Garcia v.

Executive Secretary
G.R. No. 101273, July 3, 1992
Feliciano, J. / KMD

SUBJECT MATTER: Legislative Process; requirements as to certain laws: tax laws

CASE SUMMARY:
In this case, the petitioner assails the constitutionality and legality of the Executive Orders 475 and 478
issued by president. E.O. 475 states that additional duty for oil products remain at 9% while EO 478
imposed a special duty of P 0.95 per liter and P1.00 per liter of imported oil products on top of the 9% ad
valorem (increase from 5% set by EO 443). Petitioner argues that according to article VI section 24, the
revenue-generating measure is vested on the Congress and not on the president. However, the SC ruled
that the president may increase tariff rates when authorized by Congress even for revenue purposes. This
is allowed as stated in article VI section 28 (2). In this case, Tariff and Customs Code authorized the
president to issue the assailed EO’s.

DOCTRINES:
Article VI, 1987 Constitution

Section24:
All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the House of Representatives, but the Senate
may propose or concur with amendments.

Section 28(2):
The Congress may, by law, authorize the President to fix within specified limits, and subject to such
limitations and restrictions as it may impose, tariff rates, import and export quotas, tonage and wharfage
dues, and other duties or imposts within the framework of the national development program of the
Government.

FACTS:
 On 27 November 1990, the president issued Executive Order No. 438 which imposed an additional
duty of five percent (5%) ad valorem on all articles imported into the Philippines. 5% was
subsequently increased to 9% by the Executive Order No. 443 issued on 3 January 1991.
 On 15 August 1991, Executive Order No. 475 was issued reducing the rate of additional duty on all
imported articles from 9% to 5% ad valorem, except in the cases of oil products, which continued to
be subject to the additional duty of 9% ad valorem.
 President issued Executive Order No. 478 on 23 August 1991, which levied a special duty of P0.95
per liter or P151.05 per barrel of imported crude oil and P1.00 per liter of imported oil products.
 Petitioner assails the validity of Executive Orders Nos. 475 and 478 arguing that Executive Orders
Nos. 475 and 478 are violative of Section 24, Article VI of the 1987 Constitution, which vests the
authority to enact revenue bills in Congress. The President may not assume such power by
issuing Executive Orders Nos. 475 and 478, which are in the nature of revenue-generating
measures. Executive Orders No. 475 and 478 contravene Section 401 of the Tariff and Customs
 Code, which Section authorizes the President, according to petitioner, to increase, reduce or remove
tariff duties or to impose additional duties only when necessary to protect local industries or
products but not for the purpose of raising additional revenue. It is for revenue-generating and not
protective measure.

ISSUE/S:
1. WON issuance of Executive Order No. 475 and Executive Order No. 478 is unconstitutional.
(NO)

HOLDING:
1. No, issuance of Executive Order No. 475 and Executive Order No. 478 is not unconstitutional
and does not violate section 24 Art. VI. According to sec 28 (2) Art. VI (an explicit
constitutional permission to Congress to authorize the president), the president may increase
tariff rates when authorized by Congress even for revenue purposes solely. In this case, it is
the Tariff and Customs Code which authorized the President to issue the said EOs.

Sec. 401 of the Tariff and Customs Code establishes that the authority conferred to the president
by the Congress must be exercised in “the interest of national economy, general welfare and/or
national security,” The phrase, “national economy, general welfare and national security” refers
to the protection of local industries and not the interest of the consumers. Thus, in imposing
additional duty to protect local products, generating revenue is inevitable.

Petition is dismissed for lack of merit. Costs against petitioner