Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 186400 October 20, 2010

CYNTHIA S. BOLOS, Petitioner,

vs.
DANILO T. BOLOS, Respondent.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking a review of the December 10, 2008 Decision1 of the Court of
Appeals (CA) in an original action for certiorari under Rule 65 entitled "Danilo T.
Bolos v. Hon. Lorifel Lacap Pahimna and Cynthia S. Bolos," docketed as CA-
G.R. SP. No. 97872, reversing the January 16, 2007 Order of the Regional Trial
Court of Pasig City, Branch 69 (RTC), declaring its decision pronouncing the
nullity of marriage between petitioner and respondent final and executory.

On July 10, 2003, petitioner Cynthia Bolos (Cynthia) filed a petition for the
declaration of nullity of her marriage to respondent Danilo Bolos (Danilo) under
Article 36 of the Family Code, docketed as JDRC No. 6211.

After trial on the merits, the RTC granted the petition for annulment in a Decision,
dated August 2, 2006, with the following disposition:

WHEREFORE, judgment is hereby rendered declaring the marriage between

petitioner CYNTHIA S. BOLOS and respondent DANILO T. BOLOS celebrated
on February 14, 1980 as null and void ab initio on the ground of psychological
incapacity on the part of both petitioner and respondent under Article 36 of the
Family Code with all the legal consequences provided by law.

Furnish the Local Civil Registrar of San Juan as well as the National Statistics
Office (NSO) copy of this decision.

SO ORDERED.2

A copy of said decision was received by Danilo on August 25, 2006. He timely
filed the Notice of Appeal on September 11, 2006.

In an order dated September 19, 2006, the RTC denied due course to the appeal
for Danilo’s failure to file the required motion for reconsideration or new trial, in
violation of Section 20 of the Rule on Declaration of Absolute Nullity of Void
Marriages and Annulment of Voidable Marriages.

On November 23, 2006, a motion to reconsider the denial of Danilo’s appeal was
likewise denied.
On January 16, 2007, the RTC issued the order declaring its August 2, 2006
decision final and executory and granting the Motion for Entry of Judgment filed
by Cynthia.

Not in conformity, Danilo filed with the CA a petition for certiorari under Rule 65
seeking to annul the orders of the RTC as they were rendered with grave abuse
of discretion amounting to lack or in excess of jurisdiction, to wit: 1) the
September 19, 2006 Order which denied due course to Danilo’s appeal; 2) the
November 23, 2006 Order which denied the motion to reconsider the September
19, 2006 Order; and 3) the January 16, 2007 Order which declared the August 2,
2006 decision as final and executory. Danilo also prayed that he be declared
psychologically capacitated to render the essential marital obligations to Cynthia,
who should be declared guilty of abandoning him, the family home and their
children.

As earlier stated, the CA granted the petition and reversed and set aside the
assailed orders of the RTC. The appellate court stated that the requirement of a
motion for reconsideration as a prerequisite to appeal under A.M. No. 02-11-10-
SC did not apply in this case as the marriage between Cynthia and Danilo was
solemnized on February 14, 1980 before the Family Code took effect. It relied on
the ruling of this Court in Enrico v. Heirs of Sps. Medinaceli3 to the effect that the
"coverage [of A.M. No. 02-11-10-SC] extends only to those marriages entered
into during the effectivity of the Family Code which took effect on August 3,
1988."

Cynthia sought reconsideration of the ruling by filing her Manifestation with

Motion for Extension of Time to File Motion for Reconsideration and Motion for
Partial Reconsideration [of the Honorable Court’s Decision dated December 10,
2008]. The CA, however, in its February 11, 2009 Resolution,4 denied the motion
for extension of time considering that the 15-day reglementary period to file a
motion for reconsideration is non-extendible, pursuant to Section 2, Rule 40,
1997 Rules on Civil Procedure citing Habaluyas v. Japson, 142 SCRA 208. The
motion for partial reconsideration was likewise denied.

Hence, Cynthia interposes the present petition via Rule 45 of the Rules of Court
raising the following

ISSUES

THE COURT OF APPEALS GRAVELY ERRED IN ISSUING THE

QUESTIONED DECISION DATED DECEMBER 10, 2008 CONSIDERING
THAT:

A. THE PRONOUNCEMENT OF THE HONORABLE COURT IN

ENRICO V. SPS. MEDINACELI IS NOT APPLICABLE TO THE
INSTANT CASE CONSIDERING THAT THE FACTS AND THE
ISSUE THEREIN ARE NOT SIMILAR TO THE INSTANT CASE.

B. ASSUMING ARGUENDO THAT THE PRONOUNCEMENT OF

THE HONORABLE COURT IS APLLICABLE TO THE INSTANT
CASE, ITS RULING IN ENRICO V. SPS. MEDINACELI IS
PATENTLY ERRONEOUS BECAUSE THE PHRASE "UNDER THE
 FAMILY CODE" IN A.M. NO. 02-11-10-SC PERTAINS TO THE
WORD "PETITIONS" RATHER THAN TO THE WORD
"MARRIAGES."

C. FROM THE FOREGOING, A.M. NO. 02-11-10-SC ENTITLED

"RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID
MARRIAGES AND ANNULMENT OF VOIDABLE MARRIAGES" IS
APPLICABLE TO MARRIAGES SOLEMNIZED BEFORE THE
EFFECTIVITY OF THE FAMILY CODE. HENCE, A MOTION FOR
RECONSIDERATION IS A PRECONDITION FOR AN APPEAL BY
HEREIN RESPONDENT.

D. CONSIDERING THAT HEREIN RESPONDENT REFUSED TO

COMPLY WITH A PRECONDITION FOR APPEAL, A RELAXATION
OF THE RULES ON APPEAL IS NOT PROPER IN HIS CASE.

II

THE COURT OF APPEALS GRAVELY ERRED IN ISSUING THE

QUESTIONED RESOLUTION DATED FEBRUARY 11, 2009 CONSIDERING
THE FOREGOING AND THE FACTUAL CIRCUMSTANCES OF THIS CASE.

III

THE TENETS OF JUSTICE AND FAIR PLAY, THE NOVELTY AND

IMPORTANCE OF THE ISSUE AND THE SPECIAL CIRCUMSTANCES IN
THIS CASE JUSTIFY AND WARRANT A LIBERAL VIEW OF THE RULES IN
FAVOR OF THE PETITIONER. MOREOVER, THE INSTANT PETITION IS
MERITORIOUS AND NOT INTENDED FOR DELAY.5

From the arguments advanced by Cynthia, the principal question to be resolved

is whether or not A.M. No. 02-11-10-SC entitled "Rule on Declaration of Absolute
Nullity of Void Marriages and Annulment of Voidable Marriages," is applicable to
the case at bench.

Petitioner argues that A.M. No. 02-11-10-SC is also applicable to marriages

solemnized before the effectivity of the Family Code. According to Cynthia, the
CA erroneously anchored its decision to an obiter dictum in the aforecited Enrico
case, which did not even involve a marriage solemnized before the effectivity of
the Family Code.

She added that, even assuming arguendo that the pronouncement in the said
case constituted a decision on its merits, still the same cannot be applied
because of the substantial disparity in the factual milieu of the Enrico case from
this case. In the said case, both the marriages sought to be declared null were
solemnized, and the action for declaration of nullity was filed, after the effectivity
of both the Family Code in 1988 and of A.M. No. 02-11-10-SC in 2003. In this
case, the marriage was solemnized before the effectivity of the Family Code and
A.M. No. 02-11-10-SC while the action was filed and decided after the effectivity
of both.

Danilo, in his Comment,6 counters that A.M. No. 02-11-10-SC is not applicable
because his marriage with Cynthia was solemnized on February 14, 1980, years
before its effectivity. He further stresses the meritorious nature of his appeal from
the decision of the RTC declaring their marriage as null and void due to his
purported psychological incapacity and citing the mere "failure" of the parties who
were supposedly "remiss," but not "incapacitated," to render marital obligations
as required under Article 36 of the Family Code.

The Court finds the petition devoid of merit.

Petitioner insists that A.M. No. 02-11-10-SC governs this case. Her stance is
unavailing. The Rule on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages as contained in A.M. No. 02-11-10-SC which
the Court promulgated on March 15, 2003, is explicit in its scope. Section 1 of the
Rule, in fact, reads:

Section 1. Scope – This Rule shall govern petitions for declaration of absolute
nullity of void marriages and annulment of voidable marriages under the Family
Code of the Philippines.

The Rules of Court shall apply suppletorily.

The categorical language of A.M. No. 02-11-10-SC leaves no room for doubt.
The coverage extends only to those marriages entered into during the effectivity
of the Family Code which took effect on August 3, 1988.7 The rule sets a
demarcation line between marriages covered by the Family Code and those
solemnized under the Civil Code.8

The Court finds Itself unable to subscribe to petitioner’s interpretation that the
phrase "under the Family Code" in A.M. No. 02-11-10-SC refers to the word
"petitions" rather than to the word "marriages."

A cardinal rule in statutory construction is that when the law is clear and free from
any doubt or ambiguity, there is no room for construction or interpretation. There
is only room for application.9 As the statute is clear, plain, and free from
ambiguity, it must be given its literal meaning and applied without attempted
interpretation. This is what is known as the plain-meaning rule or verba legis. It is
expressed in the maxim, index animi sermo, or "speech is the index of intention."
Furthermore, there is the maxim verba legis non est recedendum, or "from the
words of a statute there should be no departure."10

There is no basis for petitioner’s assertion either that the tenets of substantial
justice, the novelty and importance of the issue and the meritorious nature of this
case warrant a relaxation of the Rules in her favor. Time and again the Court has
stressed that the rules of procedure must be faithfully complied with and should
not be discarded with the mere expediency of claiming substantial merit.11 As a
corollary, rules prescribing the time for doing specific acts or for taking certain
proceedings are considered absolutely indispensable to prevent needless delays
and to orderly and promptly discharge judicial business. By their very nature,
these rules are regarded as mandatory.12

The appellate court was correct in denying petitioner’s motion for extension of
time to file a motion for reconsideration considering that the reglementary period
for filing the said motion for reconsideration is non-extendible. As pronounced
in Apex Mining Co., Inc. v. Commissioner of Internal Revenue, 13
The rule is and has been that the period for filing a motion for reconsideration is
non-extendible. The Court has made this clear as early as 1986 in Habaluyas
Enterprises vs. Japzon. Since then, the Court has consistently and strictly
adhered thereto. 1avvphil

Given the above, we rule without hesitation that the appellate court’s denial of
petitioner’s motion for reconsideration is justified, precisely because petitioner’s
earlier motion for extension of time did not suspend/toll the running of the 15-day
reglementary period for filing a motion for reconsideration. Under the
circumstances, the CA decision has already attained finality when petitioner filed
its motion for reconsideration. It follows that the same decision was already
beyond the review jurisdiction of this Court.

In fine, the CA committed no reversible error in setting aside the RTC decision
which denied due course to respondent’s appeal and denying petitioner’s motion
for extension of time to file a motion for reconsideration.

Appeal is an essential part of our judicial system. Its purpose is to bring up for
review a final judgment of the lower court. The courts should, thus, proceed with
caution so as not to deprive a party of his right to appeal.14 In the recent case
of Almelor v. RTC of Las Pinas City, Br. 254,15 the Court reiterated: While the
right to appeal is a statutory, not a natural right, nonetheless it is an essential part
of our judicial system and courts should proceed with caution so as not to deprive
a party of the right to appeal, but rather, ensure that every party-litigant has the
amplest opportunity for the proper and just disposition of his cause, free from the
constraints of technicalities.

In the case at bench, the respondent should be given the fullest opportunity to
establish the merits of his appeal considering that what is at stake is the
sacrosanct institution of marriage.

No less than the 1987 Constitution recognizes marriage as an inviolable social

institution. This constitutional policy is echoed in our Family Code. Article 1
thereof emphasizes its permanence and inviolability, thus:

Article 1. Marriage is a special contract of permanent union between a man and a

woman entered into in accordance with law for the establishment of conjugal and
family life. It is the foundation of the family and an inviolable social institution
whose nature, consequences, and incidents are governed by law and not subject
to stipulation, except that marriage settlements may fix the property relations
during the marriage within the limits provided by this Code.

This Court is not unmindful of the constitutional policy to protect and strengthen
the family as the basic autonomous social institution and marriage as the
foundation of the family.16

Our family law is based on the policy that marriage is not a mere contract, but a
social institution in which the State is vitally interested. The State finds no
stronger anchor than on good, solid and happy families. The break up of families
weakens our social and moral fabric and, hence, their preservation is not the
concern alone of the family members.17

WHEREFORE, the petition is DENIED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ANTONIO EDUARDO B. TERESITA J. LEONARDO-DE

NACHURA CASTRO*
Associate Justice Associate Justice

DIOSDADO M. PERALTA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson’s Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes

* Designated as an additional member in lieu of Justice Roberto A. Abad,

per Special Order No. 905 dated October 5, 2010.
1 Rollo, pp. 43-48. Penned by Associate Justice Arcangelita M. Romilla-
Lontok with Associate Justices Mariano C. Del Castillo (now a member of
this Court) and Romeo F. Barza, concurring.
2 See Rollo, p. 8; see also Annex A of petition, rollo, p. 44.
3 G.R. No. 173614, September 28, 2007, 534 SCRA 418, 427-428.
4 Annex B of petition; rollo p. 49.
5 Rollo, pp. 12-14.
6 Id. at 329.
7Supra note 3, citing Modequillo v. Breva, G.R. No. 86355, May 31, 1990,
185 SCRA 766,722.
8Carlos v. Sandoval, G.R. No. 179922, December 16, 2008, 574 SCRA
116, 132.
9Amores v. House of Representatives Electoral Tribunal, G.R. No. 189600,
June 29,2010, citing Twin Ace Holdings Corporation v. Rufina and
Company, G.R. No. 160191, June 8, 2006, 490 SCRA 368, 376.
10 Padua v. People, G.R. No. 168546, July 23, 2008, 559 SCRA 519, 531,
citing R. Agpalo, Statutory Construction 124 (5st ed., 2003).
11Laguna Metts Corporation v. Court of Appeals, G.R. No. 185220, July 27,
2009, 594 SCRA 139, 143, citing Yutingco v. Court of Appeals, 435 Phil. 83
(2002).

Id., citing Gonzales v. Torres, A.M. No. MTJ-06-1653, July 30, 2007, 528
12

SCRA 490.
13 510 Phil. 268, 274 (2005).
14 Aguilar v. Court of Appeals, 320 Phil 456, 460 (1995).
15 G.R. No. 179620, August 26, 2008, 563 SCRA 447, 460-461,
citing Salazar v. Court of Appeals, 426 Phil 864, 877 (2002), citing Labad v.
University of Southeastern Philippines, 414 Phil 815, 826 (2001).
16Almelor v. Regional Trial Court of Las Pinas City, Br. 253, G.R. No.
179620, August 26, 2008, 563 SCRA 447 citing 1987 Philippine
Constitution, Art. II, Sec. 12 which provides:

Sec. 12. The State recognizes the sanctity of family life and shall
protect and strengthen the family as a basic autonomous social
institution. x x x

Art. XV, Secs. 1-2 which provides:

Sec. 1. The State recognizes the Filipino family as the foundation of

the nation.

Accordingly, it shall strengthen its solidarity and actively promote its

total development.

Sec. 2. Marriage, as an inviolable social institution, is the foundation

of the family and shall be protected by the State.
17Azcueta v. Republic, G.R. No. 180668, May 26, 2009, 588 SCRA 196,
205, citing Ancheta v. Ancheta, G.R. No. 145370, March 4, 2004, 424
SCRA 725, 740; Tuason v. Court of Appeals, 326 Phil 169, 180-181 (1996).
 EN BANC

A.M. No. RTJ-04-1868 August 13, 2004

RE: REQUEST OF JUDGE TITO G. GUSTILO THAT THE SECOND 25%

GRANT OF THE SPECIAL ALLOWANCE FOR JUDGES BE INCLUDED IN
THE COMPUTATION OF HIS RETIREMENT BENEFITS

RESOLUTION

CALLEJO, SR., J.:

In his Letter dated May 26, 2004 addressed to Chief Justice Hilario G. Davide,
Jr., Judge Tito G. Gustilo of the Regional Trial Court of Iloilo City, Branch 23,
avers that he is due to retire at the age of 70 (compulsory retirement) on
September 29, 2004. By then, he would have served the Judiciary for 21 years; 7
years and 11-and-1/2 months of which as Executive Judge of the RTC of Iloilo
City. Judge Gustilo requests that, considering his retirement is "barely one month
from November 2004," the second tranche of the Special Allowance granted to
judges under Republic Act No. 92271 be included in the computation of his
retirement benefits.

To recall, Rep. Act No. 9227, which took effect on November 11, 2003,2 granted
additional compensation in the form of Special Allowance to justices, judges and
all other positions in the Judiciary with the equivalent rank of justices of the Court
of Appeals and judges of the Regional Trial Court. Section 2 thereof reads:

Sec. 2. Grant of Special Allowances. – All justices, judges and all other
positions in the Judiciary with the equivalent rank of justices of the Court of
Appeals and judges of the Regional Trial Court as authorized under
existing laws shall be granted special allowances equivalent to one
hundred percent (100%) of the basic monthly salary specified for their
respective salary grades under Republic Act No. 6758, as amended,
otherwise known as the Salary Standardization Law, to be implemented for
a period of four (4) years.

The grant of special allowances shall be implemented uniformly in such

sums or amounts equivalent to twenty-five percent (25%) of the basic
salaries of the positions covered hereof. Subsequent implementation shall
be in such sums and amounts and up to the extent only that can be
supported by the funding source specified in Section 3 hereof.

Further, Section 5 of the same law provides:

Sec. 5. Inclusion in the Computation of Retirement Benefits. – For

purposes of retirement, only the allowances actually received and the
tranche or tranches of the special allowance already implemented and
received pursuant to this Act by the justices, judges and all other positions
 in the Judiciary with the equivalent rank of justices of the Court of Appeals
and judges of the Regional Trial Court as authorized under existing laws
shall, at the date of their retirement, be included in the computation of their
respective retirement benefits.

On March 9, 2004, in A.M. No. 03-12-04-SC (Re: Possible Means to Implement

the Special Allowance under R.A. 9227 and to Increase the Judiciary
Development Fund), the Court promulgated the GUIDELINES ON THE GRANT
OF ADDITIONAL COMPENSATION IN THE FORM OF SPECIAL ALLOWANCE
FOR JUSTICES AND JUDGES IN THE JUDICIARY AND ALL OTHER
OFFICIALS WITH THE EQUIVALENT RANK OF JUSTICES OF THE COURT
OF APPEALS AND JUDGES OF THE REGIONAL TRIAL COURT. The
Guidelines provide for the manner of the implementation in this wise:

4.1 The Special Allowance shall be implemented uniformly in such sums or

amounts equivalent to twenty-five percent (25%) of the actual basic
monthly salaries for the positions covered starting 11 November 2003 until
the one hundred percent (100%) special allowance is fully implemented.

If the source of fund is insufficient to cover the twenty-five percent (25%)

special allowance for any year, it shall be granted in such sums and
amounts and up to the extent only that can be supported by the funding
source specified in Section 3 of Rep. Act No. 9227; provided that annually
the special allowance shall always be twenty-five percent (25%) of the
actual "basic monthly salary."

The Guidelines, likewise, reiterate that:

4.2 For purposes of computing the retirement benefits, only the special
allowance actually received and that which has accrued at the time of
retirement shall be included.

Paragraph 7.0 thereof states that cases not covered thereby shall be referred to
the Chief Justice for resolution.

Judge Gustilo claims that pursuant to OCA Circular No. 48-2004 dated March 3,
2004, the first tranche of the Special Allowance equivalent to 25% was
implemented starting November 11, 2003. The next 25% (second tranche) will be
implemented on November 11, 2004. In this connection, Judge Gustilo appeals
to the Chief Justice that, in the computation of his retirement benefits, the second
tranche of the Special Allowance be included since his retirement is only one (1)
month and twelve (12) days before its implementation on November 11, 2004.

In support thereof, Judge Gustilo points out that "in the past, Judges who retire in
October are included in the grant of the December 13th month pay." He, thus,
invokes the "liberal policy" of the Court "in granting benefits to the underpaid Trial
Court Judges."

In the Memorandum dated June 18, 2004 for the Chief Justice, the Office of the
Court Administrator (OCA)3recommends that the request of Judge Gustilo be
granted. The OCA cites Judge Gustilo’s service record in the Judiciary, which
started on January 18, 1983, including his exemplary record of disposing cases
at an average of 2.25 cases each month. It also mentions that Judge Gustilo, as
Executive Judge, introduced several innovations in the Iloilo City courts and was
able to manage well the 17 judges under his administrative supervision. Further,
Judge Gustilo was the recipient of several "awards and
recognitions."4 Considering the foregoing, the OCA concludes that "it is but just
and fair that the second additional Special Allowance of 25% be granted to him
and included in the computation of his retirement benefits."5

In compliance with the Court’s Resolution dated July 6, 2004, referring Judge
Gustilo’s letter and the OCA’s memorandum to her for study and
recommendation, Chief Attorney Edna E. Diño submitted her Report dated July
15, 2004. The Chief Attorney recommends that Judge Gustilo’s request be
denied for not being in accord with Rep. Act No. 9227 and the Guidelines
promulgated by the Court.

After a careful evaluation of Judge Gustilo’s letter, the OCA’s memorandum and
the Chief Attorney’s report, the Court, regrettably, cannot grant the request of
Judge Gustilo.

It is axiomatic that when the law is clear, the function of the courts is simple
application, not interpretation or circumvention.6 With respect to the manner of
computation of the retirement benefits in light of the Special Allowance granted
under Rep. Act No. 9227, Section 5 thereof, quoted anew below, could not be
any clearer:

Sec. 5. Inclusion in the Computation of Retirement Benefits. – For

purposes of retirement, only the allowances actually received and the
tranche or tranches of the special allowance already implemented and
received pursuant to this Act by the justices, judges and all other positions
in the Judiciary with the equivalent rank of justices of the Court of Appeals
and judges of the Regional Trial Court as authorized under existing laws
shall, at the date of their retirement, be included in the computation of their
respective retirement benefits.

A plain reading of the above provision shows that, for purposes of retirement,
only the allowances "actually received" and the tranche or tranches "already
received and implemented," upon the date of retirement, shall be included in the
computation of the retirement benefits. Otherwise put, before the Special
Allowance could be considered in the computation of retirement benefits, it
should have been "actually received" and the tranche or tranches thereof should
have been "already implemented and received" at the date of retirement.

Section 5 of Rep. Act No. 9227 is clear and unambiguous. There is no room for
its interpretation. Further, the foregoing exchange among the members of the
Bicameral Conference Committee7 on the Disagreeing Provisions of Senate Bill
(SB) No. 2018 and House Bill (HB) No. 51788 is particularly instructive:

...

THE CHAIRMAN (SEN. PANGILINAN). Accepted.

Section 4. No questions? (Silence)

Section 5. (Silence)

Just again for purposes of record and clarification, Section 5, lines 3 and 4,
"For purposes of retirement, only the allowances actually received…," and
so forth and so on, I just like to make it clear that the computation of
retirement would include the salary already being received, plus the special
allowance.

THE CO-CHAIRMAN (REP. ANDAYA). Yes.

THE CHAIRMAN (SEN. PANGILINAN). Because this seems to suggest

that you compute, rather the computation of retirement will be on the basis
only of the special allowance. So, at least, let’s make that on record.

THE CO-CHAIRMAN (REP. ANDAYA). Yes. On record, yes.

And I think that first word in the title of Section 5, "Inclusion" also explains
that.

REP. LIBANAN. Mr. Chairman.

THE CO-CHAIRMAN (REP. ANDAYA). Congressman Libanan.

REP. LIBANAN. For the sake of further clarification, would it mean that if,
for example, a judge retires on the second year of the implementation, so
his retirement benefits would be only computed….

THE CHAIRMAN (SEN. PANGILINAN). On the basis of what he is already

receiving.

REP. LIBANAN. … on the basis of [what] he is receiving, not on the 100

percent.

THE CO-CHAIRMAN (REP. ANDAYA). Actually receiving. That is correct.

REP. LIBANAN. Thank you, Mr. Chairman.

...

THE CHAIRMAN (SEN. PANGILINAN). Can we now go back to Section

5?

THE CHAIRMAN (REP. ANDAYA). Section 5, Mr. Chairman, just a

suggestion but in the House panel

SEN. ARROYO. Kasi kung mandatory, doon sa voluntary, hindi naman

dapat iyon.

THE CHAIRMAN (REP. ANDAYA). I’ll be constrained to withdraw my

proposal.

SEN. ARROYO. But your idea is very attractive.

SEN. VILLAR. In fact, it’s too attractive. In the first place, iyong allowance
is already part of the retirement benefit. Iyon, malaking bagay na iyon, eh.

Mr. Chairman, may add-on pa. Medyo sobra naman yata na iyon.
 SEN. ARROYO. No, because by the accident of birth, when they retire,
they retire on the second year, halimbawa, 68 sila ngayon. Pagkatapos,
mandatorily they have to retire at the age of 70, di iyong benefits nila is …

THE CHAIRMAN (SEN. PANGILINAN). For those born in 1934 up to 1937.

THE CHAIRMAN (REP. ANDAYA). But the fact here remains, the
allowances they have been receiving so far which is over and above,
kasama na talaga sa retirement. I mean, sobra-sobra na, eh. Lahat na lang
ng allowance na puwedeng gawin, nandoon na, eh. At saka nagre-retire pa
sila sa 70, ibig sabihin talagang marami na iyan.

THE CHAIRMAN (SEN. PANGILINAN). Okay?

THE CHAIRMAN (REP. ANDAYA). Okay.

THE CHAIRMAN (SEN. PANGILINAN). So, as is?

THE CHAIRMAN (REP. ANDAYA). Nandoon na, eh.

THE CHAIRMAN (SEN. PANGILINAN). So, whether they retire at 60 or

70, whether they opt for early retirement or mandatory retirement, they will
receive the actual. Would it not be a good idea to encourage them to stay
on …9

Thus, the congressional records as well as the text itself of Rep. Act No. 9227
reveal the unequivocal intention of the lawmakers that only the Special
Allowance actually received at the date of retirement shall be included in the
computation of the retirement benefits.

The Guidelines promulgated by this Court pursuant to Rep. Act No. 9227 is even
more definite as it used the term "accrued" in this wise: "only the special
allowance actually received and that which has accrued at the time of retirement
shall be included." As correctly reasoned by the Chief Attorney:

Notably, the phrase "has accrued at the time of retirement" is used in the
Guidelines instead of "the tranche or tranches of the special allowance
already implemented and received" which is used in Section 5 of Rep. Act
No. 9227. Nevertheless, the same meaning is conveyed. The word
"accrue" means "to come into existence as an enforceable claim: vest as a
right" or "to come by way of increase or addition: arise as a growth or
result" or "to be periodically accumulated in the process of time whether as
an increase or a decrease." Hence, a Special Allowance that has not yet
come into existence as an enforceable claim or has not yet vested on the
recipient judge as a matter of right cannot be considered in the computation
of retirement benefits.10

Indeed, "accrue" in its past tense is "in sense of due and demandable;
vested."11 In the case of Judge Gustilo, on the date of his retirement, the second
tranche of the Special Allowance has not accrued as yet; hence, it cannot be said
that the same is due and demandable or that it has vested insofar as he is
concerned.

The Chief Attorney, likewise, correctly posits that the strict application of Section
5 of Rep. Act No. 9227 is called for by the fact that, under Section 3 thereof,12 the
source for the Special Allowance is the Judiciary Development Fund (JDF),
established under Presidential Decree No. 1949, which basically comes from the
docket fees paid by litigants:

... As such, the JDF as a fund source is not constant or fixed in amount, as
its amount depends on the amount collected by the courts and the amount
of increase in docket fees that the Court would impose. The fact of the JDF
becoming insufficient has been foreseen by the Court and is reflected in the
second paragraph of 4.1 of the Guidelines quoted above. It is worth noting
that until now, the first tranche of the Special Allowance has been received
only for the months of 11 November 2003 until February 2004. The delay in
receipt thereof may continue if courts nationwide do not timely transmit the
reports of collections to the OCA, as the JDF should be disbursed only if
the reports of collections and the deposits under the JDF account for the
Special Allowance tally in accordance with accounting and auditing rules.13

While this Court had, in certain cases,14 adopted a liberal stance in interpreting
retirement laws in favor of the retiree, it cannot do so in this case because, as
earlier stated, Section 5 of Rep. Act No. 9227 is quite clear and unambiguous. In
other words, there is no room for interpretation but only simple application of
the law.

ACCORDINGLY, the request of Judge Tito G. Gustilo that the second 25% or
second tranche of the Special Allowance granted under Rep. Act No. 9227 be
included in the computation of his retirement benefits is DENIED.

SO ORDERED.

Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Carpio,

Austria-Martinez, Corona, Carpio-Morales, Azcuna, Tinga, and Chico-Nazario,
JJ., concur.
Sandoval-Gutierrez, J., on leave.

Footnotes
1An Act Granting Additional Compensation in the Form of Special
Allowances for Justices, Judges and all Other Positions in the Judiciary
with the Equivalent Rank of Justices of the Court of Appeals and Judges of
the Regional Trial Court, and For Other Purposes.
2Section 10 of Republic Act No. 9227 provides that it "shall take effect
fifteen (15) days after its publication in at least two (2) national newspapers
of general circulation." It was published in Today on October 25, 2003 and
the Times on October 27, 2003.
3Signed by Court Administrator Presbitero J. Velasco, Jr. and Senior
Deputy Court Administrator Zenaida N. Elepaño.
4These awards are: (1) National Awardee of the 3rd PNP Anniversary on
January 29, 1994 at Camp Crame, Quezon City; (2) Plaque of Recognition
for his services as Executive Judge given on March 4, 1991; (3) Plaque of
Appreciation given by the IBP, Iloilo Chapter, on April 4, 1997; (4)
Certificate of Appreciation given at the Forum with Educators, Media and
other Concerned Sectors on Enhancing Communication Between the
Judiciary and the Citizenry, given at the Days Hotel, Iloilo City, on
September 11, 1998; and (5) Certificate of Recognition for his assistance to
the Supreme Court Centenary Celebrations Executive Committee, given on
June 11, 2001.
5 Memorandum of the Office of the Court Administrator, p. 2.
6AB Leasing and Finance Corporation v. Commissioner of Internal
Revenue, 405 SCRA 380 (2003).
7The Senate Conferees were Senators Francis Pangilinan, Manuel Villar,
Jr., Joker Arroyo, Edgardo Angara and John Osmeña.

The House of Representatives Conferees were Representatives Rolando

Andaya, Jr., Marcelino Libanan, Rodolfo Albano, Jr., Danton Bueser, Rolex
Suplico, Gilbert Remulla and Bellaflor Angara-Castillo.
8 SB No. 2018 and HB No. 5178 became Rep. Act No. 9227.
9Deliberations of the Bicameral Conference Committee on the Disagreeing
Provisions of SB No. 2018 and HB No. 5178, September 3, 2003, pp. 17-
32.
10 Report of the Chief Attorney dated July 15, 2004, p. 5.
11 BLACK’S LAW DICTIONARY, 5th ed., p. 19.
12 The said provision states:

Sec. 3. Funding Source. – The amount necessary to implement the

additional compensation in the form of special allowances granted
under this Act shall be sourced from, and charged against, the legal
fees originally prescribed, imposed and collected under Rule 141 of
the Rules of Court prior to the promulgation of the amendments under
Presidential Decree No. 1949, dated July 18, 1984, and from the
increases in current fees and new fees which may be imposed by the
Supreme Court of the Philippines after the effectivity of this Act.

In the event that the said amounts are insufficient to cover the grant
of allowances on the last year of implementation of this Act, the
National Government shall subsidize the special allowance granted
for justices, judges and all other positions in the Judiciary with the
equivalent rank of justices of the Court of Appeals and judges of the
Regional Trial Court as authorized under existing laws in an amount
not exceeding One hundred sixty-five million pesos
(Php165,000,000.00) per annum.

If the collections from any increase in current fees and any new fees
imposed after the effectivity of this Act exceed the amount needed to
fund the special allowances granted to justices, judges and all other
positions in the Judiciary with the equivalent rank of justices of the
Court of Appeals and judges of the Regional Trial Court as authorized
 under existing laws, the surplus may be used by the Chief Justice of
the Supreme Court to grant additional allowances exclusively to other
court personnel not covered by the benefits granted under this Act.
13 Id. at 6.
14 See for example In re: Ruperto G. Martin, 187 SCRA 477 (1990).
 THIRD DIVISION

[G.R. No. 125183. September 29, 1997]

MUNICIPALITY OF SAN JUAN, METRO

MANILA, petitioner, vs. COURT OF APPEALS,
DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, CORAZON DE JESUS
HOMEOWNERS ASSOCIATION, INC., ADRIANO
A. DELAMIDA, SR. CELSO T. TORRES, TARCILA
V. ZATA, QUIRICO T. TORRES, CATALINA
BONGAT, MILAGROS A. HERBOLARIO,
ROSALINDA A. PIMENTAL, PURIFICACION
MORELLA, FRANCISCO RENION, SR.,
MARCELINA CORPUZ, BENEDICTO FALCON,
MAXIMO FALCON, MARIO BOLANOS, VICENTE
T. SURIAO, ROSARIO GREGORIA G. DORADO,
JEREMIAS Z. PATRON, ALEX RODRIGUEZ,
MARIA LUISA ALPAPARA, HERMINIA
C. RODRIGUEZ, VICTORIANO ESPANOL, MARIO
L. AGUILAR, FREDDIE AMADOR, SILVERIO
PURISIMA, JR., PROCOPIO B. PENARANDA,
ELADIO MAGLUYAN, HELENITA GUEI,
CELESTINO MONTANO, ROMEO GOMEZ, OFELIA
LOGO, JIMMY MACION, DAISY A. MANGA,
MAURO MANGA, ARTHUR HERBOLARIO,
MANOLITO HERBOLARIO, ROSARIO ANCHETA,
TERESITA A. VICTORIA, ROSALINA SAMPAGA,
MARIQUITA RUADO, FELIPE ANCHETA,
MAGDALENA CABREZA, MARIA BIANDILLA,
NILDA ARENSOL, LORENZO S. TOLEDO, and
NAPOLEON D. VILORIA, SR., respondents.
DECISION
MELO, J.:
 Before us is a petition for review on certiorari under Rule 45
of the Rules of Court, assailing and seeking to reverse and set
aside: a) the decision dated November 23, 1995 of the Court of
Appeals reversing the decision of the Regional Trial Court of
Pasig, Metro Manila, Branch 159; and b) the resolution dated
May 28, 1996 denying reconsideration of said decision.
The generative facts of the case are as follows:
On February 17, 1978, then President Ferdinand Marcos
issued Proclamation No. 1716 reserving for Municipal
Government Center Site Purposes certain parcels of land of the
public domain located in the Municipality of San Juan, Metro
Manila.
Considering that the land covered by the above-mentioned
proclamation was occupied by squatters, the Municipality of San
Juan purchased an 18-hectare land in Taytay, Rizal as
resettlement center for the said squatters. Only after resettling
these squatters would the municipality be able to develop and
construct its municipal government center on the subject land.
After hundreds of squatter families were resettled, the
Municipality of San Juan started to develop its government
center by constructing the INP Building, which now serves as
the PNP Headquarters, the Fire Station Headquarters, and the
site to house the two salas of the Municipal Trial Courts and the
Office of the Municipal Prosecutors.Also constructed thereon
are the Central Post Office Building and the Municipal High
School Annex Building.
On October 6, 1987, after Congress had already convened
on July 26, 1987, former President Corazon Aquino issued
Proclamation No. 164, amending Proclamation No. 1716. Said
amendatory proclamation pertinently reads as follows:
PROCLAMATION NO. 164
AMENDING PROCLAMATION NO. 1716, DATED FEBRUARY
17, 1978, WHICH RESERVED FOR MUNICIPAL
GOVERNMENT CENTER SITE PURPOSES CERTAIN
PARCELS OF LAND OF THE PUBLIC DOMAIN SITUATED IN
THE MUNICIPALITY OF SAN JUAN, METROPOLITAN
MANILA, ISLAND OF LUZON, BY EXCLUDING FROM ITS
OPERATION THE PARCELS OF LAND NOT BEING UTILIZED
FOR GOVERNMENT CENTER SITES PURPOSES BUT
ACTUALLY OCCUPIED FOR RESIDENTIAL PURPOSES AND
 DECLARING THE LAND OPEN TO DISPOSITION UNDER
THE PROVISIONS OF THE PUBLIC LAND ACT, AS
AMENDED.

Upon recommendation of the Secretary of Environment and Natural

Resources and by virtue of the powers vested in me by law, I,
CORAZON C. AQUINO, President of the Philippines, do hereby
amend Proclamation No. 1716, dated February 17, 1978, which
established for municipal government center site purposes certain
parcels of land mentioned therein situated in the Municipality of San
Juan, Metro Manila, by excluding from its operation the parcels of
land not being utilized for government center site purposes but
actually occupied for residential purposes and declaring the land so
excluded, together with other parcels of land not covered by
Proclamation No. 1716 but nevertheless occupied for residential
purposes, open to disposition under the provisions of the Public Land
Act, as amended, subject to future survey, which are hereunder
particularly described as follows :
Lot 1 (Port.) Psu-73270
xxxxxxxxx
Lot 4 (Port.) Psd-740
and Psd-810
xxxxxxxxx
Lot 5 (Port.) Psu-73270
xxxxxxxxx
IN WITNESS WHEREOF, I have hereunto set my hand and caused
the seal of the Republic of the Philippines to be affixed.
Done in the City of Manila, this 6th day of October in the year of Our
Lord, nineteen hundred and eighty-seven.
(Sgd.) CORAZON C. AQUINO
By the President :
(Sgd.) CATALINO MACARAIG, JR.
Acting Executive Secretary
(Rollo, pp. 148-151.)
On June 1, 1988, the Corazon de Jesus Homeowners
Association, Inc., one of herein private respondents, filed with
the Regional Trial Court of the National Capital Judicial Region
(Pasig, Branch 159) a petition for prohibition with urgent prayer
for restraining order against the Municipal Mayor and Engineer
of San Juan and the Curator of Pinaglabanan Shrine, to enjoin
them from either removing or demolishing the houses of the
association members who were claiming that the lots they
occupied have been awarded to them by Proclamation No. 164.
On September 14, 1990, the regional trial court dismissed the
petition, ruling that the property in question is being utilized by
the Municipality of San Juan for government purposes and thus,
the condition set forth in Proclamation No. 164 is absent.
The appeal before the Court of Appeals was dismissed in a
decision dated July 17, 1991. This decision became final and
the said judgment was duly entered on April 8, 1992.
Disregarding the ruling of the court in this final judgment,
private respondents hired a private surveyor to make
consolidation-subdivision plans of the land in question,
submitting the same to respondent Department of Environment
and Natural Resources (DENR) in connection with their
application for a grant under Proclamation No. 164.
To prevent DENR from issuing any grant to private
respondents, petitioner municipality filed a petition for prohibition
with prayer for issuance of a temporary restraining order and
preliminary injunction against respondent DENR and private
respondent Corazon de Jesus Homeowners Association.
The regional trial court sustained petitioner municipality,
enjoining the DENR from disposing and awarding the parcels of
land covered by Proclamation No. 164.
The Court of Appeals reversed, hence, the present recourse.
Cutting through the other issues, it would appear that
ultimately, the central question and bone of contention in the
petition before us boils down to the correct interpretation of
Proclamation No. 164 in relation to Proclamation No. 1716.
Petitioner municipality assails the decision of the Court of
Appeals by hammering on the issue of res judicata in view of the
fact that an earlier judgment, which had become final and
executory, had already settled the respective rights of the
parties under Proclamation No. 164. This notwithstanding,
petitioner reiterates the reasons why the court had previously
ruled in favor of petitioners rights over the subject property
against the claims of private respondents.
We find good legal basis to sustain petitioners position on the
issue of res judicata insofar as the particular area covered by
Proclamation No. 164, which was the subject matter of the
earlier case, is concerned.
The basic elements of res judicata are: (a) the former
judgment must be final; (b) the court which rendered it had
jurisdiction over the subject matter and the parties; (c) it must be
a judgment on the merits; and (d) there must be between the
first and second actions identity of parties, subject matter, and
cause of action (Mangoma vs. Court of Appeals, 241 SCRA 21
[1995]).
The existence of the first three elements can not be
disputed. As to identity of parties, we have ruled that only
substantial identity is required and not absolute identity of
parties(Suarez vs. Municipality of Naujan, 18 SCRA 682
[1966]). The addition of public respondent DENR in the second
case will thus be of no moment. Likewise, there is identity of
cause of action since the right of the municipality over the
subject property, the corresponding obligation of private
respondents to respect such right and the resulting violation of
said right all remain to be the same in both the first and the
second actions despite the fact that in the first action, private
respondents were the plaintiff while in the second action, they
were the respondents.
The last requisite is identity of subject matter. Res
judicata only extends to such portion of land covered by
Proclamation No. 164 which the court ruled may not be
automatically segregated from the land covered by
Proclamation No. 1716. It does not include those portions which
are outside the coverage of Proclamation No. 1716.
Withal, reversal of the decision of the Court of Appeals would
be justified upon the above premise and our discussion may
properly end here. However, there exists a more basic reason
for setting aside the appealed decision and this has reference to
a fundamental and gross error in the issuance of Proclamation
No. 164 on October 16, 1987 by then President Aquino.
Proclamation No. 1716 was issued by the late President
Ferdinand E. Marcos on February 17, 1978 in the due exercise
of legislative power vested upon him by Amendment No. 6
introduced in 1976. Being a valid act of legislation, said
Proclamation may only be amended by an equally valid act of
legislation. Proclamation No. 164 is obviously not a valid act of
legislation. After the so-called bloodless revolution of February
1986, President Corazon Aquino took the reigns of power under
a revolutionary government. On March 24, 1986, she issued her
historic Proclamation No. 3, promulgating the Provisional
Constitution, or more popularly referred to as the Freedom
Constitution. Under Article II, Section 1 of the Freedom
Constitution, the President shall continue to exercise legislative
power until a legislature is elected and convened under a new
constitution. Then came the ratification of the draft constitution,
to be known later as the 1987 Constitution. When Congress was
convened on July 26, 1987, President Aquino lost this legislative
power under the Freedom Constitution. Proclamation No. 164,
amending Proclamation No. 1716 was issued on October 6,
1987 when legislative power was already solely on Congress.
Although quite lamentably, this matter has escaped the
attention of petitioner as well as the courts before which this
case has already passed through, this Court cannot help
noticing this basic flaw in the issuance of Proclamation No.
164. Because this unauthorized act by the then president
constitutes a direct derogation of the most basic principle in the
separation of powers between the three branches of
government enshrined in our Constitution, we cannot simply
close our eyes and rely upon the principle of the presumption of
validity of a law.
There is a long standing principle that every statute is
presumed to be valid (Salas vs. Jarencio, 46 SCRA 734
[1970]; Peralta vs. Comelec, 82 SCRA 30 [1978]). However, this
rests upon the premise that the statute was duly enacted by
legislature. This presumption cannot apply when there is clear
usurpation of legislative power by the executive branch. For this
Court to allow such disregard of the most basic of all
constitutional principles by reason of the doctrine of presumption
of validity of a law would be to turn its back to its sacred duty to
uphold and defend the Constitution. Thus, also, it is in the
discharge of this task that we take this exception from the Courts
usual practice of not entertaining constitutional questions unless
they are specifically raised, insisted upon, and adequately
argued.
We, therefore, hold that the issuance of Proclamation No. 164
was an invalid exercise of legislative power. Consequently, said
Proclamation is hereby declared NULL and VOID.
WHEREFORE, the appealed decision of the Court of Appeals
is hereby SET ASIDE.Public respondent Department of
Environment and Natural Resources is hereby permanently
ENJOINED from enforcing Proclamation No. 164.
SO ORDERED.
Narvasa, C.J. (Chairman), Romero,
Francisco and Panganiban, JJ., concur.
EN BANC

LOUIS BAROK C. G.R. No. 192935

BIRAOGO,
Petitioner,

- versus -

THE PHILIPPINE
TRUTH COMMISSION
OF 2010,
Respondent. G.R. No. 193036
x-------------------
----x Present:
REP. EDCEL C.
LAGMAN, CORONA, C.J.,
REP. RODOLFO B. CARPIO,
ALBANO, JR., REP. CARPIO
SIMEON A. MORALES,
DATUMANONG, and REP. VELASCO, JR.,
ORLANDO B. FUA, SR., NACHURA,
Petitioners, LEONARDO-DE
CASTRO,
BRION,
PERALTA,
- versus - BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO, JJ.

Promulgated:
EXECUTIVE December 7, 2010
SECRETARY PAQUITO
N. OCHOA, JR. and
DEPARTMENT OF
BUDGET AND
MANAGEMENT
SECRETARY
FLORENCIO B. ABAD,
Respondents.

x -------------------------------------------------------------------------
------------- x

DECISION
MENDOZA, J.:

When the judiciary mediates to allocate

constitutional boundaries, it does not assert any
superiority over the other departments; it does not in
reality nullify or invalidate an act of the legislature,
but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine
conflicting claims of authority under the Constitution
and to establish for the parties in an actual
controversy the rights which that instrument secures
and guarantees to them.

--- Justice Jose P. Laurel[1]

The role of the Constitution cannot be overlooked. It is through
the Constitution that the fundamental powers of government are
established, limited and defined, and by which these powers are
distributed among the several departments.[2] The Constitution
is the basic and paramount law to which all other laws must
conform and to which all persons, including the highest
officials of the land, must defer.[3]Constitutional doctrines must
remain steadfast no matter what may be the tides of time. It
cannot be simply made to sway and accommodate the call of
situations and much more tailor itself to the whims and caprices
of government and the people who run it.[4]

For consideration before the Court are two consolidated

cases[5] both of which essentially assail the validity and
constitutionality of Executive Order No. 1, dated July 30, 2010,
entitled Creating the Philippine Truth Commission of 2010.

The first case is G.R. No. 192935, a special civil action for
prohibition instituted by petitioner Louis Biraogo (Biraogo) in
his capacity as a citizen and taxpayer. Biraogo assails Executive
Order No. 1 for being violative of the legislative power of
Congress under Section 1, Article VI of the Constitution[6] as it
usurps the constitutional authority of the legislature to create a
public office and to appropriate funds therefor.[7]

The second case, G.R. No. 193036, is a special civil action

for certiorari and prohibition filed by petitioners Edcel C.
Lagman, Rodolfo B. Albano Jr., Simeon A. Datumanong, and
Orlando B. Fua, Sr. (petitioners-legislators) as incumbent
members of the House of Representatives.

The genesis of the foregoing cases can be traced to the events

prior to the historic May 2010 elections, when then Senator
Benigno Simeon Aquino III declared his staunch condemnation
of graft and corruption with his slogan, Kung walang corrupt,
walang mahirap. The Filipino people, convinced of his
sincerity and of his ability to carry out this noble objective,
catapulted the good senator to the presidency.

To transform his campaign slogan into reality, President

Aquino found a need for a special body to investigate reported
cases of graft and corruption allegedly committed during the
previous administration.

Thus, at the dawn of his administration, the President on

July 30, 2010, signed Executive Order No. 1 establishing
the Philippine Truth Commission of 2010 (Truth
Commission). Pertinent provisions of said executive order read:
EXECUTIVE ORDER NO. 1

CREATING THE PHILIPPINE TRUTH COMMISSION OF

2010

WHEREAS, Article XI, Section 1 of the 1987 Constitution of

the Philippines solemnly enshrines the principle that a public
office is a public trust and mandates that public officers and
employees, who are servants of the people, must at all times
be accountable to the latter, serve them with utmost
responsibility, integrity, loyalty and efficiency, act with
patriotism and justice, and lead modest lives;

WHEREAS, corruption is among the most despicable acts of

defiance of this principle and notorious violation of this
mandate;

WHEREAS, corruption is an evil and scourge which seriously

affects the political, economic, and social life of a nation; in a
very special way it inflicts untold misfortune and misery on
the poor, the marginalized and underprivileged sector of
society;

WHEREAS, corruption in the Philippines has reached very

alarming levels, and undermined the peoples trust and
confidence in the Government and its institutions;

WHEREAS, there is an urgent call for the determination of the

truth regarding certain reports of large scale graft and
corruption in the government and to put a closure to them by
the filing of the appropriate cases against those involved, if
warranted, and to deter others from committing the evil,
restore the peoples faith and confidence in the Government
and in their public servants;

WHEREAS, the Presidents battlecry during his campaign for

the Presidency in the last elections kung walang corrupt,
walang mahirap expresses a solemn pledge that if elected, he
would end corruption and the evil it breeds;

WHEREAS, there is a need for a separate body dedicated

solely to investigating and finding out the truth concerning the
reported cases of graft and corruption during the previous
administration, and which will recommend the prosecution of
the offenders and secure justice for all;
WHEREAS, Book III, Chapter 10, Section 31 of Executive
Order No. 292, otherwise known as the Revised
Administrative Code of the Philippines, gives the President
the continuing authority to reorganize the Office of the
President.

NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III,

President of the Republic of the Philippines, by virtue of the
powers vested in me by law, do hereby order:

SECTION 1. Creation of a Commission. There is hereby

created the PHILIPPINETRUTH COMMISSION, hereinafter
referred to as the COMMISSION, which shall primarily seek
and find the truth on, and toward this end, investigate reports
of graft and corruption of such scale and magnitude that shock
and offend the moral and ethical sensibilities of the people,
committed by public officers and employees, their co-
principals, accomplices and accessories from the private
sector, if any, during the previous administration; and
thereafter recommend the appropriate action or measure to
be taken thereon to ensure that the full measure of justice shall
be served without fear or favor.
The Commission shall be composed of a Chairman and four
(4) members who will act as an independent collegial body.

SECTION 2. Powers and Functions. The Commission, which

shall have all the powers of an investigative body under
Section 37, Chapter 9, Book I of the Administrative Code of
1987, is primarily tasked to conduct a thorough fact-finding
investigation of reported cases of graft and corruption
referred to in Section 1, involving third level public officers
and higher, their co-principals, accomplices and accessories
from the private sector, if any, during the previous
administration and thereafter submit its finding and
recommendations to the President, Congress and the
Ombudsman.
In particular, it shall:
a) Identify and determine the reported cases of such graft
and corruption which it will investigate;

b) Collect, receive, review and evaluate evidence related to

or regarding the cases of large scale corruption which it has
chosen to investigate, and to this end require any agency,
official or employee of the Executive Branch, including
government-owned or controlled corporations, to produce
documents, books, records and other papers;

c) Upon proper request or representation, obtain

information and documents from the Senate and the House of
Representatives records of investigations conducted by
committees thereof relating to matters or subjects being
investigated by the Commission;

d) Upon proper request and representation, obtain

information from the courts, including the Sandiganbayan
and the Office of the Court Administrator, information or
documents in respect to corruption cases filed with the
Sandiganbayan or the regular courts, as the case may be;

e) Invite or subpoena witnesses and take their testimonies

and for that purpose, administer oaths or affirmations as the
case may be;

f) Recommend, in cases where there is a need to utilize any

person as a state witness to ensure that the ends of justice be
fully served, that such person who qualifies as a state witness
under the Revised Rules of Court of the Philippines be
admitted for that purpose;

g) Turn over from time to time, for expeditious prosecution,

to the appropriate prosecutorial authorities, by means of a
special or interim report and recommendation, all evidence
on corruption of public officers and employees and their
private sector co-principals, accomplices or accessories, if any,
when in the course of its investigation the Commission finds
that there is reasonable ground to believe that they are liable
for graft and corruption under pertinent applicable laws;

h) Call upon any government investigative or prosecutorial

agency such as the Department of Justice or any of the
agencies under it, and the Presidential Anti-Graft
Commission, for such assistance and cooperation as it may
require in the discharge of its functions and duties;
i) Engage or contract the services of resource persons,
professionals and other personnel determined by it as
necessary to carry out its mandate;

j) Promulgate its rules and regulations or rules of

procedure it deems necessary to effectively and efficiently
carry out the objectives of this Executive Order and to ensure
the orderly conduct of its investigations, proceedings and
hearings, including the presentation of evidence;

k) Exercise such other acts incident to or are appropriate

and necessary in connection with the objectives and purposes
of this Order.
SECTION 3. Staffing Requirements. x x x.

SECTION 4. Detail of Employees. x x x.

SECTION 5. Engagement of Experts. x x x

SECTION 6. Conduct of Proceedings. x x x.

SECTION 7. Right to Counsel of Witnesses/Resource Persons.
x x x.
SECTION 8. Protection of Witnesses/Resource Persons. x x x.
SECTION 9. Refusal to Obey Subpoena, Take Oath or Give
Testimony. Any government official or personnel who,
without lawful excuse, fails to appear upon subpoena issued
by the Commission or who, appearing before the Commission
refuses to take oath or affirmation, give testimony or produce
documents for inspection, when required, shall be subject to
administrative disciplinary action. Any private person who
does the same may be dealt with in accordance with law.
SECTION 10. Duty to Extend Assistance to the Commission. x
x x.
SECTION 11. Budget for the Commission. The Office of the
President shall provide the necessary funds for the
Commission to ensure that it can exercise its powers, execute
its functions, and perform its duties and responsibilities as
effectively, efficiently, and expeditiously as possible.
SECTION 12. Office. x x x.

SECTION 13. Furniture/Equipment. x x x.

SECTION 14. Term of the Commission. The Commission shall

accomplish its mission on or before December 31, 2012.

SECTION 15. Publication of Final Report. x x x.

 SECTION 16. Transfer of Records and Facilities of the
Commission. x x x.

SECTION 17. Special Provision Concerning Mandate. If and

when in the judgment of the President there is a need to
expand the mandate of the Commission as defined in Section
1 hereof to include the investigation of cases and instances of
graft and corruption during the prior administrations, such
mandate may be so extended accordingly by way of a
supplemental Executive Order.

SECTION 18. Separability Clause. If any provision of this

Order is declared unconstitutional, the same shall not affect
the validity and effectivity of the other provisions hereof.

SECTION 19. Effectivity. This Executive Order shall take

effect immediately.

DONE in the City of Manila, Philippines, this 30th day of July

2010.

(SGD.) BENIGNO S. AQUINO III

By the President:

(SGD.) PAQUITO N. OCHOA, JR.

Executive Secretary

Nature of the Truth Commission

As can be gleaned from the above-quoted provisions, the

Philippine Truth Commission (PTC) is a mere ad hoc body
formed under the Office of the President with the primary task
to investigate reports of graft and corruption committed by
third-level public officers and employees, their co-principals,
accomplices and accessories during the previous
administration, and thereafter to submit its finding and
recommendations to the President, Congress and the
Ombudsman. Though it has been described as an independent
collegial body, it is essentially an entity within the Office of the
President Proper and subject to his control. Doubtless, it
constitutes a public office, as an ad hoc body is one.[8]

To accomplish its task, the PTC shall have all the powers
of an investigative body under Section 37, Chapter 9, Book I of
the Administrative Code of 1987. It is not, however, a quasi-
judicial body as it cannot adjudicate, arbitrate, resolve, settle, or
render awards in disputes between contending parties. All it can
do is gather, collect and assess evidence of graft and corruption
and make recommendations. It may have subpoena powers but
it has no power to cite people in contempt, much less order their
arrest. Although it is a fact-finding body, it cannot determine
from such facts if probable cause exists as to warrant the filing
of an information in our courts of law. Needless to state, it
cannot impose criminal, civil or administrative penalties or
sanctions.
The PTC is different from the truth commissions in other
countries which have been created as official, transitory and
non-judicial fact-finding bodies to establish the facts and
context of serious violations of human rights or of international
humanitarian law in a countrys past.[9] They are usually
established by states emerging from periods of internal unrest,
civil strife or authoritarianism to serve as mechanisms for
transitional justice.

Truth commissions have been described as bodies that

share the following characteristics: (1) they examine only past
events; (2) they investigate patterns of abuse committed over a
period of time, as opposed to a particular event; (3) they are
temporary bodies that finish their work with the submission of
a report containing conclusions and recommendations; and (4)
they are officially sanctioned, authorized or empowered by the
State.[10] Commissions members are usually empowered to
conduct research, support victims, and propose policy
recommendations to prevent recurrence of crimes. Through
their investigations, the commissions may aim to discover and
learn more about past abuses, or formally acknowledge them.
They may aim to prepare the way for prosecutions and
recommend institutional reforms.[11]

Thus, their main goals range from retribution to

reconciliation. The Nuremburg and Tokyo war crime tribunals
are examples of a retributory or vindicatory body set up to try
and punish those responsible for crimes against humanity. A
form of a reconciliatory tribunal is the Truth and Reconciliation
Commission of South Africa, the principal function of which
was to heal the wounds of past violence and to prevent future
conflict by providing a cathartic experience for victims.

The PTC is a far cry from South Africas model. The latter
placed more emphasis on reconciliation than on judicial
retribution, while the marching order of the PTC is the
identification and punishment of perpetrators. As one
writer[12] puts it:

The order ruled out reconciliation. It translated

the Draconian code spelled out by Aquino in his
inaugural speech: To those who talk about
reconciliation, if they mean that they would like us to
simply forget about the wrongs that they have
committed in the past, we have this to say: There can
be no reconciliation without justice. When we allow
crimes to go unpunished, we give consent to their
occurring over and over again.

The Thrusts of the Petitions

Barely a month after the issuance of Executive Order No.

1, the petitioners asked the Court to declare it unconstitutional
and to enjoin the PTC from performing its functions. A perusal
of the arguments of the petitioners in both cases shows that they
are essentially the same. The petitioners-legislators
summarized them in the following manner:
 (a) E.O. No. 1 violates the separation of powers as
it arrogates the power of the Congress to create a
public office and appropriate funds for its operation.

(b) The provision of Book III, Chapter 10, Section

31 of the Administrative Code of 1987 cannot
legitimize E.O. No. 1 because the delegated authority
of the President to structurally reorganize the Office of
the President to achieve economy, simplicity and
efficiency does not include the power to create an
entirely new public office which was hitherto
inexistent like the Truth Commission.

(c) E.O. No. 1 illegally amended the Constitution

and pertinent statutes when it vested the Truth
Commission with quasi-judicial powers duplicating, if
not superseding, those of the Office of the
Ombudsman created under the 1987 Constitution and
the Department of Justice created under the
Administrative Code of 1987.

(d) E.O. No. 1 violates the equal protection clause

as it selectively targets for investigation and
prosecution officials and personnel of the previous
administration as if corruption is their peculiar species
even as it excludes those of the other administrations,
past and present, who may be indictable.

(e) The creation of the Philippine Truth

Commission of 2010 violates the consistent and
general international practice of four decades wherein
States constitute truth commissions to exclusively
investigate human rights violations, which customary
practice forms part of the generally accepted principles
of international law which the Philippines is mandated
to adhere to pursuant to the Declaration of Principles
enshrined in the Constitution.
 (f) The creation of the Truth Commission is an
exercise in futility, an adventure in partisan hostility, a
launching pad for trial/conviction by publicity and a
mere populist propaganda to mistakenly impress the
people that widespread poverty will altogether vanish
if corruption is eliminated without even addressing the
other major causes of poverty.

(g) The mere fact that previous commissions were

not constitutionally challenged is of no moment
because neither laches nor estoppel can bar an eventual
question on the constitutionality and validity of an
executive issuance or even a statute.[13]

In their Consolidated Comment,[14] the respondents,

through the Office of the Solicitor General (OSG), essentially
questioned the legal standing of petitioners and defended the
assailed executive order with the following arguments:

1] E.O. No. 1 does not arrogate the powers of

Congress to create a public office because the
Presidents executive power and power of control
necessarily include the inherent power to conduct
investigations to ensure that laws are faithfully
executed and that, in any event, the Constitution,
Revised Administrative Code of 1987 (E.O. No.
292), [15] Presidential Decree (P.D.) No. 1416[16] (as
amended by P.D. No. 1772), R.A. No. 9970,[17] and
settled jurisprudence that authorize the President to
create or form such bodies.

2] E.O. No. 1 does not usurp the power of

Congress to appropriate funds because there is no
appropriation but a mere allocation of funds already
appropriated by Congress.
 3] The Truth Commission does not duplicate or
supersede the functions of the Office of the
Ombudsman (Ombudsman) and the Department of
Justice (DOJ), because it is a fact-finding body and
not a quasi-judicial body and its functions do not
duplicate, supplant or erode the latters jurisdiction.

4] The Truth Commission does not violate the

equal protection clause because it was validly created
for laudable purposes.

The OSG then points to the continued existence and

validity of other executive orders and presidential issuances
creating similar bodies to justify the creation of the PTC such
as Presidential Complaint and Action Commission (PCAC)by
President Ramon B. Magsaysay, Presidential Committee on
Administrative Performance Efficiency (PCAPE) by President
Carlos P. Garcia and Presidential Agency on Reform and
Government Operations (PARGO) by President Ferdinand E.
Marcos.[18]
From the petitions, pleadings, transcripts, and memoranda,
the following are the principal issues to be resolved:

1. Whether or not the petitioners have the

legal standing to file their respective petitions and
question Executive Order No. 1;

2. Whether or not Executive Order No. 1

violates the principle of separation of powers by
usurping the powers of Congress to create and to
appropriate funds for public offices, agencies and
commissions;
3. Whether or not Executive Order No. 1
supplants the powers of the Ombudsman and the DOJ;
 4. Whether or not Executive Order No. 1 violates
the equal protection clause; and

5. Whether or not petitioners are entitled to

injunctive relief.

Essential requisites for judicial review

Before proceeding to resolve the issue of the constitutionality

of Executive Order No. 1, the Court needs to ascertain whether
the requisites for a valid exercise of its power of judicial review
are present.

Like almost all powers conferred by the Constitution, the power

of judicial review is subject to limitations, to wit: (1) there must
be an actual case or controversy calling for the exercise of
judicial power; (2) the person challenging the act must have the
standing to question the validity of the subject act or issuance;
otherwise stated, he must have a personal and substantial
interest in the case such that he has sustained, or will sustain,
direct injury as a result of its enforcement; (3) the question of
constitutionality must be raised at the earliest opportunity; and
(4) the issue of constitutionality must be the very lis mota of the
case.[19]

Among all these limitations, only the legal standing of the

petitioners has been put at issue.

Legal Standing of the Petitioners

The OSG attacks the legal personality of the petitioners-

legislators to file their petition for failure to demonstrate their
personal stake in the outcome of the case. It argues that the
petitioners have not shown that they have sustained or are in
danger of sustaining any personal injury attributable to the
creation of the PTC. Not claiming to be the subject of the
commissions investigations, petitioners will not sustain injury
in its creation or as a result of its proceedings.[20]

The Court disagrees with the OSG in questioning the legal

standing of the petitioners-legislators to assail Executive
Order No. 1. Evidently, their petition primarily invokes
usurpation of the power of the Congress as a body to which they
belong as members. This certainly justifies their resolve to take
the cudgels for Congress as an institution and present the
complaints on the usurpation of their power and rights as
members of the legislature before the Court. As held
in Philippine Constitution Association v. Enriquez,[21]

To the extent the powers of Congress are impaired,

so is the power of each member thereof, since his office
confers a right to participate in the exercise of the
powers of that institution.
An act of the Executive which injures the
institution of Congress causes a derivative but
nonetheless substantial injury, which can be
questioned by a member of Congress. In such a case,
any member of Congress can have a resort to the
courts.

Indeed, legislators have a legal standing to see to it that the

prerogative, powers and privileges vested by the Constitution
in their office remain inviolate.Thus, they are allowed to
question the validity of any official action which, to their mind,
infringes on their prerogatives as legislators.[22]

With regard to Biraogo, the OSG argues that, as a taxpayer,

he has no standing to question the creation of the PTC and the
budget for its operations.[23] It emphasizes that the funds to be
used for the creation and operation of the commission are to be
taken from those funds already appropriated by Congress.
Thus, the allocation and disbursement of funds for the
commission will not entail congressional action but will simply
be an exercise of the Presidents power over contingent funds.
 As correctly pointed out by the OSG, Biraogo has not
shown that he sustained, or is in danger of sustaining, any
personal and direct injury attributable to the implementation of
Executive Order No. 1. Nowhere in his petition is an assertion
of a clear right that may justify his clamor for the Court to
exercise judicial power and to wield the axe over presidential
issuances in defense of the Constitution. The case of David v.
Arroyo[24] explained the deep-seated rules on locus standi.
Thus:

Locus standi is defined as a right of appearance in

a court of justice on a given question. In private suits,
standing is governed by the real-parties-in interest rule
as contained in Section 2, Rule 3 of the 1997 Rules of
Civil Procedure, as amended. It provides that every
action must be prosecuted or defended in the name of the
real party in interest. Accordingly, the real-party-in
interest is the party who stands to be benefited or
injured by the judgment in the suit or the party entitled
to the avails of the suit.Succinctly put, the plaintiffs
standing is based on his own right to the relief sought.

The difficulty of determining locus standi arises

in public suits. Here, the plaintiff who asserts a public
right in assailing an allegedly illegal official action, does
so as a representative of the general public. He may be
a person who is affected no differently from any other
person. He could be suing as a stranger, or in the
category of a citizen, or taxpayer. In either case, he has
to adequately show that he is entitled to seek judicial
protection. In other words, he has to make out a
sufficient interest in the vindication of the public order
and the securing of relief as a citizen or taxpayer.

Case law in most jurisdictions now allows both

citizen and taxpayer standing in public actions. The
distinction was first laid down in Beauchamp v. Silk,
where it was held that the plaintiff in a taxpayers suit is
in a different category from the plaintiff in a citizens
suit. In the former, the plaintiff is affected by the
expenditure of public funds, while in the latter, he is
but the mere instrument of the public concern. As held
by the New York Supreme Court in People ex rel Case
v. Collins: In matter of mere public right, howeverthe
people are the real partiesIt is at least the right, if not
the duty, of every citizen to interfere and see that a
public offence be properly pursued and punished, and
that a public grievance be remedied. With respect to
taxpayers suits, Terr v. Jordan held that the right of a
citizen and a taxpayer to maintain an action in courts
to restrain the unlawful use of public funds to his injury
cannot be denied.

However, to prevent just about any person from

seeking judicial interference in any official policy or act
with which he disagreed with, and thus hinders the
activities of governmental agencies engaged in public
service, the United State Supreme Court laid down the
more stringent direct injury test in Ex Parte Levitt,
later reaffirmed in Tileston v. Ullman. The same Court
ruled that for a private individual to invoke the judicial
power to determine the validity of an executive or
legislative action, he must show that he has sustained a
direct injury as a result of that action, and it is not
sufficient that he has a general interest common to all
members of the public.

This Court adopted the direct injury test in our

jurisdiction. In People v. Vera, it held that the person
who impugns the validity of a statute must have a
personal and substantial interest in the case such that he
has sustained, or will sustain direct injury as a
result. The Vera doctrine was upheld in a litany of
cases, such as, Custodio v. President of the
Senate, Manila Race Horse Trainers Association v. De
la Fuente, Pascual v. Secretary of Public
Works and Anti-Chinese League of the Philippines v.
Felix. [Emphases included. Citations omitted]
 Notwithstanding, the Court leans on the doctrine that the
rule on standing is a matter of procedure, hence, can be relaxed
for nontraditional plaintiffs like ordinary citizens, taxpayers,
and legislators when the public interest so requires, such as
when the matter is of transcendental importance, of
overreaching significance to society, or of paramount public
interest.[25]

Thus, in Coconut Oil Refiners Association, Inc. v.

Torres,[26] the Court held that in cases of paramount importance
where serious constitutional questions are involved, the
standing requirements may be relaxed and a suit may be
allowed to prosper even where there is no direct injury to the
party claiming the right of judicial review. In the
first Emergency Powers Cases,[27] ordinary citizens and
taxpayers were allowed to question the constitutionality of
several executive orders although they had only an indirect and
general interest shared in common with the public.

The OSG claims that the determinants of transcendental

importance[28] laid down in CREBA v. ERC and Meralco[29] are
non-existent in this case. The Court, however, finds reason in
Biraogos assertion that the petition covers matters of
transcendental importance to justify the exercise of jurisdiction
by the Court. There are constitutional issues in the petition
which deserve the attention of this Court in view of their
seriousness, novelty and weight as precedents. Where the issues
are of transcendental and paramount importance not only to the
public but also to the Bench and the Bar, they should be
resolved for the guidance of all.[30]Undoubtedly, the Filipino
people are more than interested to know the status of the
Presidents first effort to bring about a promised change to the
country. The Court takes cognizance of the petition not due to
overwhelming political undertones that clothe the issue in the
eyes of the public, but because the Court stands firm in its oath
to perform its constitutional duty to settle legal controversies
with overreaching significance to society.
 Power of the President to Create the Truth Commission

In his memorandum in G.R. No. 192935, Biraogo asserts

that the Truth Commission is a public office and not merely an
adjunct body of the Office of the President.[31] Thus, in order
that the President may create a public office he must be
empowered by the Constitution, a statute or an authorization
vested in him by law. According to petitioner, such power
cannot be presumed[32] since there is no provision in the
Constitution or any specific law that authorizes the President to
create a truth commission.[33] He adds that Section 31 of the
Administrative Code of 1987, granting the President the
continuing authority to reorganize his office, cannot serve as
basis for the creation of a truth commission considering the
aforesaid provision merely uses verbs such as reorganize,
transfer, consolidate, merge, and abolish.[34] Insofar as it vests
in the President the plenary power to reorganize the Office of
the President to the extent of creating a public office, Section
31 is inconsistent with the principle of separation of powers
enshrined in the Constitution and must be deemed repealed
upon the effectivity thereof.[35]

Similarly, in G.R. No. 193036, petitioners-legislators argue

that the creation of a public office lies within the province of
Congress and not with the executive branch of
government. They maintain that the delegated authority of the
President to reorganize under Section 31 of the Revised
Administrative Code: 1) does not permit the President to create
a public office, much less a truth commission; 2) is limited to
the reorganization of the administrative structure of the Office
of the President; 3) is limited to the restructuring of the internal
organs of the Office of the President Proper, transfer of
functions and transfer of agencies; and 4) only to achieve
simplicity, economy and efficiency.[36] Such continuing
authority of the President to reorganize his office is limited, and
by issuing Executive Order No. 1, the President overstepped the
limits of this delegated authority.

The OSG counters that there is nothing exclusively

legislative about the creation by the President of a fact-finding
body such as a truth commission. Pointing to numerous offices
created by past presidents, it argues that the authority of the
President to create public offices within the Office of the
President Proper has long been recognized.[37] According to the
OSG, the Executive, just like the other two branches of
government, possesses the inherent authority to create fact-
finding committees to assist it in the performance of its
constitutionally mandated functions and in the exercise of its
administrative functions.[38] This power, as the OSG explains it,
is but an adjunct of the plenary powers wielded by the President
under Section 1 and his power of control under Section 17, both
of Article VII of the Constitution.[39]

It contends that the President is necessarily vested with the

power to conduct fact-finding investigations, pursuant to his
duty to ensure that all laws are enforced by public officials and
employees of his department and in the exercise of his authority
to assume directly the functions of the executive department,
bureau and office, or interfere with the discretion of his
officials.[40] The power of the President to investigate is not
limited to the exercise of his power of control over his
subordinates in the executive branch, but extends further in the
exercise of his other powers, such as his power to discipline
subordinates,[41] his power for rule making, adjudication and
licensing purposes[42] and in order to be informed on matters
which he is entitled to know.[43]

The OSG also cites the recent case of Banda v.

Ermita,[44] where it was held that the President has the power to
reorganize the offices and agencies in the executive department
in line with his constitutionally granted power of control and by
virtue of a valid delegation of the legislative power to
reorganize executive offices under existing statutes.

Thus, the OSG concludes that the power of control

necessarily includes the power to create offices. For the OSG,
the President may create the PTC in order to, among others, put
a closure to the reported large scale graft and corruption in the
government.[45]

The question, therefore, before the Court is this: Does the

creation of the PTC fall within the ambit of the power to
reorganize as expressed in Section 31 of the Revised
Administrative Code? Section 31 contemplates reorganization
as limited by the following functional and structural lines: (1)
restructuring the internal organization of the Office of the
President Proper by abolishing, consolidating or merging units
thereof or transferring functions from one unit to another; (2)
transferring any function under the Office of the President to
any other Department/Agency or vice versa; or (3) transferring
any agency under the Office of the President to any other
Department/Agency or vice versa. Clearly, the provision refers
to reduction of personnel, consolidation of offices, or abolition
thereof by reason of economy or redundancy of
functions. These point to situations where a body or an office is
already existent but a modification or alteration thereof has to
be effected. The creation of an office is nowhere mentioned,
much less envisioned in said provision. Accordingly, the
answer to the question is in the negative.

To say that the PTC is borne out of a restructuring of the

Office of the President under Section 31 is a misplaced
supposition, even in the plainest meaning attributable to the
term restructure an alteration of an existing
structure. Evidently, the PTC was not part of the structure of the
Office of the President prior to the enactment of Executive
Order No. 1. As held in Buklod ng Kawaning EIIB v. Hon.
Executive Secretary,[46]
 But of course, the list of legal basis authorizing the
President to reorganize any department or agency in
the executive branch does not have to end here. We
must not lose sight of the very source of the power that
which constitutes an express grant of power. Under
Section 31, Book III of Executive Order No. 292
(otherwise known as the Administrative Code of 1987),
"the President, subject to the policy in the Executive
Office and in order to achieve simplicity, economy and
efficiency, shall have the continuing authority to
reorganize the administrative structure of the Office of
the President." For this purpose, he may transfer the
functions of other Departments or Agencies to the
Office of the President. In Canonizado v. Aguirre [323
SCRA 312 (2000)], we ruled that reorganization
"involves the reduction of personnel, consolidation of
offices, or abolition thereof by reason of economy or
redundancy of functions." It takes place when there is
an alteration of the existing structure of government
offices or units therein, including the lines of control,
authority and responsibility between them. The EIIB is a
bureau attached to the Department of Finance. It falls
under the Office of the President. Hence, it is subject to
the Presidents continuing authority to reorganize.
[Emphasis Supplied]

In the same vein, the creation of the PTC is not justified by

the Presidents power of control. Control is essentially the power
to alter or modify or nullify or set aside what a subordinate
officer had done in the performance of his duties and to
substitute the judgment of the former with that of the
latter.[47] Clearly, the power of control is entirely different from
the power to create public offices. The former is inherent in the
Executive, while the latter finds basis from either a valid
delegation from Congress, or his inherent duty to faithfully
execute the laws.
 The question is this, is there a valid delegation of power
from Congress, empowering the President to create a public
office?

According to the OSG, the power to create a truth

commission pursuant to the above provision finds statutory
basis under P.D. 1416, as amended by P.D. No. 1772.[48] The
said law granted the President the continuing authority to
reorganize the national government, including the power to
group, consolidate bureaus and agencies, to abolish offices, to
transfer functions, to create and classify functions, services and
activities, transfer appropriations, and to standardize salaries
and materials. This decree, in relation to Section 20, Title I,
Book III of E.O. 292 has been invoked in several cases such
as Larin v. Executive Secretary.[49]

The Court, however, declines to recognize P.D. No. 1416

as a justification for the President to create a public office. Said
decree is already stale, anachronistic and inoperable. P.D. No.
1416 was a delegation to then President Marcos of the authority
to reorganize the administrative structure of the national
government including the power to create offices and transfer
appropriations pursuant to one of the purposes of the decree,
embodied in its last Whereas clause:
WHEREAS, the transition towards
the parliamentary form of government will
necessitate flexibility in the organization of the
national government.

Clearly, as it was only for the purpose of providing

manageability and resiliency during the interim, P.D. No. 1416,
as amended by P.D. No. 1772, became functus oficio upon the
convening of the First Congress, as expressly provided in
Section 6, Article XVIII of the 1987 Constitution. In fact, even
the Solicitor General agrees with this view. Thus:
 ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was
enacted was the last whereas
clause of P.D. 1416 says it was
enacted to prepare the
transition from presidential to
parliamentary. Now, in a
parliamentary form of
government, the legislative
and executive powers are
fused, correct?

SOLICITOR GENERAL CADIZ: Yes, Your Honor.

ASSOCIATE JUSTICE CARPIO: That is why, that P.D.

1416 was issued. Now would
you agree with me that P.D.
1416 should not be considered
effective anymore upon the
promulgation, adoption,
ratification of the 1987
Constitution.

SOLICITOR GENERAL CADIZ: Not the whole of P.D.

[No.] 1416, Your Honor.

ASSOCIATE JUSTICE CARPIO: The power of the

President to reorganize the
entire National Government is
deemed repealed, at least,
upon the adoption of the 1987
Constitution, correct.

SOLICITOR GENERAL CADIZ: Yes, Your Honor.[50]

While the power to create a truth commission cannot pass

muster on the basis of P.D. No. 1416 as amended by P.D. No.
1772, the creation of the PTC finds justification under Section
17, Article VII of the Constitution, imposing upon the President
the duty to ensure that the laws are faithfully executed. Section
17 reads:
 Section 17. The President shall have control of all
the executive departments, bureaus, and offices. He
shall ensure that the laws be faithfully
executed. (Emphasis supplied).

As correctly pointed out by the respondents, the allocation

of power in the three principal branches of government is a
grant of all powers inherent in them. The Presidents power to
conduct investigations to aid him in ensuring the faithful
execution of laws in this case, fundamental laws on public
accountability and transparency is inherent in the Presidents
powers as the Chief Executive. That the authority of the
President to conduct investigations and to create bodies to
execute this power is not explicitly mentioned in the
Constitution or in statutes does not mean that he is bereft of such
authority.[51] As explained in the landmark case of Marcos v.
Manglapus:[52]

x x x. The 1987 Constitution, however, brought

back the presidential system of government and
restored the separation of legislative, executive and
judicial powers by their actual distribution among
three distinct branches of government with provision
for checks and balances.

It would not be accurate, however, to state that

"executive power" is the power to enforce the laws, for
the President is head of state as well as head of
government and whatever powers inhere in such
positions pertain to the office unless the Constitution
itself withholds it. Furthermore, the Constitution itself
provides that the execution of the laws is only one of
the powers of the President. It also grants the President
other powers that do not involve the execution of any
provision of law, e.g., his power over the country's
foreign relations.
 On these premises, we hold the view that although
the 1987 Constitution imposes limitations on the
exercise of specific powers of the President, it
maintains intact what is traditionally considered as
within the scope of "executive power." Corollarily, the
powers of the President cannot be said to be limited
only to the specific powers enumerated in the
Constitution. In other words, executive power is more
than the sum of specific powers so enumerated.

It has been advanced that whatever power

inherent in the government that is neither legislative
nor judicial has to be executive. x x x.

Indeed, the Executive is given much leeway in ensuring that our

laws are faithfully executed. As stated above, the powers of the
President are not limited to those specific powers under the
Constitution.[53] One of the recognized powers of the President
granted pursuant to this constitutionally-mandated duty is the
power to create ad hoc committees. This flows from the
obvious need to ascertain facts and determine if laws have been
faithfully executed. Thus, in Department of Health v.
Camposano,[54] the authority of the President to issue
Administrative Order No. 298, creating an investigative
committee to look into the administrative charges filed against
the employees of the Department of Health for the anomalous
purchase of medicines was upheld. In said case, it was ruled:

The Chief Executives power to create the Ad

hoc Investigating Committee cannot be doubted. Having
been constitutionally granted full control of the
Executive Department, to which respondents belong,
the President has the obligation to ensure that all
executive officials and employees faithfully comply
with the law. With AO 298 as mandate, the legality of
the investigation is sustained. Such validity is not
affected by the fact that the investigating team and the
PCAGC had the same composition, or that the former
 used the offices and facilities of the latter in conducting
the inquiry. [Emphasis supplied]

It should be stressed that the purpose of allowing ad

hoc investigating bodies to exist is to allow an inquiry into
matters which the President is entitled to know so that he can
be properly advised and guided in the performance of his duties
relative to the execution and enforcement of the laws of the
land. And if history is to be revisited, this was also the objective
of the investigative bodies created in the past like the PCAC,
PCAPE, PARGO, the Feliciano Commission, the Melo
Commission and the Zenarosa Commission. There being no
changes in the government structure, the Court is not inclined
to declare such executive power as non-existent just because the
direction of the political winds have changed.

On the charge that Executive Order No. 1 transgresses the

power of Congress to appropriate funds for the operation of a
public office, suffice it to say that there will be no appropriation
but only an allotment or allocations of existing funds already
appropriated. Accordingly, there is no usurpation on the part of
the Executive of the power of Congress to appropriate funds.
Further, there is no need to specify the amount to be earmarked
for the operation of the commission because, in the words of the
Solicitor General, whatever funds the Congress has provided
for the Office of the President will be the very source of the
funds for the commission.[55]Moreover, since the amount that
would be allocated to the PTC shall be subject to existing
auditing rules and regulations, there is no impropriety in the
funding.

Power of the Truth Commission to Investigate

The Presidents power to conduct investigations to ensure that

laws are faithfully executed is well recognized. It flows from
the faithful-execution clause of the Constitution under Article
VII, Section 17 thereof.[56] As the Chief Executive, the
president represents the government as a whole and sees to it
that all laws are enforced by the officials and employees of his
department. He has the authority to directly assume the
functions of the executive department.[57]

Invoking this authority, the President constituted the PTC to

primarily investigate reports of graft and corruption and to
recommend the appropriate action. As previously stated, no
quasi-judicial powers have been vested in the said body as it
cannot adjudicate rights of persons who come before it. It has
been said that Quasi-judicial powers involve the power to hear
and determine questions of fact to which the legislative policy
is to apply and to decide in accordance with the standards laid
down by law itself in enforcing and administering the same
law.[58] In simpler terms, judicial discretion is involved in the
exercise of these quasi-judicial power, such that it is exclusively
vested in the judiciary and must be clearly authorized by the
legislature in the case of administrative agencies.

The distinction between the power to investigate and the

power to adjudicate was delineated by the Court in Cario v.
Commission on Human Rights.[59] Thus:

"Investigate," commonly understood, means to

examine, explore, inquire or delve or probe into,
research on, study. The dictionary definition of
"investigate" is "to observe or study closely: inquire
into systematically: "to search or inquire into: x x to
subject to an official probe x x: to conduct an official
inquiry." The purpose of investigation, of course, is to
discover, to find out, to learn, obtain information.
Nowhere included or intimated is the notion of settling,
deciding or resolving a controversy involved in the facts
inquired into by application of the law to the facts
established by the inquiry.
The legal meaning of "investigate" is essentially
the same: "(t)o follow up step by step by patient inquiry
or observation. To trace or track; to search into; to
 examine and inquire into with care and accuracy; to
find out by careful inquisition; examination; the taking
of evidence; a legal inquiry;" "to inquire; to make an
investigation," "investigation" being in turn described
as "(a)n administrative function, the exercise of which
ordinarily does not require a hearing. 2 Am J2d Adm L
Sec. 257; x x an inquiry, judicial or otherwise, for the
discovery and collection of facts concerning a certain
matter or matters."
"Adjudicate," commonly or popularly understood,
means to adjudge, arbitrate, judge, decide, determine,
resolve, rule on, settle. The dictionary defines the term
as "to settle finally (the rights and duties of the parties
to a court case) on the merits of issues raised: x x to
pass judgment on: settle judicially: x x act as judge."
And "adjudge" means "to decide or rule upon as a judge
or with judicial or quasi-judicial powers: x x to award
or grant judicially in a case of controversy x x."
In the legal sense, "adjudicate" means: "To settle
in the exercise of judicial authority. To determine
finally. Synonymous with adjudge in its strictest
sense;" and "adjudge" means: "To pass on judicially, to
decide, settle or decree, or to sentence or condemn. x x.
Implies a judicial determination of a fact, and the entry
of a judgment." [Italics included. Citations Omitted]

Fact-finding is not adjudication and it cannot be likened to

the judicial function of a court of justice, or even a quasi-
judicial agency or office. The function of receiving evidence
and ascertaining therefrom the facts of a controversy is not a
judicial function. To be considered as such, the act of receiving
evidence and arriving at factual conclusions in a controversy
must be accompanied by the authority of applying the law to
the factual conclusions to the end that the controversy may be
decided or resolved authoritatively, finally and definitively,
subject to appeals or modes of review as may be provided by
law.[60] Even respondents themselves admit that the
commission is bereft of any quasi-judicial power.[61]
Contrary to petitioners apprehension, the PTC will not supplant
the Ombudsman or the DOJ or erode their respective powers. If
at all, the investigative function of the commission will
complement those of the two offices. As pointed out by the
Solicitor General, the recommendation to prosecute is but a
consequence of the overall task of the commission to conduct a
fact-finding investigation.[62] The actual prosecution of
suspected offenders, much less adjudication on the merits of the
charges against them,[63] is certainly not a function given to the
commission.The phrase, when in the course of its investigation,
under Section 2(g), highlights this fact and gives credence to a
contrary interpretation from that of the petitioners.The function
of determining probable cause for the filing of the appropriate
complaints before the courts remains to be with the DOJ and
the Ombudsman.[64]

At any rate, the Ombudsmans power to investigate under R.A.

No. 6770 is not exclusive but is shared with other similarly
authorized government agencies. Thus, in the case
of Ombudsman v. Galicia,[65] it was written:

This power of investigation granted to the Ombudsman

by the 1987 Constitution and The Ombudsman Act is
not exclusive but is shared with other similarly
authorized government agencies such as the PCGG and
judges of municipal trial courts and municipal circuit
trial courts. The power to conduct preliminary
investigation on charges against public employees and
officials is likewise concurrently shared with the
Department of Justice. Despite the passage of the Local
Government Code in 1991, the Ombudsman retains
concurrent jurisdiction with the Office of the President
and the local Sanggunians to investigate complaints
against local elective officials. [Emphasis supplied].

Also, Executive Order No. 1 cannot contravene the power of

the Ombudsman to investigate criminal cases under Section 15
(1) of R.A. No. 6770, which states:
 (1) Investigate and prosecute on its own or on
complaint by any person, any act or omission of any
public officer or employee, office or agency, when such
act or omission appears to be illegal, unjust, improper
or inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise
of its primary jurisdiction, it may take over, at any stage,
from any investigatory agency of government, the
investigation of such cases. [Emphases supplied]

The act of investigation by the Ombudsman as enunciated

above contemplates the conduct of a preliminary investigation
or the determination of the existence of probable cause. This is
categorically out of the PTCs sphere of functions. Its power to
investigate is limited to obtaining facts so that it can advise and
guide the President in the performance of his duties relative to
the execution and enforcement of the laws of the land. In this
regard, the PTC commits no act of usurpation of the
Ombudsmans primordial duties.

The same holds true with respect to the DOJ. Its authority under
Section 3 (2), Chapter 1, Title III, Book IV in the Revised
Administrative Code is by no means exclusive and, thus, can be
shared with a body likewise tasked to investigate the
commission of crimes.

Finally, nowhere in Executive Order No. 1 can it be inferred

that the findings of the PTC are to be accorded conclusiveness.
Much like its predecessors, the Davide Commission, the
Feliciano Commission and the Zenarosa Commission, its
findings would, at best, be recommendatory in nature. And
being so, the Ombudsman and the DOJ have a wider degree of
latitude to decide whether or not to reject the recommendation.
These offices, therefore, are not deprived of their mandated
duties but will instead be aided by the reports of the PTC for
possible indictments for violations of graft laws.
 Violation of the Equal Protection Clause

Although the purpose of the Truth Commission falls within

the investigative power of the President, the Court finds
difficulty in upholding the constitutionality of Executive Order
No. 1 in view of its apparent transgression of the equal
protection clause enshrined in Section 1, Article III (Bill of
Rights) of the 1987 Constitution. Section 1 reads:

Section 1. No person shall be deprived of life,

liberty, or property without due process of law, nor
shall any person be denied the equal protection of the
laws.

The petitioners assail Executive Order No. 1 because it is

violative of this constitutional safeguard. They contend that it
does not apply equally to all members of the same class such
that the intent of singling out the previous administration as its
sole object makes the PTC an adventure in partisan
hostility.[66] Thus, in order to be accorded with validity, the
commission must also cover reports of graft and corruption in
virtually all administrations previous to that of former President
Arroyo.[67]

The petitioners argue that the search for truth behind the
reported cases of graft and corruption must encompass acts
committed not only during the administration of former
President Arroyo but also during prior administrations where
the same magnitude of controversies and anomalies[68] were
reported to have been committed against the Filipino
people. They assail the classification formulated by the
respondents as it does not fall under the recognized exceptions
because first, there is no substantial distinction between the
group of officials targeted for investigation by Executive Order
No. 1 and other groups or persons who abused their public
office for personal gain; and second, the selective classification
is not germane to the purpose of Executive Order No. 1 to end
corruption.[69] In order to attain constitutional permission, the
petitioners advocate that the commission should deal with graft
and grafters prior and subsequent to the Arroyo administration
with the strong arm of the law with equal force.[70]

Position of respondents

According to respondents, while Executive Order No. 1

identifies the previous administration as the initial subject of the
investigation, following Section 17 thereof, the PTC will not
confine itself to cases of large scale graft and corruption solely
during the said administration.[71] Assuming arguendo that the
commission would confine its proceedings to officials of the
previous administration, the petitioners argue that no offense is
committed against the equal protection clause for the
segregation of the transactions of public officers during the
previous administration as possible subjects of investigation is
a valid classification based on substantial distinctions and is
germane to the evils which the Executive Order seeks to
correct.[72] To distinguish the Arroyo administration from past
administrations, it recited the following:

First. E.O. No. 1 was issued in view

of widespread reports of large scale graft and
corruption in the previous administration which have
eroded public confidence in public institutions. There
is, therefore, an urgent call for the determination of the
truth regarding certain reports of large scale graft and
corruption in the government and to put a closure to
them by the filing of the appropriate cases against
those involved, if warranted, and to deter others from
committing the evil, restore the peoples faith and
confidence in the Government and in their public
servants.
 Second. The segregation of the preceding
administration as the object of fact-finding is
warranted by the reality that unlike with
administrations long gone, the current administration
will most likely bear the immediate consequence of
the policies of the previous administration.

Third. The classification of the previous

administration as a separate class for investigation lies
in the reality that the evidence of possible criminal
activity, the evidence that could lead to recovery of
public monies illegally dissipated, the policy lessons
to be learned to ensure that anti-corruption laws are
faithfully executed, are more easily established in the
regime that immediately precede the current
administration.

Fourth. Many administrations subject the

transactions of their predecessors to investigations to
provide closure to issues that are pivotal to national
life or even as a routine measure of due diligence and
good housekeeping by a nascent administration like
the Presidential Commission on Good Government
(PCGG), created by the late President Corazon C.
Aquino under Executive Order No. 1 to pursue the
recovery of ill-gotten wealth of her predecessor former
President Ferdinand Marcos and his cronies, and
the Saguisag Commission created by former President
Joseph Estrada under Administrative Order No, 53, to
form an ad-hoc and independent citizens committee to
investigate all the facts and circumstances surrounding
Philippine Centennial projects of his predecessor,
former President Fidel V. Ramos.[73] [Emphases
supplied]

Concept of the Equal Protection Clause

One of the basic principles on which this government was
founded is that of the equality of right which is embodied in
Section 1, Article III of the 1987 Constitution. The equal
protection of the laws is embraced in the concept of due process,
as every unfair discrimination offends the requirements of
justice and fair play. It has been embodied in a separate clause,
however, to provide for a more specific guaranty against any
form of undue favoritism or hostility from the government.
Arbitrariness in general may be challenged on the basis of the
due process clause. But if the particular act assailed partakes of
an unwarranted partiality or prejudice, the sharper weapon to
cut it down is the equal protection clause.[74]

According to a long line of decisions, equal

protection simply requires that all persons or things similarly
situated should be treated alike, both as to rights conferred and
responsibilities imposed.[75] It requires public bodies and
institutions to treat similarly situated individuals in a similar
manner.[76] The purpose of the equal protection clause is to
secure every person within a states jurisdiction against
intentional and arbitrary discrimination, whether occasioned by
the express terms of a statue or by its improper execution
through the states duly constituted authorities.[77] In other
words, the concept of equal justice under the law requires the
state to govern impartially, and it may not draw distinctions
between individuals solely on differences that are irrelevant to
a legitimate governmental objective.[78]

The equal protection clause is aimed at all official state

actions, not just those of the legislature.[79] Its inhibitions cover
all the departments of the government including the political
and executive departments, and extend to all actions of a state
denying equal protection of the laws, through whatever agency
or whatever guise is taken. [80]

It, however, does not require the universal application of

the laws to all persons or things without distinction. What it
simply requires is equality among equals as determined
according to a valid classification. Indeed, the equal protection
clause permits classification. Such classification, however, to
be valid must pass the test of reasonableness. The test has four
requisites: (1) The classification rests on substantial
distinctions; (2) It is germane to the purpose of the law; (3) It is
not limited to existing conditions only; and
(4) It applies equally to all members of the same
class.[81] Superficial differences do not make for a valid
classification.[82]

For a classification to meet the requirements of

constitutionality, it must include or embrace all persons who
naturally belong to the class.[83] The classification will be
regarded as invalid if all the members of the class are not
similarly treated, both as to rights conferred and obligations
imposed. It is not necessary that the classification be made with
absolute symmetry, in the sense that the members of the class
should possess the same characteristics in equal
degree.Substantial similarity will suffice; and as long as this is
achieved, all those covered by the classification are to be treated
equally. The mere fact that an individual belonging to a class
differs from the other members, as long as that class is
substantially distinguishable from all others, does not justify the
non-application of the law to him.[84]

The classification must not be based on existing

circumstances only, or so constituted as to preclude addition to
the number included in the class. It must be of such a nature as
to embrace all those who may thereafter be in similar
circumstances and conditions. It must not leave out or
underinclude those that should otherwise fall into a certain
classification. As elucidated in Victoriano v. Elizalde Rope
Workers' Union[85] and reiterated in a long line of cases,[86]
The guaranty of equal protection of the laws is not
a guaranty of equality in the application of the laws
upon all citizens of the state. It is not, therefore, a
requirement, in order to avoid the constitutional
 prohibition against inequality, that every man, woman
and child should be affected alike by a statute. Equality
of operation of statutes does not mean indiscriminate
operation on persons merely as such, but on persons
according to the circumstances surrounding them. It
guarantees equality, not identity of rights. The
Constitution does not require that things which are
different in fact be treated in law as though they were
the same. The equal protection clause does not forbid
discrimination as to things that are different. It does
not prohibit legislation which is limited either in the
object to which it is directed or by the territory within
which it is to operate.

The equal protection of the laws clause of the

Constitution allows classification. Classification in law,
as in the other departments of knowledge or practice,
is the grouping of things in speculation or practice
because they agree with one another in certain
particulars. A law is not invalid because of simple
inequality. The very idea of classification is that of
inequality, so that it goes without saying that the mere
fact of inequality in no manner determines the matter
of constitutionality. All that is required of a valid
classification is that it be reasonable, which means that
the classification should be based on substantial
distinctions which make for real differences, that it
must be germane to the purpose of the law; that it must
not be limited to existing conditions only; and that it
must apply equally to each member of the class. This
Court has held that the standard is satisfied if the
classification or distinction is based on a reasonable
foundation or rational basis and is not palpably
arbitrary. [Citations omitted]

Applying these precepts to this case, Executive Order No.

1 should be struck down as violative of the equal protection
clause. The clear mandate of the envisioned truth commission
is to investigate and find out the truth concerning the reported
cases of graft and corruption during the previous
administration[87] only. The intent to single out the previous
administration is plain, patent and manifest.Mention of it has
been made in at least three portions of the questioned executive
order. Specifically, these are:

WHEREAS, there is a need for a separate body

dedicated solely to investigating and finding out the
truth concerning the reported cases of graft and
corruption during the previous administration, and
which will recommend the prosecution of the offenders
and secure justice for all;

SECTION 1. Creation of a Commission. There is hereby

created the PHILIPPINE TRUTH COMMISSION,
hereinafter referred to as the COMMISSION, which
shall primarily seek and find the truth on, and toward
this end, investigate reports of graft and corruption of
such scale and magnitude that shock and offend the
moral and ethical sensibilities of the people, committed
by public officers and employees, their co-principals,
accomplices and accessories from the private sector, if
any, during the previous administration; and thereafter
recommend the appropriate action or measure to be
taken thereon to ensure that the full measure of justice
shall be served without fear or favor.

SECTION 2. Powers and Functions. The Commission,

which shall have all the powers of an investigative body
under Section 37, Chapter 9, Book I of the
Administrative Code of 1987, is primarily tasked to
conduct a thorough fact-finding investigation of
reported cases of graft and corruption referred to in
Section 1, involving third level public officers and
higher, their co-principals, accomplices and
accessories from the private sector, if any, during
the previous administration and thereafter submit its
finding and recommendations to the President,
Congress and the Ombudsman. [Emphases supplied]

In this regard, it must be borne in mind that the Arroyo

administration is but just a member of a class, that is, a class of
past administrations. It is not a class of its own. Not to include
past administrations similarly situated constitutes arbitrariness
which the equal protection clause cannot sanction. Such
discriminating differentiation clearly reverberates to label the
commission as a vehicle for vindictiveness and selective
retribution.

Though the OSG enumerates several differences between

the Arroyo administration and other past administrations, these
distinctions are not substantial enough to merit the restriction of
the investigation to the previous administration only. The
reports of widespread corruption in the Arroyo administration
cannot be taken as basis for distinguishing said administration
from earlier administrations which were also blemished by
similar widespread reports of impropriety. They are not
inherent in, and do not inure solely to, the Arroyo
administration. As Justice Isagani Cruz put it, Superficial
differences do not make for a valid classification.[88]

The public needs to be enlightened why Executive Order

No. 1 chooses to limit the scope of the intended investigation to
the previous administration only. The OSG ventures to opine
that to include other past administrations, at this point, may
unnecessarily overburden the commission and lead it to lose its
effectiveness.[89]The reason given is specious. It is without
doubt irrelevant to the legitimate and noble objective of the
PTC to stamp out or end corruption and the evil it breeds.[90]

The probability that there would be difficulty in unearthing

evidence or that the earlier reports involving the earlier
administrations were already inquired into is beside the point.
Obviously, deceased presidents and cases which have already
prescribed can no longer be the subjects of inquiry by the PTC.
Neither is the PTC expected to conduct simultaneous
investigations of previous administrations, given the bodys
limited time and resources. The law does not require the
impossible (Lex non cogit ad impossibilia).[91]
 Given the foregoing physical and legal impossibility, the
Court logically recognizes the unfeasibility of investigating
almost a centurys worth of graft cases.However, the fact
remains that Executive Order No. 1 suffers from arbitrary
classification. The PTC, to be true to its mandate of searching
for the truth, must not exclude the other past
administrations. The PTC must, at least, have the authority to
investigate all past administrations. While reasonable
prioritization is permitted, it should not be arbitrary lest it be
struck down for being unconstitutional. In the often quoted
language of Yick Wo v. Hopkins,[92]

Though the law itself be fair on its face and

impartial in appearance, yet, if applied and
administered by public authority with an evil eye and
an unequal hand, so as practically to make unjust and
illegal discriminations between persons in similar
circumstances, material to their rights, the denial of
equal justice is still within the prohibition of the
constitution. [Emphasis supplied]

It could be argued that considering that the PTC is an ad

hoc body, its scope is limited. The Court, however, is of the
considered view that although its focus is restricted, the
constitutional guarantee of equal protection under the laws
should not in any way be circumvented. The Constitution is the
fundamental and paramount law of the nation to which all other
laws must conform and in accordance with which all private
rights determined and all public authority
administered.[93] Laws that do not conform to the Constitution
should be stricken down for being unconstitutional.[94] While
the thrust of the PTC is specific, that is, for investigation of acts
of graft and corruption, Executive Order No. 1, to survive, must
be read together with the provisions of the Constitution. To
exclude the earlier administrations in the guise of substantial
distinctions would only confirm the petitioners lament that the
subject executive order is only an adventure in partisan
hostility. In the case of US v. Cyprian,[95] it was written: A
rather limited number of such classifications have routinely
been held or assumed to be arbitrary; those include: race,
national origin, gender, political activity or membership in a
political party, union activity or membership in a labor union,
or more generally the exercise of first amendment rights.

To reiterate, in order for a classification to meet the

requirements of constitutionality, it must include or embrace all
persons who naturally belong to the class.[96] Such a
classification must not be based on existing circumstances only,
or so constituted as to preclude additions to the number
included within a class, but must be of such a nature as to
embrace all those who may thereafter be in similar
circumstances and conditions. Furthermore, all who are in
situations and circumstances which are relative to the
discriminatory legislation and which are indistinguishable from
those of the members of the class must be brought under the
influence of the law and treated by it in the same way as are the
members of the class.[97]

The Court is not unaware that mere underinclusiveness is

not fatal to the validity of a law under the equal protection
clause.[98] Legislation is not unconstitutional merely because it
is not all-embracing and does not include all the evils within its
reach.[99] It has been written that a regulation challenged under
the equal protection clause is not devoid of a rational predicate
simply because it happens to be incomplete.[100] In several
instances, the underinclusiveness was not considered a valid
reason to strike down a law or regulation where the purpose can
be attained in future legislations or regulations. These cases
refer to the step by step process.[101] With regard to equal
protection claims, a legislature does not run the risk of losing
the entire remedial scheme simply because it fails, through
inadvertence or otherwise, to cover every evil that might
conceivably have been attacked.[102]

In Executive Order No. 1, however, there is no

inadvertence. That the previous administration was picked out
was deliberate and intentional as can be gleaned from the fact
that it was underscored at least three times in the assailed
executive order. It must be noted that Executive Order No. 1
does not even mention any particular act, event or report to be
focused on unlike the investigative commissions created in the
past. The equal protection clause is violated by purposeful and
intentional discrimination.[103]

To disprove petitioners contention that there is deliberate

discrimination, the OSG clarifies that the commission does not
only confine itself to cases of large scale graft and corruption
committed during the previous administration.[104] The OSG
points to Section 17 of Executive Order No. 1, which provides:

SECTION 17. Special Provision Concerning Mandate. If

and when in the judgment of the President there is a need to
expand the mandate of the Commission as defined in Section
1 hereof to include the investigation of cases and instances
of graft and corruption during the prior administrations, such
mandate may be so extended accordingly by way of a
supplemental Executive Order.

The Court is not convinced. Although Section 17 allows

the President the discretion to expand the scope of
investigations of the PTC so as to include the acts of graft and
corruption committed in other past administrations, it does not
guarantee that they would be covered in the future. Such
expanded mandate of the commission will still depend on the
whim and caprice of the President. If he would decide not to
include them, the section would then be meaningless. This will
only fortify the fears of the petitioners that the Executive Order
No. 1 was crafted to tailor-fit the prosecution of officials and
personalities of the Arroyo administration.[105]

The Court tried to seek guidance from the pronouncement

in the case of Virata v. Sandiganbayan,[106] that the PCGG
Charter (composed of Executive Orders Nos. 1, 2 and 14) does
not violate the equal protection clause. The decision, however,
was devoid of any discussion on how such conclusory statement
was arrived at, the principal issue in said case being only the
sufficiency of a cause of action.

A final word

The issue that seems to take center stage at present is -

whether or not the Supreme Court, in the exercise of its
constitutionally mandated power of Judicial Review with
respect to recent initiatives of the legislature and the executive
department, is exercising undue interference. Is the Highest
Tribunal, which is expected to be the protector of the
Constitution, itself guilty of violating fundamental tenets like
the doctrine of separation of powers? Time and again, this issue
has been addressed by the Court, but it seems that the present
political situation calls for it to once again explain the legal
basis of its action lest it continually be accused of being a
hindrance to the nations thrust to progress.

The Philippine Supreme Court, according to Article VIII,

Section 1 of the 1987 Constitution, is vested with Judicial
Power that includes the duty of the courts of justice to settle
actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not
there has been a grave of abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or
instrumentality of the government.
 Furthermore, in Section 4(2) thereof, it is vested with the
power of judicial review which is the power to declare a treaty,
international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation
unconstitutional. This power also includes the duty to rule on
the constitutionality of the application, or operation of
presidential decrees, proclamations, orders, instructions,
ordinances, and other regulations. These provisions, however,
have been fertile grounds of conflict between the Supreme
Court, on one hand, and the two co-equal bodies of government,
on the other. Many times the Court has been accused of
asserting superiority over the other departments.

To answer this accusation, the words of Justice Laurel

would be a good source of enlightenment, to wit: And when the
judiciary mediates to allocate constitutional boundaries, it does
not assert any superiority over the other departments; it does not
in reality nullify or invalidate an act of the legislature, but only
asserts the solemn and sacred obligation assigned to it by the
Constitution to determine conflicting claims of authority under
the Constitution and to establish for the parties in an actual
controversy the rights which that instrument secures and
guarantees to them.[107]

Thus, the Court, in exercising its power of judicial review,

is not imposing its own will upon a co-equal body but rather
simply making sure that any act of government is done in
consonance with the authorities and rights allocated to it by the
Constitution. And, if after said review, the Court finds no
constitutional violations of any sort, then, it has no more
authority of proscribing the actions under review. Otherwise,
the Court will not be deterred to pronounce said act as void and
unconstitutional.

It cannot be denied that most government actions are

inspired with noble intentions, all geared towards the
betterment of the nation and its people. But then again, it is
important to remember this ethical principle: The end does not
justify the means. No matter how noble and worthy of
admiration the purpose of an act, but if the means to be
employed in accomplishing it is simply irreconcilable with
constitutional parameters, then it cannot still be
allowed.[108] The Court cannot just turn a blind eye and simply
let it pass. It will continue to uphold the Constitution and its
enshrined principles.

The Constitution must ever remain supreme. All

must bow to the mandate of this law. Expediency must
not be allowed to sap its strength nor greed for power
debase its rectitude.[109]

Lest it be misunderstood, this is not the death knell for a

truth commission as nobly envisioned by the present
administration. Perhaps a revision of the executive issuance
so as to include the earlier past administrations would allow
it to pass the test of reasonableness and not be an affront to
the Constitution. Of all the branches of the government, it is
the judiciary which is the most interested in knowing the truth
and so it will not allow itself to be a hindrance or obstacle to its
attainment. It must, however, be emphasized that the search for
the truth must be within constitutional bounds for ours is still a
government of laws and not of men.[110]

WHEREFORE, the petitions are GRANTED. Executive

Order No. 1 is hereby
declared UNCONSTITUTIONAL insofar as it is violative of
the equal protection clause of the Constitution.
As also prayed for, the respondents are hereby ordered to
cease and desist from carrying out the provisions of Executive
Order No. 1.

SO ORDERED.
 JOSE CATRAL MENDOZA
Associate Justice

WE CONCUR:

See separate opinion (concurring)

RENATO C. CORONA
Chief Justice

See dissenting opinion Please see dissenting opinion

ANTONIO T. CARPIO CONCHITA CARPIO
MORALES
Associate Justice Associate Justice

I certify that Justice Velasco left his concurring vote See concurring
& dissenting opinion
PRESBITERO J. VELASCO, JR. ANTONIO EDUARDO B.
NACHURA
Associate Justice Associate Justice

See separate concurring opinion See separate opinion

(concurring)
 TERESITA J. LEONARDO-DE CASTRO ARTURO D.
BRION
Associate Justice Associate Justice

See separate concurring opinion see my separate

concurring opinion
DIOSDADO M. PERALTA LUCAS P. BERSAMIN
Associate Justice Associate Justice

See separate dissenting opinion

MARIANO C. DEL CASTILLO ROBERTO A. ABAD
Associate Justice Associate Justice

See separate opinion (concurring)

MARTIN S. VILLARAMA, JR. JOSE PORTUGAL
PEREZ
Associate Justice Associate Justice
 See dissenting opinion
MARIA LOURDES P.A. SERENO
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I

certify that the conclusions in the above Decision had been
reached in consultation before the case was assigned to the
writer of the opinion of the Court.

RENATO C. CORONA
Chief Justice

[1]
Angara v. The Electoral Commission, 63 Phil. 139, 158 (1936).
[2]
Bernas, The 1987 Constitution of the Republic of the Philippines; A Commentary, 1996
ed., p. xxxiv, citing Miller, Lectures on the Constitution of the United States 64 (1893);
1 Schwartz, The Powers of Government 1 (1963).
[3]
Cruz, Philippine Political law, 2002 ed. p. 12.
[4]
Id.
[5]
Resolution dated August 24, 2010 consolidating G.R. No. 192935 with G.R. No.
193036, rollo, pp. 87-88.
[6]
Section 1. 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.
[7]
Biraogo Petition, p. 5, rollo, p. 7.
[8]
Salvador Laurel v. Hon. Desierto, G.R. No. 145368, April 12, 2002, citing F.R.
Mechem, A Treatise On The Law of Public Offices and Officers.
[9]
International Center for Transitional Justice, <http://www.ictj.org/en/tj/138.html>
visited November 20, 2010.
[10]
Freeman, The Truth Commission and Procedural Fairness, 2006 Ed., p. 12,
citing Hayner, UnspeakableTruths: Facing the Challenge of Truth Commissions.
[11]
International Center for Transitional Justice, supra note 9.
[12]
Armando Doronila, Philippine Daily Inquirer, August 2, 2010.
<http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20100802-284444/Truth-
body-told-Take-no
prisoners> visited November 9, 2010.
[13]
Lagman Petition, pp. 50-52, rollo, pp. 58-60.
[14]
Rollo, pp. 111-216.
[15]
Otherwise known as the Administrative Code of 1987.
[16]
Granting Continuing Authority To The President Of The Philippines To Reorganize
The National Government.
[17]
Otherwise known as the General Appropriations Act of 2010.
[18]
OSG Consolidated Comment, p. 33, rollo, p. 153, citing Uy v. Sandiganbayan, G.R.
Nos. 105965-70, March 20, 2001, 354 SCRA 651, 660-661.
[19]
Senate of the Philippines v. Ermita, G.R. No. 169777, April 20, 2006, 488 SCRA 1, 35;
and Francisco v.
House of Representatives, 460 Phil. 830, 842 (2003).
[20]
OSG Memorandum, p. 29, rollo, p. 348.
[21]
G.R. No. 113105, August 19, 1994, 235 SCRA 506, 520.
[22]
Supra note 19, citing Pimentel Jr., v. Executive Secretary, G.R. No. 158088, July 6,
2005, 462 SCRA 623, 631-632.
[23]
OSG Memorandum, p. 30, rollo, p. 349.
[24]
G.R. No. 171396, May 3, 2006, 489 SCRA 160, 216-218.
[25]
Social Justice Society (SJS) v. Dangerous Drugs Board and Philippine
Drug Enforcement Agency, G.R.
No. 157870, November 3, 2008, 570 SCRA 410, 421; Tatad v. Secretary of the
Department of Energy,
346 Phil 321 (1997); De Guia v. COMELEC, G.R. No. 104712, May 6, 1992, 208 SCRA
420, 422.
[26]
G.R. 132527, July 29, 2005, 465 SCRA 47, 62.
[27]
84 Phil. 368, 373 (1949).
[28]
(1) the character of the funds or other assets involved in the case; (2) the presence of a
clear case of disregard of a constitutional or statutory prohibition by the public respondent
agency or instrumentality of the government; and, (3) the lack of any other party with a
more direct and specific interest in the questions being raised.
[29]
G.R. No. 174697, July 8, 2010.
[30]
Kilosbayan,Inc. v. Guingona, Jr., G.R. No. 113375, May 5, 1994, 232 SCRA 110, 139.
[31]
Biraogo Memorandum, p. 7, rollo, p. 69.
[32]
Id. at 6, rollo, p. 68.
[33]
Id. at 9, rollo, p. 71.
[34]
Id. at 10, rollo, p. 72.
[35]
Id. at 10-11, rollo pp. 72-73.
[36]
Lagman Memorandum, G.R. No 193036, pp. 10-11, rollo, pp. 270-271.
[37]
OSG Memorandum, p. 32, rollo, p. 351.
[38]
Id. at 33, rollo, p. 352.
[39]
OSG Consolidated Comment, p. 24, rollo, p. 144.
[40]
OSG Memorandum, pp. 38-39, rollo, pp. 357-358.
[41]
Citing Department of Health v. Camposano, G.R. No. 157684, April 27, 2005, 457
SCRA 438, 450.
[42]
Citing Evangelista v. Jarencio, No. L-27274, November 27, 1975, 68 SCRA 99, 104.
[43]
Citing Rodriguez v. Santos Diaz, No. L-19553, February 29, 1964, 10 SCRA 441, 445.
[44]
G.R. No. 166620, April 20, 2010.
[45]
Consolidated Comment, p. 45, rollo, p. 165.
[46]
G.R. Nos. 142801-802, July 10, 2001, 360 SCRA 718, also cited in Banda, supra.
[47]
The Veterans Federation of the Philippines v. Reyes, G. R. No. 155027, February 28,
2006, 483 SCRA 526, 564; DOTC v. Mabalot, 428 Phil. 154, 164-165
(2002); Mondano v. Silvosa, 97 Phil. 143 (1955).
[48]
OSG Memorandum, p. 56, rollo, p. 375.
[49]
G.R. No. 112745, October 16, 1997, 280 SCRA 713, 730.
[50]
TSN, September 28, 2010, pp. 205-207.
[51]
OSG Memorandum, p. 37, rollo, p.356.
[52]
G.R. 88211, September 15, 1989, 177 SCRA 688.
[53]
Id. at 691.
[54]
496 Phil. 886, 896-897 (2005).
[55]
Consolidated Comment, p. 48; rollo, p. 168.
[56]
Section 17. The President shall have control of all the executive departments, bureaus,
and offices. He shall ensure that the laws be faithfully executed.
[57]
Ople v. Torres, 354 Phil. 948, 967 (1998).
[58]
Smart Communications, Inc. et al. v. National Telecommunications Commission, 456
Phil. 145, 156 (2003).
[59]
G.R. No. 96681, December 2, 1991, 204 SCRA 483.
[60]
Id. at 492.
[61]
TSN, September 28, 2010, pp. 39-44; and OSG Memorandum, p. 67, rollo, p. 339.
[62]
OSG Consolidated Comment, p. 55, rollo, p. 175.
[63]
Id. at 56, rollo, p. 176.
[64]
Id.
[65]
G.R. No. 167711, October 10, 2008, 568 SCRA 327, 339.
[66]
Lagman Petition, pp. 43, 50-52, rollo, pp. 51, 50-60.
[67]
Lagman Memorandum, G.R. 193036, pp. 28-29, rollo, pp. 347-348.
[68]
Lagman Petition, p. 31, rollo, p. 39.
[69]
Id. at 28-29, rollo, pp. 36-37.
[70]
Id. at 29, rollo, p. 37.
[71]
OSG Memorandum, p. 88; rollo, p. 407.
[72]
OSG Consolidated Comment. p. 68, rollo, p. 188.
[73]
OSG Memorandum, pp. 90-93, rollo, pp. 409-412.
[74]
The Philippine Judges Association v. Hon. Pardo, G.R. No. 105371, November 11,
1993, 227 SCRA 703, 711.
[75]
Id. at 712, citing Ichong v. Hernandez, 101 Phil. 1155 (1957); Sison, Jr. v. Ancheta, No.
L-59431, July 25, 1984, 130 SCRA 654; Association of Small Landowners in the
Philippines v. Secretary of Agrarian Reform, G.R. No. 7842, July 14, 1989, 175 SCRA
343, 375.
[76]
Guino v. Senkowski, 54 F 3d 1050 (2d. Cir. 1995) cited in Am. Jur, 2d, Vol. 16 (b), p.
302.
[77]
Edward Valves, Inc. v. Wake Country, 343 N.C. 426 cited in Am. Jur. 2d, Vol. 16 (b),
p. 303.
[78]
Lehr v. Robertson, 463 US 248, 103 cited in Am. Jur. 2d, Vol. 16 (b), p. 303.
[79]
See Columbus Bd. of Ed. v. Penick, 443 US 449 cited Am. Jur. 2d, Vol. 16 (b), pp. 316-
317.
[80]
See Lombard v. State of La., 373 US 267 cited in Am. Jur. 2d, Vol. 16 (b), p. 316.
[81]
Beltran v. Secretary of Health, 512 Phil 560, 583 (2005).
[82]
Cruz, Constitutional Law, 2003 ed., p. 128.
[83]
McErlain v. Taylor, 207 Ind. 240 cited in Am. Jur. 2d, Vol. 16 (b), p. 367.
[84]
Cruz, Constitutional Law, 2003 ed., pp. 135-136.
[85]
No. L-25246, 59 SCRA 54, 77-78 (September 12, 1974).
[86]
Basa v. Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de
Filipinas (FOITAF), No. L-27113, November 19, 1974, 61 SCRA 93, 110-
111; Anuncension v. National Labor Union, No. L-26097, November 29, 1977, 80 SCRA
350, 372-373; Villegas v. Hiu Chiong Tsai Pao Ho, No. L-29646, November 10, 1978,
86 SCRA 270, 275; Dumlao v. Comelec, No. L-52245, January 22, 1980, 95 SCRA 392,
404; Ceniza v. Comelec, No. L-52304, January 28, 1980, 95 SCRA 763, 772-
773; Himagan v. People, G.R. No. 113811, October 7, 1994, 237 SCRA 538; The
Conference of Maritime Manning Agencies, Inc. v. POEA, G.R. No. 114714, April 21,
1995, 243 SCRA 666, 677; JMM Promotion and Management, Inc. v. Court of Appeals,
G.R. No. 120095, August 5, 1996, 260 SCRA 319, 331332; and Tiu v. Court of Appeals,
G.R. No. 127410, January 20, 1999, 301 SCRA 278, 288-289. See also Ichong v.
Hernandez, No. L-7995, 101 Phil. 1155 (1957); Vera v. Cuevas, Nos. L-33693-94, May
31, 1979, 90 SCRA 379, 388; and Tolentino v. Secretary of Finance, G.R. Nos. 115455,
115525, 115543, 115544, 115754, 115781, 115852, 115873, and 115931, August 25,
1994, 235 SCRA 630, 684.
[87] th
7 Whereas clause, Executive Order No. 1.
[88]
Cruz, Constitutional Law, 2003 ed., p. 128.
[89]
OSG, Memorandum, p. 89, rollo, p. 408.
[90] th
6 Whereas clause, Executive Order No. 1
[91]
Lee, Handbook of Legal Maxims, 2002 Ed., p.
[92]
118 US
357, http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=118&invol=35 <ac
cessed on December 4, 2010>.
[93]
Macalintal v. COMELEC, G.R. No. 157013, July 10, 2003, 405 SCRA 614, pp. 631-
632; Manila Prince Hotel vs. GSIS, 335 Phil. 82, 101 (1997).
[94]
Id. at 632.
[95]
756 F. Supp. 388, N.. D. Ind., 1991, Jan 30, 1991, Crim No. HCR 90-42;
also http://in.findacase.com/research/wfrmDocViewer.aspx/xq/fac.19910130_0000002.
NIN.htm/qx <accessed December 5, 2010>
[96]
McErlain v. Taylor, 207 Ind. 240 cited in Am. Jur. 2d, Vol. 16 (b), p. 367.
[97]
Martin v. Tollefson, 24 Wash. 2d 211 cited in Am. Jur. 2d, Vol. 16 (b), pp. 367-368 .
[98]
Nixon v. Administrator of General Services, 433 US 425 cited in Am. Jur. 2d, Vol. 16
(b), p. 371.
[99]
Hunter v. Flowers, 43 So 2d 435 cited in Am. Jur. 2d, Vol. 16 (b), p. 370.
[100]
Clements v. Fashing, 457 US 957.
[101]
See Am. Jur. 2d, Vol. 16 (b), pp. 370-371, as footnote (A state legislature may,
consistently with the Equal Protection Clause, address a problem one step at a time, or
even select one phase of one field and apply a remedy there, neglecting the others.
[Jeffeson v. Hackney, 406 US 535].
[102]
McDonald v. Board of Election Comrs of Chicago, 394 US 802 cited in Am Jur 2d,
Footnote No. 9.
[103]
Ricketts v. City of Hardford, 74 F. 3d 1397 cited in Am. Jur. 2d, Vol. 16 (b), p. 303.
[104]
OSG Consolidated Comment, p. 66, rollo, p.186.
[105]
Lagman Memorandum, p. 30; rollo, p. 118.
[106]
G.R. No. 86926, October 15, 1991; 202 SCRA 680.
[107]
Angara v. Electoral Commission, 63 Phil. 139, 158 (1936).
[108]
Cruz, Philippine Political Law, 2002 ed., pp. 12-13.
[109]
Id.
[110]
Republic v. Southside Homeowners Association, G.R. No. 156951, September 22,
2006.
 EN BANC

[G.R. No. 122156. February 3, 1997]

MANILA PRINCE HOTEL, petitioner, vs.

GOVERNMENT SERVICE INSURANCE SYSTEM,
MANILA HOTEL CORPORATION, COMMITTEE ON
PRIVATIZATION and OFFICE OF THE
GOVERNMENT CORPORATE
COUNSEL, respondents.
DECISION
BELLOSILLO, J.:

The Filipino First Policy enshrined in the 1987

Constitution, i.e., in the grant of rights, privileges, and
concessions covering the national economy and patrimony, the
State shall give preference to qualified Filipinos, is invoked by
[1]

petitioner in its bid to acquire 51% of the shares of the Manila

Hotel Corporation (MHC) which owns the historic Manila
Hotel.Opposing, respondents maintain that the provision is not
self-executing but requires an implementing legislation for its
enforcement. Corollarily, they ask whether the 51% shares form
part of the national economy and patrimony covered by the
protective mantle of the Constitution.
The controversy arose when respondent Government
Service Insurance System (GSIS), pursuant to the privatization
program of the Philippine Government under Proclamation No.
50 dated 8 December 1986, decided to sell through public
bidding 30% to 51% of the issued and outstanding shares of
respondent MHC. The winning bidder, or the eventual strategic
partner, is to provide management expertise and/or an
international marketing/reservation system, and financial
support to strengthen the profitability and performance of the
Manila Hotel. In a close bidding held on 18 September 1995
[2]

only two (2) bidders participated: petitioner Manila Prince Hotel

Corporation, a Filipino corporation, which offered to buy 51% of
the MHC or 15,300,000 shares at P41.58 per share, and
Renong Berhad, a Malaysian firm, with ITT-Sheraton as its hotel
operator, which bid for the same number of shares at P44.00
per share, or P2.42 more than the bid of petitioner.
Pertinent provisions of the bidding rules prepared by
respondent GSIS state -
I. EXECUTION OF THE NECESSARY CONTRACTS WITH
GSIS/MHC -
1. The Highest Bidder must comply with the conditions set forth
below by October 23, 1995 (reset to November 3, 1995) or the
Highest Bidder will lose the right to purchase the Block of Shares and
GSIS will instead offer the Block of Shares to the other Qualified
Bidders:
a. The Highest Bidder must negotiate and execute with the
GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other type of contract
specified by the Highest Bidder in its strategic plan for the Manila
Hotel x x x x
b. The Highest Bidder must execute the Stock Purchase and Sale
Agreement with GSIS x x x x
K. DECLARATION OF THE WINNING
BIDDER/STRATEGIC PARTNER -
The Highest Bidder will be declared the Winning Bidder/Strategic
Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC not later
than October 23, 1995 (reset to November 3, 1995); and
b. Requisite approvals from the GSIS/MHC and COP (Committee on
Privatization)/ OGCC (Office of the Government Corporate Counsel)
are obtained.[3]

Pending the declaration of Renong Berhard as the winning

bidder/strategic partner and the execution of the necessary
contracts, petitioner in a letter to respondent GSIS dated 28
September 1995 matched the bid price of P44.00 per share
tendered by Renong Berhad. In a subsequent letter dated 10
[4]

October 1995 petitioner sent a managers check issued by

Philtrust Bank for Thirty-three Million Pesos
(P33,000,000.00) as Bid Security to match the bid of the
Malaysian Group, Messrs. Renong Berhad x x x x which [5]

respondent GSIS refused to accept.

On 17 October 1995, perhaps apprehensive that respondent
GSIS has disregarded the tender of the matching bid and that
the sale of 51% of the MHC may be hastened by respondent
GSIS and consummated with Renong Berhad, petitioner came
to this Court on prohibition and mandamus. On 18 October 1995
the Court issued a temporary restraining order enjoining
respondents from perfecting and consummating the sale to the
Malaysian firm.
On 10 September 1996 the instant case was accepted by the
Court En Banc after it was referred to it by the First Division. The
case was then set for oral arguments with former Chief Justice
Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici
curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII,
of the 1987 Constitution and submits that the Manila Hotel has
been identified with the Filipino nation and has practically
become a historical monument which reflects the vibrancy of
Philippine heritage and culture. It is a proud legacy of an earlier
generation of Filipinos who believed in the nobility and
sacredness of independence and its power and capacity to
release the full potential of the Filipino people. To all intents and
purposes, it has become a part of the national
patrimony. Petitioner also argues that since 51% of the shares
[6]

of the MHC carries with it the ownership of the business of the

hotel which is owned by respondent GSIS, a government-owned
and controlled corporation, the hotel business of respondent
GSIS being a part of the tourism industry is unquestionably a
part of the national economy. Thus, any transaction involving
51% of the shares of stock of the MHC is clearly covered by the
term national economy, to which Sec. 10, second par., Art. XII,
1987 Constitution, applies. [7]

It is also the thesis of petitioner that since Manila Hotel is part

of the national patrimony and its business also unquestionably
part of the national economy petitioner should be preferred after
it has matched the bid offer of the Malaysian firm. For the
bidding rules mandate that if for any reason, the Highest Bidder
cannot be awarded the Block of Shares, GSIS may offer this to
the other Qualified Bidders that have validly submitted bids
provided that these Qualified Bidders are willing to match the
highest bid in terms of price per share.[8]

Respondents except. They maintain that: First, Sec. 10,

second par., Art. XII, of the 1987 Constitution is merely a
statement of principle and policy since it is not a self-executing
provision and requires implementing legislation(s) x x x x Thus,
for the said provision to operate, there must be existing laws to
lay down conditions under which business may be done. [9]

Second, granting that this provision is self-executing, Manila

Hotel does not fall under the term national patrimony which only
refers to lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna and all
marine wealth in its territorial sea, and exclusive marine zone as
cited in the first and second paragraphs of Sec. 2, Art. XII, 1987
Constitution. According to respondents, while petitioner speaks
of the guests who have slept in the hotel and the events that
have transpired therein which make the hotel historic, these
alone do not make the hotel fall under the patrimony of the
nation. What is more, the mandate of the Constitution is
addressed to the State, not to respondent GSIS which
possesses a personality of its own separate and distinct from
the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national
patrimony, the constitutional provision invoked is still
inapplicable since what is being sold is only 51% of the
outstanding shares of the corporation, not the hotel building nor
the land upon which the building stands. Certainly, 51% of the
equity of the MHC cannot be considered part of the national
patrimony. Moreover, if the disposition of the shares of the MHC
is really contrary to the Constitution, petitioner should have
questioned it right from the beginning and not after it had lost in
the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of
the bidding rules which provides that if for any reason, the
Highest Bidder cannot be awarded the Block of Shares, GSIS
may offer this to the other Qualified Bidders that have validly
submitted bids provided that these Qualified Bidders are willing
to match the highest bid in terms of price per share, is
misplaced. Respondents postulate that the privilege of
submitting a matching bid has not yet arisen since it only takes
place if for any reason, the Highest Bidder cannot be awarded
the Block of Shares. Thus the submission by petitioner of a
matching bid is premature since Renong Berhad could still very
well be awarded the block of shares and the condition giving rise
to the exercise of the privilege to submit a matching bid had not
yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of
discretion should fail since respondent GSIS did not exercise its
discretion in a capricious, whimsical manner, and if ever it did
abuse its discretion it was not so patent and gross as to amount
to an evasion of a positive duty or a virtual refusal to perform a
duty enjoined by law. Similarly, the petition for mandamus
should fail as petitioner has no clear legal right to what it
demands and respondents do not have an imperative duty to
perform the act required of them by petitioner.
We now resolve. A constitution is a system of fundamental
laws for the governance and administration of a nation. It is
supreme, imperious, absolute and unalterable except by the
authority from which it emanates. It has been defined as the
fundamental and paramount law of the nation. It prescribes the
[10]

permanent framework of a system of government, assigns to the

different departments their respective powers and duties, and
establishes certain fixed principles on which government is
founded. The fundamental conception in other words is that it is
a supreme law to which all other laws must conform and in
accordance with which all private rights must be determined and
all public authority administered. Under the doctrine of
[11]

constitutional supremacy, if a law or contract violates any norm

of the constitution that law or contract whether promulgated by
the legislative or by the executive branch or entered into by
private persons for private purposes is null and void and without
any force and effect. Thus, since the Constitution is the
fundamental, paramount and supreme law of the nation, it is
deemed written in every statute and contract.
Admittedly, some constitutions are merely declarations of
policies and principles.Their provisions command the legislature
to enact laws and carry out the purposes of the framers who
merely establish an outline of government providing for the
different departments of the governmental machinery and
securing certain fundamental and inalienable rights of
citizens. A provision which lays down a general principle, such
[12]

as those found in Art. II of the 1987 Constitution, is usually not

self-executing. But a provision which is complete in itself and
becomes operative without the aid of supplementary or enabling
legislation, or that which supplies sufficient rule by means of
which the right it grants may be enjoyed or protected, is self-
executing. Thus a constitutional provision is self-executing if the
nature and extent of the right conferred and the liability imposed
are fixed by the constitution itself, so that they can be
determined by an examination and construction of its terms, and
there is no language indicating that the subject is referred to the
legislature for action.[13]

As against constitutions of the past, modern constitutions

have been generally drafted upon a different principle and have
often become in effect extensive codes of laws intended to
operate directly upon the people in a manner similar to that of
statutory enactments, and the function of constitutional
conventions has evolved into one more like that of a legislative
body. Hence, unless it is expressly provided that a legislative act
is necessary to enforce a constitutional mandate, the
presumption now is that all provisions of the constitution are self-
executing. If the constitutional provisions are treated as
requiring legislation instead of self-executing, the legislature
would have the power to ignore and practically nullify the
mandate of the fundamental law. This
[14]
can be
cataclysmic. That is why the prevailing view is, as it has always
been, that -
x x x x in case of doubt, the Constitution should be considered self-
executing rather than non-self-executing x x x x Unless the contrary
is clearly intended, the provisions of the Constitution should be
considered self-executing, as a contrary rule would give the
legislature discretion to determine when, or whether, they shall be
effective. These provisions would be subordinated to the will of the
lawmaking body, which could make them entirely meaningless by
simply refusing to pass the needed implementing statute. [15]

Respondents argue that Sec. 10, second par., Art. XII, of the
1987 Constitution is clearly not self-executing, as they quote
from discussions on the floor of the 1986 Constitutional
Commission -
 MR. RODRIGO. Madam President, I am asking this question as
the Chairman of the Committee on Style. If the wording of
PREFERENCE is given to QUALIFIED FILIPINOS, can it be
understood as a preference to qualified Filipinos vis-a-
visFilipinos who are not qualified. So, why do we not make it
clear? To qualified Filipinos as against aliens?
THE PRESIDENT. What is the question of Commissioner
Rodrigo? Is it to remove the word QUALIFIED?
MR. RODRIGO. No, no, but say definitely TO QUALIFIED
FILIPINOS as against whom?As against aliens or over aliens
?
MR. NOLLEDO. Madam President, I think that is understood. We
use the word QUALIFIED because the existing laws or
prospective laws will always lay down conditions under which
business may be done. For example, qualifications on capital,
qualifications on the setting up of other financial structures, et
cetera(underscoring supplied by respondents).
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO. Yes.[16]
Quite apparently, Sec. 10, second par., of Art XII is couched
in such a way as not to make it appear that it is non-self-
executing but simply for purposes of style. But, certainly, the
legislature is not precluded from enacting further laws to enforce
the constitutional provision so long as the contemplated statute
squares with the Constitution. Minor details may be left to the
legislature without impairing the self-executing nature of
constitutional provisions.
In self-executing constitutional provisions, the legislature may
still enact legislation to facilitate the exercise of powers directly
granted by the constitution, further the operation of such a
provision, prescribe a practice to be used for its enforcement,
provide a convenient remedy for the protection of the rights
secured or the determination thereof, or place reasonable
safeguards around the exercise of the right. The mere fact that
legislation may supplement and add to or prescribe a penalty for
the violation of a self-executing constitutional provision does not
render such a provision ineffective in the absence of such
legislation. The omission from a constitution of any express
provision for a remedy for enforcing a right or liability is not
necessarily an indication that it was not intended to be self-
executing. The rule is that a self-executing provision of the
constitution does not necessarily exhaust legislative power on
the subject, but any legislation must be in harmony with the
constitution, further the exercise of constitutional right and make
it more available. Subsequent legislation however does not
[17]

necessarily mean that the subject constitutional provision is not,

by itself, fully enforceable.
Respondents also argue that the non-self-executing nature of
Sec. 10, second par., of Art. XII is implied from the tenor of the
first and third paragraphs of the same section which
undoubtedly are not self-executing. The argument is flawed. If
[18]

the first and third paragraphs are not self-executing because

Congress is still to enact measures to encourage the formation
and operation of enterprises fully owned by Filipinos, as in the
first paragraph, and the State still needs legislation to regulate
and exercise authority over foreign investments within its
national jurisdiction, as in the third paragraph, then a fortiori, by
the same logic, the second paragraph can only be self-executing
as it does not by its language require any legislation in order to
give preference to qualified Filipinos in the grant of rights,
privileges and concessions covering the national economy and
patrimony. A constitutional provision may be self-executing in
one part and non-self-executing in another. [19]

Even the cases cited by respondents holding that certain

constitutional provisions are merely statements of principles and
policies, which are basically not self-executing and only placed
in the Constitution as moral incentives to legislation, not as
judicially enforceable rights - are simply not in point. Basco v.
Philippine Amusements and Gaming Corporation speaks of [20]

constitutional provisions on personal dignity, the sanctity of [21]

family life, the vital role of the youth in nation-building, the

[22] [23]

promotion of social justice, and the values

[24]
of
education. Tolentino v. Secretary of Finance refers to
[25] [26]

constitutional provisions on social justice and human

rights and on education. Lastly, Kilosbayan, Inc. v.
[27] [28]

Morato cites provisions on the promotion of general

[29]

welfare, the sanctity of family life, the vital role of the youth in
[30] [31]

nation-building and the promotion of total human liberation and

[32]

development. A reading of these provisions indeed clearly

[33]

shows that they are not judicially enforceable constitutional

rights but merely guidelines for legislation. The very terms of the
provisions manifest that they are only principles upon which
legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the 1987
Constitution is a mandatory, positive command which is
complete in itself and which needs no further guidelines or
implementing laws or rules for its enforcement. From its very
words the provision does not require any legislation to put it in
operation. It is per se judicially enforceable. When our
Constitution mandates that [i]n the grant of rights, privileges,
and concessions covering national economy and patrimony, the
State shall give preference to qualified Filipinos, it means just
that - qualified Filipinos shall be preferred. And when our
Constitution declares that a right exists in certain specified
circumstances an action may be maintained to enforce such
right notwithstanding the absence of any legislation on the
subject; consequently, if there is no statute especially enacted
to enforce such constitutional right, such right enforces itself by
its own inherent potency and puissance, and from which all
legislations must take their bearings. Where there is a right there
is a remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986
Constitutional Commission explains -
[34]

The patrimony of the Nation that should be conserved and

developed refers not only to our rich natural resources but also
to the cultural heritage of our race. It also refers to our
intelligence in arts, sciences and letters. Therefore, we should
develop not only our lands, forests, mines and other natural
resources but also the mental ability or faculty of our people.
We agree. In its plain and ordinary meaning, the
term patrimony pertains to heritage. When the Constitution
[35]

speaks of national patrimony, it refers not only to the natural

resources of the Philippines, as the Constitution could have very
well used the term natural resources, but also to the cultural
heritage of the Filipinos.
Manila Hotel has become a landmark - a living testimonial of
Philippine heritage.While it was restrictively an American hotel
when it first opened in 1912, it immediately evolved to be truly
Filipino. Formerly a concourse for the elite, it has since then
become the venue of various significant events which have
shaped Philippine history. It was called the Cultural Center of
the 1930s. It was the site of the festivities during the
inauguration of the Philippine Commonwealth. Dubbed as
the Official Guest House of the Philippine Government it plays
host to dignitaries and official visitors who are accorded the
traditional Philippine hospitality.
[36]

The history of the hotel has been chronicled in the book The
Manila Hotel: The Heart and Memory of a City. During World
[37]

War II the hotel was converted by the Japanese Military

Administration into a military headquarters. When the American
forces returned to recapture Manila the hotel was selected by
the Japanese together with Intramuros as the two (2) places for
their final stand. Thereafter, in the 1950s and 1960s, the hotel
became the center of political activities, playing host to almost
every political convention. In 1970 the hotel reopened after a
renovation and reaped numerous international recognitions, an
acknowledgment of the Filipino talent and ingenuity. In 1986 the
hotel was the site of a failed coup d etat where an aspirant for
vice-president was proclaimed President of the Philippine
Republic.
For more than eight (8) decades Manila Hotel has bore mute
witness to the triumphs and failures, loves and frustrations of the
Filipinos; its existence is impressed with public interest; its own
historicity associated with our struggle for sovereignty,
independence and nationhood. Verily, Manila Hotel has become
part of our national economy and patrimony.For sure, 51% of
the equity of the MHC comes within the purview of the
constitutional shelter for it comprises the majority and controlling
stock, so that anyone who acquires or owns the 51% will have
actual control and management of the hotel. In this instance,
51% of the MHC cannot be disassociated from the hotel and the
land on which the hotel edifice stands. Consequently, we cannot
sustain respondents claim that the Filipino First Policy provision
is not applicable since what is being sold is only 51% of the
outstanding shares of the corporation, not the Hotel building nor
the land upon which the building stands. [38]

The argument is pure sophistry. The term qualified

Filipinos as used in our Constitution also includes corporations
at least 60% of which is owned by Filipinos. This is very clear
from the proceedings of the 1986 Constitutional Commission -
 THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. I would like to introduce an amendment to the
Nolledo amendment. And the amendment would consist in
substituting the words QUALIFIED FILIPINOS with the
following: CITIZENS OF THE PHILIPPINES OR
CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL
OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH
CITIZENS.
xxxx
MR. MONSOD. Madam President, apparently the proponent is
agreeable, but we have to raise a question. Suppose it is a
corporation that is 80-percent Filipino, do we not give it
preference?
MR. DAVIDE. The Nolledo amendment would refer to an
individual Filipino. What about a corporation wholly owned by
Filipino citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be limiting it if we
say that the preference should only be 100-percent Filipino.
MR. DAVIDE. I want to get that meaning clear because
QUALIFIED FILIPINOS may refer only to individuals and not to
juridical personalities or entities.
MR. MONSOD. We agree, Madam President.[39]
xxxx
MR. RODRIGO. Before we vote, may I request that the
amendment be read again.
MR. NOLLEDO. The amendment will read: IN THE GRANT OF
RIGHTS, PRIVILEGES AND CONCESSIONS COVERING
THE NATIONAL ECONOMY AND PATRIMONY, THE STATE
SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS. And
the word Filipinos here, as intended by the proponents, will
include not only individual Filipinos but also Filipino-controlled
entities or entities fully-controlled by Filipinos.[40]
The phrase preference to qualified Filipinos was explained
thus -
MR. FOZ. Madam President, I would like to request
Commissioner Nolledo to please restate his amendment so
that I can ask a question.
 MR. NOLLEDO. IN THE GRANT OF RIGHTS, PRIVILEGES AND
CONCESSIONS COVERING THE NATIONAL ECONOMY
AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE
TO QUALIFIED FILIPINOS.
MR. FOZ. In connection with that amendment, if a foreign
enterprise is qualified and a Filipino enterprise is also qualified,
will the Filipino enterprise still be given a preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects than
the Filipino enterprise, will the Filipino still be preferred?
MR. NOLLEDO. The answer is yes.
MR. FOZ. Thank you.[41]
Expounding further on the Filipino First Policy provision
Commissioner Nolledo continues
MR. NOLLEDO. Yes, Madam President. Instead of MUST, it will
be SHALL - THE STATE SHALL GIVE PREFERENCE TO
QUALIFIED FILIPINOS. This embodies the so-called Filipino
First policy. That means that Filipinos should be given
preference in the grant of concessions, privileges and rights
covering the national patrimony.[42]
The exchange of views in the sessions of the Constitutional
Commission regarding the subject provision was still further
clarified by Commissioner Nolledo - [43]

Paragraph 2 of Section 10 explicitly mandates the Pro-Filipino bias in

all economic concerns. It is better known as the FILIPINO FIRST
Policy x x x x This provision was never found in previous
Constitutions x x x x
The term qualified Filipinos simply means that preference shall be
given to those citizens who can make a viable contribution to the
common good, because of credible competence and efficiency. It
certainly does NOT mandate the pampering and preferential
treatment to Filipino citizens or organizations that are incompetent or
inefficient, since such an indiscriminate preference would be
counterproductive and inimical to the common good.
In the granting of economic rights, privileges, and concessions, when
a choice has to be made between a qualified foreigner and a qualified
Filipino, the latter shall be chosen over the former.
 Lastly, the word qualified is also determinable. Petitioner was
so considered by respondent GSIS and selected as one of
the qualified bidders. It was pre-qualified by respondent GSIS in
accordance with its own guidelines so that the sole inference
here is that petitioner has been found to be possessed of proven
management expertise in the hotel industry, or it has significant
equity ownership in another hotel company, or it has an overall
management and marketing proficiency to successfully operate
the Manila Hotel. [44]

The penchant to try to whittle away the mandate of the

Constitution by arguing that the subject provision is not self-
executory and requires implementing legislation is quite
disturbing. The attempt to violate a clear constitutional provision
- by the government itself - is only too distressing. To adopt such
a line of reasoning is to renounce the duty to ensure faithfulness
to the Constitution. For, even some of the provisions of the
Constitution which evidently need implementing legislation have
juridical life of their own and can be the source of a judicial
remedy. We cannot simply afford the government a defense that
arises out of the failure to enact further enabling, implementing
or guiding legislation. In fine, the discourse of Fr. Joaquin G.
Bernas, S.J., on constitutional government is apt -
The executive department has a constitutional duty to implement
laws, including the Constitution, even before Congress acts -
provided that there are discoverable legal standards for executive
action. When the executive acts, it must be guided by its own
understanding of the constitutional command and of applicable
laws. The responsibility for reading and understanding the
Constitution and the laws is not the sole prerogative of Congress. If it
were, the executive would have to ask Congress, or perhaps the
Court, for an interpretation every time the executive is confronted by
a constitutional command. That is not how constitutional government
operates.[45]

Respondents further argue that the constitutional provision is

addressed to the State, not to respondent GSIS which by itself
possesses a separate and distinct personality.This argument
again is at best specious. It is undisputed that the sale of 51%
of the MHC could only be carried out with the prior approval of
the State acting through respondent Committee on
Privatization. As correctly pointed out by Fr. Joaquin G. Bernas,
S.J., this fact alone makes the sale of the assets of respondents
GSIS and MHC a state action. In constitutional jurisprudence,
the acts of persons distinct from the government are
considered state action covered by the Constitution (1) when
the activity it engages in is a public function; (2) when the
government is so significantly involved with the private actor as
to make the government responsible for his action; and, (3)
when the government has approved or authorized the action. It
is evident that the act of respondent GSIS in selling 51% of its
share in respondent MHC comes under the second and third
categories of state action. Without doubt therefore the
transaction, although entered into by respondent GSIS, is in fact
a transaction of the State and therefore subject to the
constitutional command. [46]

When the Constitution addresses the State it refers not only

to the people but also to the government as elements of the
State. After all, government is composed of three (3) divisions
of power - legislative, executive and judicial. Accordingly, a
constitutional mandate directed to the State is correspondingly
directed to the three (3) branches of government. It is
undeniable that in this case the subject constitutional injunction
is addressed among others to the Executive Department and
respondent GSIS, a government instrumentality deriving its
authority from the State.
It should be stressed that while the Malaysian firm offered the
higher bid it is not yet the winning bidder. The bidding rules
expressly provide that the highest bidder shall only be declared
the winning bidder after it has negotiated and executed the
necessary contracts, and secured the requisite approvals. Since
the Filipino First Policy provision of the Constitution bestows
preference on qualified Filipinos the mere tending of the highest
bid is not an assurance that the highest bidder will be declared
the winning bidder.Resultantly, respondents are not bound to
make the award yet, nor are they under obligation to enter into
one with the highest bidder. For in choosing the awardee
respondents are mandated to abide by the dictates of the 1987
Constitution the provisions of which are presumed to be known
to all the bidders and other interested parties.
Adhering to the doctrine of constitutional supremacy, the
subject constitutional provision is, as it should be, impliedly
written in the bidding rules issued by respondent GSIS, lest the
bidding rules be nullified for being violative of the Constitution. It
is a basic principle in constitutional law that all laws and
contracts must conform with the fundamental law of the
land. Those which violate the Constitution lose their reason for
being.
Paragraph V. J. 1 of the bidding rules provides that [i]f for any
reason the Highest Bidder cannot be awarded the Block of
Shares, GSIS may offer this to other Qualified Bidders that have
validly submitted bids provided that these Qualified Bidders are
willing to match the highest bid in terms of price per
share. Certainly, the constitutional mandate itself is reason
[47]

enough not to award the block of shares immediately to the

foreign bidder notwithstanding its submission of a higher, or
even the highest, bid. In fact, we cannot conceive of
a stronger reason than the constitutional injunction itself.
In the instant case, where a foreign firm submits the highest
bid in a public bidding concerning the grant of rights, privileges
and concessions covering the national economy and patrimony,
thereby exceeding the bid of a Filipino, there is no question that
the Filipino will have to be allowed to match the bid of the foreign
entity. And if the Filipino matches the bid of a foreign firm the
award should go to the Filipino. It must be so if we are to give
life and meaning to the Filipino First Policy provision of the 1987
Constitution.For, while this may neither be expressly stated nor
contemplated in the bidding rules, the constitutional fiat is
omnipresent to be simply disregarded. To ignore it would be to
sanction a perilous skirting of the basic law.
This Court does not discount the apprehension that this policy
may discourage foreign investors. But the Constitution and laws
of the Philippines are understood to be always open to public
scrutiny. These are given factors which investors must consider
when venturing into business in a foreign jurisdiction. Any
person therefore desiring to do business in the Philippines or
with any of its agencies or instrumentalities is presumed to know
his rights and obligations under the Constitution and the laws of
the forum.
The argument of respondents that petitioner is now estopped
from questioning the sale to Renong Berhad since petitioner
was well aware from the beginning that a foreigner could
participate in the bidding is meritless. Undoubtedly, Filipinos and
foreigners alike were invited to the bidding. But foreigners may
be awarded the sale only if no Filipino qualifies, or if the qualified
Filipino fails to match the highest bid tendered by the foreign
entity. In the case before us, while petitioner was already
preferred at the inception of the bidding because of the
constitutional mandate, petitioner had not yet matched the bid
offered by Renong Berhad. Thus it did not have the right or
personality then to compel respondent GSIS to accept its earlier
bid. Rightly, only after it had matched the bid of the foreign firm
and the apparent disregard by respondent GSIS of petitioners
matching bid did the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional
safeguard unless perhaps the award has been finally made. To
insist on selling the Manila Hotel to foreigners when there is a
Filipino group willing to match the bid of the foreign group is to
insist that government be treated as any other ordinary market
player, and bound by its mistakes or gross errors of judgment,
regardless of the consequences to the Filipino people. The
miscomprehension of the Constitution is regrettable. Thus we
would rather remedy the indiscretion while there is still an
opportunity to do so than let the government develop the habit
of forgetting that the Constitution lays down the basic conditions
and parameters for its actions.
Since petitioner has already matched the bid price tendered
by Renong Berhad pursuant to the bidding rules, respondent
GSIS is left with no alternative but to award to petitioner the
block of shares of MHC and to execute the necessary
agreements and documents to effect the sale in accordance not
only with the bidding guidelines and procedures but with the
Constitution as well. The refusal of respondent GSIS to execute
the corresponding documents with petitioner as provided in the
bidding rules after the latter has matched the bid of the
Malaysian firm clearly constitutes grave abuse of discretion.
The Filipino First Policy is a product of Philippine
nationalism. It is embodied in the 1987 Constitution not merely
to be used as a guideline for future legislation but primarily to be
enforced; so must it be enforced. This Court as the ultimate
guardian of the Constitution will never shun, under any
reasonable circumstance, the duty of upholding the majesty of
the Constitution which it is tasked to defend. It is worth
emphasizing that it is not the intention of this Court to impede
and diminish, much less undermine, the influx of foreign
investments. Far from it, the Court encourages and welcomes
more business opportunities but avowedly sanctions the
preference for Filipinos whenever such preference is ordained
by the Constitution. The position of the Court on this matter
could have not been more appropriately articulated by Chief
Justice Narvasa -
As scrupulously as it has tried to observe that it is not its function to
substitute its judgment for that of the legislature or the executive
about the wisdom and feasibility of legislation economic in nature,
the Supreme Court has not been spared criticism for decisions
perceived as obstacles to economic progress and development x x x x
in connection with a temporary injunction issued by the Courts First
Division against the sale of the Manila Hotel to a Malaysian Firm and
its partner, certain statements were published in a major daily to the
effect that that injunction again demonstrates that the Philippine legal
system can be a major obstacle to doing business here.
Let it be stated for the record once again that while it is no business
of the Court to intervene in contracts of the kind referred to or set
itself up as the judge of whether they are viable or attainable, it is its
bounden duty to make sure that they do not violate the Constitution
or the laws, or are not adopted or implemented with grave abuse of
discretion amounting to lack or excess of jurisdiction. It will never
shirk that duty, no matter how buffeted by winds of unfair and ill-
informed criticism. [48]

Privatization of a business asset for purposes of enhancing

its business viability and preventing further losses, regardless of
the character of the asset, should not take precedence over non-
material values. A commercial, nay even a budgetary, objective
should not be pursued at the expense of national pride and
dignity. For the Constitution enshrines higher and nobler non-
material values. Indeed, the Court will always defer to the
Constitution in the proper governance of a free society; after all,
there is nothing so sacrosanct in any economic policy as to draw
itself beyond judicial review when the Constitution is involved. [49]

Nationalism is inherent in the very concept of the Philippines

being a democratic and republican state, with sovereignty
residing in the Filipino people and from whom all government
authority emanates. In nationalism, the happiness and welfare
of the people must be the goal. The nation-state can have no
higher purpose. Any interpretation of any constitutional
provision must adhere to such basic concept. Protection of
foreign investments, while laudible, is merely a policy. It cannot
override the demands of nationalism. [50]

The Manila Hotel or, for that matter, 51% of the MHC, is not
just any commodity to be sold to the highest bidder solely for the
sake of privatization. We are not talking about an ordinary piece
of property in a commercial district. We are talking about a
historic relic that has hosted many of the most important events
in the short history of the Philippines as a nation. We are talking
about a hotel where heads of states would prefer to be housed
as a strong manifestation of their desire to cloak the dignity of
the highest state function to their official visits to the
Philippines. Thus the Manila Hotel has played and continues to
play a significant role as an authentic repository of twentieth
century Philippine history and culture. In this sense, it has
become truly a reflection of the Filipino soul - a place with a
history of grandeur; a most historical setting that has played a
part in the shaping of a country. [51]

This Court cannot extract rhyme nor reason from the

determined efforts of respondents to sell the historical landmark
- this Grand Old Dame of hotels in Asia - to a total stranger. For,
indeed, the conveyance of this epic exponent of the Filipino
psyche to alien hands cannot be less than mephistophelian for
it is, in whatever manner viewed, a veritable alienation of a
nations soul for some pieces of foreign silver. And so we ask:
What advantage, which cannot be equally drawn from a
qualified Filipino, can be gained by the Filipinos if Manila Hotel -
and all that it stands for - is sold to a non-Filipino? How much of
national pride will vanish if the nations cultural heritage is
entrusted to a foreign entity? On the other hand, how much
dignity will be preserved and realized if the national patrimony is
safekept in the hands of a qualified, zealous and well-meaning
Filipino? This is the plain and simple meaning of the Filipino First
Policy provision of the Philippine Constitution. And this Court,
heeding the clarion call of the Constitution and accepting the
duty of being the elderly watchman of the nation, will continue to
respect and protect the sanctity of the Constitution.
 WHEREFORE, respondents GOVERNMENT SERVICE
INSURANCE SYSTEM, MANILA HOTEL CORPORATION,
COMMITTEE ON PRIVATIZATION and OFFICE OF THE
GOVERNMENT CORPORATE COUNSEL are directed to
CEASE and DESIST from selling 51% of the shares of the
Manila Hotel Corporation to RENONG BERHAD, and to
ACCEPT the matching bid of petitioner MANILA PRINCE
HOTEL CORPORATION to purchase the subject 51% of the
shares of the Manila Hotel Corporation at P44.00 per share and
thereafter to execute the necessary agreements and documents
to effect the sale, to issue the necessary clearances and to do
such other acts and deeds as may be necessary for the purpose.
SO ORDERED.
Regalado, Davide, Jr., Romero, Kapunan,
Francisco, and Hermosisima, Jr., JJ, concur.
Narvasa, C.J., (Chairman), and Melo, J., joins J. Puno in his
dissent.
Padilla, J., see concurring opinion.
Vitug, J., see separate concurring opinion
Mendoza, J., see concurring opinion
Torres, J., with separate opinion
Puno, J., see dissent.
Panganiban J., with separate dissenting opinion.

[1]
See Sec. 10, par. 2, Art. XII, 1987 Constitution.
[2]
Par. I. Introduction and Highlights, Guidelines and Procedures: Second
Prequalifications and Public Bidding of the MHC Privatization; Annex A,
Consolidated Reply to Comments of Respondents; Rollo, p.142.
[3]
Par. V. Guidelines for the Public Bidding, Id., pp. 153-154.
[4]
Annex A, Petition for Prohibition and Mandamus with Temporary Restraining
Order; Rollo, pp.13-14.
[5]
Annex B, Petition for Prohibition and Mandamus with Temporary Restraining
Order; Id., p.15.
[6]
Petition for Prohibition and Mandamus with Temporary Restraining Order, pp. 5-
6; Id., pp.6-7.
[7]
Consolidated Reply to Comments of Respondents, p. 17; Id., p.133.
[8]
Par. V. J. 1,Guidelines for Public Bidding, Guidelines and Procedures: Second
Prequalifications and Public Bidding of the MHC Privatization, Annex A,
Consolidated Reply to Comments of Respondents; Id., p. 154.
[9]
Respondents Joint Comment with Urgent Motion to Lift Temporary Restraining
Order, p.9; Rollo, p. 44.
[10]
Marbury v. Madison, 5 U.S. 138 (1803).
[11]
11 Am Jur. 606.
[12]
16 Am Jur. 2d 281.
[13]
Id., p. 282.
[14]
See Note 12.
[15]
Cruz, Isagani A., Constitutional Law, 1993 ed., pp. 8-10.
[16]
Record of the Constitutional Commission, Vol. 3, 22 August 1986, p. 608.
[17]
16 Am Jur 2d 283-284.
Sec. 10, first par., reads: The Congress shall, upon recommendation of the
[18]

economic and planning agency, when the national interest dictates, reserve to
citizens of the Philippines or to corporations or associations at least sixty per
centum of whose capital is owned by such citizens, or such higher percentage as
Congress may prescribe, certain areas of investments. The Congress shall enact
measures that will encourage the formation and operation of enterprises whose
capital is wholly owned by Filipinos.
Sec. 10, third par., reads: The State shall regulate and exercise authority over
foreign investments within its national jurisdiction and in accordance with its
national goals and priorities.
[19]
State ex rel. Miller v. OMalley, 342 Mo 641, 117 SW2d 319.
[20]
G.R. No. 91649, 14 May 1991, 197 SCRA 52.
[21]
Sec. 11, Art. II (Declaration of Principles and State Policies), provides that [t]he
State values the dignity of every human person and guarantees full respect
for human rights.
[22]
Sec. 12, Art. II, provides that [t]he State recognizes the sanctity of family life and
shall protect and strengthen the family as a basic autonomous social
institution. It shall equally protect the life of the mother and the life of the
unborn from conception. The natural and primary right and duty of parents in
the rearing of the youth for civic efficiency and the development of moral
character shall receive the support of the government.
[23]
Sec. 13, Art. II, provides that [t]he State recognizes the vital role of the youth in
nation-building and shall promote and protect their physical, moral, spiritual,
intellectual, and social well-being. It shall inculcate in the youth patriotism
and nationalism, and encourage their involvement in public and civic affairs.
Sec. 1, Art. XIII (Social Justice and Human Rights), provides that [t]he Congress
[24]

shall give highest priority to the enactment of measures that protect and enhance
the right of all the people to human dignity, reduce social, economic and political
inequalities, and remove cultural inequities by equitably diffusing wealth and
political power for the common good.
To this end, the State shall regulate the acquisition, ownership, use, and
disposition of property and its increments.
Sec. 2, Art. XIII, provides that [t]he promotion of social justice shall include the
commitment to create economic opportunities based on freedom of initiative
and self-reliance.
 Sec. 2, Art. XIV (Education, Science and Technology, Arts, Culture, and Sports),
[25]

provides that [t]he State shall:

(1) Establish, maintain, and support a complete, adequate, and integrated system
of education relevant to the needs of the people and society;
(2) Establish and maintain a system of free public education in the elementary and
high school levels.Without limiting the natural right of parents to rear their children,
elementary education is compulsory for all children of school age;
(3) Establish and maintain a system of scholarship grants, student loan programs,
subsidies, and other incentives which shall be available to deserving students in
both public and private schools, especially to the underprivileged;
(4) Encourage non-formal, informal, and indigenous learning, independent, and
out-of-school study programs particularly those that respond to community needs;
and
(5) Provide adult citizens, the disabled, and out-of-school youth with training in
civics, vocational efficiency, and other skills.
[26]
G.R. No. 115455, 25 August 1994, 235 SCRA 630.
[27]
See Note 25.
[28]
Sec. 1, Art. XIV, provides that [t]he State shall protect and promote the right of
all citizens to quality education at all levels of education and shall take
appropriate steps to make such education accessible to all.
[29]
G.R. No. 118910, 17 July 1995.
[30]
Sec. 5, Art. II (Declaration of Principles and State Policies), provides that [t]he
maintenance of peace and order, the protection of life, liberty, and property,
and the promotion of the general welfare are essential for the enjoyment by
all the people of the blessings of democracy.
[31]
See Note 23.
[32]
See Note 24.
[33]
Sec. 17, Art. II, provides that [t]he State shall give priority to education, science
and technology, arts, culture, and sports to foster patriotism and nationalism,
accelerate social progress, and promote total human liberation and
development.
[34]
Nolledo, Jose N., The New Constitution of the Philippines Annotated, 1990 ed.,
p. 72.
[35]
Websters Third New International Dictionary, 1986 ed., p. 1656.
[36]
The guest list of the Manila Hotel includes Gen. Douglas MacArthur, the Duke
of Windsor, President Richard Nixon of U.S.A., Emperor Akihito of Japan,
President Dwight Eisenhower of U.S.A, President Nguyen Van Thieu of
Vietnam, President Park Chung Hee of Korea, Prime Minister Richard Holt
of Australia, Prime Minister Keith Holyoake of New Zealand, President
Lyndon Johnson of U.S.A., President Jose Lopez Portillo of Mexico, Princess
Margaret of England, Prime Minister Malcolm Fraser of Australia, Prime
Minister Yasuhiro Nakasone of Japan, Prime Minister Pierre Elliot Trudeau
of Canada, President Raul Alfonsin of Argentina, President Felipe Gonzalez
of Spain, Prime Minister Noboru Takeshita of Japan, Prime Minister Hussain
Muhammad Ershad of Bangladesh, Prime Minister Bob Hawke of Australia,
Prime Minister Yasuhiro Nakasone of Japan, Premier Li Peng of China,
Sultan Hassanal Bolkiah of Brunei, President Ramaswami Venkataraman of
 India, Prime Minister Go Chok Tong of Singapore, Prime Minister Enrique
Silva Cimma of Chile, Princess Chulaborn and Mahacharri Sirindhorn of
Thailand, Prime Minister Tomiichi Murayama of Japan, Sultan Azlan Shah
and Raja Permaisuri Agong of Malaysia, President Kim Young Sam of Korea,
Princess Infanta Elena of Spain, President William Clinton of U.S.A., Prime
Minister Mahathir Mohamad of Malaysia, King Juan Carlos I and Queen
Sofia of Spain, President Carlos Saul Menem of Argentina, Prime Ministers
Chatichai Choonhavan and Prem Tinsulanonda of Thailand, Prime Minister
Benazir Bhutto of Pakistan, President Vaclav Havel of Czech Republic, Gen.
Norman Schwarzkopf of U.S.A., President Ernesto Perez Balladares of
Panama, Prime Minister Adolfas Slezevicius of Lithuania, President Akbar
Hashemi Rafsanjani of Iran, President Askar Akayev of Kyrgyztan, President
Ong Teng Cheong of Singapore, President Frei Ruiz Tagle of Chile,
President Le Duc Anh of Vietnam, and Prime Minister Julius Chan of Papua
New Guinea, see Memorandum for Petitioner, pp. 16-19.
[37]
Authored by Beth Day Romulo.
[38]
See Note 9, pp.15-16; Rollo, pp. 50-51.
[39]
Record of the Constitutional Commission, Vol. 3, 22 August 1986, p. 607.
[40]
Id., p. 612.
[41]
Id., p. 616.
[42]
Id., p. 606.
[43]
Nolledo, J.N., The New Constitution of the Philippines Annotated, 1990 ed.,
pp.930-931.
[44]
Bidders were required to have at least one of the these qualifications to be able
to participate in the bidding process; see Note 2.
[45]
Memorandum of Fr. Joaquin G. Bernas, S.J., p.6.
[46]
Id., pp. 3-4.
[47]
See Note 8.
[48]
Keynote Address at the ASEAN Regional Symposium on Enforcement of
Industrial Property Rights held 23 October 1995 at New World Hotel, Makati
City.
[49]
Speech of Senior Associate Justice Teodoro R. Padilla at the Induction of
Officers and Directors of the PHILCONSA for 1996 held 16 January 1996 at
the Sky-Top, Hotel Intercontinental, Makati City.
[50]
Memorandum of Authorities submitted by former Chief Justice Enrique M.
Fernando, p.5.
[51]
8 March 1996 issue of Philippine Daily Inquirer, p. B13.