section 11, while it is titled Prohibition, it must be taken in relation with the other
Sections, particularly 12 and 13 and 15, Your Honor, because it is recognized that the Inter-
Agency Committee has that power to evaluate promotional materials, Your Honor.

ASSOCIATE JUSTICE NAZARIO:

 So in short, will you please clarify there's no absolute ban on advertisement regarding milk
substitute regarding infants two (2) years below?

SOLICITOR GENERAL DEVANADERA:

We can proudly say that the general rule is that there is a prohibition, however, we take
exceptions and standards have been set. One of which is that, the Inter-Agency Committee
can allow if the advertising and promotions will not undermine breastmilk and breastfeeding,
Your Honor.63

Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code.

However, although it is the IAC which is authorized to promulgate rules and regulations for the
approval or rejection of advertising, promotional, or other marketing materials under Section 12(a) of
the Milk Code, said provision must be related to Section 6 thereof which in turn provides that the
rules and regulations must be "pursuant to the applicable standards provided for in this Code." Said
standards are set forth in Sections 5(b), 8(b), and 10 of the Code, which, at the risk of being
repetitious, and for easy reference, are quoted hereunder:

SECTION 5. Information and Education –

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall
include clear information on all the following points: (1) the benefits and superiority of
breastfeeding; (2) maternal nutrition, and the preparation for and maintenance of
breastfeeding; (3) the negative effect on breastfeeding of introducing partial bottlefeeding; (4)
the difficulty of reversing the decision not to breastfeed; and (5) where needed, the proper
use of infant formula, whether manufactured industrially or home-prepared. When such
materials contain information about the use of infant formula, they shall include the social
and financial implications of its use; the health hazards of inappropriate foods of feeding
methods; and, in particular, the health hazards of unnecessary or improper use of infant
formula and other breastmilk substitutes. Such materials shall not use any picture or text
which may idealize the use of breastmilk substitutes.

xxxx

SECTION 8. Health Workers. –

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters and
such information shall not imply or create a belief that bottle feeding is equivalent or superior
to breastfeeding. It shall also include the information specified in Section 5(b).

xxxx

SECTION 10. Containers/Label –

 (a) Containers and/or labels shall be designed to provide the necessary information about
the appropriate use of the products, and in such a way as not to discourage breastfeeding.

(b) Each container shall have a clear, conspicuous and easily readable and understandable
message in Pilipino or English printed on it, or on a label, which message can not readily
become separated from it, and which shall include the following points:

(i) the words "Important Notice" or their equivalent;

(ii) a statement of the superiority of breastfeeding;

(iii) a statement that the product shall be used only on the advice of a health worker
as to the need for its use and the proper methods of use; and

(iv) instructions for appropriate preparation, and a warning against the health hazards
of inappropriate preparation.

Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the
enforcement of the provisions of the Code. In relation to such responsibility of the DOH, Section 5(a)
of the Milk Code states that:

SECTION 5. Information and Education –

(a) The government shall ensure that objective and consistent information is provided on
infant feeding, for use by families and those involved in the field of infant nutrition. This
responsibility shall cover the planning, provision, design and dissemination of information,
and the control thereof, on infant nutrition. (Emphasis supplied)

Thus, the DOH has the significant responsibility to translate into operational terms the
standards set forth in Sections 5, 8, and 10 of the Milk Code, by which the IAC shall screen
advertising, promotional, or other marketing materials.

It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR which
reads as follows:

SECTION 13. "Total Effect" - Promotion of products within the scope of this Code must be
objective and should not equate or make the product appear to be as good or equal to
breastmilk or breastfeeding in the advertising concept. It must not in any case undermine
breastmilk or breastfeeding. The "total effect" should not directly or indirectly suggest that
buying their product would produce better individuals, or resulting in greater love,
intelligence, ability, harmony or in any manner bring better health to the baby or other such
exaggerated and unsubstantiated claim.

Such standards bind the IAC in formulating its rules and regulations on advertising, promotion, and
marketing. Through that single provision, the DOH exercises control over the information content of
advertising, promotional and marketing materials on breastmilk vis-a-vis breastmilk substitutes,
supplements and other related products. It also sets a viable standard against which the IAC may
screen such materials before they are made public.

In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs,64 the Court held:
 x x x [T]his Court had, in the past, accepted as sufficient standards the following: "public
interest," "justice and equity," "public convenience and welfare," and "simplicity, economy
and welfare."65

In this case, correct information as to infant feeding and nutrition is infused with public interest and
welfare.

4. With regard to activities for dissemination of information to health professionals, the Court also
finds that there is no inconsistency between the provisions of the Milk Code and the RIRR. Section
7(b)66 of the Milk Code, in relation to Section 8(b)67 of the same Code, allows dissemination of
information to health professionals but such information is restricted to scientific and factual
matters.

Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of information to
health professionals on scientific and factual matters. What it prohibits is the involvement of the
manufacturer and distributor of the products covered by the Code in activities for the promotion,
education and production of Information, Education and Communication (IEC) materials regarding
breastfeeding that are intended for women and children. Said provision cannot be construed to
encompass even the dissemination of information to health professionals, as restricted by the
Milk Code.

5. Next, petitioner alleges that Section 8(e)68 of the Milk Code permits milk manufacturers and
distributors to extend assistance in research and in the continuing education of health professionals,
while Sections 22 and 32 of the RIRR absolutely forbid the same. Petitioner also assails Section
4(i)69 of the RIRR prohibiting milk manufacturers' and distributors' participation in any policymaking
body in relation to the advancement of breastfeeding.

Section 4(i) of the RIRR provides that milk companies and their representatives should not form part
of any policymaking body or entity in relation to the advancement of breastfeeding. The Court finds
nothing in said provisions which contravenes the Milk Code. Note that under Section 12(b) of the
Milk Code, it is the DOH which shall be principally responsible for the implementation and
enforcement of the provisions of said Code. It is entirely up to the DOH to decide which entities to
call upon or allow to be part of policymaking bodies on breastfeeding. Therefore, the RIRR's
prohibition on milk companies’ participation in any policymaking body in relation to the advancement
of breastfeeding is in accord with the Milk Code.

Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from
giving reasearch assistance and continuing education to health professionals. Section 2270 of the
RIRR does not pertain to research assistance to or the continuing education of health
professionals; rather, it deals with breastfeeding promotion and education for women and
children. Nothing in Section 22 of the RIRR prohibits milk companies from giving assistance for
research or continuing education to health professionals; hence, petitioner's argument against this
particular provision must be struck down.

It is Sections 971 and 1072 of the RIRR which govern research assistance. Said sections of the RIRR
provide that research assistance for health workers and researchers may be allowed upon
approval of an ethics committee, and with certain disclosure requirements imposed on the
milk company and on the recipient of the research award.

The Milk Code endows the DOH with the power to determine how such research or educational
assistance may be given by milk companies or under what conditions health workers may accept the
assistance. Thus, Sections 9 and 10 of the RIRR imposing limitations on the kind of research done
or extent of assistance given by milk companies are completely in accord with the Milk Code.

Petitioner complains that Section 3273 of the RIRR prohibits milk companies from giving assistance,
support, logistics or training to health workers. This provision is within the prerogative given to the
DOH under Section 8(e)74of the Milk Code, which provides that manufacturers and distributors of
breastmilk substitutes may assist in researches, scholarships and the continuing education, of health
professionals in accordance with the rules and regulations promulgated by the Ministry of Health,
now DOH.

6. As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk Code.
Section 6(f) of the Milk Code provides that donations may be made by manufacturers and
distributors of breastmilk substitutes upon the request or with the approval of the DOH. The law
does not proscribe the refusal of donations. The Milk Code leaves it purely to the discretion of the
DOH whether to request or accept such donations. The DOH then appropriately exercised its
discretion through Section 5175 of the RIRR which sets forth its policy not to request or approve
donations from manufacturers and distributors of breastmilk substitutes.

It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any donation
from milk companies not covered by the Code should be coursed through the IAC which shall
determine whether such donation should be accepted or refused. As reasoned out by respondents,
the DOH is not mandated by the Milk Code to accept donations. For that matter, no person or entity
can be forced to accept a donation. There is, therefore, no real inconsistency between the RIRR and
the law because the Milk Code does not prohibit the DOH from refusing donations.

7. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found in
the Milk Code, the Court upholds petitioner's objection thereto.

Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc.76 is misplaced. The
glaring difference in said case and the present case before the Court is that, in the Civil Aeronautics
Board, the Civil Aeronautics Administration (CAA) was expressly granted by the law (R.A. No.
776) the power to impose fines and civil penalties, while the Civil Aeronautics Board (CAB) was
granted by the same law the power to review on appeal the order or decision of the CAA and to
determine whether to impose, remit, mitigate, increase or compromise such fine and civil penalties.
Thus, the Court upheld the CAB's Resolution imposing administrative fines.

In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc.,77 the Court upheld
the Department of Energy (DOE) Circular No. 2000-06-10
implementing Batas Pambansa (B.P.) Blg. 33. The circular provided for fines for the commission of
prohibited acts. The Court found that nothing in the circular contravened the law because the DOE
was expressly authorized by B.P. Blg. 33 and R.A. No. 7638 to impose fines or penalties.

In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH the
authority to fix or impose administrative fines. Thus, without any express grant of power to fix or
impose such fines, the DOH cannot provide for those fines in the RIRR. In this regard, the DOH
again exceeded its authority by providing for such fines or sanctions in Section 46 of the RIRR. Said
provision is, therefore, null and void.

The DOH is not left without any means to enforce its rules and regulations. Section 12(b) (3) of the
Milk Code authorizes the DOH to "cause the prosecution of the violators of this Code and other
pertinent laws on products covered by this Code." Section 13 of the Milk Code provides for the
penalties to be imposed on violators of the provision of the Milk Code or the rules and regulations
issued pursuant to it, to wit:

SECTION 13. Sanctions –

(a) Any person who violates the provisions of this Code or the rules and regulations
issued pursuant to this Code shall, upon conviction, be punished by a penalty of two (2)
months to one (1) year imprisonment or a fine of not less than One Thousand Pesos
(P1,000.00) nor more than Thirty Thousand Pesos (P30,000.00) or both. Should the offense
be committed by a juridical person, the chairman of the Board of Directors, the president,
general manager, or the partners and/or the persons directly responsible therefor, shall be
penalized.

(b) Any license, permit or authority issued by any government agency to any health worker,
distributor, manufacturer, or marketing firm or personnel for the practice of their profession or
occupation, or for the pursuit of their business, may, upon recommendation of the Ministry of
Health, be suspended or revoked in the event of repeated violations of this Code, or of the
rules and regulations issued pursuant to this Code. (Emphasis supplied)

8. Petitioner’s claim that Section 57 of the RIRR repeals existing laws that are contrary to the RIRR
is frivolous.

Section 57 reads:

SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations or parts
thereof inconsistent with these revised rules and implementing regulations are hereby
repealed or modified accordingly.

Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and rules
and regulations. Thus, said provision is valid as it is within the DOH's rule-making power.

An administrative agency like respondent possesses quasi-legislative or rule-making power or the

power to make rules and regulations which results in delegated legislation that is within the confines
of the granting statute and the Constitution, and subject to the doctrine of non-delegability and
separability of powers.78 Such express grant of rule-making power necessarily includes the power to
amend, revise, alter, or repeal the same.79 This is to allow administrative agencies flexibility in
formulating and adjusting the details and manner by which they are to implement the provisions of a
law,80 in order to make it more responsive to the times. Hence, it is a standard provision in
administrative rules that prior issuances of administrative agencies that are inconsistent therewith
are declared repealed or modified.

In fine, only Sections 4(f), 11 and 46 are ultra vires, beyond the authority of the DOH to promulgate
and in contravention of the Milk Code and, therefore, null and void. The rest of the provisions of the
RIRR are in consonance with the Milk Code.

Lastly, petitioner makes a "catch-all" allegation that:

x x x [T]he questioned RIRR sought to be implemented by the Respondents is unnecessary

and oppressive, and is offensive to the due process clause of the Constitution, insofar
as the same is in restraint of trade and because a provision therein is inadequate to
 provide the public with a comprehensible basis to determine whether or not they have
committed a violation.81 (Emphasis supplied)

Petitioner refers to Sections 4(f),82 4(i),83 5(w),84 11,85 22,86 32,87 46,88 and 5289 as the provisions that
suppress the trade of milk and, thus, violate the due process clause of the Constitution.

The framers of the constitution were well aware that trade must be subjected to some form of
regulation for the public good. Public interest must be upheld over business interests.90 In Pest
Management Association of the Philippines v. Fertilizer and Pesticide Authority,91 it was held thus:

x x x Furthermore, as held in Association of Philippine Coconut Desiccators v. Philippine

Coconut Authority, despite the fact that "our present Constitution enshrines free
enterprise as a policy, it nonetheless reserves to the government the power to
intervene whenever necessary to promote the general welfare." There can be no
question that the unregulated use or proliferation of pesticides would be hazardous to our
environment. Thus, in the aforecited case, the Court declared that "free enterprise does not
call for removal of ‘protective regulations’." x x x It must be clearly explained and
proven by competent evidence just exactly how such protective regulation would
result in the restraint of trade. [Emphasis and underscoring supplied]

In this case, petitioner failed to show that the proscription of milk manufacturers’ participation in any
policymaking body (Section 4(i)), classes and seminars for women and children (Section 22); the
giving of assistance, support and logistics or training (Section 32); and the giving of donations
(Section 52) would unreasonably hamper the trade of breastmilk substitutes. Petitioner has not
established that the proscribed activities are indispensable to the trade of breastmilk substitutes.
Petitioner failed to demonstrate that the aforementioned provisions of the RIRR are unreasonable
and oppressive for being in restraint of trade.

Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and
oppressive. Said section provides for the definition of the term "milk company," to wit:

SECTION 5 x x x. (w) "Milk Company" shall refer to the owner, manufacturer, distributor of
infant formula, follow-up milk, milk formula, milk supplement, breastmilk substitute or
replacement, or by any other description of such nature, including their representatives who
promote or otherwise advance their commercial interests in marketing those products;

On the other hand, Section 4 of the Milk Code provides:

(d) "Distributor" means a person, corporation or any other entity in the public or private sector
engaged in the business (whether directly or indirectly) of marketing at the wholesale or retail
level a product within the scope of this Code. A "primary distributor" is a manufacturer's sales
agent, representative, national distributor or broker.

xxxx

(j) "Manufacturer" means a corporation or other entity in the public or private sector engaged
in the business or function (whether directly or indirectly or through an agent or and entity
controlled by or under contract with it) of manufacturing a products within the scope of this
Code.
Notably, the definition in the RIRR merely merged together under the term "milk company" the
entities defined separately under the Milk Code as "distributor" and "manufacturer." The RIRR also
enumerated in Section 5(w) the products manufactured or distributed by an entity that would qualify
it as a "milk company," whereas in the Milk Code, what is used is the phrase "products within the
scope of this Code." Those are the only differences between the definitions given in the Milk Code
and the definition as re-stated in the RIRR.

Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and
distributors, the Court sees no harm in the RIRR providing for just one term to encompass both
entities. The definition of "milk company" in the RIRR and the definitions of "distributor" and
"manufacturer" provided for under the Milk Code are practically the same.

The Court is not convinced that the definition of "milk company" provided in the RIRR would bring
about any change in the treatment or regulation of "distributors" and "manufacturers" of breastmilk
substitutes, as defined under the Milk Code.

Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the
objective, purpose and intent of the Milk Code, constituting reasonable regulation of an industry
which affects public health and welfare and, as such, the rest of the RIRR do not constitute illegal
restraint of trade nor are they violative of the due process clause of the Constitution.

WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4(f), 11 and 46 of Administrative

Order No. 2006-0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The
Department of Health and respondents are PROHIBITED from implementing said provisions.

The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of the
provisions of Administrative Order No. 2006-0012 is concerned.

SO ORDERED.

Puno, (Chief Justice), Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Corona, Carpio-

Morales, Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr., Nachura, Reyes, JJ., concur.

I. Local Legislative Powers

CHAPTER 4 - THE SANGGUNIANG BARANGAY

SEC. 390. Composition. - The sangguniang barangay, the legislative body
of the barangay, shall be composed of the punong barangay as presiding
officer, and the seven (7) regular sangguniang barangay members elected
at large and sangguniang kabataan chairman, as members.
SEC. 391. Powers, Duties, and Functions. - (a) The sangguniang
barangay, as the legislative body of the barangay, shall:chanrobles virtual
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(1) Enact ordinances as may be necessary to discharge the

responsibilities conferred upon it by law or ordinance and to promote the
general welfare of the inhabitants therein;
(2) Enact tax and revenue ordinances, subject to the limitations imposed
in this Code;

(3) Enact annual and supplemental budgets in accordance with the

provisions of this Code;

(4) Provide for the construction and maintenance of barangay facilities and
other public works projects chargeable to the general fund of the barangay
or such other funds actually available for the purpose;

(5) Submit to the sangguniang panlungsod or sangguniang bayan such

suggestions or recommendations as it may see fit for the improvement of
the barangay or for the welfare of the inhabitants thereof;

(6) Assist in the establishment, organization, and promotion of cooperative

enterprises that will improve the economic condition and well-being of the
residents;

(7) Regulate the use of multi-purpose halls, multi- purpose pavements,

grain or copra dryers, patios and other post-harvest facilities, barangay
waterworks, barangay markets, parking areas or other similar facilities
constructed with government funds within the jurisdiction of the barangay
and charge reasonable fees for the use thereof;

(8) Solicit or accept monies, materials and voluntary labor for specific
public works and cooperative enterprises of the barangay from residents,
land owners, producers and merchants in the barangay; monies from
grants-in-aid, subsidies, contributions, and revenues made available to the
barangays from national, provincial, city or municipal funds; and monies
from other private agencies and individuals: Provided, however, That
monies or properties donated by private agencies and individuals for
specific purposes shall accrue to the barangay as trust fund;

(9) Solicit or accept, in any or all the foregoing public works and
cooperative enterprises, such cooperation as is made available by
national, provincial, city, or municipal agencies established by law to
render financial, technical, and advisory assistance to barangays and to
barangay residents: Provided, however, That in soliciting or accepting
such cooperation, the sangguniang barangay need not pledge any sum of
money for expenditure in excess of amounts currently in the barangay
treasury or encumbered for other purposes;

(10) Provide compensation, reasonable allowances or per diems as well

as travel expenses for sangguniang barangay members and other
barangay officials, subject to the budgetary limitations prescribed under
Title Five, Book II of this Code: Provided, however, That no increase in the
com- pensation or honoraria of the sangguniang barangay members shall
take effect until after the expiration of the full term of all members of the
sangguniang barangay approving such increase;

(11) Hold fund-raising activities for barangay projects without the need of
securing permits from any national or local office or agency. The proceeds
from such activities shall be tax-exempt and shall accrue to the general
fund of the barangay: Provided, That in the appropriation thereof, the
specific purpose for which such fund-raising activity has been held shall
be first satisfied: Provided, further, That no fund-raising activities shall be
held within a period of sixty (60) days immediately preceding and after a
national or local election, recall, referendum, or plebiscite: Provided,
finally, That said fund-raising activities shall comply with national policy
standards and regulations on morals, health, and safety of the persons
participating therein. The sangguniang barangay, through the punong
barangay, shall render a public accounting of the funds raised at the
completion of the project for which the fund-raising activity was under-
taken;

(12) Authorize the punong barangay to enter into contracts in behalf of the
barangay, subject to the provisions of this Code; (13) Authorize the
barangay treasurer to make direct purchases in an amount not exceeding
One thousand pesos (P1,000.00) at any one time for the ordinary and
essential administrative needs of the barangay;

(14) Prescribe fines in amounts not exceeding One thousand pesos

(P1,000.00) for violation of barangay ordinances;

(15) Provide for the administrative needs of the lupong tagapamayapa and
the pangkat ng tagapagkasundo;

(16) Provide for the organization of community brigades, barangay tanod,

or community service units as may be necessary;

(17) Organize regular lectures, programs, or fora on community problems

such as sanitation, nutrition, literacy, and drug abuse, and convene
assemblies to encourage citizen participation in government;

(18) Adopt measures to prevent and control the proliferation of squatters

and mendicants in the barangay;

(19) Provide for the proper development and welfare of children in the
barangay by promoting and supporting activities for the protection and
total development of children, particularly those below seven (7) years of
age;
(20) Adopt measures towards the prevention and eradication of drug
abuse, child abuse, and juvenile delinquency;

(21) Initiate the establishment of a barangay high school, whenever

feasible, in accordance with law;

(22) Provide for the establishment of a non-formal education center in the

barangay whenever feasible, in coordination with the Department of
Education, Culture and Sports, ;

(23) Provide for the delivery of basic services; and

(24) Exercise such other powers and perform such other duties and
functions as may be prescribed by law or ordinance.