1. EN BANC
's First Term (2010 to 2013)
G.R. Nos. 217126-27, November 10, 2015
CONCHITA CARPIO MORALES, IN HER CAPACITY AS THE
OMBUDSMAN, Petitioner,
v.
COURT OF APPEALS (SIXTH DIVISION) AND JEJOMAR ERWIN S. BINAY,
JR., Respondents.
DECISION
PERLAS-BERNABE, J.:
"All government is a trust, every branch of government is a trust, and immemorially acknowledged
so to be[.]"1ChanRoblesVirtualawlibrary
The Case
Before the Court is a petition for certiorari and prohibition2 filed on March 25, 2015 by petitioner
Conchita Carpio Morales, in her capacity as the Ombudsman (Ombudsman), through the Office of
the Solicitor General (OSG), assailing: (a) the Resolution3 dated March 16, 2015 of public
respondent the Court of Appeals (CA) in CA-G.R. SP No. 139453, which granted private
respondent Jejomar Erwin S. Binay, Jr.'s (Binay, Jr.) prayer for the issuance of a temporary
restraining order (TRO) against the implementation of the Joint Order4 dated March 10, 20,15 of
the Ombudsman in OMB-C-A-15-0058 to 0063 (preventive suspension order) preventively
suspending him and several other public officers and employees of the City Government of
Makati, for six (6) months without pay; and (b) the Resolution5 dated March 20, 2015 of the CA,
ordering the Ombudsman to comment on Binay, Jr.'s petition for contempt6 in CA-G.R. SP No.
139504.
Pursuant to the Resolution7 dated April 6, 2015, the CA issued a writ of preliminary injunction8
(WPI) in CA-G.R. SP No. 139453 which further enjoined the implementation of the preventive
suspension order, prompting the Ombudsman to file a supplemental petition9 on April 13, 2015.
The Facts
On July 22, 2014, a complaint/affidavit10 was filed by Atty. Renato L. Bondal and Nicolas "Ching"
Enciso VI before the Office of the Ombudsman against Binay, Jr. and other public officers and
employees of the City Government of Makati (Binay, Jr., et al), accusing them of Plunder11 and
violation of Republic Act No. (RA) 3019,12 otherwise known as "The Anti-Graft and Corrupt
Practices Act," in connection with the five (5) phases of the procurement and construction of the
Makati City Hall Parking Building (Makati Parking Building).13
On September 9, 2014, the Ombudsman constituted a Special Panel of Investigators14 to conduct
a fact-finding investigation, submit an investigation report, and file the necessary complaint, if
warranted (1st Special Panel).15 Pursuant to the Ombudsman's directive, on March 5, 2015, the
1st Special Panel filed a complaint16 (OMB Complaint) against Binay, Jr., et al, charging them
with six (6) administrative cases17 for Grave Misconduct, Serious Dishonesty, and Conduct
Prejudicial to the Best Interest of the Service, and six (6) criminal cases18 for violation of Section
3 (e) of RA 3019, Malversation of Public Funds, and Falsification of Public Documents (OMB
Cases).19
As to Binay, Jr., the OMB Complaint alleged that he was involved in anomalous activities
attending the following procurement and construction phases of the Makati Parking Building
project, committed during his previous and present terms as City Mayor of Makati:
Binay, Jr.
(a) On September 21, 2010, Binay, Jr. issued the Notice of Award21 for Phase III of the Makati
Parking Building project to Hilmarc's Construction Corporation (Hilmarc's), and consequently,
executed the corresponding contract22 on September 28, 2010,23 without the required publication
and the lack of architectural design,24 and approved the release of funds therefor in the following
amounts as follows: (1) P130,518,394.80 on December 15, 2010;25 (2) P134,470,659.64 on
January 19, 2011;26 (3) P92,775,202.27 on February 25, 2011;27 (4) P57,148,625.51 on March
28, 2011;28 (5) P40,908,750.61 on May 3, 2011;29 and (6) P106,672,761.90 on July 7, 2011;30
(b) On August 11, 2011, Binay, Jr. issued the Notice of Award31 for Phase IV of the Makati
Parking Building project to Hilmarc's, and consequently, executed the corresponding contract32
on August 18, 2011,33 without the required publication and the lack of architectural design,34 and
approved the release of funds therefor in the following amounts as follows: (1) P182,325,538.97
on October 4, 2O11;35 (2) P173,132,606.91 on October 28,2011;36 (3) P80,408,735.20 on
December 12, 2011;37 (4) P62,878,291.81 on February 10, 2012;38 and (5) P59,639,167.90 on
October 1, 2012;39
(c) On September 6, 2012, Binay, Jr. issued the Notice of Award40 for Phase V of the Makati
Parking Building project to Hilmarc's, and consequently, executed the corresponding contract41
on September 13, 2012,42 without the required publication and the lack of architectural design,43
and approved the release of the funds therefor in the amounts of P32,398,220.0544 and
P30,582,629.3045 on December 20, 2012;� and
Binay, Jr.'s Second Term (2013 to 2016)46
(d) On July 3, 2013 and July 4, 2013, Binay, Jr. approved the release of funds for the remaining
balance of the September 13, 2012 contract with Hilmarc's for Phase V of the Makati Parking
Building project in the amount of P27,443,629.97;47 and
(e) On July 24, 2013, Binay, Jr. approved the release of funds for the remaining balance of the
contract48 with MANA Architecture & Interior Design Co. (MANA) for the design and architectural
services covering the Makati Parking Building project in the amount of P429,011.48.49
On March 6, 2015, the Ombudsman created another Special Panel of Investigators to conduct a
preliminary investigation and administrative adjudication on the OMB Cases (2nd Special
Panel).50 Thereafter, on March 9, 2015, the 2nd Special Panel issued separate orders51 for each
of the OMB Cases, requiring Binay, Jr., et al. to file their respective counter-affidavits.52
Before Binay, Jr., et al.'s filing of their counter-affidavits, the Ombudsman, upon the
recommendation of the 2nd Special Panel, issued on March 10, 2015, the subject preventive
suspension order, placing Binay, Jr., et al. under preventive suspension for not more than six (6)
months without pay, during the pendency of the OMB Cases.53
The Ombudsman ruled that the requisites for the preventive suspension of a public officer
are present, finding that:
(a) the evidence of Binay, Jr., et al.'s guilt was strong given that
(1) the losing bidders and members of the Bids and Awards Committee of Makati City
had attested to the irregularities attending the Makati Parking Building project;
(2) the documents on record negated the publication of bids; and
(3) the disbursement vouchers, checks, and official receipts showed the release of
funds; and
(b)
(1) Binay, Jr., et al. were administratively charged with Grave Misconduct, Serious
Dishonesty, and Conduct Prejudicial to the Best Interest of the Service;
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 (2) said charges, if proven to be true, warrant removal from public service under the
Revised Rules on Administrative Cases in the Civil Service (RRACCS), and
(3) Binay, Jr., et al.'s respective positions give them access to public records and allow
them to influence possible witnesses; hence, their continued stay in office may prejudice
the investigation relative to the OMB Cases filed against them.55 Consequently, the
Ombudsman directed the Department of Interior and Local Government (DILG), through
Secretary Manuel A. Roxas II (Secretary Roxas), to immediately implement the
preventive suspension order against Binay, Jr., et al., upon receipt of the same.56
On March 11, 2015, a copy of the preventive suspension order was sent to the Office of the City
Mayor, and received by Maricon Ausan, a member of Binay, Jr.'s staff.57
The Proceedings Before the CA
On even date, Binay, Jr. filed a petition for certiorari before the CA, docketed as CA-G.R. SP No.
139453, seeking the nullification of the preventive suspension order, and praying for the issuance
of a TRO and/or WPI to enjoin its implementation.60Primarily, Binay, Jr. argued that he could not
be held administratively liable for any anomalous activity attending any of the five (5) phases of
the Makati Parking Building project since:
(a) Phases I and II were undertaken before he was elected Mayor of Makati in 2010; and
(b) Phases III to V transpired during his first term and that his re-election as City Mayor of Makati
for a second term effectively condoned his administrative liability therefor, if any, thus rendering
the administrative cases against him moot and academic.In any event, Binay, Jr. claimed that the
Ombudsman's preventive suspension order failed to show that the evidence of guilt presented
against him is strong, maintaining that he did not participate in any of the purported
irregularities.62 In support of his prayer for injunctive relief, Binay, Jr. argued that he has a clear
and unmistakable right to hold public office, having won by landslide vote in the 2010 and 2013
elections, and that, in view of the condonation doctrine, as well as the lack of evidence to
sustain the charges against him, his suspension from office would undeservedly deprive the
electorate of the services of the person they have conscientiously chosen and voted into office.63
On March 16, 2015, at around 8:24 a.m., Secretary Roxas caused the implementation of the
preventive suspension order through the DILG National Capital Region - Regional Director,
Renato L. Brion, CESO III (Director Brion), who posted a copy thereof on the wall of the Makati
City Hall after failing to personally serve the same on Binay, Jr. as the points of entry to the Makati
City Hall were closed. At around 9:47 a.m., Assistant City Prosecutor of Makati Billy C.
Evangelista administered the oath of office on Makati City Vice Mayor Romulo V. Pe�a, Jr.
(Pe�a, Jr.) who thereupon assumed office as Acting Mayor.64
At noon of the same day, the CA issued a Resolution65 (dated March 16, 2015), granting Binay,
Jr.'s prayer for a TRO,66 notwithstanding Pena, Jr.'s assumption of duties as Acting Mayor earlier
that day.67 Citing the case of Governor Garcia, Jr. v. CA,68 the CA found that it was more prudent
on its part to issue a TRO in view of the extreme urgency of the matter and seriousness of the
issues raised, considering that if it were established that the acts subject of the administrative
cases against Binay, Jr. were all committed during his prior term, then, applying the condonation
doctrine, Binay, Jr.'s re-election meant that he can no longer be administratively charged.69 The
CA then directed the Ombudsman to comment on Binay, Jr.'s petition for certiorari .70
On March 17, 2015, the Ombudsman manifested71 that the TRO did not state what act was being
restrained and that since the preventive suspension order had already been served and
implemented, there was no longer any act to restrain.72
On the same day, Binay, Jr. filed a petition for contempt,73� docketed as CA-G.R. SP No.
139504, accusing Secretary Roxas, Director Brion, the officials of the Philippine National Police,
and Pena, Jr. of deliberately refusing to obey the CA, thereby allegedly impeding, obstructing, or
degrading the administration of justice.74 The Ombudsman and Department of Justice Secretary
Leila M. De Lima were subsequently impleaded as additional respondents upon Binay, Jr.'s filing
of the amended and supplemental petition for contempt75 (petition for contempt) on March 19,
2015.76 Among others, Binay, Jr. accused the Ombudsman and other respondents therein for
willfully and maliciously ignoring the TRO issued by the CA against the preventive suspension
order.77
In a Resolution78dated March 20, 2015, the CA ordered the consolidation of CA-G.R. SP No.
139453 and CA-G.R. SP No. 139504, and, without necessarily giving due course to Binay, Jr.'s
petition for contempt, directed the Ombudsman to file her comment thereto.79 The cases were set
for hearing of oral arguments on March 30 and 31, 2015.80
The Proceedings Before the Court
Prior to the hearing of the oral arguments before the CA, or on March 25, 2015, the Ombudsman
filed the present petition before this Court, assailing the CA's March 16, 2015 Resolution, which
granted Binay, Jr.'s prayer for TRO in CA-G.R. SP No. 139453, and the March 20, 2015
Resolution directing her to file a comment on Binay, Jr.'s petition for contempt in CA-G.R. SP No.
139504.81 The Ombudsman claims that: (a) the CA had no jurisdiction to grant Binay, Jr.'s prayer
for a TRO, citing Section 14 of RA 6770,82 or "The Ombudsman Act of 1989," which states that
no injunctive writ could be issued to delay the Ombudsman's investigation unless there is prima
facie evidence that the subject matter thereof is outside the latter's jurisdiction;83 and (b) the CA's
directive for the Ombudsman to comment on Binay, Jr.'s petition for contempt is illegal and
improper, considering that the Ombudsman is an impeachable officer, and therefore, cannot be
subjected to contempt proceedings.84
In his comment85 filed on April 6, 2015, Binay, Jr. argues that Section 1, Article VIII of the 1987
Constitution specifically grants the CA judicial power to review acts of any branch or
instrumentality of government, including the Office of the Ombudsman, in case of grave abuse of
discretion amounting to lack or excess of jurisdiction, which he asserts was committed in this case
when said office issued the preventive suspension order against him.86 Binay, Jr. posits that it
was incumbent upon the Ombudsman to1 have been apprised of the condonation doctrine as this
would have weighed heavily in determining whether there was strong evidence to warrant the
issuance of the preventive suspension order.87 In this relation, Binay, Jr. maintains that the CA
correctly enjoined the implementation of the preventive suspension order given his clear and
unmistakable right to public office, and that it is clear that he could not be held administratively
liable for any of the charges against him since his subsequent re-election in 2013 operated as a
condonation of any administrative offenses he may have committed during his previous term.88
As regards the CA's order for the Ombudsman to comment on his petition for contempt, Binay, Jr.
submits that while the Ombudsman is indeed an impeachable officer and, hence, cannot be
removed from office except by way of impeachment, an action for contempt imposes the penalty
of fine and imprisonment, without necessarily resulting in removal from office. Thus, the fact that
the Ombudsman is an impeachable officer should not deprive the CA of its inherent power to
punish contempt.89
Meanwhile, the CA issued a Resolution90 dated April 6, 2015, after the oral arguments before it
were held,91 granting Binay, Jr.'s prayer for a WPI, which further enjoined the implementation of
the preventive suspension order. In so ruling, the CA found that Binay, Jr. has an ostensible right
to the final relief prayed for, namely, the nullification of the preventive suspension order, in view of
the condonation doctrine, citing Aguinaldo v. Santos.92 Particularly, it found that the Ombudsman
can hardly impose preventive suspension against Binay, Jr. given that his re-election in 2013 as
City Mayor of Makati condoned any administrative liability arising from anomalous activities
relative to the Makati Parking Building project from 2007 to 2013.93 In this regard, the CA added
that, although there were acts which were apparently committed by Binay, Jr. beyond his first term
� namely, the alleged payments on July 3, July 4, and July 24, 2013,94 corresponding to the
services of Hillmarc's and MANA - still, Binay, Jr. cannot be held administratively liable therefor
based on the cases of Salalima v. Guingona, Jr.,95 and Mayor Garcia v. Mojica96 wherein the
condonation doctrine was still applied by the Court although the payments were made after the
official's re-election, reasoning that the payments were merely effected pursuant to contracts
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executed before said re-election.97 To this, the CA added that there was no concrete evidence of
Binay, Jr.'s participation for the alleged payments made on July 3, 4, and 24, 2013.98
In view of the CA's supervening issuance of a WPI pursuant to its April 6, 2015 Resolution, the
Ombudsman filed a supplemental petition99 before this Court, arguing that the condonation
doctrine is irrelevant to the determination of whether the evidence of guilt is strong for purposes of
issuing preventive suspension orders. The Ombudsman also maintained that a reliance on the
condonation doctrine is a matter of defense, which should have been raised by Binay, Jr. before it
during the administrative proceedings, and that, at any rate, there is no condonation because
Binay, Jr. committed acts subject of the OMB Complaint after his re-election in 2013.100
On April 14 and 21, 2015,101 the Court conducted hearings for the oral arguments of the parties.
Thereafter, they were required to file their respective memoranda.102 In compliance thereto, the
Ombudsman filed her Memorandum103 on May 20, 2015, while Binay, Jr. submitted his
Memorandum the following day.104
Pursuant to a Resolution105 dated June 16, 2015, the Court directed the parties to comment on
each other's memoranda, and the OSG to comment on the Ombudsman's Memorandum, all within
ten (10) days from receipt of the notice.
On July 15, 2015, both parties filed their respective comments to each other's memoranda.106
Meanwhile, on July 16, 2015, the OSG filed its Manifestation In Lieu of Comment,107 simply
stating that it was mutually agreed upon that the Office of the Ombudsman would file its
Memorandum, consistent with its desire to state its "institutional position."108 In her Memorandum
and Comment to Binay, Jr.'s Memorandum, the Ombudsman pleaded, among others, that this
Court abandon the condonation doctrine.109 In view of the foregoing, the case was deemed
submitted for resolution.chanrobleslaw
The Issues Before the Court
Based on the parties' respective pleadings, and as raised during the oral arguments conducted
before this Court, the main issues to be resolved in seriatim are as follows:
 Whether or not the present petition, and not motions for reconsideration of the assailed
CA issuances in CA-G.R. SP No. 139453 and CA-G.R. SP No. 139504, is the
Ombudsman's plain, speedy, and adequate remedy;
 Whether or not the CA has subject matter jurisdiction over the main petition for certiorari
in CA-G.R. SP No. 139453;
 Whether or not the CA has subject matter jurisdiction to issue a TRO and/or WPI
enjoining the implementation of a preventive suspension order issued by the
Ombudsman;
 Whether or not the CA gravely abused its discretion in issuing the TRO and eventually,
the WPI in CA-G.R. SP No. 139453 enjoining the implementation of the preventive
suspension order against Binay, Jr. based on the condonation doctrine; and
 Whether or not the CA's directive for the Ombudsman to ' comment on Binay, Jr.'s
petition for contempt in CA- G.R. SP No. 139504 is improper and illegal.
The Ruling of the Court
The petition is partly meritorious.
I.
A common requirement to both a petition for certiorari and a petition for prohibition taken under
Rule 65 of the 1997 Rules of Civil Procedure is that the petitioner has no other plain, speedy, and
adequate remedy in the ordinary course of law. Sections 1 and 2 thereof provide:
Section 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-
judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain,
speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file
a verified petition in the proper court, alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require.
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Section 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board,
officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or
in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any other plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court,
alleging the facts r with certainty and praying that judgment be rendered commanding the
respondent to desist from further proceedings in the action or matter specified therein, or
otherwise granting such incidental reliefs as law and justice may require.
x x x x (Emphases supplied)
Hence, as a general rule, a motion for reconsideration must first be filed with the lower court prior
to resorting to the extraordinary remedy of certiorari or prohibition since a motion for
reconsideration may still be considered as a plain, speedy, and adequate remedy in the ordinary
course of law. The rationale for the pre-requisite is to grant an opportunity for the lower court or
agency to correct any actual or perceived error attributed to it by the re-examination of the legal
and factual circumstances of the case.110
Jurisprudence states that "[i]t is [the] inadequacy, [and] not the mere absence of all other legal
remedies and the danger of failure of justice without the writ, that must usually determine the
propriety of certiorari [or prohibition]. A remedy is plain, speedy[,] and adequate if it will promptly
relieve the petitioner from the injurious effects of the judgment, order, or resolution of the lower
court or agency, x x x."111
In this light, certain exceptions were crafted to the general rule requiring a prior motion for
reconsideration before the filing of a petition for certiorari, which exceptions also apply to a petition
for prohibition.112 These are: (a) where the order is a patent nullity, as where the court a quo has
no jurisdiction; (b) where the questions raised in the certiorari proceedings have been duly raised
and passed upon by the lower court, or are the same as those raised and passed upon in the
lower court; (c) where there is an urgent necessity for the resolution of the question and any
further delay would prejudice the interests of the Government or of the petitioner or the subject
matter of the action is perishable; (d) where, under the circumstances, a motion for
reconsideration would be useless; (e) where petitioner was deprived of due process and there is
extreme urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and
the granting of such relief by the trial court is improbable; (g) where the proceedings in the lower
court are a nullity for lack of due process; (h) where the proceedings were ex parte or in which the
petitioner had no opportunity to object; and (i) where the issue raised is one purely of law or where
public interest is involved.113
In this case, it is ineluctably clear that the above-highlighted exceptions attend since, for the first
time, the question on the authority of the CA - and of this Court, for that matter - to enjoin the
implementation of a preventive suspension order issued by the Office of the Ombudsman is put to
the fore. This case tests the constitutional and statutory limits of the fundamental powers of key
government institutions - namely, the Office of the Ombudsman, the Legislature, and the Judiciary
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- and hence, involves an issue of transcendental public importance that demands no less than a
careful but expeditious resolution. Also raised is the equally important issue on the propriety of the
continuous application of the condonation doctrine as invoked by a public officer who desires
exculpation from administrative liability. As such, the Ombudsman's direct resort to certiorari and
prohibition before this Court, notwithstanding her failure to move for the prior reconsideration of
the assailed issuances in CA-G.R. SP No. 139453 and CA-G.R. SP No. 139504 before the CA, is
justified.chanrobleslaw
II.
Albeit raised for the first time by the Ombudsman in her Memorandum,114 it is nonetheless proper
to resolve the issue on the CA's lack of subject matter jurisdiction over the main petition for
certiorari in CA-G.R. SP No. 139453, in view of the well-established rule that a court's jurisdiction
over the subject matter may be raised at any stage of the proceedings. The rationale is that
subject matter jurisdiction is conferred by law, and the lack of it affects the very authority of the
court to take cognizance of and to render judgment on the action.115 Hence, it should be
preliminarily determined if the CA indeed had subject matter jurisdiction over the main CA-G.R. SP
No. 139453 petition, as the same determines the validity of all subsequent proceedings relative
thereto. It is noteworthy to point out that Binay, Jr. was given the opportunity by this Court to be
heard on this issue,116 as he, in fact, duly submitted his opposition through his comment to the
Ombudsman's Memorandum.117 That being said, the Court perceives no reasonable objection
against ruling on this issue.
The Ombudsman's argument against the CA's lack of subject matter jurisdiction over the main
petition, and her corollary prayer for its dismissal, is based on her interpretation of Section 14, RA
6770, or the Ombudsman Act,118 which reads in full:
Section 14. Restrictions. - No writ of injunction shall be issued by any court to delay an
investigation being conducted by the Ombudsman under this Act, unless there is a prima facie
evidence that the subject matter of the investigation is outside the jurisdiction of the Office of the
Ombudsman.
No court shall hear any appeal or application for remedy against the decision or findings of the
Ombudsman, except the Supreme Court, on pure question of law.
The subject provision may be dissected into two (2) parts.
The first paragraph of Section 14, RA 6770 is a prohibition against any court (except the Supreme
Court119) from issuing a writ of injunction to delay an investigation being conducted by the Office
of the Ombudsman. Generally speaking, "[injunction is a judicial writ, process or proceeding
whereby a party is ordered to do or refrain from doing a certain act. It may be the main action or
merely a provisional remedy for and as an incident in the main action."120 Considering the textual
qualifier "to delay," which connotes a suspension of an action while the main case remains
pending, the "writ of injunction" mentioned in this paragraph could only refer to injunctions of the
provisional kind, consistent with the nature of a provisional injunctive relief.
The exception to the no injunction policy is when there is prima facie evidence that the subject
matter of the investigation is outside the office's jurisdiction. The Office of the Ombudsman has
disciplinary authority over all elective and appointive officials of the government and its
subdivisions, instrumentalities, and agencies, with the exception only of impeachable officers,
Members of Congress, and the Judiciary.121 Nonetheless, the Ombudsman retains the power to
investigate any serious misconduct in office allegedly committed by officials removable by
impeachment, for the purpose of filing a verified complaint for impeachment, if warranted.122 Note
that the Ombudsman has concurrent jurisdiction over certain administrative cases which are within
the jurisdiction of the regular courts or administrative agencies, but has primary jurisdiction to
investigate any act or omission of a public officer or employee who is under the jurisdiction of the
Sandiganbayan.123
On the other hand, the second paragraph of Section 14, RA 6770 provides that no appeal or
application for remedy may be heard against the decision or findings of the Ombudsman, with the
exception of the Supreme Court on pure questions of law. This paragraph, which the Ombudsman
particularly relies on in arguing that the CA had no jurisdiction over the main CA-G.R. SP No.
139453 petition, as it is supposedly this Court which has the sole jurisdiction to conduct a judicial
review of its decisions or findings, is vague for two (2) reasons: (1) it is unclear what the phrase
"application for remedy" or the word "findings" refers to; and (2) it does not specify what
procedural remedy is solely allowable to this Court, save that the same be taken only against a
pure question of law. The task then, is to apply the relevant principles of statutory construction to
resolve the ambiguity.
"The underlying principle of all construction is that the intent of the legislature should be sought in
the words employed to express it, and that when found[,] it should be made to govern, x x x. If the
words of the law seem to be of doubtful import, it may then perhaps become necessary to look
beyond them in order to ascertain what was in the legislative mind at the time the law was
enacted; what the circumstances were, under which the action was taken; what evil, if any, was
meant to be redressed; x x x [a]nd where the law has contemporaneously been put into operation,
and in doing so a construction has necessarily been put upon it, this construction, especially if
followed for some considerable period, is entitled to great respect, as being very probably a true
expression of the legislative purpose, and is not lightly to be overruled, although it is not
conclusive."124
As an aid to construction, courts may avail themselves of the actual proceedings of the legislative
body in interpreting a statute of doubtful meaning. In case of doubt as to what a provision of a
statute means, the meaning put to the provision during the legislative deliberations may be
adopted,125 albeit not controlling in the interpretation of the law.126
A. The Senate deliberations cited by the Ombudsman do not pertain to the second
paragraph of Section 14, RA 6770.
The Ombudsman submits that the legislative intent behind Section 14, RA 6770, particularly on
the matter of judicial review of her office's decisions or findings, is supposedly clear from the
following Senate deliberations:127
Senator [Edgardo J.] Angara, x x x. On page 15, Mr. President, line 14, after the phrase "petition
for" delete the word "review" and in lieu thereof, insert the word CERTIORARI. So that, review or
appeal from the decision of the Ombudsman would only be taken not on a petition for review, but
on certiorari.
The President [Jovito R. Salonga]. What is the practical effect of that? Will it be more difficult to
reverse the decision under review?
Senator Angara. It has two practical effect ways, Mr. President. First is that the findings of facts of
the Ombudsman would be almost conclusive if supported by substantial evidence. Second, we
would not unnecessarily clog the docket of the Supreme Court. So, it in effect will be a very strict
appeal procedure.
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Senator [Teofisto T.] Guingona, [Jr.]. Does this mean that, for example, if there are exhaustive
remedies available to a respondent, the respondent himself has the right to exhaust the
administrative remedies available to him?
Senator Angara. Yes, Mr. President, that is correct.
Senator Guingona. And he himself may cut the proceeding short by appealing to the Supreme
Court only on certiorari ?
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Senator Angara. On question of law, yes.
Senator Guingona. And no other remedy is available to him?
Senator Angara. Going to the Supreme Court, Mr. President?
Senator Guingona. Yes. What I mean to say is, at what stage, for example, if he is a presidential
appointee who is the respondent, if there is f no certiorari available, is the respondent given the
right to exhaust his administrative remedies first before the Ombudsman can take the appropriate
action?
Senator Angara. Yes, Mr. President, because we do not intend to change the administrative law
principle that before one can go to court, he must exhaust all administrative remedies xxx
available to him before he goes and seeks judicial review.
xxxx
Senator [Neptali A.] Gonzales. What is the purpose of the Committee in changing the method of
appeal from one of a petition for review to a petition for certiorari ?
Senator Angara. To make it consistent, Mr. President, with the provision here in the bill to the
effect that the finding of facts of the Ombudsman is conclusive if supported by substantial
evidence.
Senator Gonzales. A statement has been made by the Honorable Presiding Officer to which I
concur, that in an appeal by certiorari , the appeal is more difficult. Because in certiorari it is a
matter of discretion on the part of the court, whether to give due course to the petition or dismiss it
outright. Is that not correct, Mr. President?
Senator Angara. That is absolutely correct, Mr. President
Senator Gonzales. And in a petition for certiorari , the issue is limited to whether or not the
Ombudsman here has acted without jurisdiction and has committed a grave abuse of discretion
amounting to lack of jurisdiction. Is that not the consequence, Mr. President.
Senator Angara. That is correct, Mr. President.
Senator Gonzales. And it is, therefore, in this sense that the intention of the Committee is to
make it harder to have a judicial review, but should be limited only to cases that I have
enumerated.
Senator Angara. Yes, Mr. President.
Senator Gonzales. I think, Mr. President, our Supreme Court has made a distinction between a
petition for review and a petition for certiorari ; because before, under the 1935 Constitution
appeal from any order, ruling or decision of the COMELEC shall be by means of review. But under
the Constitution it is now by certiorari and the Supreme Court said that by this change, the court
exercising judicial review will not inquire into the facts, into the evidence, because we will not go
deeply by way of review into the evidence on record but its authority will be limited to a
determination of whether the administrative agency acted without, or in excess of, jurisdiction, or
committed a grave abuse of discretion. So, I assume that that is the purpose of this amendment,
Mr. President.
Senator Angara. The distinguished Gentleman has stated it so well.
Senator Gonzales. I just want to put that in the Record. Senator Angara. It is very well stated, Mr.
President.
xxxx
The President. It is evident that there must be some final authority to render decisions. Should it
be the Ombudsman or should it be the Supreme Court?
Senator Angara. As I understand it, under our scheme of government, Mr. President, it is and has
to be the Supreme Court to make the final determination.
The President. Then if that is so, we have to modify Section 17.
Senator Angara. That is why, Mr. President, some of our Colleagues have made a reservation to
introduce an appropriate change during the period of Individual Amendments.
xxxx
The President. All right. Is there any objection to the amendment inserting the word CERTIORARI
instead of "review"? [Silence] Hearing none, the same is approved.128
Upon an assiduous scrutiny of these deliberations, the Court is, however, unconvinced that the
provision debated on was Section 14, RA 6770, as the Ombudsman invokes. Note that the
exchange begins with the suggestion of Senator Angara to delete the word "review" that comes
after the phrase "petition for review" and, in its stead, insert the word "certiorari" so that the
"review or appeal from the decision of the Ombudsman would not only be taken on a petition for
review, but on certiorari" The ensuing exchange between Senators Gonzales and Angara then
dwells on the purpose of changing the method of review from one of a petition for review to a
petition for certiorari - that is, to make "the appeal x x x more difficult." Ultimately, the amendment
to the change in wording, from "petition for review" to "petition for certiorari" was approved.
Noticeably, these references to a "petition for review" and the proposed "petition for certiorari" are
nowhere to be found in the text of Section 14, RA 6770. In fact, it was earlier mentioned that this
provision, particularly its second paragraph, does not indicate what specific procedural remedy
one should take in assailing a decision or finding of the Ombudsman; it only reveals that the
remedy be taken to this Court based on pure questions of law. More so, it was even commented
upon during the oral arguments of this case129 that there was no debate or clarification made on
the current formulation of the second paragraph of Section 14, RA 6770 per the available excerpts
of the Senate deliberations. In any case, at least for the above-cited deliberations, the Court finds
no adequate support to sustain the Ombudsman's entreaty that the CA had no subject matter
jurisdiction over the main CA-G.R. SP No. 139453 petition.
On the contrary, it actually makes greater sense to posit that these deliberations refer to another
Ombudsman Act provision, namely Section 27, RA 6770. This is because the latter textually
reflects the approval of Senator Angara's suggested amendment, i.e., that the Ombudsman's
decision or finding may be assailed in a petition for certiorari to this Court (fourth paragraph), and
further, his comment on the conclusive nature of the factual findings of the Ombudsman, if
supported by substantial evidence (third paragraph):
Section 27. Effectivity and Finality of Decisions.� (1) All provisionary orders of the Office of the
Ombudsman are immediately effective and executory.
A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman
must be filed within five (5) days after receipt of written notice and shall be entertained only on any
of the following grounds:
(1) New evidence has been discovered which materially affects the order, directive or
decision;cralawlawlibrary
5
(2) Errors of law or irregularities have been committed prejudicial to the interest of the movant.
The motion for reconsideration shall be resolved within three (3) days from filing: Provided, That
only one motion for reconsideration shall be entertained.
Findings of fact by the Office of the Ombudsman when supported by substantial evidence are
conclusive. Any order, directive or decision imposing the penalty of public censure or reprimand,
suspension of not more than one (1) month's salary shall be final and unappealable.
In all administrative disciplinary cases, orders, directives, or decisions of the Office of the
Ombudsman may be appealed to the Supreme Court by filing a petition for certiorari within ten
(10) days from receipt of the written notice of the order, directive or decision or denial of the
motion for reconsideration in accordance with Rule 45 of the Rules of Court.
The above rules may be amended or modified by the Office of the ' Ombudsman as the interest of
justice may require. (Emphasis and underscoring supplied)
At first blush, it appears that Section 27, RA 6770 is equally ambiguous in stating that a "petition
for certiorari" should be taken in accordance with Rule 45 of the Rules of Court, as it is well-known
that under the present 1997 Rules of Civil Procedure, petitions for certiorari are governed by Rule
65 of the said Rules. However, it should be discerned that the Ombudsman Act was passed way
back in 1989130 and, hence, before the advent of the 1997 Rules of Civil Procedure.131 At that
time, the governing 1964 Rules of Court,132 consistent with Section 27, RA 6770, referred to the
appeal taken thereunder as a petition for certiorari , thus possibly explaining the remedy's textual
denomination, at least in the provision's final approved version:
RULE 45 Appeal from Court of Appeals to Supreme Court
SECTION 1. Filing of Petition with Supreme Court. - A party may appeal by certiorari , from a
judgment of the Court of Appeals, by filing with the Supreme Court a petition for certiorari , within
fifteen (15) days from notice of judgment or of the denial of his motion for reconsideration filed in
due time, and paying at the same time, to the clerk of said court the corresponding docketing fee.
The petition shall not be acted upon without proof of service of a copy thereof to the Court of
Appeals. (Emphasis supplied)
B. Construing the second paragraph of Section 14, RA 6770.
The Senate deliberations' lack of discussion on the second paragraph of Section 14, RA 6770
notwithstanding, the other principles of statutory construction can apply to ascertain the meaning
of the provision.
To recount, the second paragraph of Section 14, RA 6770 states that "[n]o court shall hear any
appeal or application for remedy against the decision or findings of the Ombudsman, except the
Supreme Court, on pure question of law."��� ;cralawlawlibrary
As a general rule, the second paragraph of Section 14, RA 6770 bans the whole range of
remedies against issuances of the Ombudsman, by prohibiting: (a) an appeal against any decision
or finding of the Ombudsman, and (b) "any application of remedy" (subject to the exception below)
against the same. To clarify, the phrase "application for remedy," being a generally worded
provision, and being separated from the term "appeal" by the disjunctive "or",133 refers to any
remedy (whether taken mainly or provisionally), except an appeal, following the maxim generalia
verba sunt generaliter intelligenda: general words are to be understood in a general sense.134 By
the same principle, the word "findings," which is also separated from the word "decision" by the
disjunctive "or", would therefore refer to any finding made by the Ombudsman (whether final or
provisional), except a decision.
The subject provision, however, crafts an exception to the foregoing general rule. While the
specific procedural vehicle is not explicit from its text, it is fairly deducible that the second
paragraph of Section 14, RA 6770 excepts, as the only allowable remedy against "the decision or
findings of the Ombudsman," a Rule 45 appeal, for the reason that it is the only remedy taken to
the Supreme Court on "pure questions of law," whether under the 1964 Rules of Court or the 1997
Rules of Civil Procedure:
Rule 45, 1964 Rules of Court
RULE 45 Appeal from Court of Appeals to Supreme Court
xxxx
Section 2. Contents of Petition. � The petition shall contain a concise statement of the matters
involved, the assignment of errors made in the court below, and the reasons relied on for the
allowance of the petition, and it should be accompanied with a true copy of the judgment sought to
be reviewed, together with twelve (12) copies of the record on appeal, if any, and of the
petitioner's brief as filed in the Court of Appeals. A verified statement of the date when notice of
judgment and denial of the motion for reconsideration, if any, were received shall accompany the
petition.
Only questions of law may be raised in the petition and must be distinctly set forth. If no record on
appeal has been filed in the Court of Appeals, the clerk of the Supreme Court, upon admission of
the petition, shall demand from the Court of Appeals the elevation of the whole record of the case.
(Emphasis and underscoring supplied)
Rule 45, 1997 Rules of Civil Procedure
RULE 45 Appeal by Certiorari to the Supreme Court
Section 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorari from a
judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax
Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with the
Supreme Court a verified petition for review on certiorari. The petition may include an application
for a writ of preliminary injunction or other provisional remedies and shall raise only questions of
law, which must be distinctly set forth. The petitioner may seek the same provisional remedies by
verified motion filed in the same action or proceeding at any time during its pendency. (Emphasis
and underscoring supplied)
That the remedy excepted in the second paragraph of Section 14, RA 6770 could be a petition for
certiorari under Rule 65 of the 1964 Rules of Court or the 1997 Rules of Procedure is a suggestion
that defies traditional norms of procedure. It is basic procedural law that a Rule 65 petition is
based on errors of jurisdiction, and not errors of judgment to which the classifications of (a)
questions of fact, (b) questions of law, or (c) questions of mixed fact and law, relate to. In fact,
there is no procedural rule, whether in the old or new Rules, which grounds a Rule 65 petition on
pure questions of law. Indeed, it is also a statutory construction principle that the lawmaking body
cannot be said to have intended the establishment of conflicting and hostile systems on the same
subject. Such a result would render legislation a useless and idle ceremony, and subject the laws
to uncertainty and unintelligibility.135 There should then be no confusion that the second
paragraph of Section 14, RA 6770 refers to a Rule 45 appeal to this Court, and no other. In sum,
the appropriate construction of this Ombudsman Act provision is that all remedies against
issuances of the Office of the Ombudsman are prohibited, except the above-stated Rule 45
remedy to the Court on pure questions of law.
C. Validity of the second paragraph of Section 14, RA 6770.
Of course, the second paragraph of Section 14, RA 6770's extremely limited restriction on
remedies is inappropriate since a Rule 45 appeal -which is within the sphere of the rules of
procedure promulgated by this Court - can only be taken against final decisions or orders of lower
courts,136 and not against "findings" of quasi-judicial agencies. As will be later elaborated upon,
6
Congress cannot interfere with matters of procedure; hence, it cannot alter the scope of a Rule 45
appeal so as to apply to interlocutory "findings" issued by the Ombudsman. More significantly, by
confining the remedy to a Rule 45 appeal, the provision takes away the remedy of certiorari,
grounded on errors of jurisdiction, in denigration of the judicial power constitutionally vested in
courts. In this light, the second paragraph of Section 14, RA 6770 also increased this Court's
appellate jurisdiction, without a showing, however, that it gave its consent to the same. The
provision is, in fact, very similar to the fourth paragraph of Section 27, RA 6770 (as above-cited),
which was invalidated in the case of Fabian v. Desiertoni137 (Fabian).138
In Fabian, the Court struck down the fourth paragraph of Section 27, RA 6770 as unconstitutional
since it had the effect of increasing the appellate jurisdiction of the Court without its advice and
concurrence in violation of Section 30, Article VI of the 1987 Constitution.139 Moreover, this
provision was found to be inconsistent with Section 1, Rule 45 of the present 1997 Rules of
Procedure which, as above-intimated, applies only to a review of "judgments or final orders of the
Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court, or other
courts authorized by law;" and not of quasi-judicial agencies, such as the Office of the
Ombudsman, the remedy now being a Rule 43 appeal to the Court of Appeals. In Ruivivar v.
Office of the Ombudsman,140 the Court's ratiocinations and ruling in Fabian were recounted:
The case of Fabian v. Desierto arose from the doubt created in the application of Section 27 of
R.A. No. 6770 (The Ombudsman's Act) and Section 7, Rule III of A.O. No. 7 (Rules of Procedure
of the Office of the Ombudsman) on the availability of appeal before the Supreme Court to assail a
decision or order of the Ombudsman in administrative cases. In Fabian, we invalidated Section 27
of R.A. No. 6770 (and Section 7, Rule III of A.O. No. 7 and the other rules implementing the Act)
insofar as it provided for appeal by certiorari under Rule 45 from the decisions or orders of the
Ombudsman in administrative cases. We held that Section 27 of R.A. No. 6770 had the effect, not
only of increasing the appellate jurisdiction of this Court without its advice and concurrence in
violation of Section 30, Article VI of the Constitution; it was also inconsistent with Section 1, Rule
45 of the Rules of Court which provides that a petition for review on certiorari shall apply only to a
review of "judgments or final orders of the Court of Appeals, the Sandiganbayan, the Court of Tax
Appeals, the Regional Trial Court, or other courts authorized by law." We pointedly
said:chanRoblesvirtualLawlibrary
As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck
down as unconstitutional, and in line with the regulatory philosophy adopted in appeals from
quasi-judicial agencies in the 1997 Revised Rules of Civil Procedure, appeals from decisions of
the Office of the Ombudsman in administrative disciplinary cases should be taken to the CA under
the provisions of Rule 43.141 (Emphasis supplied)
Since the second paragraph of Section 14, RA 6770 limits the remedy against "decision or
findings" of the Ombudsman to a Rule 45 appeal and thus - similar to the fourth paragraph of
Section 27, RA 6770142 - attempts to effectively increase the Supreme Court's appellate
jurisdiction without its advice and concurrence,143 it is therefore concluded that the former
provision is also unconstitutional and perforce, invalid. Contrary to the Ombudsman's
posturing,144Fabian should squarely apply since the above-stated Ombudsman Act provisions
are in part materia in that they "cover the same specific or particular subject matter,"145 that is,
the manner of judicial review over issuances of the Ombudsman.
Note that since the second paragraph of Section 14, RA 6770 is clearly determinative of the
existence of the CA's subject matter jurisdiction over the main CA-G.R. SP No. 139453 petition,
including all subsequent proceedings relative thereto, as the Ombudsman herself has developed,
the Court deems it proper to resolve this issue ex mero motu (on its own motion146). This
procedure, as was similarly adopted in Fabian, finds its bearings in settled case law:
The conventional rule, however, is that a challenge on constitutional grounds must be raised by a
party to the case, neither of whom did so in this case, but that is not an inflexible rule, as we shall
explain.
Since the constitution is intended for the observance of the judiciary and other departments of the
government and the judges are sworn to support its provisions, the courts are not at liberty to
overlook or disregard its commands or countenance evasions thereof. When it is clear , that a
statute transgresses the authority vested in a legislative body, it is the duty of the courts to declare
that the constitution, and not the statute, governs in a case before them for judgment.
Thus, while courts will not ordinarily pass upon constitutional questions which are not raised in the
pleadings, the rule has been recognized to admit of certain exceptions. It does not preclude a
court from inquiring into its own jurisdiction or compel it to enter a judgment that it lacks jurisdiction
to enter. If a statute on which a court's jurisdiction in a proceeding depends is unconstitutional, the
court has no jurisdiction in the proceeding, and since it may determine whether or not it has
jurisdiction, it necessarily follows that it may inquire into the constitutionality of the statute.
Constitutional questions, not raised in the regular and orderly procedure in the trial are ordinarily
rejected unless the jurisdiction of the court below or that of the appellate court is involved in which
case it may be raised at any time or on the court's own motion. The Court ex mero motu may take
cognizance of lack of jurisdiction at any point in the case where that fact is developed. The court
has a clearly recognized right to determine its own jurisdiction in any proceeding.147 (Emphasis
supplied)
D. Consequence of invalidity.
In this case, the Rule 65 petition for certiorari in CA-G.R. SP No. 139453 was filed by Binay, Jr.
before the CA in order to nullify the preventive suspension order issued by the Ombudsman, an
interlocutory order,148 hence, unappealable.149
In several cases decided after Fabian, the Court has ruled that Rule 65 petitions for certiorari
against unappelable issuances150 of the Ombudsman should be filed before the CA, and not
directly before this Court:
In Office of the Ombudsman v. Capulong151 (March 12, 2014), wherein a preventive suspension
order issued by the Office of the Ombudsman was - similar to this case - assailed through a Rule
65 petition for certiorari filed by the public officer before the CA, the Court held that "[t]here being a
finding of grave abuse of discretion on the part of the Ombudsman, it was certainly imperative for
the CA to grant incidental reliefs, as sanctioned by Section 1 of Rule 65."152
In Dagan v. Office of the Ombudsman153 (November 19, 2013), involving a Rule 65 petition for
certiorari assailing a final and unappealable order of the Office of the Ombudsman in an
administrative case, the Court remarked that "petitioner employed the correct mode of review in
this case, i.e., a special civil action for certiorari before the Court of Appeals."154 In this relation, it
stated that while "a special civil action for Certiorari is within the concurrent original jurisdiction of
the Supreme Court and the Court of Appeals, such petition should be initially filed with the Court of
Appeals in observance of the doctrine of hierarchy of courts." Further, the Court upheld Barata v.
Abalos, Jr.155 (June 6, 2001), wherein it was ruled that the remedy against final and
unappealable orders of the Office of the Ombudsman in an administrative case was a Rule 65
petition to the CA. The same verdict was reached in Ruivivar156 (September 16, 2008).
Thus, with the unconstitutionality of the second paragraph of Section 14, RA 6770, the Court,
consistent with existing jurisprudence, concludes that the CA has subject matter jurisdiction over
the main CA-G.R. SP No. 139453 petition. That being said, the Court now examines the
objections of the Ombudsman, this time against the CA's authority to issue the assailed TRO and
WPI against the implementation of the preventive suspension order, incidental to that main case.
III.
From the inception of these proceedings, the Ombudsman has been adamant that the CA has no
jurisdiction to issue any provisional injunctive writ against her office to enjoin its preventive
suspension orders. As basis, she invokes the first paragraph of Section 14, RA 6770 in
7
conjunction with her office's independence under the 1987 Constitution. She advances the idea
that "[i]n order to further ensure [her office's] independence, [RA 6770] likewise insulated it from
judicial intervention,"157 particularly, "from injunctive reliefs traditionally obtainable from the
courts,"158 claiming that said writs may work "just as effectively as direct harassment or political
pressure would."159
A. The concept of Ombudsman independence.
Section 5, Article XI of the 1987 Constitution guarantees the independence of the Office of the
Ombudsman:
Section 5. There is hereby created the independent Office of the Ombudsman, composed of the
Ombudsman to be known as Tanodbayan, one overall Deputy and at least one Deputy each for
Luzon, Visayas[,] and Mindanao. A separate Deputy for the military establishment may likewise be
appointed. (Emphasis supplied)
In Gonzales III v. Office of the President160 (Gonzales III), the Court traced the historical
underpinnings of the Office of the Ombudsman:
Prior to the 1973 Constitution, past presidents established several Ombudsman-like agencies to
serve as the people's medium for airing grievances and for direct redress against abuses and
misconduct in the government. Ultimately, however, these agencies failed to fully realize their
objective for lack of the political independence necessary for the effective performance of their
function as government critic.
It was under the 1973 Constitution that the Office of the Ombudsman became a constitutionally-
mandated office to give it political independence and adequate powers to enforce its mandate.
Pursuant to the ( 1973 Constitution, President Ferdinand Marcos enacted Presidential Decree
(PD) No. 1487, as amended by PD No. 1607 and PD No. 1630, creating the Office of the
Ombudsman to be known as Tanodbayan. It was tasked principally to investigate, on complaint or
motu proprio, any administrative act of any administrative agency, including any government-
owned or controlled corporation. When the Office of the Tanodbayan was reorganized in 1979, the
powers previously vested in the Special Prosecutor were transferred to the Tanodbayan himself.
He was given the exclusive authority to conduct preliminary investigation of all cases cognizable
by the Sandiganbayan, file the corresponding information, and control the prosecution of these
cases.
With the advent of the 1987 Constitution, a new Office of the Ombudsman was created by
constitutional fiat. Unlike in the 1973 Constitution, its independence was expressly and
constitutionally guaranteed. Its objectives are to enforce the state policy in Section 27, Article II
and the standard of accountability in public service under Section 1, Article XI of the 1987
Constitution. These provisions read:chanRoblesvirtualLawlibrary
Section 27. The State shall maintain honesty and integrity in the public service and take positive
and effective measures against graft and corruption.
Section 1. Public office is a public trust. Public officers and employees must, at all times, be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency;
act with patriotism and justice, and lead modest lives.161 (Emphasis supplied)
More significantly, Gonzales III explained the broad scope of the office's mandate, and in
correlation, the impetus behind its independence:
Under Section 12, Article XI of the 1987 Constitution, the Office of the Ombudsman is envisioned
to be the "protector of the people" against the inept, abusive, and corrupt in the Government, to
function essentially as a complaints and action bureau. This constitutional vision of a Philippine
Ombudsman practically intends to make the Ombudsman an authority to directly check and guard
against the ills, abuses and excesses , of the bureaucracy. Pursuant to Section 13 (8), Article XI of
the 1987 Constitution, Congress enacted RA No. 6770 to enable it to further realize the vision of
the Constitution. Section 21 of RA No. 6770 provides:chanRoblesvirtualLawlibrary
Section 21. Official Subject to Disciplinary Authority; Exceptions. - The Office of the Ombudsman
shall have disciplinary authority over all elective and appointive officials of the Government and its
subdivisions, instrumentalities, and agencies, including Members of the Cabinet, local
government, government-owned or controlled corporations and their subsidiaries, except over
officials who may be removed only by impeachment or over Members of Congress, and the
Judiciary.ChanRoblesVirtualawlibrary
As the Ombudsman is expected to be an "activist watchman," the < Court has upheld its actions,
although not squarely falling under the broad powers granted [to] it by the Constitution and by RA
No. 6770, if these actions are reasonably in line with its official function and consistent with the law
and the Constitution.
The Ombudsman's broad investigative and disciplinary powers include all acts of malfeasance,
misfeasance, and nonfeasance of all public officials, including Members of the Cabinet and key
Executive officers, during their tenure. To support these broad powers, the Constitution saw it fit to
insulate the Office of the Ombudsman from the pressures and influence of officialdom and
partisan politics and from fear of external reprisal by making it an "independent" office, x x x.
xxxx
Given the scope of its disciplinary authority, the Office of the Ombudsman is a very powerful
government constitutional agency that is considered "a notch above other grievance-handling
investigative bodies." It has powers, both constitutional and statutory, that are commensurate ,
with its daunting task of enforcing accountability of public officers.162 (Emphasis and
underscoring supplied)
Gonzales III is the first case which grappled with the meaning of the Ombudsman's independence
vis-a-vis the independence of the other constitutional bodies. Pertinently, the Court observed:
(1) "[T]he independence enjoyed by the Office of the Ombudsman and by the Constitutional
Commissions shares certain characteristics - they do not owe their existence to any act of
Congress, but are created by the Constitution itself; additionally, they all enjoy fiscal autonomy. In
general terms, the framers of the Constitution intended that these 'independent' bodies be
insulated from political pressure to the extent that the absence of 'independence' would result in
the impairment of their core functions"163;cralawlawlibrary
(2) "[T]he Judiciary, the Constitutional Commissions, and the Ombudsman must have the
independence and flexibility needed in the discharge of their constitutional duties. The imposition
of restrictions and constraints on the manner the independent constitutional offices allocate and
utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not
only [of] the express mandate of the Constitution, but especially as regards the Supreme Court, of
the independence and separation of powers upon which the entire fabric of our constitutional
system is based";164 and
(3) "[T]he constitutional deliberations explain the Constitutional Commissions' need for
independence. In the deliberations of the 1973 Constitution, the delegates amended the 1935
Constitution by providing for a constitutionally-created Civil Service Commission, instead of one
created by law, on the premise that the effectivity of this body is dependent on its freedom from
the tentacles of politics. In a similar manner, the deliberations of the 1987 Constitution on the
Commission on Audit highlighted the developments in the past Constitutions geared towards
insulating the Commission on Audit from political pressure."165
At bottom, the decisive ruling in Gonzales III, however, was that the independence of the Office of
the Ombudsman, as well as that of the foregoing independent bodies, meant freedom from control
or supervision of the Executive Department:
8
[T]he independent constitutional commissions have been consistently intended by the framers to
be independent from executive control or supervision or any form of political influence. At least
insofar as these bodies are concerned, jurisprudence is not scarce on how the "independence"
granted to these bodies prevents presidential interference.
In Brillantes, Jr. v. Yorac (G.R. No. 93867, December 18, 1990, 192 SCRA 358), we emphasized
that the Constitutional Commissions, which have been characterized under the Constitution as
"independent," are not under the control of the President, even if they discharge functions that are
executive in nature. The Court declared as unconstitutional the President's act of temporarily
appointing the respondent in that case as Acting Chairman of the [Commission on Elections]
"however well-meaning" it might have been.
In Bautista v. Senator Salonga (254 Phil. 156, 179 [1989]), the Court categorically stated that the
tenure of the commissioners of the independent Commission on Human Rights could not be
placed under the discretionary power of the President.
xxxx
The kind of independence enjoyed by the Office of the Ombudsman certainly cannot be inferior -
but is similar in degree and kind - to the independence similarly guaranteed by the Constitution to
the Constitutional Commissions since all these offices fill the political interstices of a republican
democracy that are crucial to its existence and proper functioning.166 (Emphases and
underscoring supplied)
Thus, in Gonzales III, the Court declared Section 8 (2), RA 6770, which provides that "[a] Deputy
or the Special Prosecutor, may be removed from office by the President for any of the grounds
provided for the removal of the Ombudsman, and after due process," partially unconstitutional
insofar as it subjected the Deputy Ombudsman to the disciplinary authority of the President for
violating the principle of independence. Meanwhile, the validity of Section 8 (2), RA 6770 was
maintained insofar as the Office of the Special Prosecutor was concerned since said office was
not considered to be constitutionally within the Office of the Ombudsman and is, hence, not
entitled to the independence the latter enjoys under the Constitution.167
As may be deduced from the various discourses in Gonzales III, the concept of Ombudsman's
independence covers three (3) things:
First: creation by the Constitution, which means that the office cannot be abolished, nor its
constitutionally specified functions and privileges, be removed, altered, or modified by law, unless
the Constitution itself allows, or an amendment thereto is made;cralawlawlibrary
Second: fiscal autonomy, which means that the office "may not be obstructed from [its] freedom to
use or dispose of [its] funds for purposes germane to [its] functions;168hence, its budget cannot
be strategically decreased by officials of the political branches of government so as to impair said
functions; and
Third: insulation from executive supervision and control, which means that those within the ranks
of the office can only be disciplined by an internal authority.
Evidently, all three aspects of independence intend to protect the Office of the Ombudsman from
political harassment and pressure, so as to free it from the "insidious tentacles of politics."169
That being the case, the concept of Ombudsman independence cannot be invoked as basis to
insulate the Ombudsman from judicial power constitutionally vested unto the courts. Courts are
apolitical bodies, which are ordained to act as impartial tribunals and apply even justice to all.
Hence, the Ombudsman's notion that it can be exempt from an incident of judicial power - that is,
a provisional writ of injunction against a preventive suspension order - clearly strays from the
concept's rationale of insulating the office from political harassment or pressure.
B. The first paragraph of Section 14, RA
6770 in light of the powers of Congress and the
Court under the 1987 Constitution.
The Ombudsman's erroneous abstraction of her office's independence notwithstanding, it remains
that the first paragraph of Section 14, RA 6770 textually prohibits courts from extending
provisional injunctive relief to delay any investigation conducted by her office. Despite the usage of
the general phrase "[n]o writ of injunction shall be issued by any court," the Ombudsman herself
concedes that the prohibition does not cover the Supreme Court.170 As support, she cites the
following Senate deliberations:
Senator [Ernesto M.] Maceda. Mr. President, I do not know if an amendment is necessary. I would
just like to inquire for the record whether below the Supreme Court, it is understood that there is
no injunction policy against the Ombudsman by lower courts. Or, is it necessary to have a special
paragraph for that?
Senator Angara. Well, there is no provision here, Mr. President, that will prevent an injunction
against the Ombudsman being issued.
Senator Maceda. In which case, I think that the intention, this being one of the highest
constitutional bodies, is to subject this only to certiorari to the Supreme Court. I think an injunction
from the Supreme Court is, of course, in order but no lower courts should be allowed to interfere.
We had a very bad experience with even, let us say, the Forestry Code where no injunction is
supposed to be issued against the Department of Natural Resources. Injunctions are issued right
and left by RTC judges all over the country.
The President. Why do we not make an express provision to that effect?
Senator Angara. We would welcome that, Mr. President.
The President. No [writs of injunction] from the trial courts other than the Supreme Court.
Senator Maceda. I so move, Mr. President, for that amendment.
The President. Is there any objection? [Silence] Hearing none, the same is approved.171
Further, she acknowledges that by virtue of Sections 1 and 5 (1), Article VIII of the 1987
Constitution, acts of the Ombudsman, including interlocutory orders, are subject to the Supreme
Court's power of judicial review As a corollary, the Supreme Court may issue ancillary mjunctive
writs or provisional remedies in the exercise of its power of judicial review over matters pertaining
to ongoing investigations by the Office of the Ombudsman. Respecting the CA, however, the
Ombudsman begs to differ.172
With these submissions, it is therefore apt to examine the validity of the first paragraph of Section
14, RA 6770 insofar as it prohibits all courts, except this Court, from issuing provisional writs of
injunction to enjoin an Ombudsman investigation. That the constitutionality of this provision is the
lis mota of this case has not been seriously disputed. In fact, the issue anent its constitutionality
was properly raised and presented during the course of these proceedings.173 More importantly,
its resolution is clearly necessary to the complete disposition of this case.174
In the enduring words of Justice Laurel in Angara v. The Electoral Commission (Angara),175 the
"Constitution has blocked out with deft strokes and in bold lines, allotment of power to the
executive, the legislative[,] and the judicial departments of the government."176 The constitutional
demarcation of the three fundamental powers of government is more commonly known as the
principle of separation of powers. In the landmark case of Belgica v. Ochoa, Jr. (Belgica),177 the
Court held that "there is a violation of the separation of powers principle when one branch of
government unduly encroaches on the domain of another."178 In particular, "there is a violation of
9
the principle when there is impermissible (a) interference with and/or (b) assumption of another
department's functions."179
Under Section 1, Article VIII of the 1987 Constitution, judicial power is allocated to the Supreme
Court and all such lower courts:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as
may be established by law.
Judicial power 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 abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.
This Court is the only court established by the Constitution, while all other lower courts may be
established by laws passed by Congress.� Thus, through the passage of Batas Pambansa Bilang
(BP) 129,180 known as "The Judiciary Reorganization Act of 1980," the Court of Appeals,181 the
Regional Trial Courts,182 and the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts183 were established. Later, through the passage of RA 1125,184 and
Presidential Decree No. (PD) 1486,185 the Court of Tax Appeals, and the Sandiganbayan were
respectively established.
In addition to the authority to establish lower courts, Section 2, Article VIII of the 1987 Constitution
empowers Congress to define, prescribe, and apportion the jurisdiction of all courts, except that it
may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section 5186 of
the same Article:
Section 2. The Congress shall have the power to define, prescribe, ' and apportion the jurisdiction
of the various courts but may not deprive the Supreme Court of its jurisdiction over cases
enumerated in Section 5 hereof.
xxx
Jurisdiction, as hereinabove used, more accurately pertains to jurisdiction over the subject matter
of an action. In The Diocese ofBacolod v. Commission on Elections,187 subject matter jurisdiction
was defined as "the authority 'to hear and determine cases of the general class to which the
proceedings in question belong and is conferred by the sovereign authority which organizes the
court and defines its powers.'"
Among others, Congress defined, prescribed, and apportioned the subject matter jurisdiction of
this Court (subject to the aforementioned constitutional limitations), the Court of Appeals, and the
trial courts, through the passage of BP 129, as amended.
In this case, the basis for the CA's subject matter jurisdiction over Binay, Jr.'s main petition for
certiorari in CA-G.R. SP No. 139453 is Section 9(1), Chapter I of BP 129, as amended:
Section 9. Jurisdiction. - The Court of Appeals shall exercise:
Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo
warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction[.]
Note that the CA's certiorari jurisdiction, as above-stated, is not only original but also concurrent
with the Regional Trial Courts (under Section 21 (1), Chapter II of BP 129), and the Supreme
Court (under Section 5, Article VIII of the 1987 Philippine Constitution). In view of the concurrence
of these courts' jurisdiction over petitions for certiorari, the doctrine of hierarchy of courts should
be followed. In People v. Cuaresma,188 the doctrine was explained as follows:
[T]his concurrence of jurisdiction is not x x x to be taken as according to parties seeking any of the
writs an absolute, unrestrained freedom of choice of the court to which application therefor will be
directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of
appeals, and should also serve as a general determinant of the appropriate forum for petitions for
the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that
petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals.189
When a court has subject matter jurisdiction over a particular case, as conferred unto it by law,
said court may then exercise its jurisdiction acquired over that case, which is called judicial power.
Judicial power, as vested in the Supreme Court and all other courts established by law, has been
defined as the "totality of powers a court exercises when it assumes jurisdiction and hears and
decides a case."190 Under Section 1, Article VIII of the 1987 Constitution, it 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 abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government."
In Oposa v. Factoran, Jr.191 the Court explained the expanded scope of judicial power under the
1987 Constitution:
The first part of the authority represents the traditional concept of judicial power, involving the
settlement of conflicting rights as conferred by law. The second part of the authority represents a
broadening of f judicial power to enable the courts of justice to review what was before forbidden
territory, to wit, the discretion of the political departments of the government.
As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power
to rule upon even the wisdom of the decisions of the executive and the legislature and to declare
their acts invalid for lack or excess of jurisdiction because they are tainted with grave abuse of
discretion. The catch, of course, is the meaning of "grave abuse of discretion," which is a very
elastic phrase that can expand or contract according to the disposition of the judiciary.192
Judicial power is never exercised in a vacuum. A court's exercise of the jurisdiction it has acquired
over a particular case conforms to the limits and parameters of the rules of procedure duly
promulgated by this Court. In other words, procedure is the framework within which judicial power
is exercised. In Manila Railroad Co. v. Attorney-General,193 the Court elucidated that "[t]he power
or authority of the court over the subject matter existed and was fixed before procedure in a given
cause began. Procedure does not alter or change that power or authority; it simply directs the
manner in which it shall be fully and justly exercised.� To be sure, in certain cases, if that power
is not exercised in conformity with the provisions of the procedural law, purely, the court
attempting to exercise it loses the power to exercise it legally. This does not mean that it loses
jurisdiction of the subject matter."194
While the power to define, prescribe, and apportion the jurisdiction of the various courts is, by
constitutional design, vested unto Congress, the power to promulgate rules concerning the
protection and enforcement of constitutional rights, pleading, practice, and procedure in all courts
belongs exclusively to this Court. Section 5 (5), Article VIII of the 1987 Constitution reads:
Section 5. The Supreme Court shall have the following powers:
xxxx
(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice, and procedure in all courts, the admission to the practice of law, the Integrated Bar, and
legal assistance to the underprivileged. Such rules shall provide a simplified and inexpensive
procedure for the speedy disposition of cases, shall be uniform for all courts of the same grade,
and shall not diminish, increase, or modify substantive rights. Rules of procedure of special courts
and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court.
(Emphases and underscoring supplied)
10

In Echegaray v. Secretary of Justice195 (Echegaray), the Court traced the evolution of its rule-
making authority, which, under the 1935196 and 1973 Constitutions,197 had been priorly
subjected to a power-sharing scheme with Congress.198 As it now stands, the 1987 Constitution
textually altered the old provisions by deleting the concurrent power of Congress to amend the
rules, thus solidifying in one body the Court's rule-making powers, in line with the Framers' vision
of institutionalizing a "[s]tronger and more independent judiciary."199
The records of the deliberations of the Constitutional Commission would show200 that the
Framers debated on whether or not the Court's rule-making powers should be shared with
Congress. There was an initial suggestion to insert the sentence "The National Assembly may
repeal, alter, or supplement the said rules with the advice and concurrence of the Supreme Court",
right after the phrase "Promulgate rules concerning the protection and enforcement of
constitutional rights, pleading, practice, and procedure in all courts, the admission to the practice
of law, the integrated bar, and legal assistance to the underprivileged^" in the enumeration of
powers of the Supreme Court. Later, Commissioner Felicitas S. Aquino proposed to delete the
former sentence and, instead, after the word "[underprivileged," place a comma (,) to be followed
by "the phrase with the concurrence of the National Assembly." Eventually, a compromise
formulation was reached wherein (a) the Committee members agreed to Commissioner Aquino's
proposal to delete the phrase "the National Assembly may repeal, alter, or supplement the said
rules with the advice and concurrence of the Supreme Court" and (b) in turn, Commissioner
Aquino agreed to withdraw his proposal to add "the phrase with the concurrence of the National
Assembly." The changes were approved, thereby leading to the present lack of textual reference
to any form of Congressional participation in Section 5 (5), Article VIII, supra. The prevailing
consideration was that "both bodies, the Supreme Court and the Legislature, have their inherent
powers."201
Thus, as it now stands, Congress has no authority to repeal, alter, or supplement rules concerning
pleading, practice, and procedure. As pronounced in Echegaray:
The rule making power of this Court was expanded. This Court for the first time was given the
power to promulgate rules concerning the protection and enforcement of constitutional rights. The
Court was also r granted for the first time the power to disapprove rules of procedure of special
courts and quasi-judicial bodies. But most importantly, the 1987 Constitution took away the power
of Congress to repeal, alter, or supplement rules concerning pleading, practice and procedure. In
fine, the power to promulgate rules of pleading, practice and procedure is no longer shared by this
Court with Congress, more so with the Executive.202 (Emphasis and underscoring supplied)
Under its rule-making authority, the Court has periodically passed various rules of procedure,
among others, the current 1997 Rules of Civil Procedure. Identifying the appropriate procedural
remedies needed for the reasonable exercise of every court's judicial power, the provisional
remedies of temporary restraining orders and writs of preliminary injunction were thus provided.
A temporary restraining order and a writ of preliminary injunction both constitute temporary
measures availed of during the pendency of the action. They are, by nature, ancillary because
they are mere incidents in and are dependent upon the result of the main action. It is well-settled
that the sole object of a temporary restraining order or a writ of preliminary injunction, whether
prohibitory or mandatory, is to preserve the status quo203 until the merits of the case can be
heard. They are usually granted when it is made to appear that there is a substantial controversy
between the parties and one of them is committing an act or threatening the immediate
commission of an act that will cause irreparable injury or destroy the status quo of the controversy
before a full hearing can be had on the merits of the case. In other words, they are preservative
remedies for the protection of substantive rights or interests, and, hence, not a cause of action in
itself, but merely adjunct to a main suit.204 In a sense, they are regulatory processes meant to
prevent a case from being mooted by the interim acts of the parties.
Rule 58 of the 1997 Rules of Civil Procedure generally governs the provisional remedies of a TRO
and a WPI. A preliminary injunction is defined under Section 1,205 Rule 58, while Section 3206 of
the same Rule enumerates the grounds for its issuance. Meanwhile, under Section 5207 thereof,
a TRO may be issued as a precursor to the issuance of a writ of preliminary injunction under
certain procedural parameters.
The power of a court to issue these provisional injunctive reliefs coincides with its inherent power
to issue all auxiliary writs, processes, and other means necessary to carry its acquired jurisdiction
into effect under Section 6, Rule 135 of the Rules of Court which reads:
Section 6. Means to carry jurisdiction into effect. - When by law jurisdiction is conferred on a court
or judicial officer, all auxiliary writs, f processes and other means necessary to carry it into effect
may be employed by such court or officer; and if the procedure to be followed in the exercise of
such jurisdiction is not specifically pointed out by law208 or by these rules, any suitable process or
mode of proceeding may be adopted which appears comfortable to the spirit of the said law or
rules.ChanRoblesVirtualawlibrary
In City of Manila v. Grecia-Cuerdo,209 which is a case involving "[t]he supervisory power or
jurisdiction of the [Court of Tax Appeals] to issue a writ of certiorari in aid of its appellate
jurisdiction"210 over "decisions, orders or resolutions of the RTCs in local tax cases originally
decided or resolved by them in the exercise of their original or appellate jurisdiction,"211 the Court
ruled that said power "should coexist with, and be a complement to, its appellate jurisdiction to
review, by appeal, the final orders and decisions of the RTC, in order to have complete
supervision over the acts of the latter:"212
A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise
it effectively, to make all orders that ; will preserve the subject of the action, and to give effect to
the final determination of the appeal. It carries with it the power to protect that jurisdiction and to
make the decisions of the court thereunder effective. The court, in aid of its appellate jurisdiction,
has authority to control all auxiliary and incidental matters necessary to the efficient and proper
exercise of that jurisdiction. For this purpose, it may, when necessary, prohibit or restrain the
performance of any act which might interfere with the proper exercise of its rightful jurisdiction in
cases pending before it.213 (Emphasis supplied)
In this light, the Court expounded on the inherent powers of a court endowed with subject matter
jurisdiction:
[A] court which is endowed with a particular jurisdiction should have powers which are necessary
to enable it to act effectively within such jurisdiction. These should be regarded as powers which
are inherent in its jurisdiction and the court must possess them in order to enforce its rules of
practice and to suppress any abuses of its process and to t defeat any attempted thwarting of
such process.
x x x x�cralawlawlibrary
Indeed, courts possess certain inherent powers which may be said to be implied from a general
grant of jurisdiction, in addition to those expressly conferred on them. These inherent powers are
such powers as are necessary for the ordinary and efficient exercise of jurisdiction; or are
essential to the existence, dignity and functions of the courts, as well as to the due administration
of justice; or are directly appropriate, convenient and suitable to the execution of their granted
powers; and include the power to maintain the court's jurisdiction and render it effective in behalf
of the litigants.214 (Emphases and underscoring supplied)
Broadly speaking, the inherent powers of the courts resonates the long-entrenched constitutional
principle, articulated way back in the 1936 case of Angara, that "where a general power is
conferred or duty enjoined, every particular power necessary for the exercise of the one or the
performance of the other is also conferred."215
In the United States, the "inherent powers doctrine refers to the principle, by which the courts deal
with diverse matters over which they are thought to have intrinsic authority like procedural [rule-
11
making] and general judicial housekeeping. To justify the invocation or exercise of inherent
powers, a court must show that the powers are reasonably necessary to achieve the specific
purpose for which the exercise is sought. Inherent powers enable the judiciary to accomplish its
constitutionally mandated functions."216
In Smothers v. Lewis217 (Smothers), a case involving the constitutionality of a statute which
prohibited courts from enjoining the enforcement of a revocation order of an alcohol beverage
license pending appeal,218 the Supreme Court of Kentucky held:
[T]he Court is x x x vested with certain "inherent" powers to do that which is reasonably necessary
for the administration of justice within the scope of their jurisdiction. x x x [W]e said while
considering the rule making power and the judicial power to be one and the same that ". . . the
grant of judicial power [rule making power] to the courts by the constitution carries with it, as a
necessary incident, the right to make that power effective in the administration of justice."
(Emphases supplied)
Significantly, Smothers characterized a court's issuance of provisional injunctive relief as an
exercise of the court's inherent power, and to this end, stated that any attempt on the part of
Congress to interfere with the same was constitutionally impermissible:
It is a result of this foregoing line of thinking that we now adopt the language framework of 28
Am.Jur.2d, Injunctions, Section 15, and once and for all make clear that a court, once having
obtained jurisdiction of a cause of action, has, as an incidental to its constitutional grant of power,
inherent power to do all things reasonably necessary to the administration of justice in the case
before it. In the exercise of this power, a court, when necessary in order to protect or preserve the
subject matter of the litigation, to protect its jurisdiction and to make its judgment effective, may
grant or issue a temporary injunction in aid of or ancillary to the principal action.
The control over this inherent judicial power, in this particular instance the injunction, is exclusively
within the constitutional realm of the courts. As such, it is not within the purview of the legislature
to grant or deny the power nor is it within the purview of the legislature to shape or fashion
circumstances under which this inherently judicial power may be or may not be granted or denied.
This Court has historically recognized constitutional limitations upon the power of the legislature to
interfere with or to inhibit the performance of constitutionally granted and inherently provided
judicial functions, x x x
xxxx
We reiterate our previously adopted language, ". . . a court, once having obtained jurisdiction of a
cause of action, has, as incidental to its general jurisdiction, inherent power to do all things
reasonably necessary f to the administration of justice in the case before it. . ." This includes the
inherent power to issue injunctions. (Emphases supplied)
Smothers also pointed out that the legislature's authority to provide a right to appeal in the statute
does not necessarily mean that it could control the appellate judicial proceeding:
However, the fact that the legislature statutorily provided for this appeal does not give it the right to
encroach upon the constitutionally granted powers of the judiciary. Once the administrative action
has ended and the right to appeal arises the legislature is void of any right to control a subsequent
appellate judicial proceeding. The judicial rules have come into play and have preempted the
field.219 (Emphasis supplied)
With these considerations in mind, the Court rules that when Congress passed the first paragraph
of Section 14, RA 6770 and, in so doing, took away from the courts their power to issue a TRO
and/or WPI to enjoin an investigation conducted by the Ombudsman, it encroached upon this
Court's constitutional rule-making authority. Clearly, these issuances, which are, by nature,
provisional reliefs and auxiliary writs created under the provisions of the Rules of Court, are
matters of procedure which belong exclusively within the province of this Court. Rule 58 of the
Rules of Court did not create, define, and regulate a right but merely prescribed the means of
implementing an existing right220 since it only provided for temporary reliefs to preserve the
applicant's right in esse which is threatened to be violated during the course of a pending litigation.
In the case of Fabian,211 it was stated that:
If the rule takes away a vested right, it is not procedural. If the rule creates a right such as the right
to appeal, it may be classified as a substantive matter; but if it operates as a means of
implementing an existing right then the rule deals merely with
procedure.ChanRoblesVirtualawlibrary
Notably, there have been similar attempts on the part of Congress, in the exercise of its legislative
power, to amend the Rules of Court, as in the cases of: (a) In Re: Exemption of The National
Power Corporation from Payment of Filing/ Docket Fees;222 (b) Re: Petition for Recognition of the
Exemption of the Government Service Insurance System (GSIS) from Payment of Legal Fees;223
and (c) Baguio Market Vendors Multi-Purpose Cooperative (BAMARVEMPCO) v. Cabato-
Cortes224 While these cases involved legislative enactments exempting government owned and
controlled corporations and cooperatives from paying filing fees, thus, effectively modifying Rule
141 of the Rules of Court (Rule on Legal Fees), it was, nonetheless, ruled that the prerogative to
amend, repeal or even establish new rules of procedure225 solely belongs to the Court, to the
exclusion of the legislative and executive branches of government. On this score, the Court
described its authority to promulgate rules on pleading, practice, and procedure as exclusive and
"[o]ne of the safeguards of [its] institutional independence."226
That Congress has been vested with the authority to define, prescribe, and apportion the
jurisdiction of the various courts under Section 2, Article VIII supra, as well as to create statutory
courts under Section 1, Article VIII supra, does not result in an abnegation of the Court's own
power to promulgate rules of pleading, practice, and procedure under Section 5 (5), Article VIII
supra. Albeit operatively interrelated, these powers are nonetheless institutionally separate and
distinct, each to be preserved under its own sphere of authority. When Congress creates a court
and delimits its jurisdiction, the procedure for which its jurisdiction is exercised is fixed by the
Court through the rules it promulgates. The first paragraph of Section 14, RA 6770 is not a
jurisdiction-vesting provision, as the Ombudsman misconceives,227 because it does not define,
prescribe, and apportion the subject matter jurisdiction of courts to act on certiorari cases; the
certiorari jurisdiction of courts, particularly the CA, stands under the relevant sections of BP 129
which were not shown to have been repealed. Instead, through this provision, Congress interfered
with a provisional remedy that was created by this Court under its duly promulgated rules of
procedure, which utility is both integral and inherent to every court's exercise of judicial power.
Without the Court's consent to the proscription, as may be manifested by an adoption of the same
as part of the rules of procedure through an administrative circular issued therefor, there thus,
stands to be a violation of the separation of powers principle.
In addition, it should be pointed out that the breach of Congress in prohibiting provisional
injunctions, such as in the first paragraph of Section 14, RA 6770, does not only undermine the
constitutional allocation of powers; it also practically dilutes a court's ability to carry out its
functions. This is so since a particular case can easily be mooted by supervening events if no
provisional injunctive relief is extended while the court is hearing the same. Accordingly, the
court's acquired jurisdiction, through which it exercises its judicial power, is rendered nugatory.
Indeed, the force of judicial power, especially under the present Constitution, cannot be enervated
due to a court's inability to regulate what occurs during a proceeding's course. As earlier intimated,
when jurisdiction over the subject matter is accorded by law and has been acquired by a court, its
exercise thereof should be undipped. To give true meaning to the judicial power contemplated by
the Framers of our Constitution, the Court's duly promulgated rules of procedure should therefore
remain unabridged, this, even by statute. Truth be told, the policy against provisional injunctive
writs in whatever variant should only subsist under rules of procedure duly promulgated by the
Court given its sole prerogative over the same.
12
The following exchange between Associate Justice Marvic Mario Victor F. Leonen (Justice
Leonen) and the Acting Solicitor General Florin T. Hilbay (Acting Solicitor General Hilbay) mirrors JUSTICE LEONEN:
the foregoing observations: In fact, it originated as an equitable remedy, is that not correct?

JUSTICE LEONEN: ACTING SOLICITOR GENERAL HILBAY:

Okay. Now, would you know what rule covers injunction in the Rules of Court? Correct, Your Honor.

ACTING SOLICITOR GENERAL HILBAY: JUSTICE LEONEN:

Rule 58, Your Honor. In order to preserve the power of a court so that at the end of litigation, it will not be rendered moot
and academic, is that not correct?
JUSTICE LEONEN:
58, that is under the general rubric if Justice Bersamin will correct me if I will be mistaken under ACTING SOLICITOR GENERAL HILBAY:
the rubric of what is called provisional remedies, our resident expert because Justice Peralta is not Correct, Your Honor.
here so Justice Bersamin for a while. So provisional remedy you have injunction, x x x.
JUSTICE LEONEN:
xxxx In that view, isn't Section 14, first paragraph, unconstitutional?

JUSTICE LEONEN: ACTING SOLICITOR GENERAL HILBAY:

Okay, Now, we go to the Constitution. Section 5, subparagraph 5 of Article VIII of the Constitution, No, Your Honor.
if you have a copy of the Constitution, can you please read that provision? Section 5, Article VIII
the Judiciary subparagraph 5, would you kindly read that provision? xxxx

ACTING SOLICTOR GENERAL HILBAY. JUSTICE LEONEN.

"Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, Can Congress say that a Court cannot prescribe Motions to Dismiss under Rule 16?
practice and procedure in all courts..."
ACTING SOLICITOR GENERAL HILBAY:
JUSTICE LEONEN: Your Honor, Congress cannot impair the power of the Court to create remedies, x x x.
Okay, we can stop with that, promulgate rules concerning pleading, practice and procedure in all
courts. This is the power, the competence, the jurisdiction of what constitutional organ? JUSTICE LEONEN.
What about bill [of] particulars, can Congress say, no Court shall have the power to issue the
ACTING SOLICITOR GENERAL HILBAY: supplemental pleading called the bill of t particular [s]? It cannot, because that's part of
The Supreme Court, Your Honor. procedure...

JUSTICE LEONEN: ACTING SOLICITOR GENERAL HILBAY:

The Supreme Court. This is different from Article VIII Sections 1 and 2 which we've already been That is true.
discussed with you by my other colleagues, is that not correct?
JUSTICE LEONEN
ACTING SOLICITOR GENERAL HILBAY: ...or for that matter, no Court shall act on a Motion to Quash, is that not correct?
Correct, Your Honor.
ACTING SOLICITOR GENERAL HILBAY:
JUSTICE LEONEN: Correct.
Okay, so in Section 2, [apportion] jurisdiction that is the power of Congress, is that not correct?
JUSTICE LEONEN:
ACTING SOLICITOR GENERAL HILBAY: So what's different with the writ of injunction?
Correct, Your Honor.
ACTING SOLICITOR GENERAL HILBAY:
JUSTICE LEONEN: Writ of injunction, Your Honor, requires the existence of jurisdiction on the part of a court that was
On the other hand, the power to promulgate rules is with the Court, is that not correct? created by Congress. In the absence of jurisdiction... (interrupted)

ACTING SOLICITOR GENERAL HILBAY: JUSTICE LEONEN:

Correct, Your Honor. No, writ of injunction does not attach to a court. In other words, when they create a special
agrarian court it has all procedures with it but it does not attach particularly to that particular court,
JUSTICE LEONEN: is that not correct?
A TRO and a writ of preliminary injunction, would it be a separate case or is it part of litigation in
an ordinary case? ACTING SOLICTOR GENERAL HILBAY:
When Congress, Your Honor, creates a special court...
ACTING SOLICITOR GENERAL HILBAY:
It is an ancillary remedy, Your Honor. JUSTICE LEONEN:

13
Again, Counsel, what statute provides for a TRO, created the concept of a TRO? It was a Rule. A
rule of procedure and the Rules of Court, is that not correct?
ACTING SOLICITOR GENERAL HILBAY:
Yes, Your Honor.
JUSTICE LEONEN:
And a TRO and a writ of preliminary injunction does not exist unless it is [an] ancillary to a
particular injunction in a court, is that not correct?
ACTING SOLICITOR GENERAL HILBAY:
Correct, Your Honor.
xxxx228 (Emphasis supplied)
In Biraogo v. The Philippine Truth Commission of 2010,229 the Court instructed that "[i]t 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. 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." It would then follow that laws that do not conform to
the Constitution shall be stricken down for being unconstitutional.230
However, despite the ostensible breach of the separation of powers principle, the Court is not
oblivious to the policy considerations behind the first paragraph of Section 14, RA 6770, as well as
other statutory provisions of similar import. Thus, pending deliberation on whether or not to adopt
the same, the Court, under its sole prerogative and authority over all matters of procedure, deems
it proper to declare as ineffective the prohibition against courts other than the Supreme Court from
issuing provisional injunctive writs to enjoin investigations conducted by the Office of the
Ombudsman, until it is adopted as part of the rules of procedure through an administrative circular
duly issued therefor.
Hence, with Congress interfering with matters of procedure (through passing the first paragraph of
Section 14, RA 6770) without the Court's consent thereto, it remains that the CA had the authority
to issue the questioned injunctive writs enjoining the implementation of the preventive suspension
order against Binay, Jr. At the risk of belaboring the point, these issuances were merely ancillary
to the exercise of the CA's certiorari jurisdiction conferred to it under Section 9 (1), Chapter I of BP
129, as amended, and which it had already acquired over the main CA-G.R. SP No. 139453 case.
IV.
The foregoing notwithstanding, the issue of whether or not the CA gravely abused its jurisdiction in
issuing the TRO and WPI in CA-G.R. SP No. 139453 against the preventive suspension order is a
persisting objection to the validity of said injunctive writs. For its proper analysis, the Court first
provides the context of the assailed injunctive writs.
A. Subject matter of the CA's iniunctive writs is the preventive suspension order.
By nature, a preventive suspension order is not a penalty but only a preventive measure. In
Quimbo v. Acting Ombudsman Gervacio,231 the Court explained the distinction, stating that its
purpose is to prevent the official to be suspended from using his position and the powers and
prerogatives of his office to influence potential witnesses or tamper with records which may be
vital in the prosecution of the case against him:
Jurisprudential law establishes a clear-cut distinction between suspension as preventive measure
and suspension as penalty. The distinction, by considering the purpose aspect of the suspensions,
is readily cognizable as they have different ends sought to be achieved.
Preventive suspension is merely a preventive measure, a preliminary step in an administrative
investigation. The purpose of the suspension order is to prevent the accused from using his
position and the powers and prerogatives of his office to influence potential witnesses or tamper
with records which may be vital in the prosecution of the case against him. If after such
investigation, the charge is established and the person investigated is found guilty of acts
warranting his suspension or removal, then he is suspended, removed or dismissed. This is the
penalty.
That preventive suspension is not a penalty is in fact explicitly provided by Section 24 of Rule XIV
of the Omnibus Rules Implementing Book V of the Administrative Code of 1987 (Executive Order
No. 292) and other Pertinent Civil Service Laws.
Section. 24. Preventive suspension is not a punishment or penalty for misconduct in office but is
considered to be a preventive measure. (Emphasis supplied)ChanRoblesVirtualawlibrary
Not being a penalty, the period within which one is under preventive suspension is not considered
part of the actual penalty of suspension. So Section 25 of the same Rule XIV
provides:chanRoblesvirtualLawlibrary
Section 25. The period within which a public officer or employee charged is placed under
preventive suspension shall not be considered part of the actual penalty of suspension imposed
upon the employee found guilty.232 (Emphases supplied)ChanRoblesVirtualawlibrary
The requisites for issuing a preventive suspension order are explicitly stated in Section 24, RA
6770:
Section 24. Preventive Suspension. - The Ombudsman or his Deputy may preventively suspend
any officer or employee under his authority pending an investigation, if in his judgment the
evidence of guilt is strong, and (a) the charge against such officer or employee involves
dishonesty, oppression or grave misconduct or neglect in the performance of duty; (b) the charges
would warrant removal from the service; or (c) the respondent's continued stay in office may
prejudice the case filed against him.
The preventive suspension shall continue until the case is terminated by the Office of the
Ombudsman but not more than six (6) months, without pay, except when the delay in the
disposition of the case by the Office of the Ombudsman is due to the fault, negligence or petition
of the respondent, in which case the period of such delay shall not be counted in computing the
period of suspension herein provided. (Emphasis and underscoring supplied)
In other words, the law sets forth two (2) conditions that must be satisfied to justify the issuance of
an order of preventive suspension pending an investigation, namely:
(1) The evidence of guilt is strong; and
(2) Either of the following circumstances co-exist with the first
requirement:chanRoblesvirtualLawlibrary
(a) The charge involves dishonesty, oppression or grave misconduct or neglect in the performance
of duty;cralawlawlibrary
(b) The charge would warrant removal from the service; or
(c) The respondent's continued stay in office may prejudice the case filed against
him.233ChanRoblesVirtualawlibrary
B. The basis of the CA's injunctive writs is the condonation doctrine.
Examining the CA's Resolutions in CA-G.R. SP No. 139453 would, however, show that the
Ombudsman's non-compliance with the requisites provided in Section 24, RA 6770 was not the
basis for the issuance of the assailed injunctive writs.
14
The CA's March 16, 2015 Resolution which directed the issuance of the assailed TRO was based
on the case of Governor Garcia, Jr. v. CA234 (Governor Garcia, Jr.), wherein the Court
emphasized that "if it were established in the CA that the acts subject of the administrative
complaint were indeed committed during petitioner [Garcia's] prior term, then, following settled
jurisprudence, he can no longer be administratively charged."235 Thus, the Court, contemplating
the application of the condonation doctrine, among others, cautioned, in the said case, that "it
would have been more prudent for [the appellate court] to have, at the very least, on account of
the extreme urgency of the matter and the seriousness of the issues raised in the certiorari
petition, issued a TRO x x x"236 during the pendency of the proceedings.
Similarly, the CA's April 6, 2015 Resolution which directed the issuance of the assailed WPI was
based on the condonation doctrine, citing the case of Aguinaldo v. Santos237 The CA held that
Binay, Jr. has an ostensible right to the final relief prayed for, i.e., the nullification of the preventive
suspension order, finding that the Ombudsman can hardly impose preventive suspension against
Binay, Jr. given that his re-election in 2013 as City Mayor of Makati condoned any administrative
liability arising from anomalous activities relative to the Makati Parking Building project from 2007
to 2013.238 Moreover, the CA observed that although there were acts which were apparently
committed by Binay, Jr. beyond his first term , i.e., the alleged payments on July 3, 4, and 24,
2013,239 corresponding to the services of Hillmarc's and MANA - still, Binay, Jr. cannot be held
administratively liable therefor based on the cases of Salalima v. Guingona, Jr.,240 and Mayor
Garcia v. Mojica,241 wherein the condonation dobtrine was applied by the Court although the
payments were made after the official's election, reasoning that the payments were merely
effected pursuant to contracts executed before said re-election.242
The Ombudsman contends that it was inappropriate for the CA to have considered the
condonation doctrine since it was a matter of defense which should have been raised and passed
upon by her office during the administrative disciplinary proceedings.243 However, the Court
agrees with the CA that it was not precluded from considering the same given that it was material
to the propriety of according provisional injunctive relief in conformity with the ruling in Governor
Garcia, Jr., which was the subsisting jurisprudence at that time. Thus, since condonation was duly
raised by Binay, Jr. in his petition in CA-G.R. SP No. 139453,244 the CA did not err in passing
upon the same. Note that although Binay, Jr. secondarily argued that the evidence of guilt against
him was not strong in his petition in CA-G.R. SP No. 139453,245 it appears that the CA found that
the application of the condonation doctrine was already sufficient to enjoin the implementation of
the preventive suspension order. Again, there is nothing aberrant with this since, as remarked in
the same case of Governor Garcia, Jr., if it was established that the acts subject of the
administrative complaint were indeed committed during Binay, Jr.'s prior term, then, following the
condonation doctrine, he can no longer be administratively charged. In other words, with
condonation having been invoked by Binay, Jr. as an exculpatory affirmative defense at the onset,
the CA deemed it unnecessary to determine if the evidence of guilt against him was strong, at
least for the purpose of issuing the subject injunctive writs.
With the preliminary objection resolved and the basis of the assailed writs herein laid down, the
Court now proceeds to determine if the CA gravely abused its discretion in applying the
condonation doctrine.
C. The origin of the condonation doctrine.
Generally speaking, condonation has been defined as "[a] victim's express or implied forgiveness
of an offense, [especially] by treating the offender as if there had been no offense."246
The condonation doctrine - which connotes this same sense of complete extinguishment of liability
as will be herein elaborated upon - is not based on statutory law. It is a jurisprudential creation that
originated from the 1959 case of Pascual v. Hon. Provincial Board ofNueva Ecija,247 (Pascual),
which was therefore decided under the 1935 Constitution.
In Pascual, therein petitioner, Arturo Pascual, was elected Mayor of San Jose, Nueva Ecija,
sometime in November 1951, and was later re-elected to the same position in 1955. During his
second term, or on October 6, 1956, the Acting Provincial Governor filed administrative charges
before the Provincial Board of Nueva Ecija against him for grave abuse of authority and usurpation
of judicial functions for acting on a criminal complaint in Criminal Case No. 3556 on December 18
and 20, 1954. In defense, Arturo Pascual argued that he cannot be made liable for the acts
charged against him since they were committed during his previous term of office, and therefore,
invalid grounds for disciplining him during his second term. The Provincial Board, as well as the
Court of First Instance of Nueva Ecija, later decided against Arturo Pascual, and when the case
reached this Court on appeal, it recognized that the controversy posed a novel issue - that is,
whether or not an elective official may be disciplined for a wrongful act committed by him during
his immediately preceding term of office.
As there was no legal precedent on the issue at that time, the Court, in Pascual, resorted to
American authorities and "found that cases on the matter are conflicting due in part, probably, to
differences in statutes and constitutional provisions, and also, in part, to a divergence of views
with respect to the question of whether the subsequent election or appointment condones the prior
misconduct."248Without going into the variables of these conflicting views and cases, it proceeded
to state that:
The weight of authorities x x x seems to incline toward the rule denying the right to remove one
from office because of misconduct during a prior term, to which we fully subscribe.249 (Emphasis
and underscoring supplied)
The conclusion is at once problematic since this Court has now uncovered that there is really no
established weight of authority in the United States (US) favoring the doctrine of condonation,
which, in the words of Pascual, theorizes that an official's re-election denies the right to remove
him from office due to a misconduct during a prior term. In fact, as pointed out during the oral
arguments of this case, at least seventeen (17) states in the US have abandoned the condonation
doctrine.250 The Ombudsman aptly cites several rulings of various US State courts, as well as
literature published on the matter, to demonstrate the fact that the doctrine is not uniformly applied
across all state jurisdictions. Indeed, the treatment is nuanced:
(1) For one, it has been widely recognized that the propriety of removing a public officer from his
current term or office for misconduct which he allegedly committed in a prior term of office is
governed by the language of the statute or constitutional provision applicable to the facts of a
particular case (see In Re Removal of Member of Council Coppola).251 As an example, a Texas
statute, on the one hand, expressly allows removal only for an act committed during a present
term: "no officer shall be prosecuted or removed from office for any act he may have committed
prior to his election to office" (see State ex rel. Rowlings v. Loomis).252 On the other hand, the
Supreme Court of Oklahoma allows removal from office for "acts of commission, omission, or
neglect committed, done or omitted during a previous or preceding term of office" (see State v.
Bailey)253 Meanwhile, in some states where the removal statute is silent or unclear, the case's
resolution was contingent upon the interpretation of the phrase "in office." On one end, the
Supreme Court of Ohio strictly construed a removal statute containing the phrase "misfeasance of
malfeasance in office" and thereby declared that, in the absence of clear legislative language
making, the word "office" must be limited to the single term during which the offense charged
against the public officer occurred (see State ex rel. Stokes v. Probate Court of Cuyahoga
County)254 Similarly, the Common Pleas Court of Allegheny County, Pennsylvania decided that
the phrase "in office" in its state constitution was a time limitation with regard to the grounds of
removal, so that an officer could not be removed for misbehaviour which occurred; prior to the
taking of the office (see Commonwealth v. Rudman)255 The opposite was construed in the
Supreme Court of Louisiana which took the view that an officer's inability to hold an office resulted
from the commission of certain offenses, and at once rendered him unfit to continue in office,
adding the fact that the officer had been re-elected did not condone or purge the offense (see
State ex rel. Billon v. Bourgeois).256 Also, in the Supreme Court of New York, Apellate Division,
Fourth Department, the court construed the words "in office" to refer not to a particular term of
office but to an entire tenure; it stated that the whole purpose of the legislature in enacting the
statute in question could easily be lost sight of, and the intent of the law-making body be thwarted,
15
if an unworthy official could not be removed during one term for misconduct for a previous one
(Newman v. Strobel).257
(2) For another, condonation depended on whether or not the public officer was a successor in the
same office for which he has been administratively charged. The "own-successor theory," which is
recognized in numerous States as an exception to condonation doctrine, is premised on the idea
that each term of a re-elected incumbent is not taken as separate and distinct, but rather,
regarded as one continuous term of office. Thus, infractions committed in a previous term are
grounds for removal because a re-elected incumbent has no prior term to speak of258 (see
Attorney-General v. Tufts;259State v. Welsh;260Hawkins v. Common Council of Grand
Rapids;261Territory v. Sanches;262 and Tibbs v. City of Atlanta).263
(3) Furthermore, some State courts took into consideration the continuing nature of an offense in
cases where the condonation doctrine was invoked. In State ex rel. Douglas v. Megaarden,264
the public officer charged with malversation of public funds was denied the defense of
condonation by the Supreme Court of Minnesota, observing that "the large sums of money illegally
collected during the previous years are still retained by him." In State ex rel. Beck v. Harvey265
the Supreme Court of Kansas ruled that "there is no necessity" of applying the condonation
doctrine since "the misconduct continued in the present term of office[;] [thus] there was a duty
upon defendant to restore this money on demand of the county commissioners." Moreover, in
State ex rel. Londerholm v. Schroeder,266 the Supreme Court of Kansas held that "insofar as
nondelivery and excessive prices are concerned, x x x there remains a continuing duty on the part
of the defendant to make restitution to the country x x x, this duty extends into the present term,
and neglect to discharge it constitutes misconduct."
Overall, the foregoing data clearly contravenes the preliminary conclusion in Pascual that there is
a "weight of authority" in the US on the condonation doctrine. In fact, without any cogent exegesis
to show that Pascual had accounted for the numerous factors relevant to the debate on
condonation, an outright adoption of the doctrine in this jurisdiction would not have been proper.
At any rate, these US cases are only of persuasive value in the process of this Court's decision-
making. "[They] are not relied upon as precedents, but as guides of interpretation."267 Therefore,
the ultimate analysis is on whether or not the condonation doctrine, as espoused in Pascual, and
carried over in numerous cases after, can be held up against prevailing legal norms. Note that the
doctrine of stare decisis does not preclude this Court from revisiting existing doctrine. As adjudged
in the case of Belgica, the stare decisis rule should not operate when there are powerful
countervailing considerations against its application.268 In other words, stare decisis becomes an
intractable rule only when circumstances exist to preclude reversal of standing precedent.269 As
the Ombudsman correctly points out, jurisprudence, after all, is not a rigid, atemporal abstraction;
it is an organic creature that develops and devolves along with the society within which it
thrives.270 In the words of a recent US Supreme Court Decision, "[w]hat we can decide, we can
undecide."271
In this case, the Court agrees with the Ombudsman that since the time Pascual was decided, the
legal landscape has radically shifted. Again, Pascual was a 1959 case decided under the 1935
Constitution, which dated provisions do not reflect the experience of the Filipino People under the
1973 and 1987 Constitutions. Therefore, the plain difference in setting, including, of course, the
sheer impact of the condonation doctrine on public accountability, calls for Pascual's judicious re-
examination.
D. Testing the Condonation Doctrine.
Pascual's ratio decidendi may be dissected into three (3) parts:
First, the penalty of removal may not be extended beyond the term in which the public officer was
elected for each term is separate and distinct:
Offenses committed, or acts done, during previous term are generally held not to furnish cause for
removal and this is especially true where the constitution provides that the penalty in proceedings
for removal shall not extend beyond the removal from office, and disqualification from holding
office for the term for which the officer was elected or appointed. (67 C.J.S. p. 248, citing Rice vs.
State, 161 S.W. 2d. 401; Montgomery vs. Nowell, 40 S.W. 2d. 418; People ex rel. Bagshaw vs.
Thompson, 130 P. 2d. 237; Board of Com'rs of Kingfisher County vs. Shutter, 281 P. 222; State
vs. Blake, 280 P. 388; In re Fudula, 147 A. 67; State vs. Ward, 43 S.W. 2d. 217).
The underlying theory is that each term is separate from other terms x x x.272
Second, an elective official's re-election serves as a condonation of previous misconduct, thereby
cutting the right to remove him therefor; and
[T]hat the reelection to office operates as a condonation of the officer's previous misconduct to the
extent of cutting off the right to remove him therefor. (43 Am. Jur. p. 45, citing Atty. Gen. vs. Hasty,
184 Ala. 121, 63 So. 559, 50 L.R.A. (NS) 553.273 (emphasis supplied)
Third, courts may not deprive the electorate, who are assumed to have known the life and
character of candidates, of their right to elect officers:
As held in Conant vs. Grogan (1887) 6 N.Y.S.R. 322, cited in 17 A.I.R. 281, 63 So. 559, 50 LRA
(NS) 553 �
The Court should never remove a public officer for acts done prior to his present term of office. To
do otherwise would be to deprive the people of their right to elect their officers. When the people
have elected a man to office, it must be assumed that they did this with knowledge of his life and
character, and that they disregarded or forgave his faults or misconduct, if he had been guilty of
any. It is not for the court, by reason of such faults or misconduct to practically overrule the will of
the people.274 (Emphases supplied)
The notable cases on condonation following Pascual are as follows:
(1) Lizares v. Hechanova275 (May 17, 1966) - wherein the Court first applied the condonation
doctrine, thereby quoting the above-stated passages from Pascual in verbatim.
(2) Insco v. Sanchez, et al.276 (December 18, 1967) - wherein the Court clarified that the
condonation doctrine does not apply to a criminal case. It was explained that a criminal case is
different from an administrative case in that the former involves the People of the Philippines as a
community, and is a public wrong to the State at large; whereas, in the latter, only the populace of
the constituency he serves is affected. In addition, the Court noted that it is only the President who
may pardon a criminal offense.
(3) Aguinaldo v. Santos277 (Aguinaldo; August 21, 1992) - a case decided under the 1987
Constitution wherein the condonation doctrine was applied in favor of then Cagayan Governor
Rodolfo E. Aguinaldo although his re-election merely supervened the pendency of, the
proceedings.
(4) Salalima v. Guinsona, Jr.278 (Salalima; May 22, 1996) -wherein the Court reinforced the
condonation doctrine by stating that the same is justified by "sound public policy." According to the
Court, condonation prevented the elective official from being "hounded" by administrative cases
filed by his "political enemies" during a new term, for which he has to defend himself "to the
detriment of public service." Also, the Court mentioned that the administrative liability condoned by
re-election covered the execution of the contract and the incidents related therewith.279
(5) Mayor Garcia v. Mojica280 (Mayor Garcia; September 10, 1999) - wherein the benefit of the
doctrine was extended to then Cebu City Mayor Alvin B. Garcia who was administratively charged
for his involvement in an anomalous contract for the supply of asphalt for Cebu City, executed only
four (4) days before the upcoming elections. The Court ruled that notwithstanding the timing of the
contract's execution, the electorate is presumed to have known the petitioner's background and
character, including his past misconduct; hence, his subsequent re-election was deemed a
16
condonation of his prior transgressions. More importantly, the Court held that the determinative
time element in applying the condonation doctrine should be the time when the contract was
perfected; this meant that as long as the contract was entered into during a prior term, acts which
were done to implement the same, even if done during a succeeding term, do not negate the
application of the condonation doctrine in favor of the elective official.
(6) Salumbides, Jr. v. Office of the Ombudsman281 (Salumbides, Jr.; April 23, 2010) - wherein the
Court explained the doctrinal innovations in the Salalima and Mayor Garcia rulings, to wit:
Salalima v. Guingona, Jr. and Mayor Garcia v. Hon. Mojica reinforced the doctrine. The
condonation rule was applied even if the administrative complaint was not filed before the
reelection of the public official, and even if the alleged misconduct occurred four days before the
elections, respectively. Salalima did not distinguish as to the date of filing of the administrative
complaint, as long as the alleged misconduct was committed during the prior term, the precise
timing or period of which Garcia did not further distinguish, as long as the wrongdoing that gave
rise to the public official's culpability was committed prior to the date of reelection.282 (Emphasis
supplied)ChanRoblesVirtualawlibrary
The Court, citing Civil Service Commission v. Sojor,283 also clarified that the condonation doctrine
would not apply to appointive officials since, as to them, there is no sovereign will to
disenfranchise.
(7) And finally, the above discussed case of Governor Garcia, Jr. -wherein the Court remarked
that it would have been prudent for the appellate court therein to have issued a temporary
restraining order against the implementation of a preventive suspension order issued by the
Ombudsman in view of the condonation doctrine.
A thorough review of the cases post-1987, among others, Aguinaldo, Salalima, Mayor Garcia, and
Governor Garcia, Jr. - all cited by the CA to justify its March 16, 2015 and April 6, 2015
Resolutions directing the issuance of the assailed injunctive writs - would show that the basis for
condonation under the prevailing constitutional and statutory framework was never accounted for.
What remains apparent from the text of these cases is that the basis for condonation, as
jurisprudential doctrine, was - and still remains - the above-cited postulates of Pascual, which was
lifted from rulings of US courts where condonation was amply supported by their own state laws.
With respect to its applicability to administrative cases, the core premise of condonation - that is,
an elective official's re-election cuts qff the right to remove him for an administrative offense
committed during a prior term - was adopted hook, line, and sinker in our jurisprudence largely
because the legality of that doctrine was never tested against existing legal norms. As in the US,
the propriety of condonation is - as it should be -dependent on the legal foundation of the
adjudicating jurisdiction. Hence, the Court undertakes an examination of our current laws in order
to determine if there is legal basis for the continued application of the doctrine of condonation.
The foundation of our entire legal system is the Constitution. It is the supreme law of the land;284
thus, the unbending rule is that every statute should be read in light of the Constitution.285
Likewise, the Constitution is a framework of a workable government; hence, its interpretation must
take into account the complexities, realities, and politics attendant to the operation of the political
branches of government.286
As earlier intimated, Pascual was a decision promulgated in 1959. Therefore, it was decided within
the context of the 1935 Constitution which was silent with respect to public accountability, or of the
nature of public office being a public trust. The provision in the 1935 Constitution that comes
closest in dealing with public office is Section 2, Article II which states that "[t]he defense of the
State is a prime duty of government, and in the fulfillment of this duty all citizens may be required
by law to render personal military or civil service."287 Perhaps owing to the 1935 Constitution's
silence on public accountability, and considering the dearth of jurisprudential rulings on the matter,
as well as the variance in the policy considerations, there was no glaring objection confronting the
Pascual Court in adopting the condonation doctrine that originated from select US cases existing
at that time.
With the advent of the 1973 Constitution, the approach in dealing with public officers underwent a
significant change. The new charter introduced an entire article on accountability of public officers,
found in Article XIII. Section 1 thereof positively recognized, acknowledged, and declared that
"[p]ublic office is a public trust." Accordingly, "[p]ublic officers and employees shall serve with the
highest degree of responsibility, integrity, loyalty and efficiency, and shall remain accountable to
the people."
After the turbulent decades of Martial Law rule, the Filipino People have framed and adopted the
1987 Constitution, which sets forth in the Declaration of Principles and State Policies in Article II
that "[t]he State shall maintain honesty and integrity in the public service and take positive and
effective measures against graft and corruption."288 Learning how unbridled power could corrupt
public servants under the regime of a dictator, the Framers put primacy on the integrity of the
public service by declaring it as a constitutional principle and a State policy. More significantly, the
1987 Constitution strengthened and solidified what has been first proclaimed in the 1973
Constitution by commanding public officers to be accountable to the people at all times:
Section 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency
and act with patriotism and justice, and lead modest lives.ChanRoblesVirtualawlibrary
In Belgica, it was explained that:
[t]he aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that "public
office is a public trust," is an overarching reminder that every instrumentality of government should
exercise their official functions only in accordance with the principles of the Constitution which
embodies the parameters of the people's trust. The notion of a public trust connotes accountability
x x x.289 (Emphasis supplied)ChanRoblesVirtualawlibrary
The same mandate is found in the Revised Administrative Code under the section of the Civil
Service Commission,290 and also, in the Code of Conduct and Ethical Standards for Public
Officials and Employees.291
For local elective officials like Binay, Jr., the grounds to discipline, suspend or remove an elective
local official from office are stated in Section 60 of Republic Act No. 7160,292 otherwise known as
the "Local Government Code of 1991" (LGC), which was approved on October 10 1991, and took
effect on January 1, 1992:
Section 60. Grounds for Disciplinary Action. - An elective local official may be disciplined,
suspended, or removed from office on any of the r following grounds:
(a) Disloyalty to the Republic of the Philippines;
(b) Culpable violation of the Constitution;
(c) Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of
duty;
(d) Commission of any offense involving moral turpitude or an offense punishable by at
least prision mayor;
(e) Abuse of authority;
(f) Unauthorized absence for fifteen (15) consecutive working days, except in the case
of members of the sangguniang panlalawigan, sangguniang panlunsod, sanggunian
bayan, and sangguniang barangay;
(g) Application for, or acquisition of, foreign citizenship or residence or the status of an
immigrant of another country; and
(h) Such other grounds as may be provided in this Code and other laws.
An elective local official may be removed from office on the grounds enumerated above
by order of the proper court.
17
Related to this provision is Section 40 (b) of the LGC which states that those removed from office
as a result of an administrative case shall be disqualified from running for any elective local
position:
Section 40. Disqualifications. - The following persons are disqualified from running for any elective
local position:
xxxx
(b) Those removed from office as a result of an administrative case;
x x x x (Emphasis supplied)
In the same sense, Section 52 (a) of the RRACCS provides that the penalty of dismissal from
service carries the accessory penalty of perpetual disqualification from holding public office:
Section 52. - Administrative Disabilities Inherent in Certain Penalties. -
The penalty of dismissal shall carry with it cancellation of eligibility, forfeiture of retirement
benefits, perpetual disqualification from holding public office, and bar from taking the civil service
examinations.
In contrast, Section 66 (b) of the LGC states that the penalty of suspension shall not exceed the
unexpired term of the elective local official nor constitute a bar to his candidacy for as long as he
meets the qualifications required for the office. Note, however, that the provision only pertains to
the duration of the penalty and its effect on the official's candidacy. Nothing therein states that the
administrative liability therefor is extinguished by the fact of re-election:
Section 66. Form and Notice of Decision. - x x x.
xxxx
(b) The penalty of suspension shall not exceed the unexpired term of the respondent or a period of
six (6) months for every administrative offense, nor shall said penalty be a bar to the candidacy of
the respondent so suspended as long as he meets the qualifications required for the office.
Reading the 1987 Constitution together with the above-cited legal provisions now leads this Court
to the conclusion that the doctrine of condonation is actually bereft of legal bases.
To begin with, the concept of public office is a public trust and the corollary requirement of
accountability to the people at all times, as mandated under the 1987 Constitution, is plainly
inconsistent with the idea that an elective local official's administrative liability for a misconduct
committed during a prior term can be wiped off by the fact that he was elected to a second term of
office, or even another elective post. Election is not a mode of condoning an administrative
offense, and there is simply no constitutional or statutory basis in our jurisdiction to support the
notion that an official elected for a different term is fully absolved of any administrative liability
arising from an offense done during a prior term. In this jurisdiction, liability arising from
administrative offenses may be condoned bv the President in light of Section 19, Article VII of the
1987 Constitution which was interpreted in Llamas v. Orbos293 to apply to administrative
offenses:
The Constitution does not distinguish between which cases executive clemency may be exercised
by the President, with the sole exclusion of impeachment cases. By the same token, if executive
clemency may be exercised only in criminal cases, it would indeed be unnecessary to provide for
the exclusion of impeachment cases from the coverage of Article VII, Section 19 of the
Constitution. Following petitioner's proposed interpretation, cases of impeachment are
automatically excluded inasmuch as the same do not necessarily involve criminal offenses.
In the same vein, We do not clearly see any valid and convincing , reason why the President
cannot grant executive clemency in administrative cases. It is Our considered view that if the
President can grant reprieves, commutations and pardons, and remit fines and forfeitures in
criminal cases, with much more reason can she grant executive clemency in administrative cases,
which are clearly less serious than criminal offenses.
Also, it cannot be inferred from Section 60 of the LGC that the grounds for discipline enumerated
therein cannot anymore be invoked against an elective local official to hold him administratively
liable once he is re-elected to office. In fact, Section 40 (b) of the LGC precludes condonation
since in the first place, an elective local official who is meted with the penalty of removal could not
be re-elected to an elective local position due to a direct disqualification from running for such
post. In similar regard, Section 52 (a) of the RRACCS imposes a penalty of perpetual
disqualification from holding public office as an accessory to the penalty of dismissal from service.
To compare, some of the cases adopted in Pascual were decided by US State jurisdictions
wherein the doctrine of condonation of administrative liability was supported by either a
constitutional or statutory provision stating, in effect, that an officer cannot be removed by a
misconduct committed during a previous term,294 or that the disqualification to hold the office
does not extend beyond the term in which the official's delinquency occurred.295 In one case,296
the absence of a provision against the re-election of an officer removed - unlike Section 40 (b) of
the LGC-was the justification behind condonation. In another case,297 it was deemed that
condonation through re-election was a policy under their constitution - which adoption in this
jurisdiction runs counter to our present Constitution's requirements on public accountability. There
was even one case where the doctrine of condonation was not adjudicated upon but only invoked
by a party as a ground;298 while in another case, which was not reported in full in the official
series, the crux of the disposition was that the evidence of a prior irregularity in no way pertained
to the charge at issue and therefore, was deemed to be incompetent.299 Hence, owing to either
their variance or inapplicability, none of these cases can be used as basis for the continued
adoption of the condonation doctrine under our existing laws.
At best, Section 66 (b) of the LGC prohibits the enforcement of the penalty of suspension beyond
the unexpired portion of the elective local official's prior term, and likewise allows said official to
still run for re-election This treatment is similar to People ex rel Bagshaw v. Thompson300 and
Montgomery v. Novell301 both cited in Pascual, wherein it was ruled that an officer cannot be
suspended for a misconduct committed during a prior term. However, as previously stated,
nothing in Section 66 (b) states that the elective local official's administrative liability is
extinguished by the fact of re-election. Thus, at all events, no legal provision actually supports the
theory that the liability is condoned.
Relatedly it should be clarified that there is no truth in Pascual's postulation that the courts would
be depriving the electorate of their right to elect their officers if condonation were not to be
sanctioned. In political law, election pertains to the process by which a particular constituency
chooses an individual to hold a public office. In this jurisdiction, there is, again, no legal basis to
conclude that election automatically implies condonation. Neither is there any legal basis to say
that every democratic and republican state has an inherent regime of condonation. If condonation
of an elective official's administrative liability would perhaps, be allowed in this jurisdiction, then
the same should have been provided by law under our governing legal mechanisms. May it be at
the time of Pascual or at present, by no means has it been shown that such a law, whether in a
constitutional or statutory provision, exists. Therefore, inferring from this manifest absence, it
cannot be said that the electorate's will has been abdicated.
Equally infirm is Pascual's proposition that the electorate, when re-electing a local official, are
assumed to have done so with knowledge of his life and character, and that they disregarded or
forgave his faults or misconduct, if he had been guilty of any. Suffice it to state that no such
presumption exists in any statute or procedural rule.302 Besides, it is contrary to human
experience that the electorate would have full knowledge of a public official's misdeeds. The
Ombudsman correctly points out the reality that most corrupt acts by public officers are shrouded
in secrecy, and concealed from the public. Misconduct committed by an elective official is easily
18
covered up, and is almost always unknown to the electorate when they cast their votes.303 At a
conceptual level, condonation presupposes that the condoner has actual knowledge of what is to
be condoned. Thus, there could be no condonation of an act that is unknown. As observed in
Walsh v. City Council of Trenton304 decided by the New Jersey Supreme Court:
Many of the cases holding that re-election of a public official prevents his removal for acts done in
a preceding term of office are reasoned out on the theory of condonation. We cannot subscribe to
that theory because condonation, implying as it does forgiveness, connotes knowledge and in the
absence of knowledge there can be no condonation. One cannot forgive something of which one
has no knowledge.
That being said, this Court simply finds no legal authority to sustain the condonation doctrine in
this jurisdiction. As can be seen from this discourse, it was a doctrine adopted from one class of
US rulings way back in 1959 and thus, out of touch from - and now rendered obsolete by - the
current legal regime. In consequence, it is high time for this Court to abandon the condonation
doctrine that originated from Pascual, and affirmed in the cases following the same, such as
Aguinaldo, Salalima, Mayor Garcia, and Governor Garcia, Jr. which were all relied upon by the
CA.
It should, however, be clarified that this Court's abandonment of the condonation doctrine should
be prospective in application for the reason that judicial decisions applying or interpreting the laws
or the Constitution, until reversed, shall form part of the legal system of the Philippines.305 Unto
this Court devolves the sole authority to interpret what the Constitution means, and all persons are
bound to follow its interpretation. As explained in De Castro v. Judicial Bar Council.306
Judicial decisions assume the same authority as a statute itself and, until authoritatively
abandoned, necessarily become, to the extent that they are applicable, the criteria that must
control the actuations, not only of those called upon to abide by them, but also of those duty-
bound to enforce obedience to them.307
Hence, while the future may ultimately uncover a doctrine's error, it should be, as a general rule,
recognized as "good law" prior to its abandonment. Consequently, the people's reliance thereupon
should be respected. The landmark case on this matter is People v. Jabinal,308 wherein it was
ruled:
[W]hen a doctrine of this Court is overruled and a different view is adopted, the new doctrine
should be applied prospectively, and should not apply to parties who had relied on the old doctrine
and acted on the faith thereof.
Later, in Spouses Benzonan v. CA,309 it was further elaborated:
[Pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the
Constitution shall form a part of the legal system of the Philippines." But while our decisions form
part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that
"laws shall have no retroactive effect unless the contrary is provided." This is expressed in the
familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale
against retroactivity is easy to perceive. The retroactive application of a law usually divests rights
that have already become vested or impairs the obligations of contract and hence, is
unconstitutional.310ChanRoblesVirtualawlibrary
Indeed, the lessons of history teach us that institutions can greatly benefit from hindsight and
rectify its ensuing course. Thus, while it is truly perplexing to think that a doctrine which is barren
of legal anchorage was able to endure in our jurisprudence for a considerable length of time, this
Court, under a new membership, takes up the cudgels and now abandons the condonation
doctrine.
E. Consequence of ruling.
As for this section of the Decision, the issue to be resolved is whether or not the CA committed
grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the assailed
injunctive writs.
It is well-settled that an act of a court or tribunal can only be considered as with grave abuse of
discretion when such act is done in a capricious or whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse of discretion must be so patent and gross as to
amount to an evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or
to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic
manner by reason of passion and hostility.311 It has also been held that "grave abuse of
discretion arises when a lower court or tribunal patently violates the Constitution, the law or
existing jurisprudence."312
As earlier established, records disclose that the CA's resolutions directing the issuance of the
assailed injunctive writs were all hinged on cases enunciating the condonation doctrine. To
recount, the March 16, 2015 Resolution directing the issuance of the subject TRO was based on
the case of Governor Garcia, Jr., while the April 6, 2015 Resolution directing the issuance of the
subject WPI was based on the cases of Aguinaldo, Salalima, Mayor Garcia, and again, Governor
Garcia, Jr. Thus, by merely following settled precedents on the condonation doctrine, which at that
time, unwittingly remained "good law," it cannot be concluded that the CA committed a grave
abuse of discretion based on its legal attribution above. Accordingly, the WPI against the
Ombudsman's preventive suspension order was correctly issued.
With this, the ensuing course of action should have been for the CA to resolve the main petition for
certiorari in CA-G.R. SP No. 139453 on the merits. However, considering that the Ombudsman,
on October 9, 2015, had already found Binay, Jr. administratively liable and imposed upon him the
penalty of dismissal, which carries the accessory penalty of perpetual disqualification from holding
public office, for the present administrative charges against him, the said CA petition appears to
have been mooted.313 As initially intimated, the preventive suspension order is only an ancillary
issuance that, at its core, serves the purpose of assisting the Office of the Ombudsman in its
investigation. It therefore has no more purpose - and perforce, dissolves - upon the termination of
the office's process of investigation in the instant administrative case.
F. Exceptions to the mootness principle.
This notwithstanding, this Court deems it apt to clarify that the mootness of the issue regarding the
validity of the preventive suspension order subject of this case does not preclude any of its
foregoing determinations, particularly, its abandonment of the condonation doctrine. As explained
in Belgica, '"the moot and academic principle' is not a magical formula that can automatically
dissuade the Court in resolving a case. The Court will decide cases, otherwise moot, if: first, there
is a grave violation of the Constitution; second, the exceptional character of the situation and the
paramount public interest is involved; third, when the constitutional issue raised requires
formulation of controlling principles to guide the bench, the bar, and the public; and fourth, the
case is capable of repetition yet evading review."314 All of these scenarios obtain in this case:
First, it would be a violation of the Court's own duty to uphold and defend the Constitution if it were
not to abandon the condonation doctrine now that its infirmities have become apparent. As
extensively discussed, the continued application of the condonation doctrine is simply
impermissible under the auspices of the present Constitution which explicitly mandates that public
office is a public trust and that public officials shall be accountable to the people at all times.
Second, the condonation doctrine is a peculiar jurisprudential creation that has persisted as a
defense of elective officials to escape administrative liability. It is the first time that the legal
intricacies of this doctrine have been brought to light; thus, this is a situation of exceptional
character which this Court must ultimately resolve. Further, since the doctrine has served as a
perennial obstacle against exacting public accountability from the multitude of elective local
officials throughout the years, it is indubitable that paramount public interest is involved.
19
Third, the issue on the validity of the condonation doctrine clearly requires the formulation of
controlling principles to guide the bench, the bar, and the public. The issue does not only involve
an in-depth exegesis of administrative law principles, but also puts to the forefront of legal
discourse the potency of the accountability provisions of the 1987 Constitution. The Court owes it
to the bench, the bar, and the public to explain how this controversial doctrine came about, and
now, its reasons for abandoning the same in view of its relevance on the parameters of public
office.
And fourth, the defense of condonation has been consistently invoked by elective local officials
against the administrative charges filed against them. To provide a sample size, the Ombudsman
has informed the Court that "for the period of July 2013 to December 2014 alone, 85 cases from
the Luzon Office and 24 cases from the Central Office were dismissed on the ground of
condonation. Thus, in just one and a half years, over a hundred cases of alleged misconduct -
involving infractions such as dishonesty, oppression, gross neglect of duty and grave misconduct -
were placed beyond the reach of the Ombudsman's investigatory and prosecutorial powers."315
Evidently, this fortifies the finding that the case is capable of repetition and must therefore, not
evade review.
Ombudsman under the first paragraph of the said provision is DECLARED ineffective until the
Court adopts the same as part of the rules of procedure through an administrative circular duly
issued therefor;cralawlawlibrary
(b) The condonation doctrine is ABANDONED, but the abandonment is PROSPECTIVE in
effect;cralawlawlibrary
(c) The Court of Appeals (CA) is DIRECTED to act on respondent Jejomar Erwin S. Binay, Jr.'s
(Binay, Jr.) petition for certiorari in CA-G.R. SP No. 139453 in light of the Office of the
Ombudsman's supervening issuance of its Joint Decision dated October 9, 2015 finding Binay, Jr.
administratively liable in the six (6) administrative complamts, docketed as OMB-C-A-15-0058,
OMB-C-A-15-0059, OMB-C-A-15-0060, OMB-C-A-15-0061, OMB-C-A-15-0062, and OMB-C-A-
15-0063; and
(d) After the filing of petitioner Ombudsman Conchita Carpio Morales's comment, the CA is
DIRECTED to resolve Binay, Jr.'s petition for contempt in CA-G.R. SP No. 139504 with utmost
dispatch.

In any event, the abandonment of a doctrine is wholly within the prerogative of the Court. As SO ORDERED.chanroblesvirtuallawlibrary
mentioned, it is its own jurisprudential creation and may therefore, pursuant to its mandate to
uphold and defend the Constitution, revoke it notwithstanding supervening events that render the Sereno, C.J. Carpio, Leonardo-De Castro, Del Castillo, Villarama, Jr., Perez, Reyes, and Leonen,
subject of discussion moot.chanrobleslaw JJ., concur.
Velasco, Jr., Peralta, and Jardeleza, JJ., no part.
V. Brion, J., no part/ on leave.
Mendoza, J., on leave.
With all matters pertaining to CA-G.R. SP No. 139453 passed upon, the Court now rules on the Bersamin, J., please see my concurring & dissenting opinion.
final issue on whether or not the CA's Resolution316 dated March 20, 2015 directing the
Ombudsman to comment on Binay, Jr.'s petition for contempt in CA-G.R. SP No. 139504 is
improper and illegal.

The sole premise of the Ombudsman's contention is that, as an impeachable officer, she cannot
be the subject of a charge for indirect contempt317 because this action is criminal in nature and
the penalty therefor would result in her effective removal from office.318 However, a reading of the
aforesaid March 20, 2015 Resolution does not show that she has already been subjected to
contempt proceedings. This issuance, in? fact, makes it clear that notwithstanding the directive for
the Ombudsman to comment, the CA has not necessarily given due course to Binay, Jr.'s
contempt petition:

Without necessarily giving due course to the Petition for Contempt respondents [Hon. Conchita
Carpio Morales, in her capacity as the Ombudsman, and the Department of Interior and Local
Government] are hereby DIRECTED to file Comment on the Petition/Amended and Supplemental
Petition for Contempt (CA-G.R. SP No. 139504) within an inextendible period of three (3) days
from receipt hereof. (Emphasis and underscoring supplied)ChanRoblesVirtualawlibrary

Thus, even if the Ombudsman accedes to the CA's directive by filing a comment, wherein she may
properly raise her objections to the contempt proceedings by virtue of her being an impeachable
officer, the CA, in the exercise of its sound judicial discretion, may still opt not to give due course
to Binay, Jr.'s contempt petition and accordingly, dismiss the same. Sjmply put, absent any
indication that the contempt petition has been given due course by the CA, it would then be
premature for this Court to rule on the issue. The submission of the Ombudsman on this score is
perforce denied.

WHEREFORE, the petition is PARTLY GRANTED. Under the premises of this Decision, the Court
resolves as follows:

(a) the second paragraph of Section 14 of Republic Act No. 6770 is declared
UNCONSTITUTIONAL, while the policy against the issuance of provisional injunctive writs by
courts other than the Supreme Court to enjoin an investigation conducted by the Office of the

20
2. Republic of the PhilippinesSUPREME COURT
Manila
EN BANC
G.R. No. 175356 December 3, 2013
MANILA MEMORIAL PARK, INC. AND LA FUNERARIA PAZ-SUCAT, INC.,
Petitioners,
vs.
SECRETARY OF THE DEPARTMENT OF SOCIAL WELFARE AND
DEVELOPMENT and THE SECRETARY OF THE DEPARTMENT OF
FINANCE, Respondents.
DECISION
DEL CASTILLO, J.:
When a party challeges the constitutionality of a law, the burden of proof rests upon him.
Before us is a Petition for Prohibition2 under Rule 65 of the Rules of Court filed by petitioners
Manila Memorial Park, Inc. and La Funeraria Paz-Sucat, Inc., domestic corporations engaged in
the business of providing funeral and burial services, against public respondents Secretaries of
the Department of Social Welfare and Development (DSWD) and the Department of Finance
(DOF).
Petitioners assail the constitutionality of Section 4 of Republic Act (RA) No. 7432,3 as amended by
RA 9257,4 and the implementing rules and regulations issued by the DSWD and DOF insofar as
these allow business establishments to claim the 20% discount given to senior citizens as a tax
deduction.
Factual Antecedents
On April 23, 1992, RA 7432 was passed into law, granting senior citizens the following privileges:
SECTION 4. Privileges for the Senior Citizens. – The senior citizens shall be entitled to the
following:
a) the grant of twenty percent (20%) discount from all establishments relative to
utilization of transportation services, hotels and similar lodging establishment[s],
restaurants and recreation centers and purchase of medicine anywhere in the country:
Provided, That private establishments may claim the cost as tax credit;
b) a minimum of twenty percent (20%) discount on admission fees charged by theaters,
cinema houses and concert halls, circuses, carnivals and other similar places of culture,
leisure, and amusement;
c) exemption from the payment of individual income taxes: Provided, That their annual
taxable income does not exceed the property level as determined by the National
Economic and Development Authority (NEDA) for that year;
d) exemption from training fees for socioeconomic programs undertaken by the OSCA
as part of its work;
e) free medical and dental services in government establishment[s] anywhere in the
country, subject to guidelines to be issued by the Department of Health, the
Government Service Insurance System and the Social Security System;
f) to the extent practicable and feasible, the continuance of the same benefits and
privileges given by the Government Service Insurance System (GSIS), Social Security
System (SSS) and PAG-IBIG, as the case may be, as are enjoyed by those in actual
service.
On August 23, 1993, Revenue Regulations (RR) No. 02-94 was issued to implement RA 7432.
Sections 2(i) and 4 of RR No. 02-94 provide:
Sec. 2. DEFINITIONS. – For purposes of these regulations: i. Tax Credit – refers to the amount
representing the 20% discount granted to a qualified senior citizen by all establishments relative to
their utilization of transportation services, hotels and similar lodging establishments, restaurants,
drugstores, recreation centers, theaters, cinema houses, concert halls, circuses, carnivals and
other similar places of culture, leisure and amusement, which discount shall be deducted by the
said establishments from their gross income for income tax purposes and from their gross sales
for value-added tax or other percentage tax purposes.
xxxx
Sec. 4. RECORDING/BOOKKEEPING REQUIREMENTS FOR PRIVATE ESTABLISHMENTS. –
Private establishments, i.e., transport services, hotels and similar lodging establishments,
restaurants, recreation centers, drugstores, theaters, cinema houses, concert halls, circuses,
carnivals and other similar places of culture[,] leisure and amusement, giving 20% discounts to
qualified senior citizens are required to keep separate and accurate record[s] of sales made to
senior citizens, which shall include the name, identification number, gross sales/receipts,
discounts, dates of transactions and invoice number for every transaction. The amount of 20%
discount shall be deducted from the gross income for income tax purposes and from gross sales
of the business enterprise concerned for purposes of the VAT and other percentage taxes.
In Commissioner of Internal Revenue v. Central Luzon Drug Corporation,5 the Court declared
Sections 2(i) and 4 of RR No. 02-94 as erroneous because these contravene RA 7432,6 thus:
RA 7432 specifically allows private establishments to claim as tax credit the amount of discounts
they grant. In turn, the Implementing Rules and Regulations, issued pursuant thereto, provide the
procedures for its availment. To deny such credit, despite the plain mandate of the law and the
regulations carrying out that mandate, is indefensible. First, the definition given by petitioner is
erroneous. It refers to tax credit as the amount representing the 20 percent discount that "shall be
deducted by the said establishments from their gross income for income tax purposes and from
their gross sales for value-added tax or other percentage tax purposes." In ordinary business
language, the tax credit represents the amount of such discount. However, the manner by which
the discount shall be credited against taxes has not been clarified by the revenue regulations. By
ordinary acceptation, a discount is an "abatement or reduction made from the gross amount or
value of anything." To be more precise, it is in business parlance "a deduction or lowering of an
amount of money;" or "a reduction from the full amount or value of something, especially a price."
In business there are many kinds of discount, the most common of which is that affecting the
income statement or financial report upon which the income tax is based.
xxxx
Sections 2.i and 4 of Revenue Regulations No. (RR) 2-94 define tax credit as the 20 percent
discount deductible from gross income for income tax purposes, or from gross sales for VAT or
other percentage tax purposes. In effect, the tax credit benefit under RA 7432 is related to a sales
discount. This contrived definition is improper, considering that the latter has to be deducted from
gross sales in order to compute the gross income in the income statement and cannot be
deducted again, even for purposes of computing the income tax. When the law says that the cost
of the discount may be claimed as a tax credit, it means that the amount — when claimed — shall
be treated as a reduction from any tax liability, plain and simple. The option to avail of the tax
credit benefit depends upon the existence of a tax liability, but to limit the benefit to a sales
discount — which is not even identical to the discount privilege that is granted by law — does not
define it at all and serves no useful purpose. The definition must, therefore, be stricken down.
Laws Not Amended by Regulations
Second, the law cannot be amended by a mere regulation. In fact, a regulation that "operates to
create a rule out of harmony with the statute is a mere nullity;" it cannot prevail. It is a cardinal rule
that courts "will and should respect the contemporaneous construction placed upon a statute by
the executive officers whose duty it is to enforce it x x x." In the scheme of judicial tax
administration, the need for certainty and predictability in the implementation of tax laws is crucial.
Our tax authorities fill in the details that "Congress may not have the opportunity or competence to
provide." The regulations these authorities issue are relied upon by taxpayers, who are certain that
these will be followed by the courts. Courts, however, will not uphold these authorities’
21
interpretations when clearly absurd, erroneous or improper. In the present case, the tax authorities
have given the term tax credit in Sections 2.i and 4 of RR 2-94 a meaning utterly in contrast to
what RA 7432 provides. Their interpretation has muddled x x x the intent of Congress in granting a
mere discount privilege, not a sales discount. The administrative agency issuing these regulations
may not enlarge, alter or restrict the provisions of the law it administers; it cannot engraft
additional requirements not contemplated by the legislature.
In case of conflict, the law must prevail. A "regulation adopted pursuant to law is law." Conversely,
a regulation or any portion thereof not adopted pursuant to law is no law and has neither the force
nor the effect of law.7
On February 26, 2004, RA 92578 amended certain provisions of RA 7432, to wit:
SECTION 4. Privileges for the Senior Citizens. – The senior citizens shall be entitled to the
following:
(a) the grant of twenty percent (20%) discount from all establishments relative to the utilization of
services in hotels and similar lodging establishments, restaurants and recreation centers, and
purchase of medicines in all establishments for the exclusive use or enjoyment of senior citizens,
including funeral and burial services for the death of senior citizens;
xxxx
The establishment may claim the discounts granted under (a), (f), (g) and (h) as tax deduction
based on the net cost of the goods sold or services rendered: Provided, That the cost of the
discount shall be allowed as deduction from gross income for the same taxable year that the
discount is granted. Provided, further, That the total amount of the claimed tax deduction net of
value added tax if applicable, shall be included in their gross sales receipts for tax purposes and
shall be subject to proper documentation and to the provisions of the National Internal Revenue
Code, as amended.
To implement the tax provisions of RA 9257, the Secretary of Finance issued RR No. 4-2006, the
pertinent provision of which provides:
SEC. 8. AVAILMENT BY ESTABLISHMENTS OF SALES DISCOUNTS AS DEDUCTION FROM
GROSS INCOME. – Establishments enumerated in subparagraph (6) hereunder granting sales
discounts to senior citizens on the sale of goods and/or services specified thereunder are entitled
to deduct the said discount from gross income subject to the following conditions:
(1) Only that portion of the gross sales EXCLUSIVELY USED, CONSUMED OR
ENJOYED BY THE SENIOR CITIZEN shall be eligible for the deductible sales discount.
(2) The gross selling price and the sales discount MUST BE SEPARATELY INDICATED
IN THE OFFICIAL RECEIPT OR SALES INVOICE issued by the establishment for the
sale of goods or services to the senior citizen.
(3) Only the actual amount of the discount granted or a sales discount not exceeding
20% of the gross selling price can be deducted from the gross income, net of value
added tax, if applicable, for income tax purposes, and from gross sales or gross receipts
of the business enterprise concerned, for VAT or other percentage tax purposes.
(4) The discount can only be allowed as deduction from gross income for the same
taxable year that the discount is granted.
(5) The business establishment giving sales discounts to qualified senior citizens is
required to keep separate and accurate record[s] of sales, which shall include the name
of the senior citizen, TIN, OSCA ID, gross sales/receipts, sales discount granted, [date]
of [transaction] and invoice number for every sale transaction to senior citizen.
(6) Only the following business establishments which granted sales discount to senior
citizens on their sale of goods and/or services may claim the said discount granted as
deduction from gross income, namely:
xxxx
(i) Funeral parlors and similar establishments – The beneficiary or any person who shall shoulder
the funeral and burial expenses of the deceased senior citizen shall claim the discount, such as
casket, embalmment, cremation cost and other related services for the senior citizen upon
payment and presentation of [his] death certificate.
The DSWD likewise issued its own Rules and Regulations Implementing RA 9257, to wit:
RULE VI DISCOUNTS AS TAX DEDUCTION OF ESTABLISHMENTS
Article 8. Tax Deduction of Establishments. – The establishment may claim the discounts granted
under Rule V, Section 4 – Discounts for Establishments, Section 9, Medical and Dental Services
in Private Facilities and Sections 10 and 11 – Air, Sea and Land Transportation as tax deduction
based on the net cost of the goods sold or services rendered.
Provided, That the cost of the discount shall be allowed as deduction from gross income for the
same taxable year that the discount is granted; Provided, further, That the total amount of the
claimed tax deduction net of value added tax if applicable, shall be included in their gross sales
receipts for tax purposes and shall be subject to proper documentation and to the provisions of the
National Internal Revenue Code, as amended; Provided, finally, that the implementation of the tax
deduction shall be subject to the Revenue Regulations to be issued by the Bureau of Internal
Revenue (BIR) and approved by the Department of Finance (DOF).
Feeling aggrieved by the tax deduction scheme, petitioners filed the present recourse, praying that
Section 4 of RA 7432, as amended by RA 9257, and the implementing rules and regulations
issued by the DSWD and the DOF be declared unconstitutional insofar as these allow business
establishments to claim the 20% discount given to senior citizens as a tax deduction; that the
DSWD and the DOF be prohibited from enforcing the same; and that the tax credit treatment of
the 20% discount under the former Section 4 (a) of RA 7432 be reinstated.
Issues
Petitioners raise the following issues:
A. WHETHER THE PETITION PRESENTS AN ACTUAL CASE OR CONTROVERSY.
B. WHETHER SECTION 4 OF REPUBLIC ACT NO. 9257 AND X X X ITS IMPLEMENTING
RULES AND REGULATIONS, INSOFAR AS THEY PROVIDE THAT THE TWENTY PERCENT
(20%) DISCOUNT TO SENIOR CITIZENS MAY BE CLAIMED AS A TAX DEDUCTION BY THE
PRIVATE ESTABLISHMENTS, ARE INVALID AND UNCONSTITUTIONAL.9
Petitioners’ Arguments
Petitioners emphasize that they are not questioning the 20% discount granted to senior citizens
but are only assailing the constitutionality of the tax deduction scheme prescribed under RA 9257
and the implementing rules and regulations issued by the DSWD and the DOF.10
Petitioners posit that the tax deduction scheme contravenes Article III, Section 9 of the
Constitution, which provides that: "[p]rivate property shall not be taken for public use without just
compensation."11
In support of their position, petitioners cite Central Luzon Drug Corporation,12 where it was ruled
that the 20% discount privilege constitutes taking of private property for public use which requires
the payment of just compensation,13 and Carlos Superdrug Corporation v. Department of Social
Welfare and Development,14 where it was acknowledged that the tax deduction scheme does not
meet the definition of just compensation.15
Petitioners likewise seek a reversal of the ruling in Carlos Superdrug Corporation16 that the tax
deduction scheme adopted by the government is justified by police power.17
They assert that "[a]lthough both police power and the power of eminent domain have the general
welfare for their object, there are still traditional distinctions between the two"18 and that "eminent
domain cannot be made less supreme than police power."19
22
Petitioners further claim that the legislature, in amending RA 7432, relied on an erroneous
contemporaneous construction that prior payment of taxes is required for tax credit.20
Petitioners also contend that the tax deduction scheme violates Article XV, Section 421 and Article
XIII, Section 1122 of the Constitution because it shifts the State’s constitutional mandate or duty of
improving the welfare of the elderly to the private sector.23
Under the tax deduction scheme, the private sector shoulders 65% of the discount because only
35%24 of it is actually returned by the government.25
Consequently, the implementation of the tax deduction scheme prescribed under Section 4 of RA
9257 affects the businesses of petitioners.26
Thus, there exists an actual case or controversy of transcendental importance which deserves
judicious disposition on the merits by the highest court of the land.27
Respondents’ Arguments
Respondents, on the other hand, question the filing of the instant Petition directly with the
Supreme Court as this disregards the hierarchy of courts.28
They likewise assert that there is no justiciable controversy as petitioners failed to prove that the
tax deduction treatment is not a "fair and full equivalent of the loss sustained" by them.29
As to the constitutionality of RA 9257 and its implementing rules and regulations, respondents
contend that petitioners failed to overturn its presumption of constitutionality.30
More important, respondents maintain that the tax deduction scheme is a legitimate exercise of
the State’s police power.31
Our Ruling
The Petition lacks merit.
There exists an actual case or controversy.
We shall first resolve the procedural issue. When the constitutionality of a law is put in issue,
judicial review may be availed of only if the following requisites concur: "(1) the existence of an
actual and appropriate case; (2) the existence of personal and substantial interest on the part of
the party raising the [question of constitutionality]; (3) recourse to judicial review is made at the
earliest opportunity; and (4) the [question of constitutionality] is the lis mota of the case."32
In this case, petitioners are challenging the constitutionality of the tax deduction scheme provided
in RA 9257 and the implementing rules and regulations issued by the DSWD and the DOF.
Respondents, however, oppose the Petition on the ground that there is no actual case or
controversy. We do not agree with respondents. An actual case or controversy exists when there
is "a conflict of legal rights" or "an assertion of opposite legal claims susceptible of judicial
resolution."33
The Petition must therefore show that "the governmental act being challenged has a direct
adverse effect on the individual challenging it."34
In this case, the tax deduction scheme challenged by petitioners has a direct adverse effect on
them. Thus, it cannot be denied that there exists an actual case or controversy.
The validity of the 20% senior citizen discount and tax deduction scheme under RA 9257, as an
exercise of police power of the State, has already been settled in Carlos Superdrug Corporation.
Petitioners posit that the resolution of this case lies in the determination of whether the legally
mandated 20% senior citizen discount is an exercise of police power or eminent domain. If it is
police power, no just compensation is warranted. But if it is eminent domain, the tax deduction
scheme is unconstitutional because it is not a peso for peso reimbursement of the 20% discount
given to senior citizens. Thus, it constitutes taking of private property without payment of just
compensation. At the outset, we note that this question has been settled in Carlos Superdrug
Corporation.35
In that case, we ruled:
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation
of private property. Compelling drugstore owners and establishments to grant the discount will
result in a loss of profit and capital because 1) drugstores impose a mark-up of only 5% to 10% on
branded medicines; and 2) the law failed to provide a scheme whereby drugstores will be justly
compensated for the discount. Examining petitioners’ arguments, it is apparent that what
petitioners are ultimately questioning is the validity of the tax deduction scheme as a
reimbursement mechanism for the twenty percent (20%) discount that they extend to senior
citizens. Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully
reimburse petitioners for the discount privilege accorded to senior citizens. This is because the
discount is treated as a deduction, a tax-deductible expense that is subtracted from the gross
income and results in a lower taxable income. Stated otherwise, it is an amount that is allowed by
law to reduce the income prior to the application of the tax rate to compute the amount of tax
which is due. Being a tax deduction, the discount does not reduce taxes owed on a peso for peso
basis but merely offers a fractional reduction in taxes owed. Theoretically, the treatment of the
discount as a deduction reduces the net income of the private establishments concerned. The
discounts given would have entered the coffers and formed part of the gross sales of the private
establishments, were it not for R.A. No. 9257. The permanent reduction in their total revenues is a
forced subsidy corresponding to the taking of private property for public use or benefit. This
constitutes compensable taking for which petitioners would ordinarily become entitled to a just
compensation. Just compensation is defined as the full and fair equivalent of the property taken
from its owner by the expropriator. The measure is not the taker’s gain but the owner’s loss. The
word just is used to intensify the meaning of the word compensation, and to convey the idea that
the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample.
A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would
not meet the definition of just compensation. Having said that, this raises the question of whether
the State, in promoting the health and welfare of a special group of citizens, can impose upon
private establishments the burden of partly subsidizing a government program. The Court believes
so. The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens
to nation-building, and to grant benefits and privileges to them for their improvement and well-
being as the State considers them an integral part of our society. The priority given to senior
citizens finds its basis in the Constitution as set forth in the law itself.1âwphi1
Thus, the Act provides: SEC. 2. Republic Act No. 7432 is hereby amended to read as follows:
SECTION 1. Declaration of Policies and Objectives. — Pursuant to Article XV, Section 4 of the
Constitution, it is the duty of the family to take care of its elderly members while the State may
design programs of social security for them. In addition to this, Section 10 in the Declaration of
Principles and State Policies provides: "The State shall provide social justice in all phases of
national development." Further, Article XIII, Section 11, provides: "The State shall adopt an
integrated and comprehensive approach to health development which shall endeavor to make
essential goods, health and other social services available to all the people at affordable cost.
There shall be priority for the needs of the underprivileged sick, elderly, disabled, women and
children." Consonant with these constitutional principles the following are the declared policies of
this Act:
xxx xxx xxx
(f) To recognize the important role of the private sector in the improvement of the welfare of senior
citizens and to actively seek their partnership.
23
To implement the above policy, the law grants a twenty percent discount to senior citizens for
medical and dental services, and diagnostic and laboratory fees; admission fees charged by
theaters, concert halls, circuses, carnivals, and other similar places of culture, leisure and
amusement; fares for domestic land, air and sea travel; utilization of services in hotels and similar
lodging establishments, restaurants and recreation centers; and purchases of medicines for the
exclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides that
business establishments extending the twenty percent discount to senior citizens may claim the
discount as a tax deduction. The law is a legitimate exercise of police power which, similar to the
power of eminent domain, has general welfare for its object. Police power is not capable of an
exact definition, but has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible
response to conditions and circumstances, thus assuring the greatest benefits. Accordingly, it has
been described as "the most essential, insistent and the least limitable of powers, extending as it
does to all the great public needs." It is "[t]he power vested in the legislature by the constitution to
make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge
to be for the good and welfare of the commonwealth, and of the subjects of the same." For this
reason, when the conditions so demand as determined by the legislature, property rights must
bow to the primacy of police power because property rights, though sheltered by due process,
must yield to general welfare. Police power as an attribute to promote the common good would be
diluted considerably if on the mere plea of petitioners that they will suffer loss of earnings and
capital, the questioned provision is invalidated. Moreover, in the absence of evidence
demonstrating the alleged confiscatory effect of the provision in question, there is no basis for its
nullification in view of the presumption of validity which every law has in its favor. Given these, it is
incorrect for petitioners to insist that the grant of the senior citizen discount is unduly oppressive to
their business, because petitioners have not taken time to calculate correctly and come up with a
financial report, so that they have not been able to show properly whether or not the tax deduction
scheme really works greatly to their disadvantage. In treating the discount as a tax deduction,
petitioners insist that they will incur losses because, referring to the DOF Opinion, for every ₱1.00
senior citizen discount that petitioners would give, P0.68 will be shouldered by them as only P0.32
will be refunded by the government by way of a tax deduction. To illustrate this point, petitioner
Carlos Super Drug cited the anti-hypertensive maintenance drug Norvasc as an example.
According to the latter, it acquires Norvasc from the distributors at ₱37.57 per tablet, and retails it
at ₱39.60 (or at a margin of 5%). If it grants a 20% discount to senior citizens or an amount
equivalent to ₱7.92, then it would have to sell Norvasc at ₱31.68 which translates to a loss from
capital of ₱5.89 per tablet. Even if the government will allow a tax deduction, only ₱2.53 per tablet
will be refunded and not the full amount of the discount which is ₱7.92. In short, only 32% of the
20% discount will be reimbursed to the drugstores. Petitioners’ computation is flawed. For
purposes of reimbursement, the law states that the cost of the discount shall be deducted from
gross income, the amount of income derived from all sources before deducting allowable
expenses, which will result in net income. Here, petitioners tried to show a loss on a per
transaction basis, which should not be the case. An income statement, showing an accounting of
petitioners' sales, expenses, and net profit (or loss) for a given period could have accurately
reflected the effect of the discount on their income. Absent any financial statement, petitioners
cannot substantiate their claim that they will be operating at a loss should they give the discount.
In addition, the computation was erroneously based on the assumption that their customers
consisted wholly of senior citizens. Lastly, the 32% tax rate is to be imposed on income, not on the
amount of the discount.
Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices of
their medicines given the cutthroat nature of the players in the industry. It is a business decision
on the part of petitioners to peg the mark-up at 5%. Selling the medicines below acquisition cost,
as alleged by petitioners, is merely a result of this decision. Inasmuch as pricing is a property right,
petitioners cannot reproach the law for being oppressive, simply because they cannot afford to
raise their prices for fear of losing their customers to competition. The Court is not oblivious of the
retail side of the pharmaceutical industry and the competitive pricing component of the business.
While the Constitution protects property rights, petitioners must accept the realities of business
and the State, in the exercise of police power, can intervene in the operations of a business which
may result in an impairment of property rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution
provides the precept for the protection of property, various laws and jurisprudence, particularly on
agrarian reform and the regulation of contracts and public utilities, continuously serve as x x x
reminder[s] that the right to property can be relinquished upon the command of the State for the
promotion of public good. Undeniably, the success of the senior citizens program rests largely on
the support imparted by petitioners and the other private establishments concerned. This being
the case, the means employed in invoking the active participation of the private sector, in order to
achieve the purpose or objective of the law, is reasonably and directly related. Without sufficient
proof that Section 4 (a) of R.A. No. 9257 is arbitrary, and that the continued implementation of the
same would be unconscionably detrimental to petitioners, the Court will refrain from quashing a
legislative act.36 (Bold in the original; underline supplied)
We, thus, found that the 20% discount as well as the tax deduction scheme is a valid exercise of
the police power of the State.
No compelling reason has been proffered to overturn, modify or abandon the ruling in Carlos
Superdrug Corporation.
Petitioners argue that we have previously ruled in Central Luzon Drug Corporation37 that the 20%
discount is an exercise of the power of eminent domain, thus, requiring the payment of just
compensation. They urge us to re-examine our ruling in Carlos Superdrug Corporation38 which
allegedly reversed the ruling in Central Luzon Drug Corporation.39
They also point out that Carlos Superdrug Corporation40 recognized that the tax deduction
scheme under the assailed law does not provide for sufficient just compensation. We agree with
petitioners’ observation that there are statements in Central Luzon Drug Corporation41 describing
the 20% discount as an exercise of the power of eminent domain, viz.:
[T]he privilege enjoyed by senior citizens does not come directly from the State, but
rather from the private establishments concerned. Accordingly, the tax credit benefit
granted to these establishments can be deemed as their just compensation for private
property taken by the State for public use. The concept of public use is no longer
confined to the traditional notion of use by the public, but held synonymous with public
interest, public benefit, public welfare, and public convenience. The discount privilege to
which our senior citizens are entitled is actually a benefit enjoyed by the general public
to which these citizens belong. The discounts given would have entered the coffers and
formed part of the gross sales of the private establishments concerned, were it not for
RA 7432. The permanent reduction in their total revenues is a forced subsidy
corresponding to the taking of private property for public use or benefit. As a result of
the 20 percent discount imposed by RA 7432, respondent becomes entitled to a just
compensation. This term refers not only to the issuance of a tax credit certificate
indicating the correct amount of the discounts given, but also to the promptness in its
release. Equivalent to the payment of property taken by the State, such issuance —
when not done within a reasonable time from the grant of the discounts — cannot be
considered as just compensation. In effect, respondent is made to suffer the
consequences of being immediately deprived of its revenues while awaiting actual
receipt, through the certificate, of the equivalent amount it needs to cope with the
reduction in its revenues. Besides, the taxation power can also be used as an
implement for the exercise of the power of eminent domain. Tax measures are but
"enforced contributions exacted on pain of penal sanctions" and "clearly imposed for a
public purpose." In recent years, the power to tax has indeed become a most effective
tool to realize social justice, public welfare, and the equitable distribution of wealth.
While it is a declared commitment under Section 1 of RA 7432, social justice "cannot be
invoked to trample on the rights of property owners who under our Constitution and laws
are also entitled to protection. The social justice consecrated in our [C]onstitution [is] not
intended to take away rights from a person and give them to another who is not entitled
24
 thereto." For this reason, a just compensation for income that is taken away from
respondent becomes necessary. It is in the tax credit that our legislators find support to
realize social justice, and no administrative body can alter that fact. To put it differently,
a private establishment that merely breaks even — without the discounts yet — will
surely start to incur losses because of such discounts. The same effect is expected if its
mark-up is less than 20 percent, and if all its sales come from retail purchases by senior
citizens. Aside from the observation we have already raised earlier, it will also be
grossly unfair to an establishment if the discounts will be treated merely as deductions
from either its gross income or its gross sales.1âwphi1 Operating at a loss through no
fault of its own, it will realize that the tax credit limitation under RR 2-94 is inutile, if not
improper. Worse, profit-generating businesses will be put in a better position if they avail
themselves of tax credits denied those that are losing, because no taxes are due from
the latter.42 (Italics in the original; emphasis supplied)
The above was partly incorporated in our ruling in Carlos Superdrug Corporation43 when we
stated preliminarily that—
Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation
of private property. Compelling drugstore owners and establishments to grant the discount will
result in a loss of profit and capital because 1) drugstores impose a mark-up of only 5% to 10% on
branded medicines; and 2) the law failed to provide a scheme whereby drugstores will be justly
compensated for the discount. Examining petitioners’ arguments, it is apparent that what
petitioners are ultimately questioning is the validity of the tax deduction scheme as a
reimbursement mechanism for the twenty percent (20%) discount that they extend to senior
citizens. Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully
reimburse petitioners for the discount privilege accorded to senior citizens. This is because the
discount is treated as a deduction, a tax-deductible expense that is subtracted from the gross
income and results in a lower taxable income. Stated otherwise, it is an amount that is allowed by
law to reduce the income prior to the application of the tax rate to compute the amount of tax
which is due. Being a tax deduction, the discount does not reduce taxes owed on a peso for peso
basis but merely offers a fractional reduction in taxes owed. Theoretically, the treatment of the
discount as a deduction reduces the net income of the private establishments concerned. The
discounts given would have entered the coffers and formed part of the gross sales of the private
establishments, were it not for R.A. No. 9257. The permanent reduction in their total revenues is a
forced subsidy corresponding to the taking of private property for public use or benefit. This
constitutes compensable taking for which petitioners would ordinarily become entitled to a just
compensation. Just compensation is defined as the full and fair equivalent of the property taken
from its owner by the expropriator. The measure is not the taker’s gain but the owner’s loss. The
word just is used to intensify the meaning of the word compensation, and to convey the idea that
the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample.
A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would
not meet the definition of just compensation. Having said that, this raises the question of whether
the State, in promoting the health and welfare of a special group of citizens, can impose upon
private establishments the burden of partly subsidizing a government program. The Court believes
so.44
This, notwithstanding, we went on to rule in Carlos Superdrug Corporation45 that the 20%
discount and tax deduction scheme is a valid exercise of the police power of the State. The
present case, thus, affords an opportunity for us to clarify the above-quoted statements in Central
Luzon Drug Corporation46 and Carlos Superdrug Corporation.47
First, we note that the above-quoted disquisition on eminent domain in Central Luzon Drug
Corporation48 is obiter dicta and, thus, not binding precedent. As stated earlier, in Central Luzon
Drug Corporation,49 we ruled that the BIR acted ultra vires when it effectively treated the 20%
discount as a tax deduction, under Sections 2.i and 4 of RR No. 2-94, despite the clear wording of
the previous law that the same should be treated as a tax credit. We were, therefore, not
confronted in that case with the issue as to whether the 20% discount is an exercise of police
power or eminent domain. Second, although we adverted to Central Luzon Drug Corporation50 in
our ruling in Carlos Superdrug Corporation,51 this referred only to preliminary matters. A fair
reading of Carlos Superdrug Corporation52 would show that we categorically ruled therein that the
20% discount is a valid exercise of police power. Thus, even if the current law, through its tax
deduction scheme (which abandoned the tax credit scheme under the previous law), does not
provide for a peso for peso reimbursement of the 20% discount given by private establishments,
no constitutional infirmity obtains because, being a valid exercise of police power, payment of just
compensation is not warranted. We have carefully reviewed the basis of our ruling in Carlos
Superdrug Corporation53 and we find no cogent reason to overturn, modify or abandon it. We also
note that petitioners’ arguments are a mere reiteration of those raised and resolved in Carlos
Superdrug Corporation.54 Thus, we sustain Carlos Superdrug Corporation.55
Nonetheless, we deem it proper, in what follows, to amplify our explanation in Carlos Superdrug
Corporation56 as to why the 20% discount is a valid exercise of police power and why it may not,
under the specific circumstances of this case, be considered as an exercise of the power of
eminent domain contrary to the obiter in Central Luzon Drug Corporation.57
Police power versus eminent domain.
Police power is the inherent power of the State to regulate or to restrain the use of liberty and
property for public welfare.58
The only limitation is that the restriction imposed should be reasonable, not oppressive.59
In other words, to be a valid exercise of police power, it must have a lawful subject or objective
and a lawful method of accomplishing the goal.60
Under the police power of the State, "property rights of individuals may be subjected to restraints
and burdens in order to fulfill the objectives of the government."61
The State "may interfere with personal liberty, property, lawful businesses and occupations to
promote the general welfare [as long as] the interference [is] reasonable and not arbitrary."62
Eminent domain, on the other hand, is the inherent power of the State to take or appropriate
private property for public use.63
The Constitution, however, requires that private property shall not be taken without due process of
law and the payment of just compensation.64
Traditional distinctions exist between police power and eminent domain. In the exercise of police
power, a property right is impaired by regulation,65 or the use of property is merely prohibited,
regulated or restricted66 to promote public welfare. In such cases, there is no compensable
taking, hence, payment of just compensation is not required. Examples of these regulations are
property condemned for being noxious or intended for noxious purposes (e.g., a building on the
verge of collapse to be demolished for public safety, or obscene materials to be destroyed in the
interest of public morals)67 as well as zoning ordinances prohibiting the use of property for
purposes injurious to the health, morals or safety of the community (e.g., dividing a city’s territory
into residential and industrial areas).68
It has, thus, been observed that, in the exercise of police power (as distinguished from eminent
domain), although the regulation affects the right of ownership, none of the bundle of rights which
constitute ownership is appropriated for use by or for the benefit of the public.69
On the other hand, in the exercise of the power of eminent domain, property interests are
appropriated and applied to some public purpose which necessitates the payment of just
compensation therefor. Normally, the title to and possession of the property are transferred to the
expropriating authority. Examples include the acquisition of lands for the construction of public
highways as well as agricultural lands acquired by the government under the agrarian reform law
for redistribution to qualified farmer beneficiaries. However, it is a settled rule that the acquisition
25
of title or total destruction of the property is not essential for "taking" under the power of eminent
domain to be present.70
Examples of these include establishment of easements such as where the land owner is
perpetually deprived of his proprietary rights because of the hazards posed by electric
transmission lines constructed above his property71 or the compelled interconnection of the
telephone system between the government and a private company.72
In these cases, although the private property owner is not divested of ownership or possession,
payment of just compensation is warranted because of the burden placed on the property for the
use or benefit of the public.
The 20% senior citizen discount is an exercise of police power.
It may not always be easy to determine whether a challenged governmental act is an exercise of
police power or eminent domain. The very nature of police power as elastic and responsive to
various social conditions73 as well as the evolving meaning and scope of public use74 and just
compensation75 in eminent domain evinces that these are not static concepts. Because of the
exigencies of rapidly changing times, Congress may be compelled to adopt or experiment with
different measures to promote the general welfare which may not fall squarely within the
traditionally recognized categories of police power and eminent domain. The judicious approach,
therefore, is to look at the nature and effects of the challenged governmental act and decide, on
the basis thereof, whether the act is the exercise of police power or eminent domain. Thus, we
now look at the nature and effects of the 20% discount to determine if it constitutes an exercise of
police power or eminent domain. The 20% discount is intended to improve the welfare of senior
citizens who, at their age, are less likely to be gainfully employed, more prone to illnesses and
other disabilities, and, thus, in need of subsidy in purchasing basic commodities. It may not be
amiss to mention also that the discount serves to honor senior citizens who presumably spent the
productive years of their lives on contributing to the development and progress of the nation. This
distinct cultural Filipino practice of honoring the elderly is an integral part of this law. As to its
nature and effects, the 20% discount is a regulation affecting the ability of private establishments
to price their products and services relative to a special class of individuals, senior citizens, for
which the Constitution affords preferential concern.76
In turn, this affects the amount of profits or income/gross sales that a private establishment can
derive from senior citizens. In other words, the subject regulation affects the pricing, and, hence,
the profitability of a private establishment. However, it does not purport to appropriate or burden
specific properties, used in the operation or conduct of the business of private establishments, for
the use or benefit of the public, or senior citizens for that matter, but merely regulates the pricing
of goods and services relative to, and the amount of profits or income/gross sales that such
private establishments may derive from, senior citizens. The subject regulation may be said to be
similar to, but with substantial distinctions from, price control or rate of return on investment control
laws which are traditionally regarded as police power measures.77
These laws generally regulate public utilities or industries/enterprises imbued with public interest
in order to protect consumers from exorbitant or unreasonable pricing as well as temper corporate
greed by controlling the rate of return on investment of these corporations considering that they
have a monopoly over the goods or services that they provide to the general public. The subject
regulation differs therefrom in that (1) the discount does not prevent the establishments from
adjusting the level of prices of their goods and services, and (2) the discount does not apply to all
customers of a given establishment but only to the class of senior citizens. Nonetheless, to the
degree material to the resolution of this case, the 20% discount may be properly viewed as
belonging to the category of price regulatory measures which affect the profitability of
establishments subjected thereto. On its face, therefore, the subject regulation is a police power
measure. The obiter in Central Luzon Drug Corporation,78 however, describes the 20% discount
as an exercise of the power of eminent domain and the tax credit, under the previous law,
equivalent to the amount of discount given as the just compensation therefor. The reason is that
(1) the discount would have formed part of the gross sales of the establishment were it not for the
law prescribing the 20% discount, and (2) the permanent reduction in total revenues is a forced
subsidy corresponding to the taking of private property for public use or benefit. The flaw in this
reasoning is in its premise. It presupposes that the subject regulation, which impacts the pricing
and, hence, the profitability of a private establishment, automatically amounts to a deprivation of
property without due process of law. If this were so, then all price and rate of return on investment
control laws would have to be invalidated because they impact, at some level, the regulated
establishment’s profits or income/gross sales, yet there is no provision for payment of just
compensation. It would also mean that overnment cannot set price or rate of return on investment
limits, which reduce the profits or income/gross sales of private establishments, if no just
compensation is paid even if the measure is not confiscatory. The obiter is, thus, at odds with the
settled octrine that the State can employ police power measures to regulate the pricing of goods
and services, and, hence, the profitability of business establishments in order to pursue legitimate
State objectives for the common good, provided that the regulation does not go too far as to
amount to "taking."79
In City of Manila v. Laguio, Jr.,80 we recognized that— x x x a taking also could be found if
government regulation of the use of property went "too far." When regulation reaches a certain
magnitude, in most if not in all cases there must be an exercise of eminent domain and
compensation to support the act. While property may be regulated to a certain extent, if regulation
goes too far it will be recognized as a taking. No formula or rule can be devised to answer the
questions of what is too far and when regulation becomes a taking. In Mahon, Justice Holmes
recognized that it was "a question of degree and therefore cannot be disposed of by general
propositions." On many other occasions as well, the U.S. Supreme Court has said that the issue of
when regulation constitutes a taking is a matter of considering the facts in each case. The Court
asks whether justice and fairness require that the economic loss caused by public action must be
compensated by the government and thus borne by the public as a whole, or whether the loss
should remain concentrated on those few persons subject to the public action.81
The impact or effect of a regulation, such as the one under consideration, must, thus, be
determined on a case-to-case basis. Whether that line between permissible regulation under
police power and "taking" under eminent domain has been crossed must, under the specific
circumstances of this case, be subject to proof and the one assailing the constitutionality of the
regulation carries the heavy burden of proving that the measure is unreasonable, oppressive or
confiscatory. The time-honored rule is that the burden of proving the unconstitutionality of a law
rests upon the one assailing it and "the burden becomes heavier when police power is at issue."82
The 20% senior citizen discount has not been shown to be unreasonable, oppressive or
confiscatory.
In Alalayan v. National Power Corporation,83 petitioners, who were franchise holders of electric
plants, challenged the validity of a law limiting their allowable net profits to no more than 12% per
annum of their investments plus two-month operating expenses. In rejecting their plea, we ruled
that, in an earlier case, it was found that 12% is a reasonable rate of return and that petitioners
failed to prove that the aforesaid rate is confiscatory in view of the presumption of
constitutionality.84
We adopted a similar line of reasoning in Carlos Superdrug Corporation85 when we ruled that
petitioners therein failed to prove that the 20% discount is arbitrary, oppressive or confiscatory.
We noted that no evidence, such as a financial report, to establish the impact of the 20% discount
on the overall profitability of petitioners was presented in order to show that they would be
operating at a loss due to the subject regulation or that the continued implementation of the law
would be unconscionably detrimental to the business operations of petitioners. In the case at bar,
petitioners proceeded with a hypothetical computation of the alleged loss that they will suffer
similar to what the petitioners in Carlos Superdrug Corporation86 did. Petitioners went directly to
this Court without first establishing the factual bases of their claims. Hence, the present recourse
must, likewise, fail. Because all laws enjoy the presumption of constitutionality, courts will uphold a
law’s validity if any set of facts may be conceived to sustain it.87
On its face, we find that there are at least two conceivable bases to sustain the subject
regulation’s validity absent clear and convincing proof that it is unreasonable, oppressive or
26
confiscatory. Congress may have legitimately concluded that business establishments have the
capacity to absorb a decrease in profits or income/gross sales due to the 20% discount without
substantially affecting the reasonable rate of return on their investments considering (1) not all
customers of a business establishment are senior citizens and (2) the level of its profit margins on
goods and services offered to the general public. Concurrently, Congress may have, likewise,
legitimately concluded that the establishments, which will be required to extend the 20% discount,
have the capacity to revise their pricing strategy so that whatever reduction in profits or
income/gross sales that they may sustain because of sales to senior citizens, can be recouped
through higher mark-ups or from other products not subject of discounts. As a result, the discounts
resulting from sales to senior citizens will not be confiscatory or unduly oppressive. In sum, we
sustain our ruling in Carlos Superdrug Corporation88 that the 20% senior citizen discount and tax
deduction scheme are valid exercises of police power of the State absent a clear showing that it is
arbitrary, oppressive or confiscatory.
Conclusion
In closing, we note that petitioners hypothesize, consistent with our previous ratiocinations, that
the discount will force establishments to raise their prices in order to compensate for its impact on
overall profits or income/gross sales. The general public, or those not belonging to the senior
citizen class, are, thus, made to effectively shoulder the subsidy for senior citizens. This, in
petitioners’ view, is unfair.
As already mentioned, Congress may be reasonably assumed to have foreseen this eventuality.
But, more importantly, this goes into the wisdom, efficacy and expediency of the subject law which
is not proper for judicial review. In a way, this law pursues its social equity objective in a non-
traditional manner unlike past and existing direct subsidy programs of the government for the poor
and marginalized sectors of our society. Verily, Congress must be given sufficient leeway in
formulating welfare legislations given the enormous challenges that the government faces relative
to, among others, resource adequacy and administrative capability in implementing social reform
measures which aim to protect and uphold the interests of those most vulnerable in our society. In
the process, the individual, who enjoys the rights, benefits and privileges of living in a democratic
polity, must bear his share in supporting measures intended for the common good. This is only
fair. In fine, without the requisite showing of a clear and unequivocal breach of the Constitution,
the validity of the assailed law must be sustained.
Refutation of the Dissent
The main points of Justice Carpio’s Dissent may be summarized as follows: (1) the discussion on
eminent domain in Central Luzon Drug Corporation89 is not obiter dicta ; (2) allowable taking, in
police power, is limited to property that is destroyed or placed outside the commerce of man for
public welfare; (3) the amount of mandatory discount is private property within the ambit of Article
III, Section 990 of the Constitution; and (4) the permanent reduction in a private establishment’s
total revenue, arising from the mandatory discount, is a taking of private property for public use or
benefit, hence, an exercise of the power of eminent domain requiring the payment of just
compensation. I We maintain that the discussion on eminent domain in Central Luzon Drug
Corporation91 is obiter dicta. As previously discussed, in Central Luzon Drug Corporation,92 the
BIR, pursuant to Sections 2.i and 4 of RR No. 2-94, treated the senior citizen discount in the
previous law, RA 7432, as a tax deduction instead of a tax credit despite the clear provision in that
law which stated –
SECTION 4. Privileges for the Senior Citizens. – The senior citizens shall be entitled to the
following:
a) The grant of twenty percent (20%) discount from all establishments relative to utilization of
transportation services, hotels and similar lodging establishment, restaurants and recreation
centers and purchase of medicines anywhere in the country: Provided, That private
establishments may claim the cost as tax credit; (Emphasis supplied)
Thus, the Court ruled that the subject revenue regulation violated the law, viz:
The 20 percent discount required by the law to be given to senior citizens is a tax credit,
not merely a tax deduction from the gross income or gross sale of the establishment
concerned. A tax credit is used by a private establishment only after the tax has been
computed; a tax deduction, before the tax is computed. RA 7432 unconditionally grants
a tax credit to all covered entities. Thus, the provisions of the revenue regulation that
withdraw or modify such grant are void. Basic is the rule that administrative regulations
cannot amend or revoke the law.93
As can be readily seen, the discussion on eminent domain was not necessary in order to arrive at
this conclusion. All that was needed was to point out that the revenue regulation contravened the
law which it sought to implement. And, precisely, this was done in Central Luzon Drug
Corporation94 by comparing the wording of the previous law vis-à-vis the revenue regulation;
employing the rules of statutory construction; and applying the settled principle that a regulation
cannot amend the law it seeks to implement. A close reading of Central Luzon Drug
Corporation95 would show that the Court went on to state that the tax credit "can be deemed" as
just compensation only to explain why the previous law provides for a tax credit instead of a tax
deduction. The Court surmised that the tax credit was a form of just compensation given to the
establishments covered by the 20% discount. However, the reason why the previous law provided
for a tax credit and not a tax deduction was not necessary to resolve the issue as to whether the
revenue regulation contravenes the law. Hence, the discussion on eminent domain is obiter dicta.
A court, in resolving cases before it, may look into the possible purposes or reasons that impelled
the enactment of a particular statute or legal provision. However, statements made relative thereto
are not always necessary in resolving the actual controversies presented before it. This was the
case in Central Luzon Drug Corporation96 resulting in that unfortunate statement that the tax
credit "can be deemed" as just compensation. This, in turn, led to the erroneous conclusion, by
deductive reasoning, that the 20% discount is an exercise of the power of eminent domain. The
Dissent essentially adopts this theory and reasoning which, as will be shown below, is contrary to
settled principles in police power and eminent domain analysis. II The Dissent discusses at length
the doctrine on "taking" in police power which occurs when private property is destroyed or placed
outside the commerce of man. Indeed, there is a whole class of police power measures which
justify the destruction of private property in order to preserve public health, morals, safety or
welfare. As earlier mentioned, these would include a building on the verge of collapse or
confiscated obscene materials as well as those mentioned by the Dissent with regard to property
used in violating a criminal statute or one which constitutes a nuisance. In such cases, no
compensation is required. However, it is equally true that there is another class of police power
measures which do not involve the destruction of private property but merely regulate its use. The
minimum wage law, zoning ordinances, price control laws, laws regulating the operation of motels
and hotels, laws limiting the working hours to eight, and the like would fall under this category. The
examples cited by the Dissent, likewise, fall under this category: Article 157 of the Labor Code,
Sections 19 and 18 of the Social Security Law, and Section 7 of the Pag-IBIG Fund Law. These
laws merely regulate or, to use the term of the Dissent, burden the conduct of the affairs of
business establishments. In such cases, payment of just compensation is not required because
they fall within the sphere of permissible police power measures. The senior citizen discount law
falls under this latter category. III The Dissent proceeds from the theory that the permanent
reduction of profits or income/gross sales, due to the 20% discount, is a "taking" of private
property for public purpose without payment of just compensation. At the outset, it must be
emphasized that petitioners never presented any evidence to establish that they were forced to
suffer enormous losses or operate at a loss due to the effects of the assailed law. They came
directly to this Court and provided a hypothetical computation of the loss they would allegedly
suffer due to the operation of the assailed law. The central premise of the Dissent’s argument that
the 20% discount results in a permanent reduction in profits or income/gross sales, or forces a
business establishment to operate at a loss is, thus, wholly unsupported by competent evidence.
To be sure, the Court can invalidate a law which, on its face, is arbitrary, oppressive or
confiscatory.97
But this is not the case here.
27
In the case at bar, evidence is indispensable before a determination of a constitutional violation
can be made because of the following reasons. First, the assailed law, by imposing the senior
citizen discount, does not take any of the properties used by a business establishment like, say,
the land on which a manufacturing plant is constructed or the equipment being used to produce
goods or services. Second, rather than taking specific properties of a business establishment, the
senior citizen discount law merely regulates the prices of the goods or services being sold to
senior citizens by mandating a 20% discount. Thus, if a product is sold at ₱10.00 to the general
public, then it shall be sold at ₱8.00 ( i.e., ₱10.00 less 20%) to senior citizens. Note that the law
does not impose at what specific price the product shall be sold, only that a 20% discount shall be
given to senior citizens based on the price set by the business establishment. A business
establishment is, thus, free to adjust the prices of the goods or services it provides to the general
public. Accordingly, it can increase the price of the above product to ₱20.00 but is required to sell
it at ₱16.00 (i.e. , ₱20.00 less 20%) to senior citizens. Third, because the law impacts the prices of
the goods or services of a particular establishment relative to its sales to senior citizens, its profits
or income/gross sales are affected. The extent of the impact would, however, depend on the profit
margin of the business establishment on a particular good or service. If a product costs ₱5.00 to
produce and is sold at ₱10.00, then the profit98 is ₱5.0099 or a profit margin100 of 50%.101
Under the assailed law, the aforesaid product would have to be sold at ₱8.00 to senior citizens yet
the business would still earn ₱3.00102 or a 30%103 profit margin. On the other hand, if the
product costs ₱9.00 to produce and is required to be sold at ₱8.00 to senior citizens, then the
business would experience a loss of ₱1.00.104
But note that since not all customers of a business establishment are senior citizens, the business
establishment may continue to earn ₱1.00 from non-senior citizens which, in turn, can offset any
loss arising from sales to senior citizens.
Fourth, when the law imposes the 20% discount in favor of senior citizens, it does not prevent the
business establishment from revising its pricing strategy.
By revising its pricing strategy, a business establishment can recoup any reduction of profits or
income/gross sales which would otherwise arise from the giving of the 20% discount. To illustrate,
suppose A has two customers: X, a senior citizen, and Y, a non-senior citizen. Prior to the law, A
sells his products at ₱10.00 a piece to X and Y resulting in income/gross sales of ₱20.00 (₱10.00
+ ₱10.00). With the passage of the law, A must now sell his product to X at ₱8.00 (i.e., ₱10.00
less 20%) so that his income/gross sales would be ₱18.00 (₱8.00 + ₱10.00) or lower by ₱2.00. To
prevent this from happening, A decides to increase the price of his products to ₱11.11 per piece.
Thus, he sells his product to X at ₱8.89 (i.e. , ₱11.11 less 20%) and to Y at ₱11.11. As a result,
his income/gross sales would still be ₱20.00105 (₱8.89 + ₱11.11). The capacity, then, of business
establishments to revise their pricing strategy makes it possible for them not to suffer any
reduction in profits or income/gross sales, or, in the alternative, mitigate the reduction of their
profits or income/gross sales even after the passage of the law. In other words, business
establishments have the capacity to adjust their prices so that they may remain profitable even
under the operation of the assailed law.
The Dissent, however, states that – The explanation by the majority that private establishments
can always increase their prices to recover the mandatory discount will only encourage private
establishments to adjust their prices upwards to the prejudice of customers who do not enjoy the
20% discount. It was likewise suggested that if a company increases its prices, despite the
application of the 20% discount, the establishment becomes more profitable than it was before the
implementation of R.A. 7432. Such an economic justification is self-defeating, for more consumers
will suffer from the price increase than will benefit from the 20% discount. Even then, such ability
to increase prices cannot legally validate a violation of the eminent domain clause.106
But, if it is possible that the business establishment, by adjusting its prices, will suffer no reduction
in its profits or income/gross sales (or suffer some reduction but continue to operate profitably)
despite giving the discount, what would be the basis to strike down the law? If it is possible that
the business establishment, by adjusting its prices, will not be unduly burdened, how can there be
a finding that the assailed law is an unconstitutional exercise of police power or eminent domain?
That there may be a burden placed on business establishments or the consuming public as a
result of the operation of the assailed law is not, by itself, a ground to declare it unconstitutional for
this goes into the wisdom and expediency of the law.
The cost of most, if not all, regulatory measures of the government on business establishments is
ultimately passed on to the consumers but that, by itself, does not justify the wholesale nullification
of these measures. It is a basic postulate of our democratic system of government that the
Constitution is a social contract whereby the people have surrendered their sovereign powers to
the State for the common good.107
All persons may be burdened by regulatory measures intended for the common good or to serve
some important governmental interest, such as protecting or improving the welfare of a special
class of people for which the Constitution affords preferential concern. Indubitably, the one
assailing the law has the heavy burden of proving that the regulation is unreasonable, oppressive
or confiscatory, or has gone "too far" as to amount to a "taking." Yet, here, the Dissent would have
this Court nullify the law without any proof of such nature.
Further, this Court is not the proper forum to debate the economic theories or realities that
impelled Congress to shift from the tax credit to the tax deduction scheme. It is not within our
power or competence to judge which scheme is more or less burdensome to business
establishments or the consuming public and, thereafter, to choose which scheme the State should
use or pursue. The shift from the tax credit to tax deduction scheme is a policy determination by
Congress and the Court will respect it for as long as there is no showing, as here, that the subject
regulation has transgressed constitutional limitations. Unavoidably, the lack of evidence constrains
the Dissent to rely on speculative and hypothetical argumentation when it states that the 20%
discount is a significant amount and not a minimal loss (which erroneously assumes that the
discount automatically results in a loss when it is possible that the profit margin is greater than
20% and/or the pricing strategy can be revised to prevent or mitigate any reduction in profits or
income/gross sales as illustrated above),108 and not all private establishments make a 20% profit
margin (which conversely implies that there are those who make more and, thus, would not be
greatly affected by this regulation).109
In fine, because of the possible scenarios discussed above, we cannot assume that the 20%
discount results in a permanent reduction in profits or income/gross sales, much less that
business establishments are forced to operate at a loss under the assailed law. And, even if we
gratuitously assume that the 20% discount results in some degree of reduction in profits or
income/gross sales, we cannot assume that such reduction is arbitrary, oppressive or
confiscatory. To repeat, there is no actual proof to back up this claim, and it could be that the loss
suffered by a business establishment was occasioned through its fault or negligence in not
adapting to the effects of the assailed law. The law uniformly applies to all business
establishments covered thereunder. There is, therefore, no unjust discrimination as the aforesaid
business establishments are faced with the same constraints. The necessity of proof is all the
more pertinent in this case because, as similarly observed by Justice Velasco in his Concurring
Opinion, the law has been in operation for over nine years now. However, the grim picture painted
by petitioners on the unconscionable losses to be indiscriminately suffered by business
establishments, which should have led to the closure of numerous business establishments, has
not come to pass. Verily, we cannot invalidate the assailed law based on assumptions and
conjectures. Without adequate proof, the presumption of constitutionality must prevail. IV At this
juncture, we note that the Dissent modified its original arguments by including a new paragraph, to
wit:
Section 9, Article III of the 1987 Constitution speaks of private property without any
distinction. It does not state that there should be profit before the taking of property is
subject to just compensation. The private property referred to for purposes of taking
could be inherited, donated, purchased, mortgaged, or as in this case, part of the gross
sales of private establishments. They are all private property and any taking should be
attended by corresponding payment of just compensation. The 20% discount granted to
senior citizens belong to private establishments, whether these establishments make a
28
 profit or suffer a loss. In fact, the 20% discount applies to non-profit establishments like
country, social, or golf clubs which are open to the public and not only for exclusive
membership. The issue of profit or loss to the establishments is immaterial.110
Two things may be said of this argument. First, it contradicts the rest of the arguments of the
Dissent. After it states that the issue of profit or loss is immaterial, the Dissent proceeds to argue
that the 20% discount is not a minimal loss111 and that the 20% discount forces business
establishments to operate at a loss.112
Even the obiter in Central Luzon Drug Corporation,113 which the Dissent essentially adopts and
relies on, is premised on the permanent reduction of total revenues and the loss that business
establishments will be forced to suffer in arguing that the 20% discount constitutes a "taking"
under the power of eminent domain. Thus, when the Dissent now argues that the issue of profit or
loss is immaterial, it contradicts itself because it later argues, in order to justify that there is a
"taking" under the power of eminent domain in this case, that the 20% discount forces business
establishments to suffer a significant loss or to operate at a loss. Second, this argument suffers
from the same flaw as the Dissent's original arguments. It is an erroneous characterization of the
20% discount. According to the Dissent, the 20% discount is part of the gross sales and, hence,
private property belonging to business establishments. However, as previously discussed, the
20% discount is not private property actually owned and/or used by the business establishment. It
should be distinguished from properties like lands or buildings actually used in the operation of a
business establishment which, if appropriated for public use, would amount to a "taking" under the
power of eminent domain. Instead, the 20% discount is a regulatory measure which impacts the
pricing and, hence, the profitability of business establishments. At the time the discount is
imposed, no particular property of the business establishment can be said to be "taken." That is,
the State does not acquire or take anything from the business establishment in the way that it
takes a piece of private land to build a public road. While the 20% discount may form part of the
potential profits or income/gross sales114 of the business establishment, as similarly
characterized by Justice Bersamin in his Concurring Opinion, potential profits or income/gross
sales are not private property, specifically cash or money, already belonging to the business
establishment. They are a mere expectancy because they are potential fruits of the successful
conduct of the business. Prior to the sale of goods or services, a business establishment may be
subject to State regulations, such as the 20% senior citizen discount, which may impact the level
or amount of profits or income/gross sales that can be generated by such establishment. For this
reason, the validity of the discount is to be determined based on its overall effects on the
operations of the business establishment.
Again, as previously discussed, the 20% discount does not automatically result in a 20% reduction
in profits, or, to align it with the term used by the Dissent, the 20% discount does not mean that a
20% reduction in gross sales necessarily results. Because (1) the profit margin of a product is not
necessarily less than 20%, (2) not all customers of a business establishment are senior citizens,
and (3) the establishment may revise its pricing strategy, such reduction in profits or income/gross
sales may be prevented or, in the alternative, mitigated so that the business establishment
continues to operate profitably. Thus, even if we gratuitously assume that some degree of
reduction in profits or income/gross sales occurs because of the 20% discount, it does not follow
that the regulation is unreasonable, oppressive or confiscatory because the business
establishment may make the necessary adjustments to continue to operate profitably. No
evidence was presented by petitioners to show otherwise. In fact, no evidence was presented by
petitioners at all. Justice Leonen, in his Concurring and Dissenting Opinion, characterizes "profits"
(or income/gross sales) as an inchoate right. Another way to view it, as stated by Justice Velasco
in his Concurring Opinion, is that the business establishment merely has a right to profits. The
Constitution adverts to it as the right of an enterprise to a reasonable return on investment.115
Undeniably, this right, like any other right, may be regulated under the police power of the State to
achieve important governmental objectives like protecting the interests and improving the welfare
of senior citizens. It should be noted though that potential profits or income/gross sales are
relevant in police power and eminent domain analyses because they may, in appropriate cases,
serve as an indicia when a regulation has gone "too far" as to amount to a "taking" under the
power of eminent domain. When the deprivation or reduction of profits or income/gross sales is
shown to be unreasonable, oppressive or confiscatory, then the challenged governmental
regulation may be nullified for being a "taking" under the power of eminent domain. In such a
case, it is not profits or income/gross sales which are actually taken and appropriated for public
use. Rather, when the regulation causes an establishment to incur losses in an unreasonable,
oppressive or confiscatory manner, what is actually taken is capital and the right of the business
establishment to a reasonable return on investment. If the business losses are not halted because
of the continued operation of the regulation, this eventually leads to the destruction of the business
and the total loss of the capital invested therein. But, again, petitioners in this case failed to prove
that the subject regulation is unreasonable, oppressive or confiscatory.
V.
The Dissent further argues that we erroneously used price and rate of return on investment control
laws to justify the senior citizen discount law. According to the Dissent, only profits from industries
imbued with public interest may be regulated because this is a condition of their franchises. Profits
of establishments without franchises cannot be regulated permanently because there is no law
regulating their profits. The Dissent concludes that the permanent reduction of total revenues or
gross sales of business establishments without franchises is a taking of private property under the
power of eminent domain. In making this argument, it is unfortunate that the Dissent quotes only a
portion of the ponencia – The subject regulation may be said to be similar to, but with substantial
distinctions from, price control or rate of return on investment control laws which are traditionally
regarded as police power measures. These laws generally regulate public utilities or
industries/enterprises imbued with public interest in order to protect consumers from exorbitant or
unreasonable pricing as well as temper corporate greed by controlling the rate of return on
investment of these corporations considering that they have a monopoly over the goods or
services that they provide to the general public. The subject regulation differs therefrom in that (1)
the discount does not prevent the establishments from adjusting the level of prices of their goods
and services, and (2) the discount does not apply to all customers of a given establishment but
only to the class of senior citizens.
x x x116
The above paragraph, in full, states –
The subject regulation may be said to be similar to, but with substantial distinctions from, price
control or rate of return on investment control laws which are traditionally regarded as police
power measures. These laws generally regulate public utilities or industries/enterprises imbued
with public interest in order to protect consumers from exorbitant or unreasonable pricing as well
as temper corporate greed by controlling the rate of return on investment of these corporations
considering that they have a monopoly over the goods or services that they provide to the general
public. The subject regulation differs therefrom in that (1) the discount does not prevent the
establishments from adjusting the level of prices of their goods and services, and (2) the discount
does not apply to all customers of a given establishment but only to the class of senior citizens.
Nonetheless, to the degree material to the resolution of this case, the 20% discount may be
properly viewed as belonging to the category of price regulatory measures which affects the
profitability of establishments subjected thereto. (Emphasis supplied)
The point of this paragraph is to simply show that the State has, in the past, regulated prices and
profits of business establishments. In other words, this type of regulatory measures is traditionally
recognized as police power measures so that the senior citizen discount may be considered as a
police power measure as well. What is more, the substantial distinctions between price and rate of
return on investment control laws vis-à-vis the senior citizen discount law provide greater reason
to uphold the validity of the senior citizen discount law. As previously discussed, the ability to
adjust prices allows the establishment subject to the senior citizen discount to prevent or mitigate
any reduction of profits or income/gross sales arising from the giving of the discount. In contrast,
establishments subject to price and rate of return on investment control laws cannot adjust prices
accordingly. Certainly, there is no intention to say that price and rate of return on investment
control laws are the justification for the senior citizen discount law. Not at all. The justification for
the senior citizen discount law is the plenary powers of Congress. The legislative power to
regulate business establishments is broad and covers a wide array of areas and subjects. It is well
29
within Congress’ legislative powers to regulate the profits or income/gross sales of industries and
enterprises, even those without franchises. For what are franchises but mere legislative
enactments? There is nothing in the Constitution that prohibits Congress from regulating the
profits or income/gross sales of industries and enterprises without franchises. On the contrary, the
social justice provisions of the Constitution enjoin the State to regulate the "acquisition, ownership,
use, and disposition" of property and its increments.117
This may cover the regulation of profits or income/gross sales of all businesses, without
qualification, to attain the objective of diffusing wealth in order to protect and enhance the right of
all the people to human dignity.118
Thus, under the social justice policy of the Constitution, business establishments may be
compelled to contribute to uplifting the plight of vulnerable or marginalized groups in our society
provided that the regulation is not arbitrary, oppressive or confiscatory, or is not in breach of some
specific constitutional limitation. When the Dissent, therefore, states that the "profits of private
establishments which are non-franchisees cannot be regulated permanently, and there is no such
law regulating their profits permanently,"119 it is assuming what it ought to prove. First, there are
laws which, in effect, permanently regulate profits or income/gross sales of establishments without
franchises, and RA 9257 is one such law. And, second, Congress can regulate such profits or
income/gross sales because, as previously noted, there is nothing in the Constitution to prevent it
from doing so. Here, again, it must be emphasized that petitioners failed to present any proof to
show that the effects of the assailed law on their operations has been unreasonable, oppressive or
confiscatory. The permanent regulation of profits or income/gross sales of business
establishments, even those without franchises, is not as uncommon as the Dissent depicts it to be.
For instance, the minimum wage law allows the State to set the minimum wage of employees in a
given region or geographical area. Because of the added labor costs arising from the minimum
wage, a permanent reduction of profits or income/gross sales would result, assuming that the
employer does not increase the prices of his goods or services. To illustrate, suppose it costs a
company ₱5.00 to produce a product and it sells the same at ₱10.00 with a 50% profit margin.
Later, the State increases the minimum wage. As a result, the company incurs greater labor costs
so that it now costs ₱7.00 to produce the same product. The profit per product of the company
would be reduced to ₱3.00 with a profit margin of 30%. The net effect would be the same as in the
earlier example of granting a 20% senior citizen discount. As can be seen, the minimum wage law
could, likewise, lead to a permanent reduction of profits. Does this mean that the minimum wage
law should, likewise, be declared unconstitutional on the mere plea that it results in a permanent
reduction of profits? Taking it a step further, suppose the company decides to increase the price of
its product in order to offset the effects of the increase in labor cost; does this mean that the
minimum wage law, following the reasoning of the Dissent, is unconstitutional because the
consuming public is effectively made to subsidize the wage of a group of laborers, i.e., minimum
wage earners? The same reasoning can be adopted relative to the examples cited by the Dissent
which, according to it, are valid police power regulations. Article 157 of the Labor Code, Sections
19 and 18 of the Social Security Law, and Section 7 of the Pag-IBIG Fund Law would effectively
increase the labor cost of a business establishment.1âwphi1 This would, in turn, be integrated as
part of the cost of its goods or services. Again, if the establishment does not increase its prices,
the net effect would be a permanent reduction in its profits or income/gross sales. Following the
reasoning of the Dissent that "any form of permanent taking of private property (including profits or
income/gross sales)120 is an exercise of eminent domain that requires the State to pay just
compensation,"121 then these statutory provisions would, likewise, have to be declared
unconstitutional. It does not matter that these benefits are deemed part of the employees’
legislated wages because the net effect is the same, that is, it leads to higher labor costs and a
permanent reduction in the profits or income/gross sales of the business establishments.122
The point then is this – most, if not all, regulatory measures imposed by the State on business
establishments impact, at some level, the latter’s prices and/or profits or income/gross sales.123
If the Court were to sustain the Dissent’s theory, then a wholesale nullification of such measures
would inevitably result. The police power of the State and the social justice provisions of the
Constitution would, thus, be rendered nugatory. There is nothing sacrosanct about profits or
income/gross sales. This, we made clear in Carlos Superdrug Corporation:124
Police power as an attribute to promote the common good would be diluted considerably if on the
mere plea of petitioners that they will suffer loss of earnings and capital, the questioned provision
is invalidated. Moreover, in the absence of evidence demonstrating the alleged confiscatory effect
of the provision in question, there is no basis for its nullification in view of the presumption of
validity which every law has in its favor.
xxxx
The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive
pricing component of the business. While the Constitution protects property rights petitioners must
the realities of business and the State, in the exercise of police power, can intervene in the
operations of a business which may result in an impairment of property rights in the process.
Moreover, the right to property has a social dimension. While Article XIII of the Constitution
provides the percept for the protection of property, various laws and jurisprudence, particularly on
agrarian reform and the regulation of contracts and public utilities, continously serve as a reminder
for the promotion of public good.
Undeniably, the success of the senior citizens program rests largely on the support imparted by
petitioners and the other private establishments concerned. This being the case, the means
employed in invoking the active participation of the private sector, in order to achieve the purpose
or objective of the law, is reasonably and directly related. Without sufficient proof that Section 4(a)
of R.A. No. 9257 is arbitrary, and that the continued implementation of the same would be
unconscionably detrimental to petitioners, the Court will refrain form quashing a legislative act.125
In conclusion, we maintain that the correct rule in determining whether the subject regulatory
measure has amounted to a "taking" under the power of eminent domain is the one laid down in
Alalayan v. National Power Corporation126 and followed in Carlos Superdurg Corporation127
consistent with long standing principles in police power and eminent domain analysis. Thus, the
deprivation or reduction of profits or income. Gross sales must be clearly shown to be
unreasonable, oppressive or confiscatory. Under the specific circumstances of this case, such
determination can only be made upon the presentation of competent proof which petitioners failed
to do. A law, which has been in operation for many years and promotes the welfare of a group
accorded special concern by the Constitution, cannot and should not be summarily invalidated on
a mere allegation that it reduces the profits or income/gross sales of business establishments.
WHEREFORE, the Petition is hereby DISMISSED for lack of merit.
SO ORDERED.
114 The Dissent uses the term "gross sales" instead of "income" but "income" and "gross sales"
are used in the same sense throughout this ponencia. That is, they are money derived from the
sale of goods or services. The reference to or mention of "income"/"gross sales", apart from
"profits," is intentionally made because the 20% discount may cover more than the profits from the
sale of goods or services in cases where the profit margin is less than 20% and the business
establishment does not adjust its pricing strategy. Income/gross sales is a broader concept vis-a-
vis profits because income/gross sales less cost of the goods or services equals profits. If the
subject regulation affects income/gross sales, then it follows that it affects profits and vice versa.
The shift in the use of terms, i.e., from "profits" to "gross sales," cannot erase or conceal the
materiality of profits or losses in determining the validity of the subject regulation in this case.
115 Article XIII, Section 3.
116 Dissenting Opinion, p. 12.
117 Article XIII, Section 1 of the Constitution states: The Congress 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.
30
122 According to the Dissent, these statutorily mandated employee benefits are valid police power
measures because the employer is deemed fully compensated therefor as they form part of the
employee’s legislated wage. The Dissent confuses police power with eminent domain. In police
power, no compensation is required, and it is not necessary, as the Dissent mistakenly assumes,
to show that the employer is deemed fully compensated in order for the statutorily mandated
benefits to be a valid exercise of police power. It is immaterial whether the employer is deemed
fully compensated because the justification for these statutorily mandated benefits is the
overriding State interest to protect and uphold the welfare of employees. This State interest is
principally rooted in the historical abuses suffered by employees when employers solely
determined the terms and conditions of employment. Further, the direct or incidental benefit
derived by the employer (i.e., healthier work environment which presumably translates to more
productive employees) from these statutorily mandated benefits is not a requirement to make
them valid police power measures. Again, it is the paramount State interest in protecting the
welfare of employees which justifies these measures as valid exercises of police power subject, of
course, to the test of reasonableness as to the means adopted to achieve such legitimate ends.
That the assailed law benefits senior citizens and not employees of a business establishment
makes no material difference because, precisely, police power is employed to protect and uphold
the welfare of marginalized and vulnerable groups in our society. Police power would be a
meaningless State attribute if an individual, or a business establishment for that matter, can only
be compelled to accede to State regulations provided he (or it) is directly or incidentally benefited
thereby. Precisely in instances when the individual resists or opposes a regulation because it
burdens him or her that the State exercises its police power in order to uphold the common good.
Many laudable existing police power measures would have to be invalidated if, as a condition for
their validity, the individual subjected thereto should be directly or incidentally benefited by such
measures.

123 See De Leon and De Leon, Jr., Philippine Constitutional Law: Principles and Cases Vol. 1, at
671-673 (2012), for a list of police power measures upheld by this Court. A good number of these
measures impact, directly or indirectly, the profitability of business establishments yet the same
were upheld by the Court because they were not shown to be unreasonable, oppressive or
confiscatory.

31
3. If courts are to regard the Constitution, and the Constitution is superior to any ordinary act of the
legislature, the Constitution, and not such ordinary act, must govern the case to which they both
apply.
Marbury v. Madison, 5 U.S. 1 Cranch 137 137 (1803) At the December Term, 1801, William Marbury, Dennis Ramsay, Robert Townsend Hooe, and
William Harper, by their counsel,
5 U.S. (1 Cranch) 137
Page 5 U. S. 138
severally moved the court for a rule to James Madison, Secretary of State of the United States, to
Syllabus
show cause why a mandamus should not issue commanding him to cause to be delivered to them
The clerks of the Department of State of the United States may be called upon to give evidence of
respectively their several commissions as justices of the peace in the District of Columbia. This
transactions in the Department which are not of a confidential character.
motion was supported by affidavits of the following facts: that notice of this motion had been given
The Secretary of State cannot be called upon as a witness to state transactions of a confidential
to Mr. Madison; that Mr. Adams, the late President of the United States, nominated the applicants
nature which may have occurred in his Department. But he may be called upon to give testimony
to the Senate for their advice and consent to be appointed justices of the peace of the District of
of circumstances which were not of that character.
Columbia; that the Senate advised and consented to the appointments; that commissions in due
Clerks in the Department of State were directed to be sworn, subject to objections to questions
form were signed by the said President appointing them justices, &c., and that the seal of the
upon confidential matters.
United States was in due form affixed to the said commissions by the Secretary of State; that the
Some point of time must be taken when the power of the Executive over an officer, not removable
applicants have requested Mr. Madison to deliver them their said commissions, who has not
at his will, must cease. That point of time must be when the constitutional power of appointment
complied with that request; and that their said commissions are withheld from them; that the
has been exercised. And the power has been exercised when the last act required from the
applicants have made application to Mr. Madison as Secretary of State of the United States at his
person possessing the power has been performed. This last act is the signature of the
office, for information whether the commissions were signed and sealed as aforesaid; that explicit
commission.
and satisfactory information has not been given in answer to that inquiry, either by the Secretary of
If the act of livery be necessary to give validity to the commission of an officer, it has been
State or any officer in the Department of State; that application has been made to the secretary of
delivered when executed, and given to the Secretary of State for the purpose of being sealed,
the Senate for a certificate of the nomination of the applicants, and of the advice and consent of
recorded, and transmitted to the party.
the Senate, who has declined giving such a certificate; whereupon a rule was made to show
In cases of commissions to public officers, the law orders the Secretary of State to record them.
cause on the fourth day of this term. This rule having been duly served,
When, therefore, they are signed and sealed, the order for their being recorded is given, and,
Page 5 U. S. 139
whether inserted inserted into the book or not, they are recorded.
Mr. Jacob Wagner and Mr. Daniel Brent, who had been summoned to attend the court and were
When the heads of the departments of the Government are the political or confidential officers of
required to give evidence, objected to be sworn, alleging that they were clerks in the Department
the Executive, merely to execute the will of the President, or rather to act in cases in which the
of State, and not bound to disclose any facts relating to the business or transactions of the office.
Executive possesses a constitutional or legal discretion, nothing can be more perfectly clear than
The court ordered the witnesses to be sworn, and their answers taken in writing, but informed
that their acts are only politically examinable. But where a specific duty is assigned by law, and
them that, when the questions were asked, they might state their objections to answering each
individual rights depend upon the performance of that duty, it seems equally clear that the
particular question, if they had any.
individual who considers himself injured has a right to resort to the laws of his country for a
Mr. Lincoln, who had been the acting Secretary of State, when the circumstances stated in the
remedy.
affidavits occurred, was called upon to give testimony. He objected to answering. The questions
The President of the United States, by signing the commission, appointed Mr. Marbury a justice of
were put in writing.
the peace for the County of Washington, in the District of Columbia, and the seal of the United
The court said there was nothing confidential required to be disclosed. If there had been, he was
States, affixed thereto by the Secretary of State, is conclusive testimony of the verity of the
not obliged to answer it, and if he thought anything was communicated to him confidentially, he
signature, and of the completion of the appointment; and the appointment conferred on him a legal
was not bound to disclose, nor was he obliged to state anything which would criminate himself.
right to the office for the space of five years. Having this legal right to the office, he has a
The questions argued by the counsel for the relators were, 1. Whether the Supreme Court can
consequent right to the commission, a refusal to deliver which is a plain violation of that right for
award the writ of mandamus in any case. 2. Whether it will lie to a Secretary of State, in any case
which the laws of the country afford him a remedy.
whatever. 3. Whether, in the present case, the Court may award a mandamus to James Madison,
To render a mandamus a proper remedy, the officer to whom it is directed must be one to whom,
Secretary of State.
on legal principles, such writ must be directed, and the person applying for it must be without any
Page 5 U. S. 153
other specific remedy.
Where a commission to a public officer has been made out, signed, and sealed, and is withheld
Mr. Chief Justice MARSHALL delivered the opinion of the Court.
from the person entitled to it, an action of detinue for the commission against the Secretary of
At the last term, on the affidavits then read and filed with the clerk, a rule was granted in this case
State who refuses to deliver it is not the proper remedy, as the judgment in detinue is for the thing
requiring the Secretary of State to show cause why a mandamus
itself, or its value. The value of a public office, not to be sold, is incapable of being ascertained. It
Page 5 U. S. 154
is a plain case for a mandamus, either to deliver the commission or a copy of it from the record.
should not issue directing him to deliver to William Marbury his commission as a justice of the
To enable the Court to issue a mandamus to compel the delivery of the commission of a public
peace for the county of Washington, in the District of Columbia.
office by the Secretary of State, it must be shown that it is an exercise of appellate jurisdiction, or
No cause has been shown, and the present motion is for a mandamus. The peculiar delicacy of
that it be necessary to enable them to exercise appellate jurisdiction.
this case, the novelty of some of its circumstances, and the real difficulty attending the points
It is the essential criterion of appellate jurisdiction that it revises and corrects the proceedings in a
which occur in it require a complete exposition of the principles on which the opinion to be given
cause already instituted, and does not create the cause.
by the Court is founded.
The authority given to the Supreme Court by the act establishing the judicial system of the United
These principles have been, on the side of the applicant, very ably argued at the bar. In rendering
States to issue writs of mandamus to public officers appears not to be warranted by the
the opinion of the Court, there will be some departure in form, though not in substance, from the
Constitution.
points stated in that argument.
It is emphatically the duty of the Judicial Department to say what the law is. Those who apply the
rule to particular cases must, of necessity, expound and interpret the rule. If two laws conflict with
each other, the Court must decide on the operation of each.

32
In the order in which the Court has viewed this subject, the following questions have been
considered and decided.
1. Has the applicant a right to the commission he demands?
2. If he has a right, and that right has been violated, do the laws of his country afford him a
remedy?
3. If they do afford him a remedy, is it a mandamus issuing from this court?
The first object of inquiry is:
1. Has the applicant a right to the commission he demands?
His right originates in an act of Congress passed in February, 1801, concerning the District of
Columbia.
After dividing the district into two counties, the eleventh section of this law enacts,
"that there shall be appointed in and for each of the said counties such number of discreet persons
to be justices of the peace as the President of the United States shall, from time to time, think
expedient, to continue in office for five years. "
Page 5 U. S. 155
It appears from the affidavits that, in compliance with this law, a commission for William Marbury
as a justice of peace for the County of Washington was signed by John Adams, then President of
the United States, after which the seal of the United States was affixed to it, but the commission
has never reached the person for whom it was made out.
In order to determine whether he is entitled to this commission, it becomes necessary to inquire
whether he has been appointed to the office. For if he has been appointed, the law continues him
in office for five years, and he is entitled to the possession of those evidences of office, which,
being completed, became his property.
The second section of the second article of the Constitution declares,
"The President shall nominate, and, by and with the advice and consent of the Senate, shall
appoint ambassadors, other public ministers and consuls, and all other officers of the United
States, whose appointments are not otherwise provided for."
The third section declares, that "He shall commission all the officers of the United States."
An act of Congress directs the Secretary of State to keep the seal of the United States,
"to make out and record, and affix the said seal to all civil commissions to officers of the United
States to be appointed by the President, by and with the consent of the Senate, or by the
President alone; provided that the said seal shall not be affixed to any commission before the
same shall have been signed by the President of the United States."
These are the clauses of the Constitution and laws of the United States which affect this part of
the case. They seem to contemplate three distinct operations:
1. The nomination. This is the sole act of the President, and is completely voluntary.
2. The appointment. This is also the act of the President, and is also a voluntary act,
though it can only be performed by and with the advice and consent of the Senate.
Page 5 U. S. 156
3. The commission. To grant a commission to a person appointed might perhaps be
deemed a duty enjoined by the Constitution. "He shall," says that instrument,
"commission all the officers of the United States."
The acts of appointing to office and commissioning the person appointed can scarcely be
considered as one and the same, since the power to perform them is given in two separate and
distinct sections of the Constitution. The distinction between the appointment and the commission
will be rendered more apparent by adverting to that provision in the second section of the second
article of the Constitution which authorises Congress"to vest by law the appointment of such
inferior officers as they think proper in the President alone, in the Courts of law, or in the heads of
departments;" thus contemplating cases where the law may direct the President to commission an
officer appointed by the Courts or by the heads of departments. In such a case, to issue a
commission would be apparently a duty distinct from the appointment, the performance of which
perhaps could not legally be refused.
Although that clause of the Constitution which requires the President to commission all the officers
of the United States may never have been applied to officers appointed otherwise than by himself,
yet it would be difficult to deny the legislative power to apply it to such cases. Of consequence, the
constitutional distinction between the appointment to an office and the commission of an officer
who has been appointed remains the same as if in practice the President had commissioned
officers appointed by an authority other than his own.
It follows too from the existence of this distinction that, if an appointment was to be evidenced by
any public act other than the commission, the performance of such public act would create the
officer, and if he was not removable at the will of the President, would either give him a right to his
commission or enable him to perform the duties without it.
These observations are premised solely for the purpose of rendering more intelligible those which
apply more directly to the particular case under consideration.
Page 5 U. S. 157
This is an appointment made by the President, by and with the advice and consent of the Senate,
and is evidenced by no act but the commission itself. In such a case, therefore, the commission
and the appointment seem inseparable, it being almost impossible to show an appointment
otherwise than by proving the existence of a commission; still, the commission is not necessarily
the appointment; though conclusive evidence of it.
But at what stage does it amount to this conclusive evidence?
The answer to this question seems an obvious one. The appointment, being the sole act of the
President, must be completely evidenced when it is shown that he has done everything to be
performed by him.
Should the commission, instead of being evidence of an appointment, even be considered as
constituting the appointment itself, still it would be made when the last act to be done by the
President was performed, or, at furthest, when the commission was complete.
The last act to be done by the President is the signature of the commission. He has then acted on
the advice and consent of the Senate to his own nomination. The time for deliberation has then
passed. He has decided. His judgment, on the advice and consent of the Senate concurring with
his nomination, has been made, and the officer is appointed. This appointment is evidenced by an
open, unequivocal act, and, being the last act required from the person making it, necessarily
excludes the idea of its being, so far as it respects the appointment, an inchoate and incomplete
transaction.
Some point of time must be taken when the power of the Executive over an officer, not removable
at his will, must cease. That point of time must be when the constitutional power of appointment
has been exercised. And this power has been exercised when the last act required from the
person possessing the power has been performed. This last act is the signature of the
commission. This idea seems to have prevailed with the Legislature when the act passed
converting the Department of Foreign Affairs into the Department of State. By that act, it is
enacted that the Secretary of State shall keep the seal of the United States, "and shall make out
and record, and shall affix the said seal to all civil commissions to officers of the United States, to
be appointed by the President: . . . provided that the said seal shall not be affixed to any
commission before the same shall have been signed by the President of the United States, nor to
any other instrument or act without the special warrant of the President therefor."
The signature is a warrant for affixing the great seal to the commission, and the great seal is only
to be affixed to an instrument which is complete. It attests, by an act supposed to be of public
notoriety, the verity of the Presidential signature.
It is never to be affixed till the commission is signed, because the signature, which gives force and
effect to the commission, is conclusive evidence that the appointment is made.
33
The commission being signed, the subsequent duty of the Secretary of State is prescribed by law,
and not to be guided by the will of the President. He is to affix the seal of the United States to the
commission, and is to record it.
This is not a proceeding which may be varied if the judgment of the Executive shall suggest one
more eligible, but is a precise course accurately marked out by law, and is to be strictly pursued. It
is the duty of the Secretary of State to conform to the law, and in this he is an officer of the United
States, bound to obey the laws. He acts, in this respect, as has been very properly stated at the
bar, under the authority of law, and not by the instructions of the President. It is a ministerial act
which the law enjoins on a particular officer for a particular purpose.
If it should be supposed that the solemnity of affixing the seal is necessary not only to the validity
of the commission, but even to the completion of an appointment, still, when the seal is affixed, the
appointment is made, and the commission is valid. No other solemnity is required by law; no other
act is to be performed on the part of government. All that the Executive can do to invest the
person with his office is done, and unless the appointment be then made, the Executive cannot
make one without the cooperation of others.
After searching anxiously for the principles on which a contrary opinion may be supported, none
has been found which appear of sufficient force to maintain the opposite doctrine.
Such as the imagination of the Court could suggest have been very deliberately examined, and
after allowing them all the weight which it appears possible to give them, they do not shake the
opinion which has been formed.
In considering this question, it has been conjectured that the commission may have been
assimilated to a deed to the validity of which delivery is essential.
This idea is founded on the supposition that the commission is not merely evidence of an
appointment, but is itself the actual appointment -- a supposition by no means unquestionable.
But, for the purpose of examining this objection fairly, let it be conceded that the principle claimed
for its support is established.
The appointment being, under the Constitution, to be made by the President personally, the
delivery of the deed of appointment, if necessary to its completion, must be made by the President
also. It is not necessary that the livery should be made personally to the grantee of the office; it
never is so made. The law would seem to contemplate that it should be made to the Secretary of
State, since it directs the secretary to affix the seal to the commission after it shall have been
signed by the President. If then the act of livery be necessary to give validity to the commission, it
has been delivered when executed and given to the Secretary for the purpose of being sealed,
recorded, and transmitted to the party.
But in all cases of letters patent, certain solemnities are required by law, which solemnities are the
evidences of the validity of the instrument. A formal delivery to the person is not among them. In
cases of commissions, the sign manual of the President and the seal of the United States are
those solemnities. This objection therefore does not touch the case.
It has also occurred as possible, and barely possible, that the transmission of the commission and
the acceptance thereof might be deemed necessary to complete the right of the plaintiff.
The transmission of the commission is a practice directed by convenience, but not by law. It
cannot therefore be necessary to constitute the appointment, which must precede it and which is
the mere act of the President. If the Executive required that every person appointed to an office
should himself take means to procure his commission, the appointment would not be the less valid
on that account. The appointment is the sole act of the President; the transmission of the
commission is the sole act of the officer to whom that duty is assigned, and may be accelerated or
retarded by circumstances which can have no influence on the appointment. A commission is
transmitted to a person already appointed, not to a person to be appointed or not, as the letter
enclosing the commission should happen to get into the post office and reach him in safety, or to
miscarry.
It may have some tendency to elucidate this point to inquire whether the possession of the original
commission be indispensably necessary to authorize a person appointed to any office to perform
the duties of that office. If it was necessary, then a loss of the commission would lose the office.
Not only negligence, but accident or fraud, fire or theft might deprive an individual of his office. In
such a case, I presume it could not be doubted but that a copy from the record of the Office of the
Secretary of State would be, to every intent and purpose, equal to the original. The act of
Congress has expressly made it so. To give that copy validity, it would not be necessary to prove
that the original had been transmitted and afterwards lost. The copy would be complete evidence
that the original had existed, and that the appointment had been made, but not that the original
had been transmitted. If indeed it should appear that the original had been mislaid in the Office of
State, that circumstance would not affect the operation of the copy. When all the requisites have
been performed which authorize a recording officer to record any instrument whatever, and the
order for that purpose has been given, the instrument is in law considered as recorded, although
the manual labour of inserting it in a book kept for that purpose may not have been performed.
In the case of commissions, the law orders the Secretary of State to record them. When,
therefore, they are signed and sealed, the order for their being recorded is given, and, whether
inserted in the book or not, they are in law recorded.
A copy of this record is declared equal to the original, and the fees to be paid by a person
requiring a copy are ascertained by law. Can a keeper of a public record erase therefrom a
commission which has been recorded? Or can he refuse a copy thereof to a person demanding it
on the terms prescribed by law?
Such a copy would, equally with the original, authorize the justice of peace to proceed in the
performance of his duty, because it would, equally with the original, attest his appointment.
If the transmission of a commission be not considered as necessary to give validity to an
appointment, still less is its acceptance. The appointment is the sole act of the President; the
acceptance is the sole act of the officer, and is, in plain common sense, posterior to the
appointment. As he may resign, so may he refuse to accept; but neither the one nor the other is
capable of rendering the appointment a nonentity.
That this is the understanding of the government is apparent from the whole tenor of its conduct.
A commission bears date, and the salary of the officer commences from his appointment, not from
the transmission or acceptance of his commission. When a person appointed to any office refuses
to accept that office, the successor is nominated in the place of the person who has declined to
accept, and not in the place of the person who had been previously in office and had created the
original vacancy.
It is therefore decidedly the opinion of the Court that, when a commission has been signed by the
President, the appointment is made, and that the commission is complete when the seal of the
United States has been affixed to it by the Secretary of State.
Where an officer is removable at the will of the Executive, the circumstance which completes his
appointment is of no concern, because the act is at any time revocable, and the commission may
be arrested if still in the office. But when the officer is not removable at the will of the Executive,
the appointment is not revocable, and cannot be annulled. It has conferred legal rights which
cannot be resumed.
The discretion of the Executive is to be exercised until the appointment has been made. But
having once made the appointment, his power over the office is terminated in all cases, where by
law the officer is not removable by him. The right to the office is then in the person appointed, and
he has the absolute, unconditional power of accepting or rejecting it.
Mr. Marbury, then, since his commission was signed by the President and sealed by the Secretary
of State, was appointed, and as the law creating the office gave the officer a right to hold for five
years independent of the Executive, the appointment was not revocable, but vested in the officer
legal rights which are protected by the laws of his country.
34
To withhold the commission, therefore, is an act deemed by the Court not warranted by law, but
violative of a vested legal right.
This brings us to the second inquiry, which is:
2. If he has a right, and that right has been violated, do the laws of his country afford him a
remedy?
Page 5 U. S. 163
The very essence of civil liberty certainly consists in the right of every individual to claim the
protection of the laws whenever he receives an injury. One of the first duties of government is to
afford that protection. In Great Britain, the King himself is sued in the respectful form of a petition,
and he never fails to comply with the judgment of his court.
In the third volume of his Commentaries, page 23, Blackstone states two cases in which a remedy
is afforded by mere operation of law.
"In all other cases," he says,
"it is a general and indisputable rule that where there is a legal right, there is also a legal remedy
by suit or action at law whenever that right is invaded."
And afterwards, page 109 of the same volume, he says,
"I am next to consider such injuries as are cognizable by the Courts of common law. And herein I
shall for the present only remark that all possible injuries whatsoever that did not fall within the
exclusive cognizance of either the ecclesiastical, military, or maritime tribunals are, for that very
reason, within the cognizance of the common law courts of justice, for it is a settled and invariable
principle in the laws of England that every right, when withheld, must have a remedy, and every
injury its proper redress."
The Government of the United States has been emphatically termed a government of laws, and
not of men. It will certainly cease to deserve this high appellation if the laws furnish no remedy for
the violation of a vested legal right.
If this obloquy is to be cast on the jurisprudence of our country, it must arise from the peculiar
character of the case.
It behooves us, then, to inquire whether there be in its composition any ingredient which shall
exempt from legal investigation or exclude the injured party from legal redress. In pursuing this
inquiry, the first question which presents itself is whether this can be arranged with that class of
cases which come under the description of damnum absque injuria -- a loss without an injury.
This description of cases never has been considered, and, it is believed, never can be considered,
as comprehending offices of trust, of honour or of profit. The office of justice of peace in the
District of Columbia is such an office; it is therefore worthy of the attention and guardianship of the
laws. It has received that attention and guardianship. It has been created by special act of
Congress, and has been secured, so far as the laws can give security to the person appointed to
fill it, for five years. It is not then on account of the worthlessness of the thing pursued that the
injured party can be alleged to be without remedy.
Is it in the nature of the transaction? Is the act of delivering or withholding a commission to be
considered as a mere political act belonging to the Executive department alone, for the
performance of which entire confidence is placed by our Constitution in the Supreme Executive,
and for any misconduct respecting which the injured individual has no remedy?
That there may be such cases is not to be questioned. but that every act of duty to be performed
in any of the great departments of government constitutes such a case is not to be admitted.
By the act concerning invalids, passed in June, 1794, the Secretary at War is ordered to place on
the pension list all persons whose names are contained in a report previously made by him to
Congress. If he should refuse to do so, would the wounded veteran be without remedy? Is it to be
contended that where the law, in precise terms, directs the performance of an act in which an
individual is interested, the law is incapable of securing obedience to its mandate? Is it on account
of the character of the person against whom the complaint is made? Is it to be contended that the
heads of departments are not amenable to the laws of their country?
Whatever the practice on particular occasions may be, the theory of this principle will certainly
never be maintained.
No act of the Legislature confers so extraordinary a privilege, nor can it derive countenance from
the doctrines of the common law. After stating that personal injury from the King to a subject is
presumed to be impossible, Blackstone, Vol. III. p. 255, says,"but injuries to the rights of property
can scarcely be committed by the Crown without the intervention of its officers, for whom, the law,
in matters of right, entertains no respect or delicacy, but furnishes various methods of detecting
the errors and misconduct of those agents by whom the King has been deceived and induced to
do a temporary injustice."
By the act passed in 1796, authorizing the sale of the lands above the mouth of Kentucky river,
the purchaser, on paying his purchase money, becomes completely entitled to the property
purchased, and, on producing to the Secretary of State the receipt of the treasurer upon a
certificate required by the law, the President of the United States is authorized to grant him a
patent. It is further enacted that all patents shall be countersigned by the Secretary of State, and
recorded in his office. If the Secretary of State should choose to withhold this patent, or, the patent
being lost, should refuse a copy of it, can it be imagined that the law furnishes to the injured
person no remedy?
It is not believed that any person whatever would attempt to maintain such a proposition.
It follows, then, that the question whether the legality of an act of the head of a department be
examinable in a court of justice or not must always depend on the nature of that act.
If some acts be examinable and others not, there must be some rule of law to guide the Court in
the exercise of its jurisdiction.
In some instances, there may be difficulty in applying the rule to particular cases; but there cannot,
it is believed, be much difficulty in laying down the rule.
By the Constitution of the United States, the President is invested with certain important political
powers, in the exercise of which he is to use his own discretion, and is accountable only to his
country in his political character and to his own conscience. To aid him in the performance of
these duties, he is authorized to appoint certain officers, who act by his authority and in conformity
with his orders.
In such cases, their acts are his acts; and whatever opinion may be entertained of the manner in
which executive discretion may be used, still there exists, and can exist, no power to control that
discretion. The subjects are political. They respect the nation, not individual rights, and, being
entrusted to the Executive, the decision of the Executive is conclusive. The application of this
remark will be perceived by adverting to the act of Congress for establishing the Department of
Foreign Affairs. This officer, as his duties were prescribed by that act, is to conform precisely to
the will of the President. He is the mere organ by whom that will is communicated. The acts of
such an officer, as an officer, can never be examinable by the Courts.
But when the Legislature proceeds to impose on that officer other duties; when he is directed
peremptorily to perform certain acts; when the rights of individuals are dependent on the
performance of those acts; he is so far the officer of the law, is amenable to the laws for his
conduct, and cannot at his discretion, sport away the vested rights of others.
The conclusion from this reasoning is that, where the heads of departments are the political or
confidential agents of the Executive, merely to execute the will of the President, or rather to act in
cases in which the Executive possesses a constitutional or legal discretion, nothing can be more
perfectly clear than that their acts are only politically examinable. But where a specific duty is
assigned by law, and individual rights depend upon the performance of that duty, it seems equally
clear that the individual who considers himself injured has a right to resort to the laws of his
country for a remedy.
If this be the rule, let us inquire how it applies to the case under the consideration of the Court.
35
Page 5 U. S. 167
The power of nominating to the Senate, and the power of appointing the person nominated, are
political powers, to be exercised by the President according to his own discretion. When he has
made an appointment, he has exercised his whole power, and his discretion has been completely
applied to the case. If, by law, the officer be removable at the will of the President, then a new
appointment may be immediately made, and the rights of the officer are terminated. But as a fact
which has existed cannot be made never to have existed, the appointment cannot be annihilated,
and consequently, if the officer is by law not removable at the will of the President, the rights he
has acquired are protected by the law, and are not resumable by the President. They cannot be
extinguished by Executive authority, and he has the privilege of asserting them in like manner as if
they had been derived from any other source.
The question whether a right has vested or not is, in its nature, judicial, and must be tried by the
judicial authority. If, for example, Mr. Marbury had taken the oaths of a magistrate and proceeded
to act as one, in consequence of which a suit had been instituted against him in which his defence
had depended on his being a magistrate; the validity of his appointment must have been
determined by judicial authority.
So, if he conceives that, by virtue of his appointment, he has a legal right either to the commission
which has been made out for him or to a copy of that commission, it is equally a question
examinable in a court, and the decision of the Court upon it must depend on the opinion
entertained of his appointment.
That question has been discussed, and the opinion is that the latest point of time which can be
taken as that at which the appointment was complete and evidenced was when, after the
signature of the President, the seal of the United States was affixed to the commission.
It is then the opinion of the Court:
1. That, by signing the commission of Mr. Marbury, the President of the United States
appointed him a justice of peace for the County of Washington in the District of
Columbia, and that the seal of the United States, affixed thereto by the Secretary of
State, is conclusive testimony of the verity of the signature, and of the completion
of the appointment, and that the appointment conferred on him a legal right to the
office for the space of five years.
2. That, having this legal title to the office, he has a consequent right to the
commission, a refusal to deliver which is a plain violation of that right, for which the
laws of his country afford him a remedy. It remains to be inquired whether,
3. He is entitled to the remedy for which he applies. This depends on:
1. The nature of the writ applied for, and
2. The power of this court.
1. The nature of the writ.
Blackstone, in the third volume of his Commentaries, page 110, defines a mandamus to be
"a command issuing in the King's name from the Court of King's Bench, and directed to any
person, corporation, or inferior court of judicature within the King's dominions requiring them to do
some particular thing therein specified which appertains to their office and duty, and which the
Court of King's Bench has previously determined, or at least supposes, to be consonant to right
and justice."
Lord Mansfield, in 3 Burrows, 1266, in the case of The King v. Baker et al., states with much
precision and explicitness the cases in which this writ may be used.
"Whenever," says that very able judge,"there is a right to execute an office, perform a service, or
exercise a franchise (more especially if it be in a matter of public concern or attended with profit),
and a person is kept out of possession, or dispossessed of such right, and has no other specific
legal remedy, this court ought to assist by mandamus, upon reasons of justice, as the writ
expresses, and upon reasons of public policy, to preserve peace, order and good government."
In the same case, he says,"this writ ought to be used upon all occasions where the law has
established no specific remedy, and where in justice and good government there ought to be one."
In addition to the authorities now particularly cited, many others were relied on at the bar which
show how far the practice has conformed to the general doctrines that have been just quoted.
This writ, if awarded, would be directed to an officer of government, and its mandate to him would
be, to use the words of Blackstone,"to do a particular thing therein specified, which appertains to
his office and duty and which the Court has previously determined or at least supposes to be
consonant to right and justice."
Or, in the words of Lord Mansfield, the applicant, in this case, has a right to execute an office of
public concern, and is kept out of possession of that right.
These circumstances certainly concur in this case.
Still, to render the mandamus a proper remedy, the officer to whom it is to be directed must be
one to whom, on legal principles, such writ may be directed, and the person applying for it must be
without any other specific and legal remedy.
1. With respect to the officer to whom it would be directed. The intimate political relation,
subsisting between the President of the United States and the heads of departments, necessarily
renders any legal investigation of the acts of one of those high officers peculiarly irksome, as well
as delicate, and excites some hesitation with respect to the propriety of entering into such
investigation. Impressions are often received without much reflection or examination, and it is not
wonderful that, in such a case as this, the assertion by an individual of his legal claims in a court of
justice, to which claims it is the duty of that court to attend, should, at first view, be considered by
some as an attempt to intrude into the cabinet and to intermeddle with the prerogatives of the
Executive.
It is scarcely necessary for the Court to disclaim all pretensions to such a jurisdiction. An
extravagance so absurd and excessive could not have been entertained for a moment. The
province of the Court is solely to decide on the rights of individuals, not to inquire how the
Executive or Executive officers perform duties in which they have a discretion. Questions, in their
nature political or which are, by the Constitution and laws, submitted to the Executive, can never
be made in this court.
But, if this be not such a question; if so far from being an intrusion into the secrets of the cabinet, it
respects a paper which, according to law, is upon record, and to a copy of which the law gives a
right, on the payment of ten cents; if it be no intermeddling with a subject over which the Executive
can be considered as having exercised any control; what is there in the exalted station of the
officer which shall bar a citizen from asserting in a court of justice his legal rights, or shall forbid a
court to listen to the claim or to issue a mandamus directing the performance of a duty not
depending on Executive discretion, but on particular acts of Congress and the general principles
of law?
If one of the heads of departments commits any illegal act under colour of his office by which an
individual sustains an injury, it cannot be pretended that his office alone exempts him from being
sued in the ordinary mode of proceeding, and being compelled to obey the judgment of the law.
How then can his office exempt him from this particular mode of deciding on the legality of his
conduct if the case be such a case as would, were any other individual the party complained of,
authorize the process?
It is not by the office of the person to whom the writ is directed, but the nature of the thing to be
done, that the propriety or impropriety of issuing a mandamus is to be determined. Where the
head of a department acts in a case in which Executive discretion is to be exercised, in which he
is the mere organ of Executive will, it is again repeated, that any application to a court to control, in
any respect, his conduct, would be rejected without hesitation.
36
But where he is directed by law to do a certain act affecting the absolute rights of individuals, in
the performance of which he is not placed under the particular direction of the President, and the
performance of which the President cannot lawfully forbid, and therefore is never presumed to
have forbidden -- as for example, to record a commission, or a patent for land, which has received
all the legal solemnities; or to give a copy of such record -- in such cases, it is not perceived on
what ground the Courts of the country are further excused from the duty of giving judgment that
right to be done to an injured individual than if the same services were to be performed by a
person not the head of a department.
This opinion seems not now for the first time to be taken up in this country.
It must be well recollected that, in 1792, an act passed, directing the secretary at war to place on
the pension list such disabled officers and soldiers as should be reported to him by the Circuit
Courts, which act, so far as the duty was imposed on the Courts, was deemed unconstitutional;
but some of the judges, thinking that the law might be executed by them in the character of
commissioners, proceeded to act and to report in that character.
This law being deemed unconstitutional at the circuits, was repealed, and a different system was
established; but the question whether those persons who had been reported by the judges, as
commissioners, were entitled, in consequence of that report, to be placed on the pension list was
a legal question, properly determinable in the Courts, although the act of placing such persons on
the list was to be performed by the head of a department.
That this question might be properly settled, Congress passed an act in February, 1793, making it
the duty of the Secretary of War, in conjunction with the Attorney General, to take such measures
as might be necessary to obtain an adjudication of the Supreme Court of the United States on the
validity of any such rights, claimed under the act aforesaid.
After the passage of this act, a mandamus was moved for, to be directed to the Secretary of War,
commanding him to place on the pension list a person stating himself to be on the report of the
judges.
There is, therefore, much reason to believe that this mode of trying the legal right of the
complainant was deemed by the head of a department, and by the highest law officer of the
United States, the most proper which could be selected for the purpose.
When the subject was brought before the Court, the decision was not that a mandamus would not
lie to the head of a department directing him to perform an act enjoined by law, in the performance
of which an individual had a vested interest, but that a mandamus ought not to issue in that case --
the decision necessarily to be made if the report of the commissioners did not confer on the
applicant a legal right.
The judgment in that case is understood to have decided the merits of all claims of that
description, and the persons, on the report of the commissioners, found it necessary to pursue the
mode prescribed by the law subsequent to that which had been deemed unconstitutional in order
to place themselves on the pension list.
The doctrine, therefore, now advanced is by no means a novel one.
It is true that the mandamus now moved for is not for the performance of an act expressly
enjoined by statute.
It is to deliver a commission, on which subjects the acts of Congress are silent. This difference is
not considered as affecting the case. It has already been stated that the applicant has, to that
commission, a vested legal right of which the Executive cannot deprive him. He has been
appointed to an office from which he is not removable at the will of the Executive, and, being so
appointed, he has a right to the commission which the Secretary has received from the President
for his use. The act of Congress does not, indeed, order the Secretary of State to send it to him,
but it is placed in his hands for the person entitled to it, and cannot be more lawfully withheld by
him than by another person.
It was at first doubted whether the action of detinue was not a specific legal remedy for the
commission which has been withheld from Mr. Marbury, in which case a mandamus would be
improper. But this doubt has yielded to the consideration that the judgment in detinue is for the
thing itself, or its value. The value of a public office not to be sold is incapable of being
ascertained, and the applicant has a right to the office itself, or to nothing. He will obtain the office
by obtaining the commission or a copy of it from the record.
This, then, is a plain case of a mandamus, either to deliver the commission or a copy of it from the
record, and it only remains to be inquired:
Whether it can issue from this Court.
The act to establish the judicial courts of the United States authorizes the Supreme Court "to issue
writs of mandamus, in cases warranted by the principles and usages of law, to any courts
appointed, or persons holding office, under the authority of the United States."
The Secretary of State, being a person, holding an office under the authority of the United States,
is precisely within the letter of the description, and if this Court is not authorized to issue a writ of
mandamus to such an officer, it must be because the law is unconstitutional, and therefore
absolutely incapable of conferring the authority and assigning the duties which its words purport to
confer and assign.
The Constitution vests the whole judicial power of the United States in one Supreme Court, and
such inferior courts as Congress shall, from time to time, ordain and establish. This power is
expressly extended to all cases arising under the laws of the United States; and consequently, in
some form, may be exercised over the present case, because the right claimed is given by a law
of the United States.
In the distribution of this power. it is declared that "The Supreme Court shall have original
jurisdiction in all cases affecting ambassadors, other public ministers and consuls, and those in
which a state shall be a party. In all other cases, the Supreme Court shall have appellate
jurisdiction."
It has been insisted at the bar, that, as the original grant of jurisdiction to the Supreme and inferior
courts is general, and the clause assigning original jurisdiction to the Supreme Court contains no
negative or restrictive words, the power remains to the Legislature to assign original jurisdiction to
that Court in other cases than those specified in the article which has been recited, provided those
cases belong to the judicial power of the United States.
If it had been intended to leave it in the discretion of the Legislature to apportion the judicial power
between the Supreme and inferior courts according to the will of that body, it would certainly have
been useless to have proceeded further than to have defined the judicial power and the tribunals
in which it should be vested. The subsequent part of the section is mere surplusage -- is entirely
without meaning -- if such is to be the construction. If Congress remains at liberty to give this court
appellate jurisdiction where the Constitution has declared their jurisdiction shall be original, and
original jurisdiction where the Constitution has declared it shall be appellate, the distribution of
jurisdiction made in the Constitution, is form without substance.
Affirmative words are often, in their operation, negative of other objects than those affirmed, and,
in this case, a negative or exclusive sense must be given to them or they have no operation at all.
It cannot be presumed that any clause in the Constitution is intended to be without effect, and
therefore such construction is inadmissible unless the words require it.
If the solicitude of the Convention respecting our peace with foreign powers induced a provision
that the Supreme Court should take original jurisdiction in cases which might be supposed to
affect them, yet the clause would have proceeded no further than to provide for such cases if no
further restriction on the powers of Congress had been intended. That they should have appellate
jurisdiction in all other cases, with such exceptions as Congress might make, is no restriction
unless the words be deemed exclusive of original jurisdiction.
37
When an instrument organizing fundamentally a judicial system divides it into one Supreme and
so many inferior courts as the Legislature may ordain and establish, then enumerates its powers,
and proceeds so far to distribute them as to define the jurisdiction of the Supreme Court by
declaring the cases in which it shall take original jurisdiction, and that in others it shall take
appellate jurisdiction, the plain import of the words seems to be that, in one class of cases, its
jurisdiction is original, and not appellate; in the other, it is appellate, and not original. ,If any other
construction would render the clause inoperative, that is an additional reason for rejecting such
other construction, and for adhering to the obvious meaning.
To enable this court then to issue a mandamus, it must be shown to be an exercise of appellate
jurisdiction, or to be necessary to enable them to exercise appellate jurisdiction.
It has been stated at the bar that the appellate jurisdiction may be exercised in a variety of forms,
and that, if it be the will of the Legislature that a mandamus should be used for that purpose, that
will must be obeyed. This is true; yet the jurisdiction must be appellate, not original.
It is the essential criterion of appellate jurisdiction that it revises and corrects the proceedings in a
cause already instituted, and does not create that case. Although, therefore, a mandamus may be
directed to courts, yet to issue such a writ to an officer for the delivery of a paper is, in effect, the
same as to sustain an original action for that paper, and therefore seems not to belong to
appellate, but to original jurisdiction. Neither is it necessary in such a case as this to enable the
Court to exercise its appellate jurisdiction.
The authority, therefore, given to the Supreme Court by the act establishing the judicial courts of
the United States to issue writs of mandamus to public officers appears not to be warranted by the
Constitution, and it becomes necessary to inquire whether a jurisdiction so conferred can be
exercised.
The question whether an act repugnant to the Constitution can become the law of the land is a
question deeply interesting to the United States, but, happily, not of an intricacy proportioned to its
interest. It seems only necessary to recognise certain principles, supposed to have been long and
well established, to decide it.
That the people have an original right to establish for their future government such principles as, in
their opinion, shall most conduce to their own happiness is the basis on which the whole American
fabric has been erected. The exercise of this original right is a very great exertion; nor can it nor
ought it to be frequently repeated. The principles, therefore, so established are deemed
fundamental. And as the authority from which they proceed, is supreme, and can seldom act, they
are designed to be permanent.
This original and supreme will organizes the government and assigns to different departments
their respective powers. It may either stop here or establish certain limits not to be transcended by
those departments.
The Government of the United States is of the latter description. The powers of the Legislature are
defined and limited; and that those limits may not be mistaken or forgotten, the Constitution is
written. To what purpose are powers limited, and to what purpose is that limitation committed to
writing, if these limits may at any time be passed by those intended to be restrained? The
distinction between a government with limited and unlimited powers is abolished if those limits do
not confine the persons on whom they are imposed, and if acts prohibited and acts allowed are of
equal obligation. It is a proposition too plain to be contested that the Constitution controls any
legislative act repugnant to it, or that the Legislature may alter the Constitution by an ordinary act.
Between these alternatives there is no middle ground. The Constitution is either a superior,
paramount law, unchangeable by ordinary means, or it is on a level with ordinary legislative acts,
and, like other acts, is alterable when the legislature shall please to alter it.
If the former part of the alternative be true, then a legislative act contrary to the Constitution is not
law; if the latter part be true, then written Constitutions are absurd attempts on the part of the
people to limit a power in its own nature illimitable.
Certainly all those who have framed written Constitutions contemplate them as forming the
fundamental and paramount law of the nation, and consequently the theory of every such
government must be that an act of the Legislature repugnant to the Constitution is void.
This theory is essentially attached to a written Constitution, and is consequently to be considered
by this Court as one of the fundamental principles of our society. It is not, therefore, to be lost sight
of in the further consideration of this subject.
If an act of the Legislature repugnant to the Constitution is void, does it, notwithstanding its
invalidity, bind the Courts and oblige them to give it effect? Or, in other words, though it be not
law, does it constitute a rule as operative as if it was a law? This would be to overthrow in fact
what was established in theory, and would seem, at first view, an absurdity too gross to be
insisted on. It shall, however, receive a more attentive consideration.
It is emphatically the province and duty of the Judicial Department to say what the law is. Those
who apply the rule to particular cases must, of necessity, expound and interpret that rule. If two
laws conflict with each other, the Courts must decide on the operation of each.
Page 5 U. S. 178
So, if a law be in opposition to the Constitution, if both the law and the Constitution apply to a
particular case, so that the Court must either decide that case conformably to the law,
disregarding the Constitution, or conformably to the Constitution, disregarding the law, the Court
must determine which of these conflicting rules governs the case. This is of the very essence of
judicial duty.
If, then, the Courts are to regard the Constitution, and the Constitution is superior to any ordinary
act of the Legislature, the Constitution, and not such ordinary act, must govern the case to which
they both apply.
Those, then, who controvert the principle that the Constitution is to be considered in court as a
paramount law are reduced to the necessity of maintaining that courts must close their eyes on
the Constitution, and see only the law.
This doctrine would subvert the very foundation of all written Constitutions. It would declare that an
act which, according to the principles and theory of our government, is entirely void, is yet, in
practice, completely obligatory. It would declare that, if the Legislature shall do what is expressly
forbidden, such act, notwithstanding the express prohibition, is in reality effectual. It would be
giving to the Legislature a practical and real omnipotence with the same breath which professes to
restrict their powers within narrow limits. It is prescribing limits, and declaring that those limits may
be passed at pleasure.
That it thus reduces to nothing what we have deemed the greatest improvement on political
institutions -- a written Constitution, would of itself be sufficient, in America where written
Constitutions have been viewed with so much reverence, for rejecting the construction. But the
peculiar expressions of the Constitution of the United States furnish additional arguments in favour
of its rejection.
The judicial power of the United States is extended to all cases arising under the Constitution.
Could it be the intention of those who gave this power to say that, in using it, the Constitution
should not be looked into? That a case arising under the Constitution should be decided without
examining the instrument under which it arises?
This is too extravagant to be maintained.
In some cases then, the Constitution must be looked into by the judges. And if they can open it at
all, what part of it are they forbidden to read or to obey?
There are many other parts of the Constitution which serve to illustrate this subject.
It is declared that "no tax or duty shall be laid on articles exported from any State." Suppose a duty
on the export of cotton, of tobacco, or of flour, and a suit instituted to recover it. Ought judgment to
38
be rendered in such a case? ought the judges to close their eyes on the Constitution, and only see
the law?
The Constitution declares that "no bill of attainder or ex post facto law shall be passed."
If, however, such a bill should be passed and a person should be prosecuted under it, must the
Court condemn to death those victims whom the Constitution endeavours to preserve?
"No person,' says the Constitution, 'shall be convicted of treason unless on the testimony of two
witnesses to the same overt act, or on confession in open court."
Here. the language of the Constitution is addressed especially to the Courts. It prescribes, directly
for them, a rule of evidence not to be departed from. If the Legislature should change that rule,
and declare one witness, or a confession out of court, sufficient for conviction, must the
constitutional principle yield to the legislative act?

From these and many other selections which might be made, it is apparent that the framers of the
Constitution contemplated that instrument as a rule for the government of courts, as well as of the
Legislature.

Why otherwise does it direct the judges to take an oath to support it? This oath certainly applies in
an especial manner to their conduct in their official character. How immoral to impose it on them if
they were to be used as the instruments, and the knowing instruments, for violating what they
swear to support!

The oath of office, too, imposed by the Legislature, is completely demonstrative of the legislative
opinion on this subject. It is in these words:

"I do solemnly swear that I will administer justice without respect to persons, and do
equal right to the poor and to the rich; and that I will faithfully and impartially discharge
all the duties incumbent on me as according to the best of my abilities and
understanding, agreeably to the Constitution and laws of the United States."

Why does a judge swear to discharge his duties agreeably to the Constitution of the United States
if that Constitution forms no rule for his government? if it is closed upon him and cannot be
inspected by him?
If such be the real state of things, this is worse than solemn mockery. To prescribe or to take this
oath becomes equally a crime.

It is also not entirely unworthy of observation that, in declaring what shall be the supreme law of
the land, the Constitution itself is first mentioned, and not the laws of the United States generally,
but those only which shall be made in pursuance of the Constitution, have that rank.

Thus, the particular phraseology of the Constitution of the United States confirms and strengthens
the principle, supposed to be essential to all written Constitutions, that a law repugnant to the
Constitution is void, and that courts, as well as other departments, are bound by that instrument.
The rule must be discharged.

39
 4. EN BANC x--------------------------------------------------------x
ARTURO M. DE CASTRO,
Intervenor.
RAUL L. LAMBINO and ERICO B. G.R. No. 174153 x ------------------------------------------------------- x
TRADE UNION CONGRESS OF THE
AUMENTADO, TOGETHER WITH
PHILIPPINES,
6,327,952 REGISTERED VOTERS,
Intervenor.
Petitioners,
x---------------------------------------------------------x
LUWALHATI RICASA ANTONINO,
- versus -
Intervenor.
x ------------------------------------------------------- x
THE COMMISSION ON ELECTIONS, PHILIPPINE CONSTITUTION
Respondent. ASSOCIATION (PHILCONSA), CONRADO
x--------------------------------------------------------x F. ESTRELLA, TOMAS C. TOLEDO,
MARIANO M. TAJON, FROILAN M.
ALTERNATIVE LAW GROUPS, INC., BACUNGAN, JOAQUIN T. VENUS, JR.,
Intervenor. FORTUNATO P. AGUAS, and AMADO
x ------------------------------------------------------ x GAT INCIONG,
Intervenors.
ONEVOICE INC., CHRISTIAN S. x ------------------------------------------------------- x
MONSOD, RENE B. AZURIN, RONALD L. ADAMAT, ROLANDO
MANUEL L. QUEZON III, BENJAMIN MANUEL RIVERA, and RUELO BAYA,
T. TOLOSA, JR., SUSAN V. OPLE, and Intervenors.
CARLOS P. MEDINA, JR., x -------------------------------------------------------- x
Intervenors. PHILIPPINE TRANSPORT AND GENERAL
x------------------------------------------------------ x WORKERS ORGANIZATION (PTGWO)
ATTY. PETE QUIRINO QUADRA, and MR. VICTORINO F. BALAIS,
Intervenor. Intervenors.
x--------------------------------------------------------x x -------------------------------------------------------- x
BAYAN represented by its Chairperson
Dr. Carolina Pagaduan-Araullo, BAYAN MUNA
represented by its Chairperson Dr. Reynaldo SENATE OF THE PHILIPPINES, represented
Lesaca, KILUSANG MAYO UNO represented by its President, MANUEL VILLAR, JR.,
by its Secretary General Joel Maglunsod, HEAD Intervenor.
represented by its Secretary General Dr. Gene
Alzona Nisperos, ECUMENICAL BISHOPS x ------------------------------------------------------- x
FORUM represented by Fr. Dionito Cabillas, SULONG BAYAN MOVEMENT
MIGRANTE represented by its Chairperson FOUNDATION, INC.,
Concepcion Bragas-Regalado, GABRIELA Intervenor.
represented by its Secretary General x ------------------------------------------------------- x
Emerenciana de Jesus, GABRIELA WOMENS JOSE ANSELMO I. CADIZ, BYRON D.
PARTY represented by Sec. Gen. Cristina Palabay, BOCAR, MA. TANYA KARINA A. LAT,
ANAKBAYAN represented by Chairperson ANTONIO L. SALVADOR, and
RANDALL TABAYOYONG,
Eleanor de Guzman, LEAGUE OF FILIPINO Intervenors.
STUDENTS represented by Chair Vencer x -------------------------------------------------------- x
Crisostomo Palabay, JOJO PINEDA of the INTEGRATED BAR OF THE PHILIPPINES,
League of Concerned Professionals and CEBU CITY AND CEBU PROVINCE
Businessmen, DR. DARBY SANTIAGO CHAPTERS,
of the Solidarity of Health Against Charter Intervenors.
Change, DR. REGINALD PAMUGAS of x --------------------------------------------------------x
Health Action for Human Rights, SENATE MINORITY LEADER AQUILINO
Intervenors. Q. PIMENTEL, JR. and SENATORS
x--------------------------------------------------------x SERGIO R. OSMEŇA III, JAMBY
LORETTA ANN P. ROSALES, MADRIGAL, JINGGOY ESTRADA,
MARIO JOYO AGUJA, and ANA THERESA ALFREDO S. LIM and
HONTIVEROS-BARAQUEL, PANFILO LACSON,
Intervenors. Intervenors.

40
x -----------------------------------------------------x The Lambino Groups initiative petition changes the 1987 Constitution by modifying Sections 1-7 of
JOSEPH EJERCITO ESTRADA and Article VI (Legislative Department)[4] and Sections 1-4 of Article VII (Executive Department)[5]
PWERSA NG MASANG PILIPINO, and by adding Article XVIII entitled Transitory Provisions.[6] These proposed changes will shift the
Intervenors. present Bicameral-Presidential system to a Unicameral-Parliamentary form of government. The
x -----------------------------------------------------x Lambino Group prayed that after due publication of their petition, the COMELEC should submit
MAR-LEN ABIGAIL BINAY, G.R. No. 174299 the following proposition in a plebiscite for the voters ratification:
SOFRONIO UNTALAN, JR., and
RENE A.V. SAGUISAG, Present: DO YOU APPROVE THE AMENDMENT OF ARTICLES VI AND VII OF THE 1987
Petitioners, CONSTITUTION, CHANGING THE FORM OF GOVERNMENT FROM THE PRESENT
PANGANIBAN, C.J., BICAMERAL-PRESIDENTIAL TO A UNICAMERAL-PARLIAMENTARY SYSTEM, AND
- versus - PUNO, PROVIDING ARTICLE XVIII AS TRANSITORY PROVISIONS FOR THE ORDERLY SHIFT FROM
QUISUMBING, ONE SYSTEM TO THE OTHER?
YNARES-SANTIAGO,
COMMISSION ON ELECTIONS, SANDOVAL-GUTIERREZ,
represented by Chairman BENJAMIN CARPIO, On 30 August 2006, the Lambino Group filed an Amended Petition with the COMELEC indicating
S. ABALOS, SR., and Commissioners AUSTRIA-MARTINEZ, modifications in the proposed Article XVIII (Transitory Provisions) of their initiative.[7]
RESURRECCION Z. BORRA, CORONA,
FLORENTINO A. TUASON, JR., CARPIO MORALES,
ROMEO A. BRAWNER, CALLEJO, SR., The Ruling of the COMELEC
RENE V. SARMIENTO, AZCUNA,
NICODEMO T. FERRER, and TINGA, On 31 August 2006, the COMELEC issued its Resolution denying due course to the Lambino
John Doe and Peter Doe, CHICO-NAZARIO, Groups petition for lack of an enabling law governing initiative petitions to amend the Constitution.
Respondents. GARCIA, and VELASCO, JR., JJ. The COMELEC invoked this Courts ruling in Santiago v. Commission on Elections[8] declaring RA
6735 inadequate to implement the initiative clause on proposals to amend the Constitution.[9]

Promulgated: In G.R. No. 174153, the Lambino Group prays for the issuance of the writs of certiorari and
mandamus to set aside the COMELEC Resolution of 31 August 2006 and to compel the
October 25, 2006 COMELEC to give due course to their initiative petition. The Lambino Group contends that the
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x COMELEC committed grave abuse of discretion in denying due course to their petition since
Santiago is not a binding precedent. Alternatively, the Lambino Group claims that Santiago binds
only the parties to that case, and their petition deserves cognizance as an expression of the will of
the sovereign people.
DECISION
In G.R. No. 174299, petitioners (Binay Group) pray that the Court require respondent COMELEC
Commissioners to show cause why they should not be cited in contempt for the COMELECs
CARPIO, J.: verification of signatures and for entertaining the Lambino Groups petition despite the permanent
injunction in Santiago. The Court treated the Binay Groups petition as an opposition-in-
intervention.
The Case
In his Comment to the Lambino Groups petition, the Solicitor General joined causes with the
These are consolidated petitions on the Resolution dated 31 August 2006 of the Commission on petitioners, urging the Court to grant the petition despite the Santiago ruling. The Solicitor General
Elections (COMELEC) denying due course to an initiative petition to amend the 1987 Constitution. proposed that the Court treat RA 6735 and its implementing rules as temporary devises to
implement the system of initiative.

Antecedent Facts
On 15 February 2006, petitioners in G.R. No. 174153, namely Raul L. Lambino and Erico B.
Aumentado (Lambino Group), with other groups[1] and individuals, commenced gathering
signatures for an initiative petition to change the 1987 Constitution. On 25 August 2006, the
Lambino Group filed a petition with the COMELEC to hold a plebiscite that will ratify their initiative
petition under Section 5(b) and (c)[2] and Section 7[3] of Republic Act No. 6735 or the Initiative
and Referendum Act (RA 6735).
The Lambino Group alleged that their petition had the support of 6,327,952 individuals constituting
at least twelve per centum (12%) of all registered voters, with each legislative district represented
by at least three per centum (3%) of its registered voters. The Lambino Group also claimed that
COMELEC election registrars had verified the signatures of the 6.3 million individuals.
Various groups and individuals sought intervention, filing pleadings supporting or opposing the
Lambino Groups petition. The supporting intervenors[10] uniformly hold the view that the
COMELEC committed grave abuse of discretion in relying on Santiago. On the other hand, the
opposing intervenors[11] hold the contrary view and maintain that Santiago is a binding precedent.
The opposing intervenors also challenged (1) the Lambino Groups standing to file the petition; (2)
the validity of the signature gathering and verification process; (3) the Lambino Groups
compliance with the minimum requirement for the percentage of voters supporting an initiative
petition under Section 2, Article XVII of the 1987 Constitution;[12] (4) the nature of the proposed
changes as revisions and not mere amendments as provided under Section 2, Article XVII of the
1987 Constitution; and (5) the Lambino Groups compliance with the requirement in Section 10(a)
of RA 6735 limiting initiative petitions to only one subject.
The Court heard the parties and intervenors in oral arguments on 26 September 2006. After
receiving the parties memoranda, the Court considered the case submitted for resolution.

41

The Issues
The petitions raise the following issues:
1. Whether the Lambino Groups initiative petition complies with Section 2, Article XVII of the
Constitution on amendments to the Constitution through a peoples initiative;
2. Whether this Court should revisit its ruling in Santiago declaring RA 6735 incomplete,
inadequate or wanting in essential terms and conditions to implement the initiative clause on
proposals to amend the Constitution; and
3. Whether the COMELEC committed grave abuse of discretion in denying due course to the
Lambino Groups petition.
The Ruling of the Court
There is no merit to the petition.
The Lambino Group miserably failed to comply with the basic requirements of the Constitution for
conducting a peoples initiative. Thus, there is even no need to revisit Santiago, as the present
petition warrants dismissal based alone on the Lambino Groups glaring failure to comply with the
basic requirements of the Constitution. For following the Courts ruling in Santiago, no grave abuse
of discretion is attributable to the Commision on Elections.
1. The Initiative Petition Does Not Comply with Section 2, Article XVII of the Constitution on
Direct Proposal by the People
Section 2, Article XVII of the Constitution is the governing constitutional provision that allows a
peoples initiative to propose amendments to the Constitution. This section states:
Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through
initiative upon a petition of at least twelve per centum of the total number of registered voters of
which every legislative district must be represented by at least three per centum of the registered
voters therein. x x x x (Emphasis supplied)
The deliberations of the Constitutional Commission vividly explain the meaning of an amendment
directly proposed by the people through initiative upon a petition, thus:
MR. RODRIGO: Let us look at the mechanics. Let us say some voters want to propose a
constitutional amendment. Is the draft of the proposed constitutional amendment ready to be
shown to the people when they are asked to sign?
MR. SUAREZ: That can be reasonably assumed, Madam President.
MR. RODRIGO: What does the sponsor mean? The draft is ready and shown to them before they
sign. Now, who prepares the draft?
MR. SUAREZ: The people themselves, Madam President.
MR. RODRIGO: No, because before they sign there is already a draft shown to them and they are
asked whether or not they want to propose this constitutional amendment.
MR. SUAREZ: As it is envisioned, any Filipino can prepare that proposal and pass it around for
signature.[13] (Emphasis supplied)
Clearly, the framers of the Constitution intended that the draft of the proposed constitutional
amendment should be ready and shown to the people before they sign such proposal. The
framers plainly stated that before they sign there is already a draft shown to them. The framers
also envisioned that the people should sign on the proposal itself because the proponents must
prepare that proposal and pass it around for signature.
The essence of amendments directly proposed by the people through initiative upon a petition is
that the entire proposal on its face is a petition by the people. This means two essential elements
must be present. First, the people must author and thus sign the entire proposal. No agent or
representative can sign on their behalf. Second, as an initiative upon a petition, the proposal must
be embodied in a petition.
These essential elements are present only if the full text of the proposed amendments is first
shown to the people who express their assent by signing such complete proposal in a petition.
Thus, an amendment is directly proposed by the people through initiative upon a petition only if
the people sign on a petition that contains the full text of the proposed amendments.
The full text of the proposed amendments may be either written on the face of the petition, or
attached to it. If so attached, the petition must state the fact of such attachment. This is an
assurance that every one of the several millions of signatories to the petition had seen the full text
of the proposed amendments before signing. Otherwise, it is physically impossible, given the time
constraint, to prove that every one of the millions of signatories had seen the full text of the
proposed amendments before signing.
The framers of the Constitution directly borrowed[14] the concept of peoples initiative from the
United States where various State constitutions incorporate an initiative clause. In almost all
States[15] which allow initiative petitions, the unbending requirement is that the people must first
see the full text of the proposed amendments before they sign to signify their assent, and that the
people must sign on an initiative petition that contains the full text of the proposed
amendments.[16]
The rationale for this requirement has been repeatedly explained in several decisions of various
courts. Thus, in Capezzuto v. State Ballot Commission, the Supreme Court of Massachusetts,
affirmed by the First Circuit Court of Appeals, declared:
[A] signature requirement would be meaningless if the person supplying the signature has not first
seen what it is that he or she is signing. Further, and more importantly, loose interpretation of the
subscription requirement can pose a significant potential for fraud. A person permitted to describe
orally the contents of an initiative petition to a potential signer, without the signer having actually
examined the petition, could easily mislead the signer by, for example, omitting, downplaying, or
even flatly misrepresenting, portions of the petition that might not be to the signer's liking. This
danger seems particularly acute when, in this case, the person giving the description is the drafter
of the petition, who obviously has a vested interest in seeing that it gets the requisite signatures to
qualify for the ballot.[17] (Boldfacing and underscoring supplied)
Likewise, in Kerr v. Bradbury,[18] the Court of Appeals of Oregon explained:
The purposes of full text provisions that apply to amendments by initiative commonly are
described in similar terms. x x x (The purpose of the full text requirement is to provide sufficient
information so that registered voters can intelligently evaluate whether to sign the initiative
petition.); x x x (publication of full text of amended constitutional provision required because it is
essential for the elector to have x x x the section which is proposed to be added to or subtracted
42
from. If he is to vote intelligently, he must have this knowledge. Otherwise in many instances he
would be required to vote in the dark.) (Emphasis supplied)
Moreover, an initiative signer must be informed at the time of signing of the nature and effect of
that which is proposed and failure to do so is deceptive and misleading which renders the initiative
void.[19]
Section 2, Article XVII of the Constitution does not expressly state that the petition must set forth
the full text of the proposed amendments. However, the deliberations of the framers of our
Constitution clearly show that the framers intended to adopt the relevant American jurisprudence
on peoples initiative. In particular, the deliberations of the Constitutional Commission explicitly
reveal that the framers intended that the people must first see the full text of the proposed
amendments before they sign, and that the people must sign on a petition containing such full text.
Indeed, Section 5(b) of Republic Act No. 6735, the Initiative and Referendum Act that the Lambino
Group invokes as valid, requires that the people must sign the petition x x x as signatories.
The proponents of the initiative secure the signatures from the people. The proponents secure the
signatures in their private capacity and not as public officials. The proponents are not disinterested
parties who can impartially explain the advantages and disadvantages of the proposed
amendments to the people. The proponents present favorably their proposal to the people and do
not present the arguments against their proposal. The proponents, or their supporters, often pay
those who gather the signatures.
Thus, there is no presumption that the proponents observed the constitutional requirements in
gathering the signatures. The proponents bear the burden of proving that they complied with the
constitutional requirements in gathering the signatures - that the petition contained, or
incorporated by attachment, the full text of the proposed amendments.
The Lambino Group did not attach to their present petition with this Court a copy of the paper that
the people signed as their initiative petition. The Lambino Group submitted to this Court a copy of
a signature sheet[20] after the oral arguments of 26 September 2006 when they filed their
Memorandum on 11 October 2006. The signature sheet with this Court during the oral arguments
was the signature sheet attached[21] to the opposition in intervention filed on 7 September 2006
by intervenor Atty. Pete Quirino-Quadra.
The signature sheet attached to Atty. Quadras opposition and the signature sheet attached to the
Lambino Groups Memorandum are the same. We reproduce below the signature sheet in full:
Province:
City/Municipality:
No. of
Verified
Signatures:
Legislative District:
Barangay:
PROPOSITION: DO YOU APPROVE OF THE AMENDMENT OF ARTICLES VI AND VII OF THE
1987 CONSTITUTION, CHANGING THE FORM OF GOVERNMENT FROM THE PRESENT
BICAMERAL-PRESIDENTIAL TO A UNICAMERAL-PARLIAMENTARY SYSTEM OF
GOVERNMENT, IN ORDER TO ACHIEVE GREATER EFFICIENCY, SIMPLICITY AND
ECONOMY IN GOVERNMENT; AND PROVIDING AN ARTICLE XVIII AS TRANSITORY
PROVISIONS FOR THE ORDERLY SHIFT FROM ONE SYSTEM TO ANOTHER?
I hereby APPROVE the proposed amendment to the 1987 Constitution. My signature herein which
shall form part of the petition for initiative to amend the Constitution signifies my support for the
filing thereof.
Precinct Number
Name
Last Name, First Name, M.I.
Address
Birthdate
MM/DD/YY
Signature
Verification
_________________ _________________ __________________
Barangay Official Witness Witness
(Print Name and Sign) (Print Name and Sign) (Print Name and Sign)
There is not a single word, phrase, or sentence of text of the Lambino Groups proposed changes
in the signature sheet. Neither does the signature sheet state that the text of the proposed
changes is attached to it. Petitioner Atty. Raul Lambino admitted this during the oral arguments
before this Court on 26 September 2006.
The signature sheet merely asks a question whether the people approve a shift from the
Bicameral-Presidential to the Unicameral-Parliamentary system of government. The signature
sheet does not show to the people the draft of the proposed changes before they are asked to
sign the signature sheet. Clearly, the signature sheet is not the petition that the framers of the
Constitution envisioned when they formulated the initiative clause in Section 2, Article XVII of the
Constitution.
Petitioner Atty. Lambino, however, explained that during the signature-gathering from February to
August 2006, the Lambino Group circulated, together with the signature sheets, printed copies of
the Lambino Groups draft petition which they later filed on 25 August 2006 with the COMELEC.
When asked if his group also circulated the draft of their amended petition filed on 30 August 2006
with the COMELEC, Atty. Lambino initially replied that they circulated both. However, Atty.
Lambino changed his answer and stated that what his group circulated was the draft of the 30
August 2006 amended petition, not the draft of the 25 August 2006 petition.
The Lambino Group would have this Court believe that they prepared the draft of the 30 August
2006 amended petition almost seven months earlier in February 2006 when they started gathering
signatures. Petitioner Erico B. Aumentados Verification/Certification of the 25 August 2006
petition, as well as of the 30 August 2006 amended petition, filed with the COMELEC, states as
follows:
I have caused the preparation of the foregoing [Amended] Petition in my personal capacity as a
registered voter, for and on behalf of the Union of Local Authorities of the Philippines, as shown by
ULAP Resolution No. 2006-02 hereto attached, and as representative of the mass of signatories
hereto. (Emphasis supplied)
The Lambino Group failed to attach a copy of ULAP Resolution No. 2006-02 to the present
petition. However, the Official Website of the Union of Local Authorities of the Philippines[22] has
posted the full text of Resolution No. 2006-02, which provides:
43

RESOLUTION NO. 2006-02
RESOLUTION SUPPORTING THE PROPOSALS OF THE PEOPLES CONSULTATIVE
COMMISSION ON CHARTER CHANGE THROUGH PEOPLES INITIATIVE AND REFERENDUM
AS A MODE OF AMENDING THE 1987 CONSTITUTION
WHEREAS, there is a need for the Union of Local Authorities of the Philippines (ULAP) to adopt a
common stand on the approach to support the proposals of the Peoples Consultative Commission
on Charter Change;
WHEREAS, ULAP maintains its unqualified support to the agenda of Her Excellency President
Gloria Macapagal-Arroyo for constitutional reforms as embodied in the ULAP Joint Declaration for
Constitutional Reforms signed by the members of the ULAP and the majority coalition of the
House of Representatives in Manila Hotel sometime in October 2005;
WHEREAS, the Peoples Consultative Commission on Charter Change created by Her Excellency
to recommend amendments to the 1987 Constitution has submitted its final report sometime in
December 2005;
WHEREAS, the ULAP is mindful of the current political developments in Congress which militates
against the use of the expeditious form of amending the 1987 Constitution;
WHEREAS, subject to the ratification of its institutional members and the failure of Congress to
amend the Constitution as a constituent assembly, ULAP has unanimously agreed to pursue the
constitutional reform agenda through Peoples Initiative and Referendum without prejudice to other
pragmatic means to pursue the same;
WHEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED, THAT ALL THE MEMBER-
LEAGUES OF THE UNION OF LOCAL AUTHORITIES OF THE PHILIPPINES (ULAP) SUPPORT
THE PORPOSALS (SIC) OF THE PEOPLES CONSULATATIVE (SIC) COMMISSION ON
CHARTER CHANGE THROUGH PEOPLES INITIATIVE AND REFERENDUM AS A MODE OF
AMENDING THE 1987 CONSTITUTION;
DONE, during the ULAP National Executive Board special meeting held on 14 January 2006 at
the Century Park Hotel, Manila.[23] (Underscoring supplied)
ULAP Resolution No. 2006-02 does not authorize petitioner Aumentado to prepare the 25 August
2006 petition, or the 30 August 2006 amended petition, filed with the COMELEC. ULAP
Resolution No. 2006-02 support(s) the porposals (sic) of the Consulatative (sic) Commission on
Charter Change through peoples initiative and referendum as a mode of amending the 1987
Constitution. The proposals of the Consultative Commission[24] are vastly different from the
proposed changes of the Lambino Group in the 25 August 2006 petition or 30 August 2006
amended petition filed with the COMELEC.
For example, the proposed revisions of the Consultative Commission affect all provisions of the
existing Constitution, from the Preamble to the Transitory Provisions. The proposed revisions have
profound impact on the Judiciary and the National Patrimony provisions of the existing
Constitution, provisions that the Lambino Groups proposed changes do not touch. The Lambino
Groups proposed changes purport to affect only Articles VI and VII of the existing Constitution,
including the introduction of new Transitory Provisions.
The ULAP adopted Resolution No. 2006-02 on 14 January 2006 or more than six months before
the filing of the 25 August 2006 petition or the 30 August 2006 amended petition with the
COMELEC. However, ULAP Resolution No. 2006-02 does not establish that ULAP or the Lambino
Group caused the circulation of the draft petition, together with the signature sheets, six months
before the filing with the COMELEC. On the contrary, ULAP Resolution No. 2006-02 casts grave
doubt on the Lambino Groups claim that they circulated the draft petition together with the
signature sheets. ULAP Resolution No. 2006-02 does not refer at all to the draft petition or to the
Lambino Groups proposed changes.
In their Manifestation explaining their amended petition before the COMELEC, the Lambino Group
declared:
After the Petition was filed, Petitioners belatedly realized that the proposed amendments alleged
in the Petition, more specifically, paragraph 3 of Section 4 and paragraph 2 of Section 5 of the
Transitory Provisions were inaccurately stated and failed to correctly reflect their proposed
amendments.
The Lambino Group did not allege that they were amending the petition because the amended
petition was what they had shown to the people during the February to August 2006 signature-
gathering. Instead, the Lambino Group alleged that the petition of 25 August 2006 inaccurately
stated and failed to correctly reflect their proposed amendments.
The Lambino Group never alleged in the 25 August 2006 petition or the 30 August 2006 amended
petition with the COMELEC that they circulated printed copies of the draft petition together with
the signature sheets. Likewise, the Lambino Group did not allege in their present petition before
this Court that they circulated printed copies of the draft petition together with the signature
sheets. The signature sheets do not also contain any indication that the draft petition is attached
to, or circulated with, the signature sheets.
It is only in their Consolidated Reply to the Opposition-in-Interventions that the Lambino Group
first claimed that they circulated the petition for initiative filed with the COMELEC, thus:
[T]here is persuasive authority to the effect that (w)here there is not (sic) fraud, a signer who did
not read the measure attached to a referendum petition cannot question his signature on the
ground that he did not understand the nature of the act. [82 C.J.S. S128h. Mo. State v. Sullivan,
224, S.W. 327, 283 Mo. 546.] Thus, the registered voters who signed the signature sheets
circulated together with the petition for initiative filed with the COMELEC below, are presumed to
have understood the proposition contained in the petition. (Emphasis supplied)
The Lambino Groups statement that they circulated to the people the petition for initiative filed
with the COMELEC appears an afterthought, made after the intervenors Integrated Bar of the
Philippines (Cebu City Chapter and Cebu Province Chapters) and Atty. Quadra had pointed out
that the signature sheets did not contain the text of the proposed changes. In their Consolidated
Reply, the Lambino Group alleged that they circulated the petition for initiative but failed to
mention the amended petition. This contradicts what Atty. Lambino finally stated during the oral
arguments that what they circulated was the draft of the amended petition of 30 August 2006.
The Lambino Group cites as authority Corpus Juris Secundum, stating that a signer who did not
read the measure attached to a referendum petition cannot question his signature on the ground
that he did not understand the nature of the act. The Lambino Group quotes an authority that cites
a proposed change attached to the petition signed by the people. Even the authority the Lambino
Group quotes requires that the proposed change must be attached to the petition. The same
authority the Lambino Group quotes requires the people to sign on the petition itself.
Indeed, it is basic in American jurisprudence that the proposed amendment must be incorporated
with, or attached to, the initiative petition signed by the people. In the present initiative, the
Lambino Groups proposed changes were not incorporated with, or attached to, the signature
sheets. The Lambino Groups citation of Corpus Juris Secundum pulls the rug from under their
feet.
It is extremely doubtful that the Lambino Group prepared, printed, circulated, from February to
August 2006 during the signature-gathering period, the draft of the petition or amended petition
they filed later with the COMELEC. The Lambino Group are less than candid with this Court in
their belated claim that they printed and circulated, together with the signature sheets, the petition
or amended petition. Nevertheless, even assuming the Lambino Group circulated the amended
petition during the signature-gathering period, the Lambino Group admitted circulating only very
limited copies of the petition.
During the oral arguments, Atty. Lambino expressly admitted that they printed only 100,000 copies
of the draft petition they filed more than six months later with the COMELEC. Atty. Lambino added
that he also asked other supporters to print additional copies of the draft petition but he could not
state with certainty how many additional copies the other supporters printed. Atty. Lambino could
44
only assure this Court of the printing of 100,000 copies because he himself caused the printing of
these 100,000 copies.
Likewise, in the Lambino Groups Memorandum filed on 11 October 2006, the Lambino Group
expressly admits that petitioner Lambino initiated the printing and reproduction of 100,000 copies
of the petition for initiative x x x.[25] This admission binds the Lambino Group and establishes
beyond any doubt that the Lambino Group failed to show the full text of the proposed changes to
the great majority of the people who signed the signature sheets.
Thus, of the 6.3 million signatories, only 100,000 signatories could have received with certainty
one copy each of the petition, assuming a 100 percent distribution with no wastage. If Atty.
Lambino and company attached one copy of the petition to each signature sheet, only 100,000
signature sheets could have circulated with the petition. Each signature sheet contains space for
ten signatures. Assuming ten people signed each of these 100,000 signature sheets with the
attached petition, the maximum number of people who saw the petition before they signed the
signature sheets would not exceed 1,000,000.
With only 100,000 printed copies of the petition, it would be physically impossible for all or a great
majority of the 6.3 million signatories to have seen the petition before they signed the signature
sheets. The inescapable conclusion is that the Lambino Group failed to show to the 6.3 million
signatories the full text of the proposed changes. If ever, not more than one million signatories saw
the petition before they signed the signature sheets.
In any event, the Lambino Groups signature sheets do not contain the full text of the proposed
changes, either on the face of the signature sheets, or as attachment with an indication in the
signature sheet of such attachment. Petitioner Atty. Lambino admitted this during the oral
arguments, and this admission binds the Lambino Group. This fact is also obvious from a mere
reading of the signature sheet. This omission is fatal. The failure to so include the text of the
proposed changes in the signature sheets renders the initiative void for non-compliance with the
constitutional requirement that the amendment must be directly proposed by the people through
initiative upon a petition. The signature sheet is not the petition envisioned in the initiative clause
of the Constitution.
For sure, the great majority of the 6.3 million people who signed the signature sheets did not see
the full text of the proposed changes before signing. They could not have known the nature and
effect of the proposed changes, among which are:
1. The term limits on members of the legislature will be lifted and thus members of
Parliament can be re-elected indefinitely;[26]
2. The interim Parliament can continue to function indefinitely until its members, who are
almost all the present members of Congress, decide to call for new parliamentary elections. Thus,
the members of the interim Parliament will determine the expiration of their own term of office; [27]
3. Within 45 days from the ratification of the proposed changes, the interim Parliament
shall convene to propose further amendments or revisions to the Constitution.[28]
These three specific amendments are not stated or even indicated in the Lambino Groups
signature sheets. The people who signed the signature sheets had no idea that they were
proposing these amendments. These three proposed changes are highly controversial. The
people could not have inferred or divined these proposed changes merely from a reading or
rereading of the contents of the signature sheets.
During the oral arguments, petitioner Atty. Lambino stated that he and his group assured the
people during the signature-gathering that the elections for the regular Parliament would be held
during the 2007 local elections if the proposed changes were ratified before the 2007 local
elections. However, the text of the proposed changes belies this.
The proposed Section 5(2), Article XVIII on Transitory Provisions, as found in the amended
petition, states:
Section 5(2). The interim Parliament shall provide for the election of the members of Parliament,
which shall be synchronized and held simultaneously with the election of all local government
officials. x x x x (Emphasis supplied)
Section 5(2) does not state that the elections for the regular Parliament will be held
simultaneously with the 2007 local elections. This section merely requires that the elections for the
regular Parliament shall be held simultaneously with the local elections without specifying the
year.
Petitioner Atty. Lambino, who claims to be the principal drafter of the proposed changes, could
have easily written the word next before the phrase election of all local government officials. This
would have insured that the elections for the regular Parliament would be held in the next local
elections following the ratification of the proposed changes. However, the absence of the word
next allows the interim Parliament to schedule the elections for the regular Parliament
simultaneously with any future local elections.
Thus, the members of the interim Parliament will decide the expiration of their own term of office.
This allows incumbent members of the House of Representatives to hold office beyond their
current three-year term of office, and possibly even beyond the five-year term of office of regular
members of the Parliament. Certainly, this is contrary to the representations of Atty. Lambino and
his group to the 6.3 million people who signed the signature sheets. Atty. Lambino and his group
deceived the 6.3 million signatories, and even the entire nation.
This lucidly shows the absolute need for the people to sign an initiative petition that contains the
full text of the proposed amendments to avoid fraud or misrepresentation. In the present initiative,
the 6.3 million signatories had to rely on the verbal representations of Atty. Lambino and his group
because the signature sheets did not contain the full text of the proposed changes. The result is a
grand deception on the 6.3 million signatories who were led to believe that the proposed changes
would require the holding in 2007 of elections for the regular Parliament simultaneously with the
local elections.
The Lambino Groups initiative springs another surprise on the people who signed the signature
sheets. The proposed changes mandate the interim Parliament to make further amendments or
revisions to the Constitution. The proposed Section 4(4), Article XVIII on Transitory Provisions,
provides:
Section 4(4). Within forty-five days from ratification of these amendments, the interim Parliament
shall convene to propose amendments to, or revisions of, this Constitution consistent with the
principles of local autonomy, decentralization and a strong bureaucracy. (Emphasis supplied)
During the oral arguments, Atty. Lambino stated that this provision is a surplusage and the Court
and the people should simply ignore it. Far from being a surplusage, this provision invalidates the
Lambino Groups initiative.
Section 4(4) is a subject matter totally unrelated to the shift from the Bicameral-Presidential to the
Unicameral-Parliamentary system. American jurisprudence on initiatives outlaws this as logrolling
- when the initiative petition incorporates an unrelated subject matter in the same petition. This
puts the people in a dilemma since they can answer only either yes or no to the entire proposition,
forcing them to sign a petition that effectively contains two propositions, one of which they may
find unacceptable.
Under American jurisprudence, the effect of logrolling is to nullify the entire proposition and not
only the unrelated subject matter. Thus, in Fine v. Firestone,[29] the Supreme Court of Florida
declared:
45
Combining multiple propositions into one proposal constitutes logrolling, which, if our judicial
responsibility is to mean anything, we cannot permit. The very broadness of the proposed
amendment amounts to logrolling because the electorate cannot know what it is voting on - the
amendments proponents simplistic explanation reveals only the tip of the iceberg. x x x x The
ballot must give the electorate fair notice of the proposed amendment being voted on. x x x x The
ballot language in the instant case fails to do that. The very broadness of the proposal makes it
impossible to state what it will affect and effect and violates the requirement that proposed
amendments embrace only one subject. (Emphasis supplied)
Logrolling confuses and even deceives the people. In Yute Air Alaska v. McAlpine,[30] the
Supreme Court of Alaska warned against inadvertence, stealth and fraud in logrolling:
Whenever a bill becomes law through the initiative process, all of the problems that the single-
subject rule was enacted to prevent are exacerbated. There is a greater danger of logrolling, or
the deliberate intermingling of issues to increase the likelihood of an initiatives passage, and there
is a greater opportunity for inadvertence, stealth and fraud in the enactment-by-initiative process.
The drafters of an initiative operate independently of any structured or supervised process. They
often emphasize particular provisions of their proposition, while remaining silent on other (more
complex or less appealing) provisions, when communicating to the public. x x x Indeed, initiative
promoters typically use simplistic advertising to present their initiative to potential petition-signers
and eventual voters. Many voters will never read the full text of the initiative before the election.
More importantly, there is no process for amending or splitting the several provisions in an
initiative proposal. These difficulties clearly distinguish the initiative from the legislative process.
(Emphasis supplied)
Thus, the present initiative appears merely a preliminary step for further amendments or revisions
to be undertaken by the interim Parliament as a constituent assembly. The people who signed the
signature sheets could not have known that their signatures would be used to propose an
amendment mandating the interim Parliament to propose further amendments or revisions to the
Constitution.
Apparently, the Lambino Group inserted the proposed Section 4(4) to compel the interim
Parliament to amend or revise again the Constitution within 45 days from ratification of the
proposed changes, or before the May 2007 elections. In the absence of the proposed Section
4(4), the interim Parliament has the discretion whether to amend or revise again the Constitution.
With the proposed Section 4(4), the initiative proponents want the interim Parliament mandated to
immediately amend or revise again the Constitution.
However, the signature sheets do not explain the reason for this rush in amending or revising
again so soon the Constitution. The signature sheets do not also explain what specific
amendments or revisions the initiative proponents want the interim Parliament to make, and why
there is a need for such further amendments or revisions. The people are again left in the dark to
fathom the nature and effect of the proposed changes. Certainly, such an initiative is not directly
proposed by the people because the people do not even know the nature and effect of the
proposed changes.
There is another intriguing provision inserted in the Lambino Groups amended petition of 30
August 2006. The proposed Section 4(3) of the Transitory Provisions states:
Section 4(3). Senators whose term of office ends in 2010 shall be members of Parliament until
noon of the thirtieth day of June 2010.
After 30 June 2010, not one of the present Senators will remain as member of Parliament if the
interim Parliament does not schedule elections for the regular Parliament by 30 June 2010.
However, there is no counterpart provision for the present members of the House of
Representatives even if their term of office will all end on 30 June 2007, three years earlier than
that of half of the present Senators. Thus, all the present members of the House will remain
members of the interim Parliament after 30 June 2010.
The term of the incumbent President ends on 30 June 2010. Thereafter, the Prime Minister
exercises all the powers of the President. If the interim Parliament does not schedule elections for
the regular Parliament by 30 June 2010, the Prime Minister will come only from the present
members of the House of Representatives to the exclusion of the present Senators.
The signature sheets do not explain this discrimination against the Senators. The 6.3 million
people who signed the signature sheets could not have known that their signatures would be used
to discriminate against the Senators. They could not have known that their signatures would be
used to limit, after 30 June 2010, the interim Parliaments choice of Prime Minister only to
members of the existing House of Representatives.
An initiative that gathers signatures from the people without first showing to the people the full text
of the proposed amendments is most likely a deception, and can operate as a gigantic fraud on
the people. That is why the Constitution requires that an initiative must be directly proposed by the
people x x x in a petition - meaning that the people must sign on a petition that contains the full
text of the proposed amendments. On so vital an issue as amending the nations fundamental law,
the writing of the text of the proposed amendments cannot be hidden from the people under a
general or special power of attorney to unnamed, faceless, and unelected individuals.
The Constitution entrusts to the people the power to directly propose amendments to the
Constitution. This Court trusts the wisdom of the people even if the members of this Court do not
personally know the people who sign the petition. However, this trust emanates from a
fundamental assumption: the full text of the proposed amendment is first shown to the people
before they sign the petition, not after they have signed the petition.
In short, the Lambino Groups initiative is void and unconstitutional because it dismally fails to
comply with the requirement of Section 2, Article XVII of the Constitution that the initiative must be
directly proposed by the people through initiative upon a petition.
2. The Initiative Violates Section 2, Article XVII of the Constitution Disallowing Revision through
Initiatives
A peoples initiative to change the Constitution applies only to an amendment of the Constitution
and not to its revision. In contrast, Congress or a constitutional convention can propose both
amendments and revisions to the Constitution. Article XVII of the Constitution provides:
ARTICLE XVII AMENDMENTS OR REVISIONS
Sec. 1. Any amendment to, or revision of, this Constitution may be proposed by:
(1) The Congress, upon a vote of three-fourths of all its Members, or
(2) A constitutional convention.
Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through
initiative x x x. (Emphasis supplied)
Article XVII of the Constitution speaks of three modes of amending the Constitution. The first
mode is through Congress upon three-fourths vote of all its Members. The second mode is
through a constitutional convention. The third mode is through a peoples initiative.
Section 1 of Article XVII, referring to the first and second modes, applies to [A]ny amendment to,
or revision of, this Constitution. In contrast, Section 2 of Article XVII, referring to the third mode,
applies only to [A]mendments to this Constitution. This distinction was intentional as shown by the
following deliberations of the Constitutional Commission:
MR. SUAREZ: Thank you, Madam President.
46
May we respectfully call the attention of the Members of the Commission that pursuant to the
mandate given to us last night, we submitted this afternoon a complete Committee Report No. 7
which embodies the proposed provision governing the matter of initiative. This is now covered by
Section 2 of the complete committee report. With the permission of the Members, may I quote
Section 2:
The people may, after five years from the date of the last plebiscite held, directly propose
amendments to this Constitution thru initiative upon petition of at least ten percent of the
registered voters.
This completes the blanks appearing in the original Committee Report No. 7. This proposal was
suggested on the theory that this matter of initiative, which came about because of the
extraordinary developments this year, has to be separated from the traditional modes of amending
the Constitution as embodied in Section 1. The committee members felt that this system of
initiative should be limited to amendments to the Constitution and should not extend to the revision
of the entire Constitution, so we removed it from the operation of Section 1 of the proposed Article
on Amendment or Revision. x x x x
xxxx
MS. AQUINO: [I] am seriously bothered by providing this process of initiative as a separate
section in the Article on Amendment. Would the sponsor be amenable to accepting an
amendment in terms of realigning Section 2 as another subparagraph (c) of Section 1, instead of
setting it up as another separate section as if it were a self-executing provision?
MR. SUAREZ: We would be amenable except that, as we clarified a while ago, this process of
initiative is limited to the matter of amendment and should not expand into a revision which
contemplates a total overhaul of the Constitution. That was the sense that was conveyed by the
Committee.
MS. AQUINO: In other words, the Committee was attempting to distinguish the coverage of modes
(a) and (b) in Section 1 to include the process of revision; whereas, the process of initiation to
amend, which is given to the public, would only apply to amendments?
MR. SUAREZ: That is right. Those were the terms envisioned in the Committee.
MS. AQUINO: I thank the sponsor; and thank you, Madam President.
xxxx
MR. MAAMBONG: My first question: Commissioner Davide's proposed amendment on line 1
refers to "amendments." Does it not cover the word "revision" as defined by Commissioner Padilla
when he made the distinction between the words "amendments" and "revision"?
MR. DAVIDE: No, it does not, because "amendments" and "revision" should be covered by
Section 1. So insofar as initiative is concerned, it can only relate to "amendments" not "revision."
MR. MAAMBONG: Thank you.[31] (Emphasis supplied)
There can be no mistake about it. The framers of the Constitution intended, and wrote, a clear
distinction between amendment and revision of the Constitution. The framers intended, and wrote,
that only Congress or a constitutional convention may propose revisions to the Constitution. The
framers intended, and wrote, that a peoples initiative may propose only amendments to the
Constitution. Where the intent and language of the Constitution clearly withhold from the people
the power to propose revisions to the Constitution, the people cannot propose revisions even as
they are empowered to propose amendments.
This has been the consistent ruling of state supreme courts in the United States. Thus, in
McFadden v. Jordan,[32] the Supreme Court of California ruled:
The initiative power reserved by the people by amendment to the Constitution x x x applies only to
the proposing and the adopting or rejecting of laws and amendments to the Constitution and does
not purport to extend to a constitutional revision. x x x x It is thus clear that a revision of the
Constitution may be accomplished only through ratification by the people of a revised constitution
proposed by a convention called for that purpose as outlined hereinabove. Consequently if the
scope of the proposed initiative measure (hereinafter termed the measure) now before us is so
broad that if such measure became law a substantial revision of our present state Constitution
would be effected, then the measure may not properly be submitted to the electorate until and
unless it is first agreed upon by a constitutional convention, and the writ sought by petitioner
should issue. x x x x (Emphasis supplied)
Likewise, the Supreme Court of Oregon ruled in Holmes v. Appling:[33]
It is well established that when a constitution specifies the manner in which it may be amended or
revised, it can be altered by those who favor amendments, revision, or other change only through
the use of one of the specified means. The constitution itself recognizes that there is a difference
between an amendment and a revision; and it is obvious from an examination of the measure here
in question that it is not an amendment as that term is generally understood and as it is used in
Article IV, Section 1. The document appears to be based in large part on the revision of the
constitution drafted by the Commission for Constitutional Revision authorized by the 1961
Legislative Assembly, x x x and submitted to the 1963 Legislative Assembly. It failed to receive in
the Assembly the two-third's majority vote of both houses required by Article XVII, Section 2, and
hence failed of adoption, x x x.
While differing from that document in material respects, the measure sponsored by the plaintiffs is,
nevertheless, a thorough overhauling of the present constitution x x x.
To call it an amendment is a misnomer.
Whether it be a revision or a new constitution, it is not such a measure as can be submitted to the
people through the initiative. If a revision, it is subject to the requirements of Article XVII, Section
2(1); if a new constitution, it can only be proposed at a convention called in the manner provided in
Article XVII, Section 1. x x x x
Similarly, in this jurisdiction there can be no dispute that a peoples initiative can only propose
amendments to the Constitution since the Constitution itself limits initiatives to amendments.
There can be no deviation from the constitutionally prescribed modes of revising the Constitution.
A popular clamor, even one backed by 6.3 million signatures, cannot justify a deviation from the
specific modes prescribed in the Constitution itself.
As the Supreme Court of Oklahoma ruled in In re Initiative Petition No. 364:[34]
It is a fundamental principle that a constitution can only be revised or amended in the manner
prescribed by the instrument itself, and that any attempt to revise a constitution in a manner other
than the one provided in the instrument is almost invariably treated as extra-constitutional and
revolutionary. x x x x While it is universally conceded that the people are sovereign and that they
have power to adopt a constitution and to change their own work at will, they must, in doing so, act
in an orderly manner and according to the settled principles of constitutional law. And where the
people, in adopting a constitution, have prescribed the method by which the people may alter or
amend it, an attempt to change the fundamental law in violation of the self-imposed restrictions, is
unconstitutional. x x x x (Emphasis supplied)
This Court, whose members are sworn to defend and protect the Constitution, cannot shirk from
its solemn oath and duty to insure compliance with the clear command of the Constitution ― that a
peoples initiative may only amend, never revise, the Constitution.
47
The question is, does the Lambino Groups initiative constitute an amendment or revision of the
Constitution? If the Lambino Groups initiative constitutes a revision, then the present petition
should be dismissed for being outside the scope of Section 2, Article XVII of the Constitution.
Courts have long recognized the distinction between an amendment and a revision of a
constitution. One of the earliest cases that recognized the distinction described the fundamental
difference in this manner:
[T]he very term constitution implies an instrument of a permanent and abiding nature, and the
provisions contained therein for its revision indicate the will of the people that the underlying
principles upon which it rests, as well as the substantial entirety of the instrument, shall be of a like
permanent and abiding nature. On the other hand, the significance of the term amendment implies
such an addition or change within the lines of the original instrument as will effect an improvement,
or better carry out the purpose for which it was framed.[35] (Emphasis supplied)
Revision broadly implies a change that alters a basic principle in the constitution, like altering the
principle of separation of powers or the system of checks-and-balances. There is also revision if
the change alters the substantial entirety of the constitution, as when the change affects
substantial provisions of the constitution. On the other hand, amendment broadly refers to a
change that adds, reduces, or deletes without altering the basic principle involved. Revision
generally affects several provisions of the constitution, while amendment generally affects only the
specific provision being amended.
In California where the initiative clause allows amendments but not revisions to the constitution
just like in our Constitution, courts have developed a two-part test: the quantitative test and the
qualitative test. The quantitative test asks whether the proposed change is so extensive in its
provisions as to change directly the substantial entirety of the constitution by the deletion or
alteration of numerous existing provisions.[36] The court examines only the number of provisions
affected and does not consider the degree of the change.
The qualitative test inquires into the qualitative effects of the proposed change in the constitution.
The main inquiry is whether the change will accomplish such far reaching changes in the nature of
our basic governmental plan as to amount to a revision.[37] Whether there is an alteration in the
structure of government is a proper subject of inquiry. Thus, a change in the nature of [the] basic
governmental plan includes change in its fundamental framework or the fundamental powers of its
Branches.[38] A change in the nature of the basic governmental plan also includes changes that
jeopardize the traditional form of government and the system of check and balances.[39]
Under both the quantitative and qualitative tests, the Lambino Groups initiative is a revision and
not merely an amendment. Quantitatively, the Lambino Groups proposed changes overhaul two
articles - Article VI on the Legislature and Article VII on the Executive - affecting a total of 105
provisions in the entire Constitution.[40] Qualitatively, the proposed changes alter substantially the
basic plan of government, from presidential to parliamentary, and from a bicameral to a
unicameral legislature.
A change in the structure of government is a revision of the Constitution, as when the three great
co-equal branches of government in the present Constitution are reduced into two. This alters the
separation of powers in the Constitution. A shift from the present Bicameral-Presidential system to
a Unicameral-Parliamentary system is a revision of the Constitution. Merging the legislative and
executive branches is a radical change in the structure of government.
The abolition alone of the Office of the President as the locus of Executive Power alters the
separation of powers and thus constitutes a revision of the Constitution. Likewise, the abolition
alone of one chamber of Congress alters the system of checks-and-balances within the legislature
and constitutes a revision of the Constitution.
By any legal test and under any jurisdiction, a shift from a Bicameral-Presidential to a Unicameral-
Parliamentary system, involving the abolition of the Office of the President and the abolition of one
chamber of Congress, is beyond doubt a revision, not a mere amendment. On the face alone of
the Lambino Groups proposed changes, it is readily apparent that the changes will radically alter
the framework of government as set forth in the Constitution. Father Joaquin Bernas, S.J., a
leading member of the Constitutional Commission, writes:
An amendment envisages an alteration of one or a few specific and separable provisions. The
guiding original intention of an amendment is to improve specific parts or to add new provisions
deemed necessary to meet new conditions or to suppress specific portions that may have become
obsolete or that are judged to be dangerous. In revision, however, the guiding original intention
and plan contemplates a re-examination of the entire document, or of provisions of the document
which have over-all implications for the entire document, to determine how and to what extent they
should be altered. Thus, for instance a switch from the presidential system to a parliamentary
system would be a revision because of its over-all impact on the entire constitutional structure. So
would a switch from a bicameral system to a unicameral system be because of its effect on other
important provisions of the Constitution.[41] (Emphasis supplied)
In Adams v. Gunter,[42] an initiative petition proposed the amendment of the Florida State
constitution to shift from a bicameral to a unicameral legislature. The issue turned on whether the
initiative was defective and unauthorized where [the] proposed amendment would x x x affect
several other provisions of [the] Constitution. The Supreme Court of Florida, striking down the
initiative as outside the scope of the initiative clause, ruled as follows:
The proposal here to amend Section 1 of Article III of the 1968 Constitution to provide for a
Unicameral Legislature affects not only many other provisions of the Constitution but provides for
a change in the form of the legislative branch of government, which has been in existence in the
United States Congress and in all of the states of the nation, except one, since the earliest days. It
would be difficult to visualize a more revolutionary change. The concept of a House and a Senate
is basic in the American form of government. It would not only radically change the whole pattern
of government in this state and tear apart the whole fabric of the Constitution, but would even
affect the physical facilities necessary to carry on government.
xxxx
We conclude with the observation that if such proposed amendment were adopted by the people
at the General Election and if the Legislature at its next session should fail to submit further
amendments to revise and clarify the numerous inconsistencies and conflicts which would result,
or if after submission of appropriate amendments the people should refuse to adopt them, simple
chaos would prevail in the government of this State. The same result would obtain from an
amendment, for instance, of Section 1 of Article V, to provide for only a Supreme Court and Circuit
Courts-and there could be other examples too numerous to detail. These examples point
unerringly to the answer.
The purpose of the long and arduous work of the hundreds of men and women and many
sessions of the Legislature in bringing about the Constitution of 1968 was to eliminate
inconsistencies and conflicts and to give the State a workable, accordant, homogenous and up-to-
date document. All of this could disappear very quickly if we were to hold that it could be amended
in the manner proposed in the initiative petition here.[43] (Emphasis supplied)
The rationale of the Adams decision applies with greater force to the present petition. The
Lambino Groups initiative not only seeks a shift from a bicameral to a unicameral legislature, it
also seeks to merge the executive and legislative departments. The initiative in Adams did not
even touch the executive department.
In Adams, the Supreme Court of Florida enumerated 18 sections of the Florida Constitution that
would be affected by the shift from a bicameral to a unicameral legislature. In the Lambino Groups
present initiative, no less than 105 provisions of the Constitution would be affected based on the
count of Associate Justice Romeo J. Callejo, Sr.[44] There is no doubt that the Lambino Groups
present initiative seeks far more radical changes in the structure of government than the initiative
in Adams.
48
The Lambino Group theorizes that the difference between amendment and revision is only one of
procedure, not of substance. The Lambino Group posits that when a deliberative body drafts and
proposes changes to the Constitution, substantive changes are called revisions because members
of the deliberative body work full-time on the changes. However, the same substantive changes,
when proposed through an initiative, are called amendments because the changes are made by
ordinary people who do not make an occupation, profession, or vocation out of such endeavor.
Thus, the Lambino Group makes the following exposition of their theory in their Memorandum:
99. With this distinction in mind, we note that the constitutional provisions expressly provide for
both amendment and revision when it speaks of legislators and constitutional delegates, while the
same provisions expressly provide only for amendment when it speaks of the people. It would
seem that the apparent distinction is based on the actual experience of the people, that on one
hand the common people in general are not expected to work full-time on the matter of correcting
the constitution because that is not their occupation, profession or vocation; while on the other
hand, the legislators and constitutional convention delegates are expected to work full-time on the
same matter because that is their occupation, profession or vocation. Thus, the difference
between the words revision and amendment pertain only to the process or procedure of coming
up with the corrections, for purposes of interpreting the constitutional provisions.
100. Stated otherwise, the difference between amendment and revision cannot reasonably be in
the substance or extent of the correction. x x x x (Underlining in the original; boldfacing supplied)
The Lambino Group in effect argues that if Congress or a constitutional convention had drafted the
same proposed changes that the Lambino Group wrote in the present initiative, the changes
would constitute a revision of the Constitution. Thus, the Lambino Group concedes that the
proposed changes in the present initiative constitute a revision if Congress or a constitutional
convention had drafted the changes. However, since the Lambino Group as private individuals
drafted the proposed changes, the changes are merely amendments to the Constitution. The
Lambino Group trivializes the serious matter of changing the fundamental law of the land.
The express intent of the framers and the plain language of the Constitution contradict the
Lambino Groups theory. Where the intent of the framers and the language of the Constitution are
clear and plainly stated, courts do not deviate from such categorical intent and language.[45] Any
theory espousing a construction contrary to such intent and language deserves scant
consideration. More so, if such theory wreaks havoc by creating inconsistencies in the form of
government established in the Constitution. Such a theory, devoid of any jurisprudential mooring
and inviting inconsistencies in the Constitution, only exposes the flimsiness of the Lambino
Groups position. Any theory advocating that a proposed change involving a radical structural
change in government does not constitute a revision justly deserves rejection.
The Lambino Group simply recycles a theory that initiative proponents in American jurisdictions
have attempted to advance without any success. In Lowe v. Keisling,[46] the Supreme Court of
Oregon rejected this theory, thus:
Mabon argues that Article XVII, section 2, does not apply to changes to the constitution proposed
by initiative. His theory is that Article XVII, section 2 merely provides a procedure by which the
legislature can propose a revision of the constitution, but it does not affect proposed revisions
initiated by the people.
Plaintiffs argue that the proposed ballot measure constitutes a wholesale change to the
constitution that cannot be enacted through the initiative process. They assert that the distinction
between amendment and revision is determined by reviewing the scope and subject matter of the
proposed enactment, and that revisions are not limited to a formal overhauling of the constitution.
They argue that this ballot measure proposes far reaching changes outside the lines of the original
instrument, including profound impacts on existing fundamental rights and radical restructuring of
the government's relationship with a defined group of citizens. Plaintiffs assert that, because the
proposed ballot measure will refashion the most basic principles of Oregon constitutional law, the
trial court correctly held that it violated Article XVII, section 2, and cannot appear on the ballot
without the prior approval of the legislature.
We first address Mabon's argument that Article XVII, section 2(1), does not prohibit revisions
instituted by initiative. In Holmes v. Appling, x x x, the Supreme Court concluded that a revision of
the constitution may not be accomplished by initiative, because of the provisions of Article XVII,
section 2. After reviewing Article XVII, section1, relating to proposed amendments, the court said:
From the foregoing it appears that Article IV, Section 1, authorizes the use of the initiative as a
means of amending the Oregon Constitution, but it contains no similar sanction for its use as a
means of revising the constitution. x x x x
It then reviewed Article XVII, section 2, relating to revisions, and said: It is the only section of the
constitution which provides the means for constitutional revision and it excludes the idea that an
individual, through the initiative, may place such a measure before the electorate. x x x x
Accordingly, we reject Mabon's argument that Article XVII, section 2, does not apply to
constitutional revisions proposed by initiative. (Emphasis supplied)
Similarly, this Court must reject the Lambino Groups theory which negates the express intent of
the framers and the plain language of the Constitution.
We can visualize amendments and revisions as a spectrum, at one end green for amendments
and at the other end red for revisions. Towards the middle of the spectrum, colors fuse and
difficulties arise in determining whether there is an amendment or revision. The present initiative is
indisputably located at the far end of the red spectrum where revision begins. The present
initiative seeks a radical overhaul of the existing separation of powers among the three co-equal
departments of government, requiring far-reaching amendments in several sections and articles of
the Constitution.
Where the proposed change applies only to a specific provision of the Constitution without
affecting any other section or article, the change may generally be considered an amendment and
not a revision. For example, a change reducing the voting age from 18 years to 15 years[47] is an
amendment and not a revision. Similarly, a change reducing Filipino ownership of mass media
companies from 100 percent to 60 percent is an amendment and not a revision.[48] Also, a
change requiring a college degree as an additional qualification for election to the Presidency is an
amendment and not a revision.[49]
The changes in these examples do not entail any modification of sections or articles of the
Constitution other than the specific provision being amended. These changes do not also affect
the structure of government or the system of checks-and-balances among or within the three
branches. These three examples are located at the far green end of the spectrum, opposite the far
red end where the revision sought by the present petition is located.
However, there can be no fixed rule on whether a change is an amendment or a revision. A
change in a single word of one sentence of the Constitution may be a revision and not an
amendment. For example, the substitution of the word republican with monarchic or theocratic in
Section 1, Article II[50] of the Constitution radically overhauls the entire structure of government
and the fundamental ideological basis of the Constitution. Thus, each specific change will have to
be examined case-by-case, depending on how it affects other provisions, as well as how it affects
the structure of government, the carefully crafted system of checks-and-balances, and the
underlying ideological basis of the existing Constitution.
Since a revision of a constitution affects basic principles, or several provisions of a constitution, a
deliberative body with recorded proceedings is best suited to undertake a revision. A revision
requires harmonizing not only several provisions, but also the altered principles with those that
remain unaltered. Thus, constitutions normally authorize deliberative bodies like constituent
assemblies or constitutional conventions to undertake revisions. On the other hand, constitutions
allow peoples initiatives, which do not have fixed and identifiable deliberative bodies or recorded
proceedings, to undertake only amendments and not revisions.
49

In the present initiative, the Lambino Groups proposed Section 2 of the Transitory Provisions
states:
Section 2. Upon the expiration of the term of the incumbent President and Vice President, with the
exception of Sections 1, 2, 3, 4, 5, 6 and 7 of Article VI of the 1987 Constitution which shall hereby
be amended and Sections 18 and 24 which shall be deleted, all other Sections of Article VI are
hereby retained and renumbered sequentially as Section 2, ad seriatim up to 26, unless they are
inconsistent with the Parliamentary system of government, in which case, they shall be amended
to conform with a unicameral parliamentary form of government; x x x x (Emphasis supplied)
The basic rule in statutory construction is that if a later law is irreconcilably inconsistent with a prior
law, the later law prevails. This rule also applies to construction of constitutions. However, the
Lambino Groups draft of Section 2 of the Transitory Provisions turns on its head this rule of
construction by stating that in case of such irreconcilable inconsistency, the earlier provision shall
be amended to conform with a unicameral parliamentary form of government. The effect is to
freeze the two irreconcilable provisions until the earlier one shall be amended, which requires a
future separate constitutional amendment.
Realizing the absurdity of the need for such an amendment, petitioner Atty. Lambino readily
conceded during the oral arguments that the requirement of a future amendment is a surplusage.
In short, Atty. Lambino wants to reinstate the rule of statutory construction so that the later
provision automatically prevails in case of irreconcilable inconsistency. However, it is not as
simple as that.
The irreconcilable inconsistency envisioned in the proposed Section 2 of the Transitory Provisions
is not between a provision in Article VI of the 1987 Constitution and a provision in the proposed
changes. The inconsistency is between a provision in Article VI of the 1987 Constitution and the
Parliamentary system of government, and the inconsistency shall be resolved in favor of a
unicameral parliamentary form of government.
Now, what unicameral parliamentary form of government do the Lambino Groups proposed
changes refer to ― the Bangladeshi, Singaporean, Israeli, or New Zealand models, which are
among the few countries with unicameral parliaments? The proposed changes could not possibly
refer to the traditional and well-known parliamentary forms of government ― the British, French,
Spanish, German, Italian, Canadian, Australian, or Malaysian models, which have all bicameral
parliaments. Did the people who signed the signature sheets realize that they were adopting the
Bangladeshi, Singaporean, Israeli, or New Zealand parliamentary form of government?
This drives home the point that the peoples initiative is not meant for revisions of the Constitution
but only for amendments. A shift from the present Bicameral-Presidential to a Unicameral-
Parliamentary system requires harmonizing several provisions in many articles of the Constitution.
Revision of the Constitution through a peoples initiative will only result in gross absurdities in the
Constitution.
In sum, there is no doubt whatsoever that the Lambino Groups initiative is a revision and not an
amendment. Thus, the present initiative is void and unconstitutional because it violates Section 2,
Article XVII of the Constitution limiting the scope of a peoples initiative to [A]mendments to this
Constitution.
3. A Revisit of Santiago v. COMELEC is Not Necessary
The present petition warrants dismissal for failure to comply with the basic requirements of Section
2, Article XVII of the Constitution on the conduct and scope of a peoples initiative to amend the
Constitution. There is no need to revisit this Courts ruling in Santiago declaring RA 6735
incomplete, inadequate or wanting in essential terms and conditions to cover the system of
initiative to amend the Constitution. An affirmation or reversal of Santiago will not change the
outcome of the present petition. Thus, this Court must decline to revisit Santiago which effectively
ruled that RA 6735 does not comply with the requirements of the Constitution to implement the
initiative clause on amendments to the Constitution.
This Court must avoid revisiting a ruling involving the constitutionality of a statute if the case
before the Court can be resolved on some other grounds. Such avoidance is a logical
consequence of the well-settled doctrine that courts will not pass upon the constitutionality of a
statute if the case can be resolved on some other grounds.[51]
Nevertheless, even assuming that RA 6735 is valid to implement the constitutional provision on
initiatives to amend the Constitution, this will not change the result here because the present
petition violates Section 2, Article XVII of the Constitution. To be a valid initiative, the present
initiative must first comply with Section 2, Article XVII of the Constitution even before complying
with RA 6735.
Even then, the present initiative violates Section 5(b) of RA 6735 which requires that the petition
for an initiative on the 1987 Constitution must have at least twelve per centum (12%) of the total
number of registered voters as signatories. Section 5(b) of RA 6735 requires that the people must
sign the petition x x x as signatories.
The 6.3 million signatories did not sign the petition of 25 August 2006 or the amended petition of
30 August 2006 filed with the COMELEC. Only Atty. Lambino, Atty. Demosthenes B. Donato, and
Atty. Alberto C. Agra signed the petition and amended petition as counsels for Raul L. Lambino
and Erico B. Aumentado, Petitioners. In the COMELEC, the Lambino Group, claiming to act
together with the 6.3 million signatories, merely attached the signature sheets to the petition and
amended petition. Thus, the petition and amended petition filed with the COMELEC did not even
comply with the basic requirement of RA 6735 that the Lambino Group claims as valid.
The Lambino Groups logrolling initiative also violates Section 10(a) of RA 6735 stating, No petition
embracing more than one (1) subject shall be submitted to the electorate; x x x. The proposed
Section 4(4) of the Transitory Provisions, mandating the interim Parliament to propose further
amendments or revisions to the Constitution, is a subject matter totally unrelated to the shift in the
form of government. Since the present initiative embraces more than one subject matter, RA 6735
prohibits submission of the initiative petition to the electorate. Thus, even if RA 6735 is valid, the
Lambino Groups initiative will still fail.
4. The COMELEC Did Not Commit Grave Abuse of Discretion in Dismissing the Lambino
Groups Initiative
In dismissing the Lambino Groups initiative petition, the COMELEC en banc merely followed this
Courts ruling in Santiago and Peoples Initiative for Reform, Modernization and Action (PIRMA) v.
COMELEC.[52] For following this Courts ruling, no grave abuse of discretion is attributable to the
COMELEC. On this ground alone, the present petition warrants outright dismissal. Thus, this
Court should reiterate its unanimous ruling in PIRMA:
The Court ruled, first, by a unanimous vote, that no grave abuse of discretion could be attributed
to the public respondent COMELEC in dismissing the petition filed by PIRMA therein, it appearing
that it only complied with the dispositions in the Decisions of this Court in G.R. No. 127325,
promulgated on March 19, 1997, and its Resolution of June 10, 1997.
5. Conclusion
The Constitution, as the fundamental law of the land, deserves the utmost respect and obedience
of all the citizens of this nation. No one can trivialize the Constitution by cavalierly amending or
revising it in blatant violation of the clearly specified modes of amendment and revision laid down
in the Constitution itself.
50
To allow such change in the fundamental law is to set adrift the Constitution in unchartered Associate Justice
waters, to be tossed and turned by every dominant political group of the day. If this Court allows MA. ALICIA AUSTRIA-MARTINEZ
today a cavalier change in the Constitution outside the constitutionally prescribed modes, Associate Justice
tomorrow the new dominant political group that comes will demand its own set of changes in the RENATO C. CORONA
same cavalier and unconstitutional fashion. A revolving-door constitution does not augur well for Associate Justice
the rule of law in this country.
CONCHITA CARPIO MORALES
An overwhelming majority − 16,622,111 voters comprising 76.3 percent of the total votes cast[53] Associate Justice
− approved our Constitution in a national plebiscite held on 11 February 1987. That approval is the
unmistakable voice of the people, the full expression of the peoples sovereign will. That approval ROMEO J. CALLEJO, SR.
included the prescribed modes for amending or revising the Constitution. Associate Justice

No amount of signatures, not even the 6,327,952 million signatures gathered by the Lambino ADOLFO S. AZCUNA
Group, can change our Constitution contrary to the specific modes that the people, in their Associate Justice
sovereign capacity, prescribed when they ratified the Constitution. The alternative is an extra-
constitutional change, which means subverting the peoples sovereign will and discarding the DANTE O. TINGA
Constitution. This is one act the Court cannot and should never do. As the ultimate guardian of the Associate Justice
Constitution, this Court is sworn to perform its solemn duty to defend and protect the Constitution,
which embodies the real sovereign will of the people. MINITA V. CHICO-NAZARIO CANCIO C. GARCIA
Associate Justice Associate Justice
Incantations of peoples voice, peoples sovereign will, or let the people decide cannot override the
specific modes of changing the Constitution as prescribed in the Constitution itself. Otherwise, the PRESBITERO J. VELASCO, JR.
Constitution ― the peoples fundamental covenant that provides enduring stability to our society ― Associate Justice
becomes easily susceptible to manipulative changes by political groups gathering signatures
through false promises. Then, the Constitution ceases to be the bedrock of the nations stability.
CERTIFICATION
The Lambino Group claims that their initiative is the peoples voice. However, the Lambino Group
unabashedly states in ULAP Resolution No. 2006-02, in the verification of their petition with the Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
COMELEC, that ULAP maintains its unqualified support to the agenda of Her Excellency Decision were reached in consultation before the case was assigned to the writer of the opinion of
President Gloria Macapagal-Arroyo for constitutional reforms. The Lambino Group thus admits the Court.
that their peoples initiative is an unqualified support to the agenda of the incumbent President to
change the Constitution. This forewarns the Court to be wary of incantations of peoples voice or ARTEMIO V. PANGANIBAN
sovereign will in the present initiative. Chief Justice

This Court cannot betray its primordial duty to defend and protect the Constitution. The [1] Including Sigaw ng Bayan and Union of Local Authorities of the Philippines (ULAP).
Constitution, which embodies the peoples sovereign will, is the bible of this Court. This Court [2] This provision states: Requirements. x x x x
exists to defend and protect the Constitution. To allow this constitutionally infirm initiative, (b) A petition for an initiative on the 1987 Constitution must have at least twelve per centum (12%)
propelled by deceptively gathered signatures, to alter basic principles in the Constitution is to allow of the total number of registered voters as signatories, of which every legislative district must be
a desecration of the Constitution. To allow such alteration and desecration is to lose this Courts represented by at least three per centum (3%) of the registered voters therein. Initiative on the
raison d'etre. Constitution may be exercised only after five (5) years from the ratification of the 1987 Constitution
and only once every five (5) years thereafter.
WHEREFORE, we DISMISS the petition in G.R. No. 174153. (c) The petition shall state the following:
c.1. contents or text of the proposed law sought to be enacted, approved or rejected, amended or
SO ORDERED. repealed, as the case may be;
c.2. the proposition;
c.3. the reason or reasons therefor;
ANTONIO T. CARPIO c.4. that it is not one of the exceptions provided herein;
Associate Justice c.5. signatures of the petitioners or registered voters; and
c.6. an abstract or summary in not more than one hundred (100) words which shall be legibly
WE CONCUR: written or printed at the top of every page of the petition.
[3] This provision states: Verification of Signatures. The Election Registrar shall verify the
ARTEMIO V. PANGANIBANChief Justice signatures on the basis of the registry list of voters, voters' affidavits and voters identification cards
REYNATO S. PUNOAssociate Justice used in the immediately preceding election.
LEONARDO A. QUISUMBING [4] Sections 1, 2, 3, 4, 5, 6 and 7 of Article VI will be changed thus:
Associate Justice Section 1. (1) The legislative and executive powers shall be vested in a unicameral Parliament
CONSUELO YNARES-SANTIAGO which shall be composed of as many members as may be provided by law, to be apportioned
Associate Justice among the provinces, representative districts, and cities in accordance with the number of their
ANGELINA SANDOVAL-GUTIERREZ respective inhabitants, with at least three hundred thousand inhabitants per district, and on the

51
basis of a uniform and progressive ratio. Each district shall comprise, as far as practicable,
contiguous, compact and adjacent territory, and each province must have at least one member.
(2) Each Member of Parliament shall be a natural-born citizen of the Philippines, at least twenty-
five years old on the day of the election, a resident of his district for at least one year prior thereto,
and shall be elected by the qualified voters of his district for a term of five years without limitation
as to the number thereof, except those under the party-list system which shall be provided for by
law and whose number shall be equal to twenty per centum of the total membership coming from
the parliamentary districts.
[5] Sections 1, 2, 3, and 4 of Article VII will be changed thus:
Section 1. There shall be a President who shall be the Head of State. The executive power shall
be exercised by a Prime Minister, with the assistance of the Cabinet. The Prime Minister shall be
elected by a majority of all the Members of Parliament from among themselves. He shall be
responsible to the Parliament for the program of government.
[6] Sections 1-5 of the Transitory Provisions read:
Section 1. (1) The incumbent President and Vice President shall serve until the expiration of their
term at noon on the thirtieth day of June 2010 and shall continue to exercise their powers under
the 1987 Constitution unless impeached by a vote of two thirds of all the members of the interim
parliament.
(2) In case of death, permanent disability, resignation or removal from office of the incumbent
President, the incumbent Vice President shall succeed as President. In case of death, permanent
disability, resignation or removal from office of both the incumbent President and Vice President,
the interim Prime Minister shall assume all the powers and responsibilities of Prime Minister under
Article VII as amended.
Section 2. Upon the expiration of the term of the incumbent President and Vice President, with the
exception of Sections 1, 2, 3, 4, 5, 6 and 7 of Article VI of the 1987 Constitution which shall hereby
be amended and Sections 18 and 24 which shall be deleted, all other sections of Article VI are
hereby retained and renumbered sequentially as Section 2, ad seriatim up to 26, unless they are
inconsistent with the Parliamentary system of government, in which case, they shall be amended
to conform with a unicameral parliamentary form of government; provided, however, that any and
all references therein to Congress, Senate, House of Representatives and Houses of Congress
shall be changed to read Parliament; that any and all references therein to Member[s] of
Congress, Senator[s] or Member[s] of the House of Representatives shall be changed to read as
Member[s] of Parliament and any and all references to the President and or Acting President shall
be changed to read Prime Minister.
Section 3. Upon the expiration of the term of the incumbent President and Vice President, with the
exception of Sections 1, 2, 3 and 4 of Article VII of the 1987 Constitution which are hereby
amended and Sections 7, 8, 9, 10, 11 and 12 which are hereby deleted, all other Sections of
Article VII shall be retained and renumbered sequentially as Section 2, ad seriatim up to 14,
unless they shall be inconsistent with Section 1 hereof, in which case they shall be deemed
amended so as to conform to a unicameral Parliamentary System of government; provided
however that any and all references therein to Congress, Senate, House of Representatives and
Houses of Congress shall be changed to read Parliament; that any and all references therein to
Member[s] of Congress, Senator[s] or Member[s] of the House of Representatives shall be
changed to read as Member[s] of Parliament and any and all references to the President and or
Acting President shall be changed to read Prime Minister.
Section 4. (1) There shall exist, upon the ratification of these amendments, an interim Parliament
which shall continue until the Members of the regular Parliament shall have been elected and shall
have qualified. It shall be composed of the incumbent Members of the Senate and the House of
Representatives and the incumbent Members of the Cabinet who are heads of executive
departments.
(2) The incumbent Vice President shall automatically be a Member of Parliament until noon of the
thirtieth day of June 2010. He shall also be a member of the cabinet and shall head a ministry. He
shall initially convene the interim Parliament and shall preside over its sessions for the election of
the interim Prime Minister and until the Speaker shall have been elected by a majority vote of all
the members of the interim Parliament from among themselves.
(3) Within forty-five days from ratification of these amendments, the interim Parliament shall
convene to propose amendments to, or revisions of, this Constitution consistent with the principles
of local autonomy, decentralization and a strong bureaucracy.
Section 5. (1) The incumbent President, who is the Chief Executive, shall nominate, from among
the members of the interim Parliament, an interim Prime Minister, who shall be elected by a
majority vote of the members thereof. The interim Prime Minister shall oversee the various
ministries and shall perform such powers and responsibilities as may be delegated to him by the
incumbent President.
(2) The interim Parliament shall provide for the election of the members of Parliament, which shall
be synchronized and held simultaneously with the election of all local government officials.
Thereafter, the Vice President, as Member of Parliament, shall immediately convene the
Parliament and shall initially preside over its session for the purpose of electing the Prime Minister,
who shall be elected by a majority vote of all its members, from among themselves. The duly
elected Prime Minister shall continue to exercise and perform the powers, duties and
responsibilities of the interim Prime Minister until the expiration of the term of incumbent President
and Vice President.
[7] As revised, Article XVIII contained a new paragraph in Section 4 (paragraph 3) and a modified
paragraph 2, Section 5, thus:
Section 4. x x x x
(3) Senators whose term of office ends in 2010 shall be Members of Parliament until noon of the
thirtieth day of June 2010.
xxxx
Section 5. x x x x
(2) The interim Parliament shall provide for the election of the members of Parliament, which shall
be synchronized and held simultaneously with the election of all local government officials. The
duly elected Prime Minister shall continue to exercise and perform the powers, duties and
responsibilities of the interim Prime Minister until the expiration of the term of the incumbent
President and Vice President.
[8] 336 Phil. 848 (1997); Resolution dated 10 June 1997.
[9] The COMELEC held:
We agree with the Petitioners that this Commission has the solemn Constitutional duty to enforce
and administer all laws and regulations relative to the conduct of, as in this case, initiative.
This mandate, however, should be read in relation to the other provisions of the Constitution
particularly on initiative.
Section 2, Article XVII of the 1987 Constitution provides:
Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through
initiative, upon a petition of at least twelve per centum of the total number of registered voters, of
which every legislative district must be represented by at least three per centum of the registered
voters therein. x x x.
The Congress shall provide for the implementation of the exercise of this right.
The afore-quoted provision of the Constitution being a non self-executory provision needed an
enabling law for its implementation. Thus, in order to breathe life into the constitutional right of the
people under a system of initiative to directly propose, enact, approve or reject, in whole or in part,
the Constitution, laws, ordinances, or resolution, Congress enacted Republic Act No. 6735.
However, the Supreme Court, in the landmark case of Santiago vs. Commission on Elections
struck down the said law for being incomplete, inadequate, or wanting in essential terms and
conditions insofar as initiative on amendments to the Constitution is concerned.
The Supreme Court likewise declared that this Commission should be permanently enjoined from
entertaining or taking cognizance of any petition for initiative on amendments to the Constitution
until a sufficient law shall have been validly enacted to provide for the implementation of the
system.
Thus, even if the signatures in the instant Petition appear to meet the required minimum per
centum of the total number of registered voters, of which every legislative district is represented by
at least three per centum of the registered voters therein, still the Petition cannot be given due
52
course since the Supreme Court categorically declared R.A. No. 6735 as inadequate to cover the
system of initiative on amendments to the Constitution.
This Commission is not unmindful of the transcendental importance of the right of the people
under a system of initiative. However, neither can we turn a blind eye to the pronouncement of the
High Court that in the absence of a valid enabling law, this right of the people remains nothing but
an empty right, and that this Commission is permanently enjoined from entertaining or taking
cognizance of any petition for initiative on amendments to the Constitution.
Considering the foregoing, We are therefore constrained not to entertain or give due course to the
instant Petition.
[10] Arturo M. De Castro; Ronald L. Adamat, Rolando Manuel Rivera, Ruelo Baya; Philippine
Transport and General Workers Organization (PTGWO); Trade Union Congress of the Philippines;
Sulong Bayan Movement Foundation, Inc.
[11] Onevoice Inc., Christian S. Monsod, Rene B. Azurin, Manuel L. Quezon III, Benjamin T.
Tolosa, Jr., Susan V. Ople and Carlos P. Medina, Jr.; Alternative Law Groups, Inc.; Atty. Pete
Quirino Quadra; Bayan, Bayan Muna, Kilusang Mayo Uno, Head, Ecumenical Bishops Forum,
Migrante, Gabriela, Gabriela Women's Party, Anakbayan, League of Filipino Students, Jojo
Pineda, Dr. Darby Santiago, Dr. Reginald Pamugas; Loretta Ann P. Rosales, and Mario Joyo
Aguja, Ana Theresa Hontiveros-Baraquel, Luwalhati Ricasa Antonino; Philippine Constitution
Association (PHILCONSA), Conrado F. Estrella, Tomas C. Toledo, Mariano M. Tajon, Froilan M.
Bacungan, Joaquin T. Venus, Jr., Fortunato P. Aguas, and Amado Gat Inciong; Senate of the
Philippines; Jose Anselmo I. Cadiz, Byron D. Bocar, Ma. Tanya Karina A. Lat, Antonio L. Salvador
and Randall C. Tabayoyong, Integrated Bar of the Philippines, Cebu City and Cebu Province
Chapters; Senate Minority Leader Aquilino Q. Pimentel, Jr., and Senators Sergio R. Osmeňa III,
Jamby Madrigal, Jinggoy Estrada, Alfredo S. Lim and Panfilo Lacson; Joseph Ejercito Estrada and
Pwersa ng Masang Pilipino.
[12] This provision states: Amendments to this Constitution may likewise be directly proposed by
the people through initiative upon a petition of at least twelve per centum of the total number of
registered voters, of which every legislative district must be represented by at least three per
centum of the registered voters therein. No amendment under this section shall be authorized
within five years following the ratification of this Constitution nor oftener than once every five
years.
[13] I RECORD, 387-388.
[14] During the deliberations of the Constitutional Commission, Commissioner Rene V. Sarmiento
made the following report (I RECORD 389):
MR. SARMIENTO: Madam President, I am happy that the Committee on Amendments and
Transitory Provisions decided to retain the system of initiative as a mode of amending the
Constitution. I made a survey of American constitutions and I discovered that 13 States provide for
a system of initiative as a mode of amending the Constitution Arizona, Arkansas, California,
Colorado, Massachusetts, Michigan, Missouri, Nebraska, Nevada, North Dakota, Ohio, Oklahoma
and Oregon. The initiative for ordinary laws only is used in Idaho, Maine, Montana and South
Dakota. So, I am happy that this was accepted or retained by the Committee.
xxxx
The Americans in turn copied the concept of initiatives from the Swiss beginning in 1898 when
South Dakota adopted the initiative in its constitution. The Swiss cantons experimented with
initiatives in the 1830s. In 1891, the Swiss incorporated the initiative as a mode of amending their
national constitution. Initiatives promote direct democracy by allowing the people to directly
propose amendments to the constitution. In contrast, the traditional mode of changing the
constitution is known as indirect democracy because the amendments are referred to the voters
by the legislature or the constitutional convention.
[15] Florida requires only that the title and summary of the proposed amendment are printed in
clear and unambiguous language. Advisory Opinion to the Attorney General RE Right of Citizens
to Choose Health Care Providers, No. 90160, 22 January 1998, Supreme Court of Florida.
[16] State ex. rel Patton v. Myers, 127 Ohio St. 95, 186 N.E. 872 (1933); Whitman v. Moore, 59
Ariz. 211, 125 P.2d 445 (1942); Heidtman v. City of Shaker Heights, 99 Ohio App. 415, 119 N.E.
2d 644 (1954); Christen v. Baker, 138 Colo. 27, 328 P.2d 951 (1958); Stop the Pay Hike
Committee v. Town Council of Town of Irvington, 166 N.J. Super. 197, 399 A.2d 336 (1979); State
ex rel Evans v. Blackwell, Slip copy, 2006 WL 1102804 (Ohio App. 10 Dist.), 2006-Ohio-2076.
[17] 407 Mass. 949, 955 (1990). Affirmed by the District Court of Massachusetts in Henry v.
Conolly, 743 F. Supp. 922 (1990) and by the Court of Appeals, First Circuit, in Henry v. Conolly,
9109 F. 2d. 1000 (1990), and cited in Marino v. Town Council of Southbridge, 13 Mass.L.Rptr. 14
(2001).
[18] 89 P.3d 1227, 1235 (2004).
[19] Stumpf v. Law, 839 P. 2d 120, 124 (1992).
[20] Exhibit B of the Lambino Groups Memorandum filed on 11 October 2006.
[21] Annex B of the Comment/Opposition in Intervention of Atty. Pete Quirino-Quadra filed on 7
September 2006.
[22] www.ulap.gov.ph.
[23] www.ulap.gov.ph/reso2006-02.html.
[24] The full text of the proposals of the Consultative Commission on Charter Change can be
downloaded at its official website at www.concom.ph.
[25] The Lambino Groups Memorandum, p. 5.
[26] Under the proposed Section 1(2), Article VI of the Constitution, members of Parliament shall
be elected for a term of five years without limitation as to the number thereof.
[27] Under the proposed Section 4(1), Article XVIII, Transitory Provisions of the Constitution, the
interim Parliament shall continue until the Members of the regular Parliament shall have been
elected and shall have qualified. Also, under the proposed Section 5(2), Article XVIII, of the same
Transitory Provisions, the interim Parliament shall provide for the election of the members of
Parliament.
[28] Under the proposed Section 4(3), Article XVIII, Transitory Provisions of the Constitution, the
interim Parliament, within 45 days from ratification of the proposed changes, shall convene to
propose amendments to, or revisions of, this Constitution.
[29] 448 So.2d 984, 994 (1984), internal citations omitted.
[30] 698 P.2d 1173, 1184 (1985).
[31] I RECORD 386, 392, 402-403.
[32] 196 P.2d 787, 790 (1948). See also Lowe v. Keisling, 130 Or.App. 1, 882 P.2d 91 (1994).
[33] 392 P.2d 636, 638 (1964).
[34] 930 P.2d 186, 196 (1996), internal citations omitted.
[35] Livermore v. Waite, 102 Cal. 113, 118-119 (1894).
[36] Amador Valley Joint Union High School District v. State Board of Equalization, 583 P.2d 1281,
1286 (1978).
[37] Id.
[38] Legislature of the State of California v. EU, 54 Cal.3d 492, 509 (1991).
[39] California Association of Retail Tobacconists v. State, 109 Cal.App.4th 792, 836 (2003).
[40] See note 44, infra.
[41] Joaquin Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary, p.
1294 (2003).
[42] 238 So.2d 824 (1970).
[43] Id. at 830-832.
[44] As stated by Associate Justice Romeo J. Callejo, Sr. during the 26 September 2006 oral
arguments.
[45] Francisco, Jr. v. House of Representatives, G.R. No. 160261, 10 November 2003, 415 SCRA
44; J.M. Tuason & Co., Inc. v. Land Tenure Administration, 142 Phil. 393 (1970); Gold Creek
Mining Corporation v. Rodriguez, 66 Phil. 259 (1938).
[46] 882 P.2d 91, 96-97 (1994). On the merits, the Court in Lowe v. Keisling found the amendment
in question was not a revision.
[47] Section 1, Article V of the Constitution.
[48] Section 11(1), Article XVI of the Constitution.
[49] Section 2, Article VII of the Constitution.
[50] This section provides: The Philippines is a democratic and republican State. Sovereignty
resides in the people and all government authority emanates from them.
[51] Spouses Mirasol v. Court of Appeals, 403 Phil. 760 (2001); Intia Jr. v. COA, 366 Phil. 273
(1999).
[52] G.R. No. 129754, Resolution dated 23 September 1997.
53
[53] Presidential Proclamation No. 58 dated February 11, 1987, entitled Proclaiming the localized projects and secured solely or primarily to bring money to a representative's district.7
Ratification of the Constitution of the Republic of the Philippines Adopted by the Constitutional Some scholars on the subject further use it to refer to legislative control of local appropriations.8
Commission of 1986, including the Ordinance Appended thereto. In the Philippines, "Pork Barrel" has been commonly referred to as lump-sum, discretionary funds
of Members of the Legislature,9 although, as will be later discussed, its usage would evolve in
reference to certain funds of the Executive.
II. History of Congressional Pork Barrel in the Philippines.
5. Republic of the Philippines A. Pre-Martial Law Era (1922-1972).
SUPREME COURT Act 3044,10 or the Public Works Act of 1922, is considered11 as the earliest form of
Manila "Congressional Pork Barrel" in the Philippines since the utilization of the funds appropriated
EN BANC therein were subjected to post-enactment legislator approval. Particularly, in the area of fund
release, Section 312 provides that the sums appropriated for certain public works projects13 "shall
G.R. No. 208566 November 19, 2013 be distributed x x x subject to the approval of a joint committee elected by the Senate and the
House of Representatives. "The committee from each House may also authorize one of its
GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS JR. JOSE L. members to approve the distribution made by the Secretary of Commerce and
Communications."14 Also, in the area of fund realignment, the same section provides that the said
GONZALEZ REUBEN M. ABANTE and QUINTIN PAREDES SAN DIEGO, Petitioners,
secretary, "with the approval of said joint committee, or of the authorized members thereof, may,
vs. for the purposes of said distribution, transfer unexpended portions of any item of appropriation
under this Act to any other item hereunder."
In 1950, it has been documented15 that post-enactment legislator participation broadened from
HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA JR. the areas of fund release and realignment to the area of project identification. During that year, the
SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B. ABAD, NATIONAL mechanics of the public works act was modified to the extent that the discretion of choosing
TREASURER ROSALIA V. DE LEON SENATE OF THE PHILIPPINES represented by projects was transferred from the Secretary of Commerce and Communications to legislators. "For
FRANKLIN M. DRILON m his capacity as SENATE PRESIDENT and HOUSE OF the first time, the law carried a list of projects selected by Members of Congress, they ‘being the
REPRESENTATIVES represented by FELICIANO S. BELMONTE, JR. in his capacity as representatives of the people, either on their own account or by consultation with local officials or
SPEAKER OF THE HOUSE, Respondents. civil leaders.‘"16 During this period, the pork barrel process commenced with local government
x-----------------------x councils, civil groups, and individuals appealing to Congressmen or Senators for projects.
G.R. No. 208493 Petitions that were accommodated formed part of a legislator‘s allocation, and the amount each
SOCIAL JUSTICE SOCIETY (SJS) PRESIDENT SAMSON S. ALCANTARA, Petitioner, legislator would eventually get is determined in a caucus convened by the majority. The amount
vs. was then integrated into the administration bill prepared by the Department of Public Works and
HONORABLE FRANKLIN M. DRILON in his capacity as SENATE PRESIDENT and Communications. Thereafter, the Senate and the House of Representatives added their own
HONORABLE FELICIANO S. BELMONTE, JR., in his capacity as SPEAKER OF THE HOUSE OF provisions to the bill until it was signed into law by the President – the Public Works Act.17 In the
REPRESENTATIVES, Respondents. 1960‘s, however, pork barrel legislation reportedly ceased in view of the stalemate between the
x-----------------------x House of Representatives and the Senate.18
G.R. No. 209251 B. Martial Law Era (1972-1986).
PEDRITO M. NEPOMUCENO, Former Mayor-Boac, Marinduque Former Provincial Board While the previous" Congressional Pork Barrel" was apparently discontinued in 1972 after Martial
Member -Province of Marinduque, Petitioner, Law was declared, an era when "one man controlled the legislature,"19 the reprieve was only
vs. temporary. By 1982, the Batasang Pambansa had already introduced a new item in the General
PRESIDENT BENIGNO SIMEON C. AQUINO III* and SECRETARY FLORENCIO BUTCH ABAD, Appropriations Act (GAA) called the" Support for Local Development Projects" (SLDP) under the
DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents. article on "National Aid to Local Government Units". Based on reports,20 it was under the SLDP
DECISION that the practice of giving lump-sum allocations to individual legislators began, with each
PERLAS-BERNABE, J.: assemblyman receiving ₱500,000.00. Thereafter, assemblymen would communicate their project
"Experience is the oracle of truth."1 preferences to the Ministry of Budget and Management for approval. Then, the said ministry would
-James Madison release the allocation papers to the Ministry of Local Governments, which would, in turn, issue the
Before the Court are consolidated petitions2 taken under Rule 65 of the Rules of Court, all of checks to the city or municipal treasurers in the assemblyman‘s locality. It has been further
which assail the constitutionality of the Pork Barrel System. Due to the complexity of the subject reported that "Congressional Pork Barrel" projects under the SLDP also began to cover not only
matter, the Court shall heretofore discuss the system‘s conceptual underpinnings before detailing public works projects, or so- called "hard projects", but also "soft projects",21 or non-public works
the particulars of the constitutional challenge. projects such as those which would fall under the categories of, among others, education, health
The Facts and livelihood.22
I. Pork Barrel: General Concept. C. Post-Martial Law Era:
"Pork Barrel" is political parlance of American -English origin.3 Historically, its usage may be Corazon Cojuangco Aquino Administration (1986-1992).
traced to the degrading ritual of rolling out a barrel stuffed with pork to a multitude of black slaves After the EDSA People Power Revolution in 1986 and the restoration of Philippine democracy,
who would cast their famished bodies into the porcine feast to assuage their hunger with morsels "Congressional Pork Barrel" was revived in the form of the "Mindanao Development Fund" and the
coming from the generosity of their well-fed master.4 This practice was later compared to the "Visayas Development Fund" which were created with lump-sum appropriations of ₱480 Million
actions of American legislators in trying to direct federal budgets in favor of their districts.5 While and ₱240 Million, respectively, for the funding of development projects in the Mindanao and
the advent of refrigeration has made the actual pork barrel obsolete, it persists in reference to Visayas areas in 1989. It has been documented23 that the clamor raised by the Senators and the
political bills that "bring home the bacon" to a legislator‘s district and constituents.6 In a more Luzon legislators for a similar funding, prompted the creation of the "Countrywide Development
technical sense, "Pork Barrel" refers to an appropriation of government spending meant for Fund" (CDF) which was integrated into the 1990 GAA24 with an initial funding of ₱2.3 Billion to
cover "small local infrastructure and other priority community projects."

54
Under the GAAs for the years 1991 and 1992,25 CDF funds were, with the approval of the
President, to be released directly to the implementing agencies but "subject to the submission of
the required list of projects and activities."Although the GAAs from 1990 to 1992 were silent as to
the amounts of allocations of the individual legislators, as well as their participation in the
identification of projects, it has been reported26 that by 1992, Representatives were receiving
₱12.5 Million each in CDF funds, while Senators were receiving ₱18 Million each, without any
limitation or qualification, and that they could identify any kind of project, from hard or
infrastructure projects such as roads, bridges, and buildings to "soft projects" such as textbooks,
medicines, and scholarships.27
D. Fidel Valdez Ramos (Ramos) Administration (1992-1998).
The following year, or in 1993,28 the GAA explicitly stated that the release of CDF funds was to be
made upon the submission of the list of projects and activities identified by, among others,
individual legislators. For the first time, the 1993 CDF Article included an allocation for the Vice-
President.29 As such, Representatives were allocated ₱12.5 Million each in CDF funds, Senators,
₱18 Million each, and the Vice-President, ₱20 Million.
In 1994,30 1995,31 and 1996,32 the GAAs contained the same provisions on project identification
and fund release as found in the 1993 CDF Article. In addition, however, the Department of
Budget and Management (DBM) was directed to submit reports to the Senate Committee on
Finance and the House Committee on Appropriations on the releases made from the funds.33
Under the 199734 CDF Article, Members of Congress and the Vice-President, in consultation with
the implementing agency concerned, were directed to submit to the DBM the list of 50% of
projects to be funded from their respective CDF allocations which shall be duly endorsed by (a)
the Senate President and the Chairman of the Committee on Finance, in the case of the Senate,
and (b) the Speaker of the House of Representatives and the Chairman of the Committee on
Appropriations, in the case of the House of Representatives; while the list for the remaining 50%
was to be submitted within six (6) months thereafter. The same article also stated that the project
list, which would be published by the DBM,35 "shall be the basis for the release of funds" and that
"no funds appropriated herein shall be disbursed for projects not included in the list herein
required."
The following year, or in 1998,36 the foregoing provisions regarding the required lists and
endorsements were reproduced, except that the publication of the project list was no longer
required as the list itself sufficed for the release of CDF Funds.
The CDF was not, however, the lone form of "Congressional Pork Barrel" at that time. Other forms
of "Congressional Pork Barrel" were reportedly fashioned and inserted into the GAA (called
"Congressional Insertions" or "CIs") in order to perpetuate the ad ministration‘s political agenda.37
It has been articulated that since CIs "formed part and parcel of the budgets of executive
departments, they were not easily identifiable and were thus harder to monitor." Nonetheless, the
lawmakers themselves as well as the finance and budget officials of the implementing agencies,
as well as the DBM, purportedly knew about the insertions.38 Examples of these CIs are the
Department of Education (DepEd) School Building Fund, the Congressional Initiative Allocations,
the Public Works Fund, the El Niño Fund, and the Poverty Alleviation Fund.39 The allocations for
the School Building Fund, particularly, ―shall be made upon prior consultation with the
representative of the legislative district concerned.”40 Similarly, the legislators had the power to
direct how, where and when these appropriations were to be spent.41
E. Joseph Ejercito Estrada (Estrada) Administration (1998-2001).
In 1999,42 the CDF was removed in the GAA and replaced by three (3) separate forms of CIs,
namely, the "Food Security Program Fund,"43 the "Lingap Para Sa Mahihirap Program Fund,"44
and the "Rural/Urban Development Infrastructure Program Fund,"45 all of which contained a
special provision requiring "prior consultation" with the Member s of Congress for the release of
the funds.
It was in the year 200046 that the "Priority Development Assistance Fund" (PDAF) appeared in
the GAA. The requirement of "prior consultation with the respective Representative of the District"
before PDAF funds were directly released to the implementing agency concerned was explicitly
stated in the 2000 PDAF Article. Moreover, realignment of funds to any expense category was
expressly allowed, with the sole condition that no amount shall be used to fund personal services
and other personnel benefits.47 The succeeding PDAF provisions remained the same in view of
the re-enactment48 of the 2000 GAA for the year 2001.
F. Gloria Macapagal-Arroyo (Arroyo) Administration (2001-2010).
The 200249 PDAF Article was brief and straightforward as it merely contained a single special
provision ordering the release of the funds directly to the implementing agency or local
government unit concerned, without further qualifications. The following year, 2003,50 the same
single provision was present, with simply an expansion of purpose and express authority to
realign. Nevertheless, the provisions in the 2003 budgets of the Department of Public Works and
Highways51 (DPWH) and the DepEd52 required prior consultation with Members of Congress on
the aspects of implementation delegation and project list submission, respectively. In 2004, the
2003 GAA was re-enacted.53
In 2005,54 the PDAF Article provided that the PDAF shall be used "to fund priority programs and
projects under the ten point agenda of the national government and shall be released directly to
the implementing agencies." It also introduced the program menu concept,55 which is essentially
a list of general programs and implementing agencies from which a particular PDAF project may
be subsequently chosen by the identifying authority. The 2005 GAA was re-enacted56 in 2006
and hence, operated on the same bases. In similar regard, the program menu concept was
consistently integrated into the 2007,57 2008,58 2009,59 and 201060 GAAs.
Textually, the PDAF Articles from 2002 to 2010 were silent with respect to the specific amounts
allocated for the individual legislators, as well as their participation in the proposal and
identification of PDAF projects to be funded. In contrast to the PDAF Articles, however, the
provisions under the DepEd School Building Program and the DPWH budget, similar to its
predecessors, explicitly required prior consultation with the concerned Member of Congress61
anent certain aspects of project implementation.
Significantly, it was during this era that provisions which allowed formal participation of non-
governmental organizations (NGO) in the implementation of government projects were introduced.
In the Supplemental Budget for 2006, with respect to the appropriation for school buildings, NGOs
were, by law, encouraged to participate. For such purpose, the law stated that "the amount of at
least ₱250 Million of the ₱500 Million allotted for the construction and completion of school
buildings shall be made available to NGOs including the Federation of Filipino-Chinese Chambers
of Commerce and Industry, Inc. for its "Operation Barrio School" program, with capability and
proven track records in the construction of public school buildings x x x."62 The same allocation
was made available to NGOs in the 2007 and 2009 GAAs under the DepEd Budget.63 Also, it was
in 2007 that the Government Procurement Policy Board64 (GPPB) issued Resolution No. 12-2007
dated June 29, 2007 (GPPB Resolution 12-2007), amending the implementing rules and
regulations65 of RA 9184,66 the Government Procurement Reform Act, to include, as a form of
negotiated procurement,67 the procedure whereby the Procuring Entity68 (the implementing
agency) may enter into a memorandum of agreement with an NGO, provided that "an
appropriation law or ordinance earmarks an amount to be specifically contracted out to NGOs."69
G. Present Administration (2010-Present).
Differing from previous PDAF Articles but similar to the CDF Articles, the 201170 PDAF Article
included an express statement on lump-sum amounts allocated for individual legislators and the
Vice-President: Representatives were given ₱70 Million each, broken down into ₱40 Million for
"hard projects" and ₱30 Million for "soft projects"; while ₱200 Million was given to each Senator as
well as the Vice-President, with a ₱100 Million allocation each for "hard" and "soft projects."
Likewise, a provision on realignment of funds was included, but with the qualification that it may be
allowed only once. The same provision also allowed the Secretaries of Education, Health, Social
Welfare and Development, Interior and Local Government, Environment and Natural Resources,
Energy, and Public Works and Highways to realign PDAF Funds, with the further conditions that:
(a) realignment is within the same implementing unit and same project category as the original
project, for infrastructure projects; (b) allotment released has not yet been obligated for the original
scope of work, and (c) the request for realignment is with the concurrence of the legislator
concerned.71
In the 201272 and 201373 PDAF Articles, it is stated that the "identification of projects and/or
designation of beneficiaries shall conform to the priority list, standard or design prepared by each
implementing agency (priority list requirement) x x x." However, as practiced, it would still be the
individual legislator who would choose and identify the project from the said priority list.74
Provisions on legislator allocations75 as well as fund realignment76 were included in the 2012 and
2013 PDAF Articles; but the allocation for the Vice-President, which was pegged at ₱200 Million in
the 2011 GAA, had been deleted. In addition, the 2013 PDAF Article now allowed LGUs to be
identified as implementing agencies if they have the technical capability to implement the
55
projects.77 Legislators were also allowed to identify programs/projects, except for assistance to
indigent patients and scholarships, outside of his legislative district provided that he secures the
written concurrence of the legislator of the intended outside-district, endorsed by the Speaker of
the House.78 Finally, any realignment of PDAF funds, modification and revision of project
identification, as well as requests for release of funds, were all required to be favorably endorsed
by the House Committee on Appropriations and the Senate Committee on Finance, as the case
may be.79
III. History of Presidential Pork Barrel in the Philippines.
While the term "Pork Barrel" has been typically associated with lump-sum, discretionary funds of
Members of Congress, the present cases and the recent controversies on the matter have,
however, shown that the term‘s usage has expanded to include certain funds of the President
such as the Malampaya Funds and the Presidential Social Fund.
On the one hand, the Malampaya Funds was created as a special fund under Section 880 of
Presidential Decree No. (PD) 910,81 issued by then President Ferdinand E. Marcos (Marcos) on
March 22, 1976. In enacting the said law, Marcos recognized the need to set up a special fund to
help intensify, strengthen, and consolidate government efforts relating to the exploration,
exploitation, and development of indigenous energy resources vital to economic growth.82 Due to
the energy-related activities of the government in the Malampaya natural gas field in Palawan, or
the "Malampaya Deep Water Gas-to-Power Project",83 the special fund created under PD 910
has been currently labeled as Malampaya Funds.
On the other hand the Presidential Social Fund was created under Section 12, Title IV84 of PD
1869,85 or the Charter of the Philippine Amusement and Gaming Corporation (PAGCOR). PD
1869 was similarly issued by Marcos on July 11, 1983. More than two (2) years after, he amended
PD 1869 and accordingly issued PD 1993 on October 31, 1985,86 amending Section 1287 of the
former law. As it stands, the Presidential Social Fund has been described as a special funding
facility managed and administered by the Presidential Management Staff through which the
President provides direct assistance to priority programs and projects not funded under the regular
budget. It is sourced from the share of the government in the aggregate gross earnings of
PAGCOR.88
IV. Controversies in the Philippines.
Over the decades, "pork" funds in the Philippines have increased tremendously,89 owing in no
small part to previous Presidents who reportedly used the "Pork Barrel" in order to gain
congressional support.90 It was in 1996 when the first controversy surrounding the "Pork Barrel"
erupted. Former Marikina City Representative Romeo Candazo (Candazo), then an anonymous
source, "blew the lid on the huge sums of government money that regularly went into the pockets
of legislators in the form of kickbacks."91 He said that "the kickbacks were ‘SOP‘ (standard
operating procedure) among legislators and ranged from a low 19 percent to a high 52 percent of
the cost of each project, which could be anything from dredging, rip rapping, sphalting, concreting,
and construction of school buildings."92 "Other sources of kickbacks that Candazo identified were
public funds intended for medicines and textbooks. A few days later, the tale of the money trail
became the banner story of the Philippine Daily Inquirer issue of August 13, 1996, accompanied
by an illustration of a roasted pig."93 "The publication of the stories, including those about
congressional initiative allocations of certain lawmakers, including ₱3.6 Billion for a Congressman,
sparked public outrage."94
Thereafter, or in 2004, several concerned citizens sought the nullification of the PDAF as enacted
in the 2004 GAA for being unconstitutional. Unfortunately, for lack of "any pertinent evidentiary
support that illegal misuse of PDAF in the form of kickbacks has become a common exercise of
unscrupulous Members of Congress," the petition was dismissed.95
Recently, or in July of the present year, the National Bureau of Investigation (NBI) began its probe
into allegations that "the government has been defrauded of some ₱10 Billion over the past 10
years by a syndicate using funds from the pork barrel of lawmakers and various government
agencies for scores of ghost projects."96 The investigation was spawned by sworn affidavits of six
(6) whistle-blowers who declared that JLN Corporation – "JLN" standing for Janet Lim Napoles
(Napoles) – had swindled billions of pesos from the public coffers for "ghost projects" using no
fewer than 20 dummy NGOs for an entire decade. While the NGOs were supposedly the ultimate
recipients of PDAF funds, the whistle-blowers declared that the money was diverted into Napoles‘
private accounts.97 Thus, after its investigation on the Napoles controversy, criminal complaints
were filed before the Office of the Ombudsman, charging five (5) lawmakers for Plunder, and three
(3) other lawmakers for Malversation, Direct Bribery, and Violation of the Anti-Graft and Corrupt
Practices Act. Also recommended to be charged in the complaints are some of the lawmakers‘
chiefs -of-staff or representatives, the heads and other officials of three (3) implementing
agencies, and the several presidents of the NGOs set up by Napoles.98
On August 16, 2013, the Commission on Audit (CoA) released the results of a three-year audit
investigation99 covering the use of legislators' PDAF from 2007 to 2009, or during the last three
(3) years of the Arroyo administration. The purpose of the audit was to determine the propriety of
releases of funds under PDAF and the Various Infrastructures including Local Projects (VILP)100
by the DBM, the application of these funds and the implementation of projects by the appropriate
implementing agencies and several government-owned-and-controlled corporations (GOCCs).101
The total releases covered by the audit amounted to ₱8.374 Billion in PDAF and ₱32.664 Billion in
VILP, representing 58% and 32%, respectively, of the total PDAF and VILP releases that were
found to have been made nationwide during the audit period.102 Accordingly, the Co A‘s findings
contained in its Report No. 2012-03 (CoA Report), entitled "Priority Development Assistance Fund
(PDAF) and Various Infrastructures including Local Projects (VILP)," were made public, the
highlights of which are as follows:103
● Amounts released for projects identified by a considerable number of legislators significantly
exceeded their respective allocations.
● Amounts were released for projects outside of legislative districts of sponsoring members of the
Lower House.
● Total VILP releases for the period exceeded the total amount appropriated under the 2007 to
2009 GAAs.
● Infrastructure projects were constructed on private lots without these having been turned over to
the government.
● Significant amounts were released to implementing agencies without the latter‘s endorsement
and without considering their mandated functions, administrative and technical capabilities to
implement projects.
● Implementation of most livelihood projects was not undertaken by the implementing agencies
themselves but by NGOs endorsed by the proponent legislators to which the Funds were
transferred.
● The funds were transferred to the NGOs in spite of the absence of any appropriation law or
ordinance.
● Selection of the NGOs were not compliant with law and regulations.
● Eighty-Two (82) NGOs entrusted with implementation of seven hundred seventy two (772)
projects amount to ₱6.156 Billion were either found questionable, or submitted
questionable/spurious documents, or failed to liquidate in whole or in part their utilization of the
Funds.
● Procurement by the NGOs, as well as some implementing agencies, of goods and services
reportedly used in the projects were not compliant with law.
As for the "Presidential Pork Barrel", whistle-blowers alleged that" at least ₱900 Million from
royalties in the operation of the Malampaya gas project off Palawan province intended for agrarian
reform beneficiaries has gone into a dummy NGO."104 According to incumbent CoA Chairperson
Maria Gracia Pulido Tan (CoA Chairperson), the CoA is, as of this writing, in the process of
preparing "one consolidated report" on the Malampaya Funds.105
V. The Procedural Antecedents.
Spurred in large part by the findings contained in the CoA Report and the Napoles controversy,
several petitions were lodged before the Court similarly seeking that the "Pork Barrel System" be
declared unconstitutional. To recount, the relevant procedural antecedents in these cases are as
follows:
On August 28, 2013, petitioner Samson S. Alcantara (Alcantara), President of the Social Justice
Society, filed a Petition for Prohibition of even date under Rule 65 of the Rules of Court (Alcantara
Petition), seeking that the "Pork Barrel System" be declared unconstitutional, and a writ of
prohibition be issued permanently restraining respondents Franklin M. Drilon and Feliciano S.
Belmonte, Jr., in their respective capacities as the incumbent Senate President and Speaker of
the House of Representatives, from further taking any steps to enact legislation appropriating
funds for the "Pork Barrel System," in whatever form and by whatever name it may be called, and
from approving further releases pursuant thereto.106 The Alcantara Petition was docketed as
G.R. No. 208493.
56
On September 3, 2013, petitioners Greco Antonious Beda B. Belgica, Jose L. Gonzalez, Reuben
M. Abante, Quintin Paredes San Diego (Belgica, et al.), and Jose M. Villegas, Jr. (Villegas) filed
an Urgent Petition For Certiorari and Prohibition With Prayer For The Immediate Issuance of
Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction dated August 27, 2013
under Rule 65 of the Rules of Court (Belgica Petition), seeking that the annual "Pork Barrel
System," presently embodied in the provisions of the GAA of 2013 which provided for the 2013
PDAF, and the Executive‘s lump-sum, discretionary funds, such as the Malampaya Funds and the
Presidential Social Fund,107 be declared unconstitutional and null and void for being acts
constituting grave abuse of discretion. Also, they pray that the Court issue a TRO against
respondents Paquito N. Ochoa, Jr., Florencio B. Abad (Secretary Abad) and Rosalia V. De Leon,
in their respective capacities as the incumbent Executive Secretary, Secretary of the Department
of Budget and Management (DBM), and National Treasurer, or their agents, for them to
immediately cease any expenditure under the aforesaid funds. Further, they pray that the Court
order the foregoing respondents to release to the CoA and to the public: (a) "the complete
schedule/list of legislators who have availed of their PDAF and VILP from the years 2003 to 2013,
specifying the use of the funds, the project or activity and the recipient entities or individuals, and
all pertinent data thereto"; and (b) "the use of the Executive‘s lump-sum, discretionary funds,
including the proceeds from the x x x Malampaya Funds and remittances from the PAGCOR x x x
from 2003 to 2013, specifying the x x x project or activity and the recipient entities or individuals,
and all pertinent data thereto."108 Also, they pray for the "inclusion in budgetary deliberations with
the Congress of all presently off-budget, lump-sum, discretionary funds including, but not limited
to, proceeds from the Malampaya Funds and remittances from the PAGCOR."109 The Belgica
Petition was docketed as G.R. No. 208566.110
Lastly, on September 5, 2013, petitioner Pedrito M. Nepomuceno (Nepomuceno), filed a Petition
dated August 23, 2012 (Nepomuceno Petition), seeking that the PDAF be declared
unconstitutional, and a cease and desist order be issued restraining President Benigno Simeon S.
Aquino III (President Aquino) and Secretary Abad from releasing such funds to Members of
Congress and, instead, allow their release to fund priority projects identified and approved by the
Local Development Councils in consultation with the executive departments, such as the DPWH,
the Department of Tourism, the Department of Health, the Department of Transportation, and
Communication and the National Economic Development Authority.111 The Nepomuceno Petition
was docketed as UDK-14951.112
On September 10, 2013, the Court issued a Resolution of even date (a) consolidating all cases;
(b) requiring public respondents to comment on the consolidated petitions; (c) issuing a TRO
(September 10, 2013 TRO) enjoining the DBM, National Treasurer, the Executive Secretary, or
any of the persons acting under their authority from releasing (1) the remaining PDAF allocated to
Members of Congress under the GAA of 2013, and (2) Malampaya Funds under the phrase "for
such other purposes as may be hereafter directed by the President" pursuant to Section 8 of PD
910 but not for the purpose of "financing energy resource development and exploitation programs
and projects of the government‖ under the same provision; and (d) setting the consolidated cases
for Oral Arguments on October 8, 2013.
On September 23, 2013, the Office of the Solicitor General (OSG) filed a Consolidated Comment
(Comment) of even date before the Court, seeking the lifting, or in the alternative, the partial lifting
with respect to educational and medical assistance purposes, of the Court‘s September 10, 2013
TRO, and that the consolidated petitions be dismissed for lack of merit.113
On September 24, 2013, the Court issued a Resolution of even date directing petitioners to reply
to the Comment.
Petitioners, with the exception of Nepomuceno, filed their respective replies to the Comment: (a)
on September 30, 2013, Villegas filed a separate Reply dated September 27, 2013 (Villegas
Reply); (b) on October 1, 2013, Belgica, et al. filed a Reply dated September 30, 2013 (Belgica
Reply); and (c) on October 2, 2013, Alcantara filed a Reply dated October 1, 2013.
On October 1, 2013, the Court issued an Advisory providing for the guidelines to be observed by
the parties for the Oral Arguments scheduled on October 8, 2013. In view of the technicality of the
issues material to the present cases, incumbent Solicitor General Francis H. Jardeleza (Solicitor
General) was directed to bring with him during the Oral Arguments representative/s from the DBM
and Congress who would be able to competently and completely answer questions related to,
among others, the budgeting process and its implementation. Further, the CoA Chairperson was
appointed as amicus curiae and thereby requested to appear before the Court during the Oral
Arguments.
On October 8 and 10, 2013, the Oral Arguments were conducted. Thereafter, the Court directed
the parties to submit their respective memoranda within a period of seven (7) days, or until
October 17, 2013, which the parties subsequently did.
The Issues Before the Court
Based on the pleadings, and as refined during the Oral Arguments, the following are the main
issues for the Court‘s resolution:
I. Procedural Issues.
Whether or not (a) the issues raised in the consolidated petitions involve an actual and justiciable
controversy; (b) the issues raised in the consolidated petitions are matters of policy not subject to
judicial review; (c) petitioners have legal standing to sue; and (d) the Court‘s Decision dated
August 19, 1994 in G.R. Nos. 113105, 113174, 113766, and 113888, entitled "Philippine
Constitution Association v. Enriquez"114 (Philconsa) and Decision dated April 24, 2012 in G.R.
No. 164987, entitled "Lawyers Against Monopoly and Poverty v. Secretary of Budget and
Management"115 (LAMP) bar the re-litigatio n of the issue of constitutionality of the "Pork Barrel
System" under the principles of res judicata and stare decisis.
II. Substantive Issues on the "Congressional Pork Barrel."
Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel Laws similar
thereto are unconstitutional considering that they violate the principles of/constitutional provisions
on (a) separation of powers; (b) non-delegability of legislative power; (c) checks and balances; (d)
accountability; (e) political dynasties; and (f) local autonomy.
III. Substantive Issues on the "Presidential Pork Barrel."
Whether or not the phrases (a) "and for such other purposes as may be hereafter directed by the
President" under Section 8 of PD 910,116 relating to the Malampaya Funds, and (b) "to finance
the priority infrastructure development projects and to finance the restoration of damaged or
destroyed facilities due to calamities, as may be directed and authorized by the Office of the
President of the Philippines" under Section 12 of PD 1869, as amended by PD 1993, relating to
the Presidential Social Fund, are unconstitutional insofar as they constitute undue delegations of
legislative power.
These main issues shall be resolved in the order that they have been stated. In addition, the Court
shall also tackle certain ancillary issues as prompted by the present cases.
The Court’s Ruling
The petitions are partly granted.
I. Procedural Issues.
The prevailing rule in constitutional litigation is that no question involving the constitutionality or
validity of a law or governmental act may be heard and decided by the Court unless there is
compliance with the legal requisites for judicial inquiry,117 namely: (a) there must be an actual
case or controversy calling for the exercise of judicial power; (b) the person challenging the act
must have the standing to question the validity of the subject act or issuance; (c) the question of
constitutionality must be raised at the earliest opportunity ; and (d) the issue of constitutionality
must be the very lis mota of the case.118 Of these requisites, case law states that the first two are
the most important119 and, therefore, shall be discussed forthwith.
A. Existence of an Actual Case or Controversy.
By constitutional fiat, judicial power operates only when there is an actual case or controversy.120
This is embodied in Section 1, Article VIII of the 1987 Constitution which pertinently states that
"judicial power includes the duty of the courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable x x x." Jurisprudence provides that an actual
case or controversy is one which "involves a conflict of legal rights, an assertion of opposite legal
claims, susceptible of judicial resolution as distinguished from a hypothetical or abstract difference
or dispute.121 In other words, "there must be a contrariety of legal rights that can be interpreted
and enforced on the basis of existing law and jurisprudence."122 Related to the requirement of an
actual case or controversy is the requirement of "ripeness," meaning that the questions raised for
constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when
the act being challenged has had a direct adverse effect on the individual challenging it. It is a
prerequisite that something had then been accomplished or performed by either branch before a
court may come into the picture, and the petitioner must allege the existence of an immediate or
threatened injury to itself as a result of the challenged action."123 "Withal, courts will decline to
57
pass upon constitutional issues through advisory opinions, bereft as they are of authority to
resolve hypothetical or moot questions."124
Based on these principles, the Court finds that there exists an actual and justiciable controversy in
these cases.
The requirement of contrariety of legal rights is clearly satisfied by the antagonistic positions of the
parties on the constitutionality of the "Pork Barrel System." Also, the questions in these
consolidated cases are ripe for adjudication since the challenged funds and the provisions
allowing for their utilization – such as the 2013 GAA for the PDAF, PD 910 for the Malampaya
Funds and PD 1869, as amended by PD 1993, for the Presidential Social Fund – are currently
existing and operational; hence, there exists an immediate or threatened injury to petitioners as a
result of the unconstitutional use of these public funds.
As for the PDAF, the Court must dispel the notion that the issues related thereto had been
rendered moot and academic by the reforms undertaken by respondents. A case becomes moot
when there is no more actual controversy between the parties or no useful purpose can be served
in passing upon the merits.125 Differing from this description, the Court observes that
respondents‘ proposed line-item budgeting scheme would not terminate the controversy nor
diminish the useful purpose for its resolution since said reform is geared towards the 2014 budget,
and not the 2013 PDAF Article which, being a distinct subject matter, remains legally effective and
existing. Neither will the President‘s declaration that he had already "abolished the PDAF" render
the issues on PDAF moot precisely because the Executive branch of government has no
constitutional authority to nullify or annul its legal existence. By constitutional design, the
annulment or nullification of a law may be done either by Congress, through the passage of a
repealing law, or by the Court, through a declaration of unconstitutionality. Instructive on this point
is the following exchange between Associate Justice Antonio T. Carpio (Justice Carpio) and the
Solicitor General during the Oral Arguments:126
Justice Carpio: The President has taken an oath to faithfully execute the law,127 correct? Solicitor
General Jardeleza: Yes, Your Honor.
Justice Carpio: And so the President cannot refuse to implement the General Appropriations Act,
correct?
Solicitor General Jardeleza: Well, that is our answer, Your Honor. In the case, for example of the
PDAF, the President has a duty to execute the laws but in the face of the outrage over PDAF, the
President was saying, "I am not sure that I will continue the release of the soft projects," and that
started, Your Honor. Now, whether or not that … (interrupted)
Justice Carpio: Yeah. I will grant the President if there are anomalies in the project, he has the
power to stop the releases in the meantime, to investigate, and that is Section 38 of Chapter 5 of
Book 6 of the Revised Administrative Code128 x x x. So at most the President can suspend, now
if the President believes that the PDAF is unconstitutional, can he just refuse to implement it?
Solicitor General Jardeleza: No, Your Honor, as we were trying to say in the specific case of the
PDAF because of the CoA Report, because of the reported irregularities and this Court can take
judicial notice, even outside, outside of the COA Report, you have the report of the whistle-
blowers, the President was just exercising precisely the duty ….
xxxx
Justice Carpio: Yes, and that is correct. You‘ve seen the CoA Report, there are anomalies, you
stop and investigate, and prosecute, he has done that. But, does that mean that PDAF has been
repealed?
Solicitor General Jardeleza: No, Your Honor x x x.
xxxx
Justice Carpio: So that PDAF can be legally abolished only in two (2) cases. Congress passes a
law to repeal it, or this Court declares it unconstitutional, correct?
Solictor General Jardeleza: Yes, Your Honor.
Justice Carpio: The President has no power to legally abolish PDAF. (Emphases supplied)
Even on the assumption of mootness, jurisprudence, nevertheless, dictates that "the moot and
academic‘ principle is not a magical formula that can automatically dissuade the Court in resolving
a case." The Court will decide cases, otherwise moot, if: first, there is a grave violation of the
Constitution; second, the exceptional character of the situation and the paramount public interest
is involved; third, when the constitutional issue raised requires formulation of controlling principles
to guide the bench, the bar, and the public; and fourth, the case is capable of repetition yet
evading review.129
The applicability of the first exception is clear from the fundamental posture of petitioners – they
essentially allege grave violations of the Constitution with respect to, inter alia, the principles of
separation of powers, non-delegability of legislative power, checks and balances, accountability
and local autonomy.
The applicability of the second exception is also apparent from the nature of the interests involved
– the constitutionality of the very system within which significant amounts of public funds have
been and continue to be utilized and expended undoubtedly presents a situation of exceptional
character as well as a matter of paramount public interest. The present petitions, in fact, have
been lodged at a time when the system‘s flaws have never before been magnified. To the Court‘s
mind, the coalescence of the CoA Report, the accounts of numerous whistle-blowers, and the
government‘s own recognition that reforms are needed "to address the reported abuses of the
PDAF"130 demonstrates a prima facie pattern of abuse which only underscores the importance of
the matter. It is also by this finding that the Court finds petitioners‘ claims as not merely theorized,
speculative or hypothetical. Of note is the weight accorded by the Court to the findings made by
the CoA which is the constitutionally-mandated audit arm of the government. In Delos Santos v.
CoA,131 a recent case wherein the Court upheld the CoA‘s disallowance of irregularly disbursed
PDAF funds, it was emphasized that:
The COA is endowed with enough latitude to determine, prevent, and disallow irregular,
unnecessary, excessive, extravagant or unconscionable expenditures of government funds. It is
tasked to be vigilant and conscientious in safeguarding the proper use of the government's, and
ultimately the people's, property. The exercise of its general audit power is among the
constitutional mechanisms that gives life to the check and balance system inherent in our form of
government.
It is the general policy of the Court to sustain the decisions of administrative authorities, especially
one which is constitutionally-created, such as the CoA, not only on the basis of the doctrine of
separation of powers but also for their presumed expertise in the laws they are entrusted to
enforce. Findings of administrative agencies are accorded not only respect but also finality when
the decision and order are not tainted with unfairness or arbitrariness that would amount to grave
abuse of discretion. It is only when the CoA has acted without or in excess of jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction, that this Court entertains a
petition questioning its rulings. x x x. (Emphases supplied)
Thus, if only for the purpose of validating the existence of an actual and justiciable controversy in
these cases, the Court deems the findings under the CoA Report to be sufficient.
The Court also finds the third exception to be applicable largely due to the practical need for a
definitive ruling on the system‘s constitutionality. As disclosed during the Oral Arguments, the CoA
Chairperson estimates that thousands of notices of disallowances will be issued by her office in
connection with the findings made in the CoA Report. In this relation, Associate Justice Marvic
Mario Victor F. Leonen (Justice Leonen) pointed out that all of these would eventually find their
way to the courts.132 Accordingly, there is a compelling need to formulate controlling principles
relative to the issues raised herein in order to guide the bench, the bar, and the public, not just for
the expeditious resolution of the anticipated disallowance cases, but more importantly, so that the
government may be guided on how public funds should be utilized in accordance with
constitutional principles.
Finally, the application of the fourth exception is called for by the recognition that the preparation
and passage of the national budget is, by constitutional imprimatur, an affair of annual
occurrence.133 The relevance of the issues before the Court does not cease with the passage of
a "PDAF -free budget for 2014."134 The evolution of the "Pork Barrel System," by its multifarious
iterations throughout the course of history, lends a semblance of truth to petitioners‘ claim that "the
same dog will just resurface wearing a different collar."135 In Sanlakas v. Executive Secretary,136
the government had already backtracked on a previous course of action yet the Court used the
"capable of repetition but evading review" exception in order "to prevent similar questions from re-
emerging."137 The situation similarly holds true to these cases. Indeed, the myriad of issues
underlying the manner in which certain public funds are spent, if not resolved at this most
opportune time, are capable of repetition and hence, must not evade judicial review.
B. Matters of Policy: the Political Question Doctrine.
The "limitation on the power of judicial review to actual cases and controversies‖ carries the
assurance that "the courts will not intrude into areas committed to the other branches of
government."138 Essentially, the foregoing limitation is a restatement of the political question
58
doctrine which, under the classic formulation of Baker v. Carr,139 applies when there is found,
among others, "a textually demonstrable constitutional commitment of the issue to a coordinate
political department," "a lack of judicially discoverable and manageable standards for resolving it"
or "the impossibility of deciding without an initial policy determination of a kind clearly for non-
judicial discretion." Cast against this light, respondents submit that the "the political branches are
in the best position not only to perform budget-related reforms but also to do them in response to
the specific demands of their constituents" and, as such, "urge the Court not to impose a solution
at this stage."140
The Court must deny respondents‘ submission.
Suffice it to state that the issues raised before the Court do not present political but legal questions
which are within its province to resolve. A political question refers to "those questions which, under
the Constitution, are to be decided by the people in their sovereign capacity, or in regard to which
full discretionary authority has been delegated to the Legislature or executive branch of the
Government. It is concerned with issues dependent upon the wisdom, not legality, of a particular
measure."141 The intrinsic constitutionality of the "Pork Barrel System" is not an issue dependent
upon the wisdom of the political branches of government but rather a legal one which the
Constitution itself has commanded the Court to act upon. Scrutinizing the contours of the system
along constitutional lines is a task that the political branches of government are incapable of
rendering precisely because it is an exercise of judicial power. More importantly, the present
Constitution has not only vested the Judiciary the right to exercise judicial power but essentially
makes it a duty to proceed therewith. Section 1, Article VIII of the 1987 Constitution cannot be any
clearer: "The judicial power shall be vested in one Supreme Court and in such lower courts as
may be established by law. It 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 abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government." In Estrada v.
Desierto,142 the expanded concept of judicial power under the 1987 Constitution and its effect on
the political question doctrine was explained as follows:143
To a great degree, the 1987 Constitution has narrowed the reach of the political question doctrine
when it expanded the power of judicial review of this court not only to settle actual controversies
involving rights which are legally demandable and enforceable but also to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of government. Heretofore, the judiciary has focused on the
"thou shalt not's" of the Constitution directed against the exercise of its jurisdiction. With the new
provision, however, courts are given a greater prerogative to determine what it can do to prevent
grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of government. Clearly, the new provision did not just grant the Court power of
doing nothing. x x x (Emphases supplied)
It must also be borne in mind that ― when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other departments; does not in reality nullify
or invalidate an act of the legislature or the executive, but only asserts the solemn and sacred
obligation assigned to it by the Constitution."144 To a great extent, the Court is laudably cognizant
of the reforms undertaken by its co-equal branches of government. But it is by constitutional force
that the Court must faithfully perform its duty. Ultimately, it is the Court‘s avowed intention that a
resolution of these cases would not arrest or in any manner impede the endeavors of the two
other branches but, in fact, help ensure that the pillars of change are erected on firm constitutional
grounds. After all, it is in the best interest of the people that each great branch of government,
within its own sphere, contributes its share towards achieving a holistic and genuine solution to the
problems of society. For all these reasons, the Court cannot heed respondents‘ plea for judicial
restraint.
C. Locus Standi.
"The gist of the question of standing is whether a party alleges such personal stake in the outcome
of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court depends for illumination of difficult constitutional questions. Unless a
person is injuriously affected in any of his constitutional rights by the operation of statute or
ordinance, he has no standing."145
Petitioners have come before the Court in their respective capacities as citizen-taxpayers and
accordingly, assert that they "dutifully contribute to the coffers of the National Treasury."146
Clearly, as taxpayers, they possess the requisite standing to question the validity of the existing
"Pork Barrel System" under which the taxes they pay have been and continue to be utilized. It is
undeniable that petitioners, as taxpayers, are bound to suffer from the unconstitutional usage of
public funds, if the Court so rules. Invariably, taxpayers have been allowed to sue where there is a
claim that public funds are illegally disbursed or that public money is being deflected to any
improper purpose, or that public funds are wasted through the enforcement of an invalid or
unconstitutional law,147 as in these cases.
Moreover, as citizens, petitioners have equally fulfilled the standing requirement given that the
issues they have raised may be classified as matters "of transcendental importance, of
overreaching significance to society, or of paramount public interest."148 The CoA Chairperson‘s
statement during the Oral Arguments that the present controversy involves "not merely a systems
failure" but a "complete breakdown of controls"149 amplifies, in addition to the matters above-
discussed, the seriousness of the issues involved herein. Indeed, of greater import than the
damage caused by the illegal expenditure of public funds is the mortal wound inflicted upon the
fundamental law by the enforcement of an invalid statute.150 All told, petitioners have sufficient
locus standi to file the instant cases.
D. Res Judicata and Stare Decisis.
Res judicata (which means a "matter adjudged") and stare decisis non quieta et movere (or
simply, stare decisis which means "follow past precedents and do not disturb what has been
settled") are general procedural law principles which both deal with the effects of previous but
factually similar dispositions to subsequent cases. For the cases at bar, the Court examines the
applicability of these principles in relation to its prior rulings in Philconsa and LAMP.
The focal point of res judicata is the judgment. The principle states that a judgment on the merits
in a previous case rendered by a court of competent jurisdiction would bind a subsequent case if,
between the first and second actions, there exists an identity of parties, of subject matter, and of
causes of action.151 This required identity is not, however, attendant hereto since Philconsa and
LAMP, respectively involved constitutional challenges against the 1994 CDF Article and 2004
PDAF Article, whereas the cases at bar call for a broader constitutional scrutiny of the entire "Pork
Barrel System." Also, the ruling in LAMP is essentially a dismissal based on a procedural
technicality – and, thus, hardly a judgment on the merits – in that petitioners therein failed to
present any "convincing proof x x x showing that, indeed, there were direct releases of funds to
the Members of Congress, who actually spend them according to their sole discretion" or
"pertinent evidentiary support to demonstrate the illegal misuse of PDAF in the form of kickbacks
and has become a common exercise of unscrupulous Members of Congress." As such, the Court
up held, in view of the presumption of constitutionality accorded to every law, the 2004 PDAF
Article, and saw "no need to review or reverse the standing pronouncements in the said case."
Hence, for the foregoing reasons, the res judicata principle, insofar as the Philconsa and LAMP
cases are concerned, cannot apply.
On the other hand, the focal point of stare decisis is the doctrine created. The principle,
entrenched under Article 8152 of the Civil Code, evokes the general rule that, for the sake of
certainty, a conclusion reached in one case should be doctrinally applied to those that follow if the
facts are substantially the same, even though the parties may be different. It proceeds from the
first principle of justice that, absent any powerful countervailing considerations, like cases ought to
be decided alike. Thus, where the same questions relating to the same event have been put
forward by the parties similarly situated as in a previous case litigated and decided by a competent
court, the rule of stare decisis is a bar to any attempt to re-litigate the same issue.153
Philconsa was the first case where a constitutional challenge against a Pork Barrel provision, i.e.,
the 1994 CDF Article, was resolved by the Court. To properly understand its context, petitioners‘
posturing was that "the power given to the Members of Congress to propose and identify projects
and activities to be funded by the CDF is an encroachment by the legislature on executive power,
since said power in an appropriation act is in implementation of the law" and that "the proposal
and identification of the projects do not involve the making of laws or the repeal and amendment
thereof, the only function given to the Congress by the Constitution."154 In deference to the
foregoing submissions, the Court reached the following main conclusions: one, under the
Constitution, the power of appropriation, or the "power of the purse," belongs to Congress; two,
the power of appropriation carries with it the power to specify the project or activity to be funded
under the appropriation law and it can be detailed and as broad as Congress wants it to be; and,
three, the proposals and identifications made by Members of Congress are merely
59
recommendatory. At once, it is apparent that the Philconsa resolution was a limited response to a
separation of powers problem, specifically on the propriety of conferring post-enactment
identification authority to Members of Congress. On the contrary, the present cases call for a more
holistic examination of (a) the inter-relation between the CDF and PDAF Articles with each other,
formative as they are of the entire "Pork Barrel System" as well as (b) the intra-relation of post-
enactment measures contained within a particular CDF or PDAF Article, including not only those
related to the area of project identification but also to the areas of fund release and realignment.
The complexity of the issues and the broader legal analyses herein warranted may be, therefore,
considered as a powerful countervailing reason against a wholesale application of the stare
decisis principle.
In addition, the Court observes that the Philconsa ruling was actually riddled with inherent
constitutional inconsistencies which similarly countervail against a full resort to stare decisis. As
may be deduced from the main conclusions of the case, Philconsa‘s fundamental premise in
allowing Members of Congress to propose and identify of projects would be that the said
identification authority is but an aspect of the power of appropriation which has been
constitutionally lodged in Congress. From this premise, the contradictions may be easily seen. If
the authority to identify projects is an aspect of appropriation and the power of appropriation is a
form of legislative power thereby lodged in Congress, then it follows that: (a) it is Congress which
should exercise such authority, and not its individual Members; (b) such authority must be
exercised within the prescribed procedure of law passage and, hence, should not be exercised
after the GAA has already been passed; and (c) such authority, as embodied in the GAA, has the
force of law and, hence, cannot be merely recommendatory. Justice Vitug‘s Concurring Opinion in
the same case sums up the Philconsa quandary in this wise: "Neither would it be objectionable for
Congress, by law, to appropriate funds for such specific projects as it may be minded; to give that
authority, however, to the individual members of Congress in whatever guise, I am afraid, would
be constitutionally impermissible." As the Court now largely benefits from hindsight and current
findings on the matter, among others, the CoA Report, the Court must partially abandon its
previous ruling in Philconsa insofar as it validated the post-enactment identification authority of
Members of Congress on the guise that the same was merely recommendatory. This postulate
raises serious constitutional inconsistencies which cannot be simply excused on the ground that
such mechanism is "imaginative as it is innovative." Moreover, it must be pointed out that the
recent case of Abakada Guro Party List v. Purisima155 (Abakada) has effectively overturned
Philconsa‘s allowance of post-enactment legislator participation in view of the separation of
powers principle. These constitutional inconsistencies and the Abakada rule will be discussed in
greater detail in the ensuing section of this Decision.
As for LAMP, suffice it to restate that the said case was dismissed on a procedural technicality
and, hence, has not set any controlling doctrine susceptible of current application to the
substantive issues in these cases. In fine, stare decisis would not apply.
II. Substantive Issues.
A. Definition of Terms.
Before the Court proceeds to resolve the substantive issues of these cases, it must first define the
terms "Pork Barrel System," "Congressional Pork Barrel," and "Presidential Pork Barrel" as they
are essential to the ensuing discourse.
Petitioners define the term "Pork Barrel System" as the "collusion between the Legislative and
Executive branches of government to accumulate lump-sum public funds in their offices with
unchecked discretionary powers to determine its distribution as political largesse."156 They assert
that the following elements make up the Pork Barrel System: (a) lump-sum funds are allocated
through the appropriations process to an individual officer; (b) the officer is given sole and broad
discretion in determining how the funds will be used or expended; (c) the guidelines on how to
spend or use the funds in the appropriation are either vague, overbroad or inexistent; and (d)
projects funded are intended to benefit a definite constituency in a particular part of the country
and to help the political careers of the disbursing official by yielding rich patronage benefits.157
They further state that the Pork Barrel System is comprised of two (2) kinds of discretionary public
funds: first, the Congressional (or Legislative) Pork Barrel, currently known as the PDAF;158 and,
second, the Presidential (or Executive) Pork Barrel, specifically, the Malampaya Funds under PD
910 and the Presidential Social Fund under PD 1869, as amended by PD 1993.159
Considering petitioners‘ submission and in reference to its local concept and legal history, the
Court defines the Pork Barrel System as the collective body of rules and practices that govern the
manner by which lump-sum, discretionary funds, primarily intended for local projects, are utilized
through the respective participations of the Legislative and Executive branches of government,
including its members. The Pork Barrel System involves two (2) kinds of lump-sum discretionary
funds:
First, there is the Congressional Pork Barrel which is herein defined as a kind of lump-sum,
discretionary fund wherein legislators, either individually or collectively organized into committees,
are able to effectively control certain aspects of the fund’s utilization through various post-
enactment measures and/or practices. In particular, petitioners consider the PDAF, as it appears
under the 2013 GAA, as Congressional Pork Barrel since it is, inter alia, a post-enactment
measure that allows individual legislators to wield a collective power;160 and
Second, there is the Presidential Pork Barrel which is herein defined as a kind of lump-sum,
discretionary fund which allows the President to determine the manner of its utilization. For
reasons earlier stated,161 the Court shall delimit the use of such term to refer only to the
Malampaya Funds and the Presidential Social Fund.
With these definitions in mind, the Court shall now proceed to discuss the substantive issues of
these cases.
B. Substantive Issues on the Congressional Pork Barrel.
1. Separation of Powers.
a. Statement of Principle.
The principle of separation of powers refers to the constitutional demarcation of the three
fundamental powers of government. In the celebrated words of Justice Laurel in Angara v.
Electoral Commission,162 it means that the "Constitution has blocked out with deft strokes and in
bold lines, allotment of power to the executive, the legislative and the judicial departments of the
government."163 To the legislative branch of government, through Congress,164 belongs the
power to make laws; to the executive branch of government, through the President,165 belongs
the power to enforce laws; and to the judicial branch of government, through the Court,166
belongs the power to interpret laws. Because the three great powers have been, by constitutional
design, ordained in this respect, "each department of the government has exclusive cognizance of
matters within its jurisdiction, and is supreme within its own sphere."167 Thus, "the legislature has
no authority to execute or construe the law, the executive has no authority to make or construe the
law, and the judiciary has no power to make or execute the law."168 The principle of separation of
powers and its concepts of autonomy and independence stem from the notion that the powers of
government must be divided to avoid concentration of these powers in any one branch; the
division, it is hoped, would avoid any single branch from lording its power over the other branches
or the citizenry.169 To achieve this purpose, the divided power must be wielded by co-equal
branches of government that are equally capable of independent action in exercising their
respective mandates. Lack of independence would result in the inability of one branch of
government to check the arbitrary or self-interest assertions of another or others.170
Broadly speaking, there is a violation of the separation of powers principle when one branch of
government unduly encroaches on the domain of another. US Supreme Court decisions instruct
that the principle of separation of powers may be violated in two (2) ways: firstly, "one branch may
interfere impermissibly with the other’s performance of its constitutionally assigned function";171
and "alternatively, the doctrine may be violated when one branch assumes a function that more
properly is entrusted to another."172 In other words, there is a violation of the principle when there
is impermissible (a) interference with and/or (b) assumption of another department‘s functions.
The enforcement of the national budget, as primarily contained in the GAA, is indisputably a
function both constitutionally assigned and properly entrusted to the Executive branch of
government. In Guingona, Jr. v. Hon. Carague173 (Guingona, Jr.), the Court explained that the
phase of budget execution "covers the various operational aspects of budgeting" and accordingly
includes "the evaluation of work and financial plans for individual activities," the "regulation and
release of funds" as well as all "other related activities" that comprise the budget execution
cycle.174 This is rooted in the principle that the allocation of power in the three principal branches
of government is a grant of all powers inherent in them.175 Thus, unless the Constitution provides
otherwise, the Executive department should exclusively exercise all roles and prerogatives which
go into the implementation of the national budget as provided under the GAA as well as any other
appropriation law.
In view of the foregoing, the Legislative branch of government, much more any of its members,
should not cross over the field of implementing the national budget since, as earlier stated, the
60
same is properly the domain of the Executive. Again, in Guingona, Jr., the Court stated that
"Congress enters the picture when it deliberates or acts on the budget proposals of the President.
Thereafter, Congress, "in the exercise of its own judgment and wisdom, formulates an
appropriation act precisely following the process established by the Constitution, which specifies
that no money may be paid from the Treasury except in accordance with an appropriation made
by law." Upon approval and passage of the GAA, Congress‘ law -making role necessarily comes
to an end and from there the Executive‘s role of implementing the national budget begins. So as
not to blur the constitutional boundaries between them, Congress must "not concern it self with
details for implementation by the Executive."176
The foregoing cardinal postulates were definitively enunciated in Abakada where the Court held
that "from the moment the law becomes effective, any provision of law that empowers Congress or
any of its members to play any role in the implementation or enforcement of the law violates the
principle of separation of powers and is thus unconstitutional."177 It must be clarified, however,
that since the restriction only pertains to "any role in the implementation or enforcement of the
law," Congress may still exercise its oversight function which is a mechanism of checks and
balances that the Constitution itself allows. But it must be made clear that Congress‘ role must be
confined to mere oversight. Any post-enactment-measure allowing legislator participation beyond
oversight is bereft of any constitutional basis and hence, tantamount to impermissible interference
and/or assumption of executive functions. As the Court ruled in Abakada:178
Any post-enactment congressional measure x x x should be limited to scrutiny and
investigation.1âwphi1 In particular, congressional oversight must be confined to the following:
(1) scrutiny based primarily on Congress‘ power of appropriation and the budget hearings
conducted in connection with it, its power to ask heads of departments to appear before and be
heard by either of its Houses on any matter pertaining to their departments and its power of
confirmation; and
(2) investigation and monitoring of the implementation of laws pursuant to the power of Congress
to conduct inquiries in aid of legislation.
Any action or step beyond that will undermine the separation of powers guaranteed by the
Constitution. (Emphases supplied)
b. Application.
In these cases, petitioners submit that the Congressional Pork Barrel – among others, the 2013
PDAF Article – "wrecks the assignment of responsibilities between the political branches" as it is
designed to allow individual legislators to interfere "way past the time it should have ceased" or,
particularly, "after the GAA is passed."179 They state that the findings and recommendations in
the CoA Report provide "an illustration of how absolute and definitive the power of legislators wield
over project implementation in complete violation of the constitutional principle of separation of
powers."180 Further, they point out that the Court in the Philconsa case only allowed the CDF to
exist on the condition that individual legislators limited their role to recommending projects and not
if they actually dictate their implementation.181
For their part, respondents counter that the separations of powers principle has not been violated
since the President maintains "ultimate authority to control the execution of the GAA‖ and that he
"retains the final discretion to reject" the legislators‘ proposals.182 They maintain that the Court, in
Philconsa, "upheld the constitutionality of the power of members of Congress to propose and
identify projects so long as such proposal and identification are recommendatory."183 As such,
they claim that "everything in the Special Provisions [of the 2013 PDAF Article follows the
Philconsa framework, and hence, remains constitutional."184
The Court rules in favor of petitioners.
As may be observed from its legal history, the defining feature of all forms of Congressional Pork
Barrel would be the authority of legislators to participate in the post-enactment phases of project
implementation.
At its core, legislators – may it be through project lists,185 prior consultations186 or program
menus187 – have been consistently accorded post-enactment authority to identify the projects
they desire to be funded through various Congressional Pork Barrel allocations. Under the 2013
PDAF Article, the statutory authority of legislators to identify projects post-GAA may be construed
from the import of Special Provisions 1 to 3 as well as the second paragraph of Special Provision
4. To elucidate, Special Provision 1 embodies the program menu feature which, as evinced from
past PDAF Articles, allows individual legislators to identify PDAF projects for as long as the
identified project falls under a general program listed in the said menu. Relatedly, Special
Provision 2 provides that the implementing agencies shall, within 90 days from the GAA is passed,
submit to Congress a more detailed priority list, standard or design prepared and submitted by
implementing agencies from which the legislator may make his choice. The same provision further
authorizes legislators to identify PDAF projects outside his district for as long as the representative
of the district concerned concurs in writing. Meanwhile, Special Provision 3 clarifies that PDAF
projects refer to "projects to be identified by legislators"188 and thereunder provides the allocation
limit for the total amount of projects identified by each legislator. Finally, paragraph 2 of Special
Provision 4 requires that any modification and revision of the project identification "shall be
submitted to the House Committee on Appropriations and the Senate Committee on Finance for
favorable endorsement to the DBM or the implementing agency, as the case may be." From the
foregoing special provisions, it cannot be seriously doubted that legislators have been accorded
post-enactment authority to identify PDAF projects.
Aside from the area of project identification, legislators have also been accorded post-enactment
authority in the areas of fund release and realignment. Under the 2013 PDAF Article, the statutory
authority of legislators to participate in the area of fund release through congressional committees
is contained in Special Provision 5 which explicitly states that "all request for release of funds shall
be supported by the documents prescribed under Special Provision No. 1 and favorably endorsed
by House Committee on Appropriations and the Senate Committee on Finance, as the case may
be"; while their statutory authority to participate in the area of fund realignment is contained in: first
, paragraph 2, Special Provision 4189 which explicitly state s, among others, that "any realignment
of funds shall be submitted to the House Committee on Appropriations and the Senate Committee
on Finance for favorable endorsement to the DBM or the implementing agency, as the case may
be‖ ; and, second , paragraph 1, also of Special Provision 4 which authorizes the "Secretaries of
Agriculture, Education, Energy, Interior and Local Government, Labor and Employment, Public
Works and Highways, Social Welfare and Development and Trade and Industry190 x x x to
approve realignment from one project/scope to another within the allotment received from this
Fund, subject to among others (iii) the request is with the concurrence of the legislator concerned."
Clearly, these post-enactment measures which govern the areas of project identification, fund
release and fund realignment are not related to functions of congressional oversight and, hence,
allow legislators to intervene and/or assume duties that properly belong to the sphere of budget
execution. Indeed, by virtue of the foregoing, legislators have been, in one form or another,
authorized to participate in – as Guingona, Jr. puts it – "the various operational aspects of
budgeting," including "the evaluation of work and financial plans for individual activities" and the
"regulation and release of funds" in violation of the separation of powers principle. The
fundamental rule, as categorically articulated in Abakada, cannot be overstated – from the
moment the law becomes effective, any provision of law that empowers Congress or any of its
members to play any role in the implementation or enforcement of the law violates the principle of
separation of powers and is thus unconstitutional.191 That the said authority is treated as merely
recommendatory in nature does not alter its unconstitutional tenor since the prohibition, to repeat,
covers any role in the implementation or enforcement of the law. Towards this end, the Court must
therefore abandon its ruling in Philconsa which sanctioned the conduct of legislator identification
on the guise that the same is merely recommendatory and, as such, respondents‘ reliance on the
same falters altogether.
Besides, it must be pointed out that respondents have nonetheless failed to substantiate their
position that the identification authority of legislators is only of recommendatory import. Quite the
contrary, respondents – through the statements of the Solicitor General during the Oral Arguments
– have admitted that the identification of the legislator constitutes a mandatory requirement before
his PDAF can be tapped as a funding source, thereby highlighting the indispensability of the said
act to the entire budget execution process:192
Justice Bernabe: Now, without the individual legislator’s identification of the project, can the PDAF
of the legislator be utilized?
Solicitor General Jardeleza: No, Your Honor.
Justice Bernabe: It cannot?
Solicitor General Jardeleza: It cannot… (interrupted)
Justice Bernabe: So meaning you should have the identification of the project by the individual
legislator?
Solicitor General Jardeleza: Yes, Your Honor.
xxxx
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Justice Bernabe: In short, the act of identification is mandatory?
Solictor General Jardeleza: Yes, Your Honor. In the sense that if it is not done and then there is no
identification.
xxxx
Justice Bernabe: Now, would you know of specific instances when a project was implemented
without the identification by the individual legislator?
Solicitor General Jardeleza: I do not know, Your Honor; I do not think so but I have no specific
examples. I would doubt very much, Your Honor, because to implement, there is a need for a
SARO and the NCA. And the SARO and the NCA are triggered by an identification from the
legislator.
xxxx
Solictor General Jardeleza: What we mean by mandatory, Your Honor, is we were replying to a
question, "How can a legislator make sure that he is able to get PDAF Funds?" It is mandatory in
the sense that he must identify, in that sense, Your Honor. Otherwise, if he does not identify, he
cannot avail of the PDAF Funds and his district would not be able to have PDAF Funds, only in
that sense, Your Honor. (Emphases supplied)
Thus, for all the foregoing reasons, the Court hereby declares the 2013 PDAF Article as well as all
other provisions of law which similarly allow legislators to wield any form of post-enactment
authority in the implementation or enforcement of the budget, unrelated to congressional
oversight, as violative of the separation of powers principle and thus unconstitutional. Corollary
thereto, informal practices, through which legislators have effectively intruded into the proper
phases of budget execution, must be deemed as acts of grave abuse of discretion amounting to
lack or excess of jurisdiction and, hence, accorded the same unconstitutional treatment. That such
informal practices do exist and have, in fact, been constantly observed throughout the years has
not been substantially disputed here. As pointed out by Chief Justice Maria Lourdes P.A. Sereno
(Chief Justice Sereno) during the Oral Arguments of these cases:193
Chief Justice Sereno:
Now, from the responses of the representative of both, the DBM and two (2) Houses of Congress,
if we enforces the initial thought that I have, after I had seen the extent of this research made by
my staff, that neither the Executive nor Congress frontally faced the question of constitutional
compatibility of how they were engineering the budget process. In fact, the words you have been
using, as the three lawyers of the DBM, and both Houses of Congress has also been using is
surprise; surprised that all of these things are now surfacing. In fact, I thought that what the 2013
PDAF provisions did was to codify in one section all the past practice that had been done since
1991. In a certain sense, we should be thankful that they are all now in the PDAF Special
Provisions. x x x (Emphasis and underscoring supplied)
Ultimately, legislators cannot exercise powers which they do not have, whether through formal
measures written into the law or informal practices institutionalized in government agencies, else
the Executive department be deprived of what the Constitution has vested as its own.
2. Non-delegability of Legislative Power.
a. Statement of Principle.
As an adjunct to the separation of powers principle,194 legislative power shall be exclusively
exercised by the body to which the Constitution has conferred the same. In particular, Section 1,
Article VI of the 1987 Constitution states that such 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.195 Based on this provision, it
is clear that only Congress, acting as a bicameral body, and the people, through the process of
initiative and referendum, may constitutionally wield legislative power and no other. This premise
embodies the principle of non-delegability of legislative power, and the only recognized exceptions
thereto would be: (a) delegated legislative power to local governments which, by immemorial
practice, are allowed to legislate on purely local matters;196 and (b) constitutionally-grafted
exceptions such as the authority of the President to, by law, exercise powers necessary and
proper to carry out a declared national policy in times of war or other national emergency,197 or
fix within specified limits, and subject to such limitations and restrictions as Congress may impose,
tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or imposts
within the framework of the national development program of the Government.198
Notably, the principle of non-delegability should not be confused as a restriction to delegate rule-
making authority to implementing agencies for the limited purpose of either filling up the details of
the law for its enforcement (supplementary rule-making) or ascertaining facts to bring the law into
actual operation (contingent rule-making).199 The conceptual treatment and limitations of
delegated rule-making were explained in the case of People v. Maceren200 as follows:
The grant of the rule-making power to administrative agencies is a relaxation of the principle of
separation of powers and is an exception to the nondelegation of legislative powers.
Administrative regulations or "subordinate legislation" calculated to promote the public interest are
necessary because of "the growing complexity of modern life, the multiplication of the subjects of
governmental regulations, and the increased difficulty of administering the law."
xxxx
Nevertheless, it must be emphasized that the rule-making power must be confined to details for
regulating the mode or proceeding to carry into effect the law as it has been enacted. The power
cannot be extended to amending or expanding the statutory requirements or to embrace matters
not covered by the statute. Rules that subvert the statute cannot be sanctioned. (Emphases
supplied)
b. Application.
In the cases at bar, the Court observes that the 2013 PDAF Article, insofar as it confers post-
enactment identification authority to individual legislators, violates the principle of non-delegability
since said legislators are effectively allowed to individually exercise the power of appropriation,
which – as settled in Philconsa – is lodged in Congress.201 That the power to appropriate must be
exercised only through legislation is clear from Section 29(1), Article VI of the 1987 Constitution
which states that: "No money shall be paid out of the Treasury except in pursuance of an
appropriation made by law." To understand what constitutes an act of appropriation, the Court, in
Bengzon v. Secretary of Justice and Insular Auditor202 (Bengzon), held that the power of
appropriation involves (a) the setting apart by law of a certain sum from the public revenue for (b)
a specified purpose. Essentially, under the 2013 PDAF Article, individual legislators are given a
personal lump-sum fund from which they are able to dictate (a) how much from such fund would
go to (b) a specific project or beneficiary that they themselves also determine. As these two (2)
acts comprise the exercise of the power of appropriation as described in Bengzon, and given that
the 2013 PDAF Article authorizes individual legislators to perform the same, undoubtedly, said
legislators have been conferred the power to legislate which the Constitution does not, however,
allow. Thus, keeping with the principle of non-delegability of legislative power, the Court hereby
declares the 2013 PDAF Article, as well as all other forms of Congressional Pork Barrel which
contain the similar legislative identification feature as herein discussed, as unconstitutional.
3. Checks and Balances.
a. Statement of Principle; Item-Veto Power.
The fact that the three great powers of government are intended to be kept separate and distinct
does not mean that they are absolutely unrestrained and independent of each other. The
Constitution has also provided for an elaborate system of checks and balances to secure
coordination in the workings of the various departments of the government.203
A prime example of a constitutional check and balance would be the President’s power to veto an
item written into an appropriation, revenue or tariff bill submitted to him by Congress for approval
through a process known as "bill presentment." The President‘s item-veto power is found in
Section 27(2), Article VI of the 1987 Constitution which reads as follows:
Sec. 27. x x x.
xxxx
(2) The President shall have the power to veto any particular item or items in an appropriation,
revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.
The presentment of appropriation, revenue or tariff bills to the President, wherein he may exercise
his power of item-veto, forms part of the "single, finely wrought and exhaustively considered,
procedures" for law-passage as specified under the Constitution.204 As stated in Abakada, the
final step in the law-making process is the "submission of the bill to the President for approval.
Once approved, it takes effect as law after the required publication."205
Elaborating on the President‘s item-veto power and its relevance as a check on the legislature, the
Court, in Bengzon, explained that:206
The former Organic Act and the present Constitution of the Philippines make the Chief Executive
an integral part of the law-making power. His disapproval of a bill, commonly known as a veto, is
essentially a legislative act. The questions presented to the mind of the Chief Executive are
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precisely the same as those the legislature must determine in passing a bill, except that his will be
a broader point of view.
The Constitution is a limitation upon the power of the legislative department of the government,
but in this respect it is a grant of power to the executive department. The Legislature has the
affirmative power to enact laws; the Chief Executive has the negative power by the constitutional
exercise of which he may defeat the will of the Legislature. It follows that the Chief Executive must
find his authority in the Constitution. But in exercising that authority he may not be confined to
rules of strict construction or hampered by the unwise interference of the judiciary. The courts will
indulge every intendment in favor of the constitutionality of a veto in the same manner as they will
presume the constitutionality of an act as originally passed by the Legislature. (Emphases
supplied)
The justification for the President‘s item-veto power rests on a variety of policy goals such as to
prevent log-rolling legislation,207 impose fiscal restrictions on the legislature, as well as to fortify
the executive branch‘s role in the budgetary process.208 In Immigration and Naturalization
Service v. Chadha, the US Supreme Court characterized the President‘s item-power as "a salutary
check upon the legislative body, calculated to guard the community against the effects of factions,
precipitancy, or of any impulse unfriendly to the public good, which may happen to influence a
majority of that body"; phrased differently, it is meant to "increase the chances in favor of the
community against the passing of bad laws, through haste, inadvertence, or design."209
For the President to exercise his item-veto power, it necessarily follows that there exists a proper
"item" which may be the object of the veto. An item, as defined in the field of appropriations,
pertains to "the particulars, the details, the distinct and severable parts of the appropriation or of
the bill." In the case of Bengzon v. Secretary of Justice of the Philippine Islands,210 the US
Supreme Court characterized an item of appropriation as follows:
An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation
of money, not some general provision of law which happens to be put into an appropriation bill.
(Emphases supplied)
On this premise, it may be concluded that an appropriation bill, to ensure that the President may
be able to exercise his power of item veto, must contain "specific appropriations of money" and
not only "general provisions" which provide for parameters of appropriation.
Further, it is significant to point out that an item of appropriation must be an item characterized by
singular correspondence – meaning an allocation of a specified singular amount for a specified
singular purpose, otherwise known as a "line-item."211 This treatment not only allows the item to
be consistent with its definition as a "specific appropriation of money" but also ensures that the
President may discernibly veto the same. Based on the foregoing formulation, the existing
Calamity Fund, Contingent Fund and the Intelligence Fund, being appropriations which state a
specified amount for a specific purpose, would then be considered as "line- item" appropriations
which are rightfully subject to item veto. Likewise, it must be observed that an appropriation may
be validly apportioned into component percentages or values; however, it is crucial that each
percentage or value must be allocated for its own corresponding purpose for such component to
be considered as a proper line-item. Moreover, as Justice Carpio correctly pointed out, a valid
appropriation may even have several related purposes that are by accounting and budgeting
practice considered as one purpose, e.g., MOOE (maintenance and other operating expenses), in
which case the related purposes shall be deemed sufficiently specific for the exercise of the
President‘s item veto power. Finally, special purpose funds and discretionary funds would equally
square with the constitutional mechanism of item-veto for as long as they follow the rule on
singular correspondence as herein discussed. Anent special purpose funds, it must be added that
Section 25(4), Article VI of the 1987 Constitution requires that the "special appropriations bill shall
specify the purpose for which it is intended, and shall be supported by funds actually available as
certified by the National Treasurer, or t o be raised by a corresponding revenue proposal therein."
Meanwhile, with respect to discretionary funds, Section 2 5(6), Article VI of the 1987 Constitution
requires that said funds "shall be disbursed only for public purposes to be supported by
appropriate vouchers and subject to such guidelines as may be prescribed by law."
In contrast, what beckons constitutional infirmity are appropriations which merely provide for a
singular lump-sum amount to be tapped as a source of funding for multiple purposes. Since such
appropriation type necessitates the further determination of both the actual amount to be
expended and the actual purpose of the appropriation which must still be chosen from the multiple
purposes stated in the law, it cannot be said that the appropriation law already indicates a "specific
appropriation of money‖ and hence, without a proper line-item which the President may veto. As a
practical result, the President would then be faced with the predicament of either vetoing the entire
appropriation if he finds some of its purposes wasteful or undesirable, or approving the entire
appropriation so as not to hinder some of its legitimate purposes. Finally, it may not be amiss to
state that such arrangement also raises non-delegability issues considering that the implementing
authority would still have to determine, again, both the actual amount to be expended and the
actual purpose of the appropriation. Since the foregoing determinations constitute the integral
aspects of the power to appropriate, the implementing authority would, in effect, be exercising
legislative prerogatives in violation of the principle of non-delegability.
b. Application.
In these cases, petitioners claim that "in the current x x x system where the PDAF is a lump-sum
appropriation, the legislator‘s identification of the projects after the passage of the GAA denies the
President the chance to veto that item later on."212 Accordingly, they submit that the "item veto
power of the President mandates that appropriations bills adopt line-item budgeting" and that
"Congress cannot choose a mode of budgeting which effectively renders the constitutionally-given
power of the President useless."213
On the other hand, respondents maintain that the text of the Constitution envisions a process
which is intended to meet the demands of a modernizing economy and, as such, lump-sum
appropriations are essential to financially address situations which are barely foreseen when a
GAA is enacted. They argue that the decision of the Congress to create some lump-sum
appropriations is constitutionally allowed and textually-grounded.214
The Court agrees with petitioners.
Under the 2013 PDAF Article, the amount of ₱24.79 Billion only appears as a collective allocation
limit since the said amount would be further divided among individual legislators who would then
receive personal lump-sum allocations and could, after the GAA is passed, effectively appropriate
PDAF funds based on their own discretion. As these intermediate appropriations are made by
legislators only after the GAA is passed and hence, outside of the law, it necessarily means that
the actual items of PDAF appropriation would not have been written into the General
Appropriations Bill and thus effectuated without veto consideration. This kind of lump-sum/post-
enactment legislative identification budgeting system fosters the creation of a budget within a
budget" which subverts the prescribed procedure of presentment and consequently impairs the
President‘s power of item veto. As petitioners aptly point out, the above-described system forces
the President to decide between (a) accepting the entire ₱24.79 Billion PDAF allocation without
knowing the specific projects of the legislators, which may or may not be consistent with his
national agenda and (b) rejecting the whole PDAF to the detriment of all other legislators with
legitimate projects.215
Moreover, even without its post-enactment legislative identification feature, the 2013 PDAF Article
would remain constitutionally flawed since it would then operate as a prohibited form of lump-sum
appropriation above-characterized. In particular, the lump-sum amount of ₱24.79 Billion would be
treated as a mere funding source allotted for multiple purposes of spending, i.e., scholarships,
medical missions, assistance to indigents, preservation of historical materials, construction of
roads, flood control, etc. This setup connotes that the appropriation law leaves the actual amounts
and purposes of the appropriation for further determination and, therefore, does not readily
indicate a discernible item which may be subject to the President‘s power of item veto.
In fact, on the accountability side, the same lump-sum budgeting scheme has, as the CoA
Chairperson relays, "limited state auditors from obtaining relevant data and information that would
aid in more stringently auditing the utilization of said Funds."216 Accordingly, she recommends
the adoption of a "line by line budget or amount per proposed program, activity or project, and per
implementing agency."217
Hence, in view of the reasons above-stated, the Court finds the 2013 PDAF Article, as well as all
Congressional Pork Barrel Laws of similar operation, to be unconstitutional. That such budgeting
system provides for a greater degree of flexibility to account for future contingencies cannot be an
excuse to defeat what the Constitution requires. Clearly, the first and essential truth of the matter
is that unconstitutional means do not justify even commendable ends.218
c. Accountability.
Petitioners further relate that the system under which various forms of Congressional Pork Barrel
operate defies public accountability as it renders Congress incapable of checking itself or its
Members. In particular, they point out that the Congressional Pork Barrel "gives each legislator a
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direct, financial interest in the smooth, speedy passing of the yearly budget" which turns them
"from fiscalizers" into "financially-interested partners."219 They also claim that the system has an
effect on re- election as "the PDAF excels in self-perpetuation of elective officials." Finally, they
add that the "PDAF impairs the power of impeachment" as such "funds are indeed quite useful, ‘to
well, accelerate the decisions of senators.‘"220
The Court agrees in part.
The aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that "public
office is a public trust," is an overarching reminder that every instrumentality of government should
exercise their official functions only in accordance with the principles of the Constitution which
embodies the parameters of the people‘s trust. The notion of a public trust connotes
accountability,221 hence, the various mechanisms in the Constitution which are designed to exact
accountability from public officers.
Among others, an accountability mechanism with which the proper expenditure of public funds
may be checked is the power of congressional oversight. As mentioned in Abakada,222
congressional oversight may be performed either through: (a) scrutiny based primarily on
Congress‘ power of appropriation and the budget hearings conducted in connection with it, its
power to ask heads of departments to appear before and be heard by either of its Houses on any
matter pertaining to their departments and its power of confirmation;223 or (b) investigation and
monitoring of the implementation of laws pursuant to the power of Congress to conduct inquiries in
aid of legislation.224
The Court agrees with petitioners that certain features embedded in some forms of Congressional
Pork Barrel, among others the 2013 PDAF Article, has an effect on congressional oversight. The
fact that individual legislators are given post-enactment roles in the implementation of the budget
makes it difficult for them to become disinterested "observers" when scrutinizing, investigating or
monitoring the implementation of the appropriation law. To a certain extent, the conduct of
oversight would be tainted as said legislators, who are vested with post-enactment authority,
would, in effect, be checking on activities in which they themselves participate. Also, it must be
pointed out that this very same concept of post-enactment authorization runs afoul of Section 14,
Article VI of the 1987 Constitution which provides that:
Sec. 14. No Senator or Member of the House of Representatives may personally appear as
counsel before any court of justice or before the Electoral Tribunals, or quasi-judicial and other
administrative bodies. Neither shall he, directly or indirectly, be interested financially in any
contract with, or in any franchise or special privilege granted by the Government, or any
subdivision, agency, or instrumentality thereof, including any government-owned or controlled
corporation, or its subsidiary, during his term of office. He shall not intervene in any matter before
any office of the Government for his pecuniary benefit or where he may be called upon to act on
account of his office. (Emphasis supplied)
Clearly, allowing legislators to intervene in the various phases of project implementation – a matter
before another office of government – renders them susceptible to taking undue advantage of their
own office.
The Court, however, cannot completely agree that the same post-enactment authority and/or the
individual legislator‘s control of his PDAF per se would allow him to perpetuate himself in office.
Indeed, while the Congressional Pork Barrel and a legislator‘s use thereof may be linked to this
area of interest, the use of his PDAF for re-election purposes is a matter which must be analyzed
based on particular facts and on a case-to-case basis.
Finally, while the Court accounts for the possibility that the close operational proximity between
legislators and the Executive department, through the former‘s post-enactment participation, may
affect the process of impeachment, this matter largely borders on the domain of politics and does
not strictly concern the Pork Barrel System‘s intrinsic constitutionality. As such, it is an improper
subject of judicial assessment.
In sum, insofar as its post-enactment features dilute congressional oversight and violate Section
14, Article VI of the 1987 Constitution, thus impairing public accountability, the 2013 PDAF Article
and other forms of Congressional Pork Barrel of similar nature are deemed as unconstitutional.
4. Political Dynasties.
One of the petitioners submits that the Pork Barrel System enables politicians who are members
of political dynasties to accumulate funds to perpetuate themselves in power, in contravention of
Section 26, Article II of the 1987 Constitution225 which states that:
Sec. 26. The State shall guarantee equal access to opportunities for public service, and prohibit
political dynasties as may be defined by law. (Emphasis and underscoring supplied)
At the outset, suffice it to state that the foregoing provision is considered as not self-executing due
to the qualifying phrase "as may be defined by law." In this respect, said provision does not, by
and of itself, provide a judicially enforceable constitutional right but merely specifies guideline for
legislative or executive action.226 Therefore, since there appears to be no standing law which
crystallizes the policy on political dynasties for enforcement, the Court must defer from ruling on
this issue.
In any event, the Court finds the above-stated argument on this score to be largely speculative
since it has not been properly demonstrated how the Pork Barrel System would be able to
propagate political dynasties.
5. Local Autonomy.
The State‘s policy on local autonomy is principally stated in Section 25, Article II and Sections 2
and 3, Article X of the 1987 Constitution which read as follows:
ARTICLE II
Sec. 25. The State shall ensure the autonomy of local governments.
ARTICLE X
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
Sec. 3. The Congress shall enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system of
decentralization with effective mechanisms of recall, initiative, and referendum, allocate among the
different local government units their powers, responsibilities, and resources, and provide for the
qualifications, election, appointment and removal, term, salaries, powers and functions and duties
of local officials, and all other matters relating to the organization and operation of the local units.
Pursuant thereto, Congress enacted RA 7160,227 otherwise known as the "Local Government
Code of 1991" (LGC), wherein the policy on local autonomy had been more specifically explicated
as follows:
Sec. 2. Declaration of Policy. – (a) It is hereby declared the policy of the State that the territorial
and political subdivisions of the State shall enjoy genuine and meaningful local autonomy to
enable them to attain their fullest development as self-reliant communities and make them more
effective partners in the attainment of national goals. Toward this end, the State shall provide for a
more responsive and accountable local government structure instituted through a system of
decentralization whereby local government units shall be given more powers, authority,
responsibilities, and resources. The process of decentralization shall proceed from the National
Government to the local government units.
xxxx
(c) It is likewise the policy of the State to require all national agencies and offices to conduct
periodic consultations with appropriate local government units, nongovernmental and people‘s
organizations, and other concerned sectors of the community before any project or program is
implemented in their respective jurisdictions. (Emphases and underscoring supplied)
The above-quoted provisions of the Constitution and the LGC reveal the policy of the State to
empower local government units (LGUs) to develop and ultimately, become self-sustaining and
effective contributors to the national economy. As explained by the Court in Philippine Gamefowl
Commission v. Intermediate Appellate Court:228
This is as good an occasion as any to stress the commitment of the Constitution to the policy of
local autonomy which is intended to provide the needed impetus and encouragement to the
development of our local political subdivisions as "self - reliant communities." In the words of
Jefferson, "Municipal corporations are the small republics from which the great one derives its
strength." The vitalization of local governments will enable their inhabitants to fully exploit their
resources and more important, imbue them with a deepened sense of involvement in public affairs
as members of the body politic. This objective could be blunted by undue interference by the
national government in purely local affairs which are best resolved by the officials and inhabitants
of such political units. The decision we reach today conforms not only to the letter of the pertinent
laws but also to the spirit of the Constitution.229 (Emphases and underscoring supplied)
In the cases at bar, petitioners contend that the Congressional Pork Barrel goes against the
constitutional principles on local autonomy since it allows district representatives, who are national
officers, to substitute their judgments in utilizing public funds for local development.230 The Court
agrees with petitioners.
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Philconsa described the 1994 CDF as an attempt "to make equal the unequal" and that "it is also a
recognition that individual members of Congress, far more than the President and their
congressional colleagues, are likely to be knowledgeable about the needs of their respective
constituents and the priority to be given each project."231 Drawing strength from this
pronouncement, previous legislators justified its existence by stating that "the relatively small
projects implemented under the Congressional Pork Barrel complement and link the national
development goals to the countryside and grassroots as well as to depressed areas which are
overlooked by central agencies which are preoccupied with mega-projects.232 Similarly, in his
August 23, 2013 speech on the "abolition" of PDAF and budgetary reforms, President Aquino
mentioned that the Congressional Pork Barrel was originally established for a worthy goal, which
is to enable the representatives to identify projects for communities that the LGU concerned
cannot afford.233
Notwithstanding these declarations, the Court, however, finds an inherent defect in the system
which actually belies the avowed intention of "making equal the unequal." In particular, the Court
observes that the gauge of PDAF and CDF allocation/division is based solely on the fact of office,
without taking into account the specific interests and peculiarities of the district the legislator
represents. In this regard, the allocation/division limits are clearly not based on genuine
parameters of equality, wherein economic or geographic indicators have been taken into
consideration. As a result, a district representative of a highly-urbanized metropolis gets the same
amount of funding as a district representative of a far-flung rural province which would be relatively
"underdeveloped" compared to the former. To add, what rouses graver scrutiny is that even
Senators and Party-List Representatives – and in some years, even the Vice-President – who do
not represent any locality, receive funding from the Congressional Pork Barrel as well. These
certainly are anathema to the Congressional Pork Barrel‘s original intent which is "to make equal
the unequal." Ultimately, the PDAF and CDF had become personal funds under the effective
control of each legislator and given unto them on the sole account of their office.
The Court also observes that this concept of legislator control underlying the CDF and PDAF
conflicts with the functions of the various Local Development Councils (LDCs) which are already
legally mandated to "assist the corresponding sanggunian in setting the direction of economic and
social development, and coordinating development efforts within its territorial jurisdiction."234
Considering that LDCs are instrumentalities whose functions are essentially geared towards
managing local affairs,235 their programs, policies and resolutions should not be overridden nor
duplicated by individual legislators, who are national officers that have no law-making authority
except only when acting as a body. The undermining effect on local autonomy caused by the post-
enactment authority conferred to the latter was succinctly put by petitioners in the following
wise:236
With PDAF, a Congressman can simply bypass the local development council and initiate projects
on his own, and even take sole credit for its execution. Indeed, this type of personality-driven
project identification has not only contributed little to the overall development of the district, but
has even contributed to "further weakening infrastructure planning and coordination efforts of the
government."
Thus, insofar as individual legislators are authorized to intervene in purely local matters and
thereby subvert genuine local autonomy, the 2013 PDAF Article as well as all other similar forms
of Congressional Pork Barrel is deemed unconstitutional.
With this final issue on the Congressional Pork Barrel resolved, the Court now turns to the
substantive issues involving the Presidential Pork Barrel.
C. Substantive Issues on the Presidential Pork Barrel.
1. Validity of Appropriation.
Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of PD1869 (now, amended by
PD 1993), which respectively provide for the Malampaya Funds and the Presidential Social Fund,
as invalid appropriations laws since they do not have the "primary and specific" purpose of
authorizing the release of public funds from the National Treasury. Petitioners submit that Section
8 of PD 910 is not an appropriation law since the "primary and specific‖ purpose of PD 910 is the
creation of an Energy Development Board and Section 8 thereof only created a Special Fund
incidental thereto.237 In similar regard, petitioners argue that Section 12 of PD 1869 is neither a
valid appropriations law since the allocation of the Presidential Social Fund is merely incidental to
the "primary and specific" purpose of PD 1869 which is the amendment of the Franchise and
Powers of PAGCOR.238 In view of the foregoing, petitioners suppose that such funds are being
used without any valid law allowing for their proper appropriation in violation of Section 29(1),
Article VI of the 1987 Constitution which states that: "No money shall be paid out of the Treasury
except in pursuance of an appropriation made by law."239
The Court disagrees.
"An appropriation made by law‖ under the contemplation of Section 29(1), Article VI of the 1987
Constitution exists when a provision of law (a) sets apart a determinate or determinable240
amount of money and (b) allocates the same for a particular public purpose. These two minimum
designations of amount and purpose stem from the very definition of the word "appropriation,"
which means "to allot, assign, set apart or apply to a particular use or purpose," and hence, if
written into the law, demonstrate that the legislative intent to appropriate exists. As the
Constitution "does not provide or prescribe any particular form of words or religious recitals in
which an authorization or appropriation by Congress shall be made, except that it be ‘made by
law,‘" an appropriation law may – according to Philconsa – be "detailed and as broad as Congress
wants it to be" for as long as the intent to appropriate may be gleaned from the same. As held in
the case of Guingona, Jr.:241
There is no provision in our Constitution that provides or prescribes any particular form of words or
religious recitals in which an authorization or appropriation by Congress shall be made, except
that it be "made by law," such as precisely the authorization or appropriation under the questioned
presidential decrees. In other words, in terms of time horizons, an appropriation may be made
impliedly (as by past but subsisting legislations) as well as expressly for the current fiscal year (as
by enactment of laws by the present Congress), just as said appropriation may be made in
general as well as in specific terms. The Congressional authorization may be embodied in annual
laws, such as a general appropriations act or in special provisions of laws of general or special
application which appropriate public funds for specific public purposes, such as the questioned
decrees. An appropriation measure is sufficient if the legislative intention clearly and certainly
appears from the language employed (In re Continuing Appropriations, 32 P. 272), whether in the
past or in the present. (Emphases and underscoring supplied)
Likewise, as ruled by the US Supreme Court in State of Nevada v. La Grave:242
To constitute an appropriation there must be money placed in a fund applicable to the designated
purpose. The word appropriate means to allot, assign, set apart or apply to a particular use or
purpose. An appropriation in the sense of the constitution means the setting apart a portion of the
public funds for a public purpose. No particular form of words is necessary for the purpose, if the
intention to appropriate is plainly manifested. (Emphases supplied)
Thus, based on the foregoing, the Court cannot sustain the argument that the appropriation must
be the "primary and specific" purpose of the law in order for a valid appropriation law to exist. To
reiterate, if a legal provision designates a determinate or determinable amount of money and
allocates the same for a particular public purpose, then the legislative intent to appropriate
becomes apparent and, hence, already sufficient to satisfy the requirement of an "appropriation
made by law" under contemplation of the Constitution.
Section 8 of PD 910 pertinently provides:
Section 8. Appropriations. x x x
All fees, revenues and receipts of the Board from any and all sources including receipts from
service contracts and agreements such as application and processing fees, signature bonus,
discovery bonus, production bonus; all money collected from concessionaires, representing
unspent work obligations, fines and penalties under the Petroleum Act of 1949; as well as the
government share representing royalties, rentals, production share on service contracts and
similar payments on the exploration, development and exploitation of energy resources, shall form
part of a Special Fund to be used to finance energy resource development and exploitation
programs and projects of the government and for such other purposes as may be hereafter
directed by the President. (Emphases supplied)
Whereas Section 12 of PD 1869, as amended by PD 1993, reads:
Sec. 12. Special Condition of Franchise. — After deducting five (5%) percent as Franchise Tax,
the Fifty (50%) percent share of the Government in the aggregate gross earnings of the
Corporation from this Franchise, or 60% if the aggregate gross earnings be less than
₱150,000,000.00 shall be set aside and shall accrue to the General Fund to finance the priority
infrastructure development projects and to finance the restoration of damaged or destroyed
facilities due to calamities, as may be directed and authorized by the Office of the President of the
Philippines. (Emphases supplied)
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Analyzing the legal text vis-à-vis the above-mentioned principles, it may then be concluded that (a)
Section 8 of PD 910, which creates a Special Fund comprised of "all fees, revenues, and receipts
of the Energy Development Board from any and all sources" (a determinable amount) "to be used
to finance energy resource development and exploitation programs and projects of the
government and for such other purposes as may be hereafter directed by the President" (a
specified public purpose), and (b) Section 12 of PD 1869, as amended by PD 1993, which
similarly sets aside, "after deducting five (5%) percent as Franchise Tax, the Fifty (50%) percent
share of the Government in the aggregate gross earnings of PAGCOR, or 60%, if the aggregate
gross earnings be less than ₱150,000,000.00" (also a determinable amount) "to finance the
priority infrastructure development projects and x x x the restoration of damaged or destroyed
facilities due to calamities, as may be directed and authorized by the Office of the President of the
Philippines" (also a specified public purpose), are legal appropriations under Section 29(1), Article
VI of the 1987 Constitution.
In this relation, it is apropos to note that the 2013 PDAF Article cannot be properly deemed as a
legal appropriation under the said constitutional provision precisely because, as earlier stated, it
contains post-enactment measures which effectively create a system of intermediate
appropriations. These intermediate appropriations are the actual appropriations meant for
enforcement and since they are made by individual legislators after the GAA is passed, they occur
outside the law. As such, the Court observes that the real appropriation made under the 2013
PDAF Article is not the ₱24.79 Billion allocated for the entire PDAF, but rather the post-enactment
determinations made by the individual legislators which are, to repeat, occurrences outside of the
law. Irrefragably, the 2013 PDAF Article does not constitute an "appropriation made by law" since
it, in its truest sense, only authorizes individual legislators to appropriate in violation of the non-
delegability principle as afore-discussed.
2. Undue Delegation.
On a related matter, petitioners contend that Section 8 of PD 910 constitutes an undue delegation
of legislative power since the phrase "and for such other purposes as may be hereafter directed by
the President" gives the President "unbridled discretion to determine for what purpose the funds
will be used."243 Respondents, on the other hand, urged the Court to apply the principle of
ejusdem generis to the same section and thus, construe the phrase "and for such other purposes
as may be hereafter directed by the President" to refer only to other purposes related "to energy
resource development and exploitation programs and projects of the government."244
The Court agrees with petitioners‘ submissions.
While the designation of a determinate or determinable amount for a particular public purpose is
sufficient for a legal appropriation to exist, the appropriation law must contain adequate legislative
guidelines if the same law delegates rule-making authority to the Executive245 either for the
purpose of (a) filling up the details of the law for its enforcement, known as supplementary rule-
making, or (b) ascertaining facts to bring the law into actual operation, referred to as contingent
rule-making.246 There are two (2) fundamental tests to ensure that the legislative guidelines for
delegated rule-making are indeed adequate. The first test is called the "completeness test." Case
law states that a law is complete when it sets forth therein the policy to be executed, carried out,
or implemented by the delegate. On the other hand, the second test is called the "sufficient
standard test." Jurisprudence holds that a law lays down a sufficient standard when it provides
adequate guidelines or limitations in the law to map out the boundaries of the delegate‘s authority
and prevent the delegation from running riot.247 To be sufficient, the standard must specify the
limits of the delegate‘s authority, announce the legislative policy, and identify the conditions under
which it is to be implemented.248
In view of the foregoing, the Court agrees with petitioners that the phrase "and for such other
purposes as may be hereafter directed by the President" under Section 8 of PD 910 constitutes an
undue delegation of legislative power insofar as it does not lay down a sufficient standard to
adequately determine the limits of the President‘s authority with respect to the purpose for which
the Malampaya Funds may be used. As it reads, the said phrase gives the President wide latitude
to use the Malampaya Funds for any other purpose he may direct and, in effect, allows him to
unilaterally appropriate public funds beyond the purview of the law. That the subject phrase may
be confined only to "energy resource development and exploitation programs and projects of the
government" under the principle of ejusdem generis, meaning that the general word or phrase is to
be construed to include – or be restricted to – things akin to, resembling, or of the same kind or
class as those specifically mentioned,249 is belied by three (3) reasons: first, the phrase "energy
resource development and exploitation programs and projects of the government" states a
singular and general class and hence, cannot be treated as a statutory reference of specific things
from which the general phrase "for such other purposes" may be limited; second, the said phrase
also exhausts the class it represents, namely energy development programs of the
government;250 and, third, the Executive department has, in fact, used the Malampaya Funds for
non-energy related purposes under the subject phrase, thereby contradicting respondents‘ own
position that it is limited only to "energy resource development and exploitation programs and
projects of the government."251 Thus, while Section 8 of PD 910 may have passed the
completeness test since the policy of energy development is clearly deducible from its text, the
phrase "and for such other purposes as may be hereafter directed by the President" under the
same provision of law should nonetheless be stricken down as unconstitutional as it lies
independently unfettered by any sufficient standard of the delegating law. This notwithstanding, it
must be underscored that the rest of Section 8, insofar as it allows for the use of the Malampaya
Funds "to finance energy resource development and exploitation programs and projects of the
government," remains legally effective and subsisting. Truth be told, the declared
unconstitutionality of the aforementioned phrase is but an assurance that the Malampaya Funds
would be used – as it should be used – only in accordance with the avowed purpose and intention
of PD 910.
As for the Presidential Social Fund, the Court takes judicial notice of the fact that Section 12 of PD
1869 has already been amended by PD 1993 which thus moots the parties‘ submissions on the
same.252 Nevertheless, since the amendatory provision may be readily examined under the
current parameters of discussion, the Court proceeds to resolve its constitutionality.
Primarily, Section 12 of PD 1869, as amended by PD 1993, indicates that the Presidential Social
Fund may be used "to first, finance the priority infrastructure development projects and second, to
finance the restoration of damaged or destroyed facilities due to calamities, as may be directed
and authorized by the Office of the President of the Philippines." The Court finds that while the
second indicated purpose adequately curtails the authority of the President to spend the
Presidential Social Fund only for restoration purposes which arise from calamities, the first
indicated purpose, however, gives him carte blanche authority to use the same fund for any
infrastructure project he may so determine as a "priority". Verily, the law does not supply a
definition of "priority in frastructure development projects" and hence, leaves the President without
any guideline to construe the same. To note, the delimitation of a project as one of "infrastructure"
is too broad of a classification since the said term could pertain to any kind of facility. This may be
deduced from its lexicographic definition as follows: "the underlying framework of a system,
especially public services and facilities (such as highways, schools, bridges, sewers, and water-
systems) needed to support commerce as well as economic and residential development."253 In
fine, the phrase "to finance the priority infrastructure development projects" must be stricken down
as unconstitutional since – similar to the above-assailed provision under Section 8 of PD 910 – it
lies independently unfettered by any sufficient standard of the delegating law. As they are
severable, all other provisions of Section 12 of PD 1869, as amended by PD 1993, remains legally
effective and subsisting.
D. Ancillary Prayers. 1.
Petitioners’ Prayer to be Furnished Lists and Detailed Reports.
Aside from seeking the Court to declare the Pork Barrel System unconstitutional – as the Court did
so in the context of its pronouncements made in this Decision – petitioners equally pray that the
Executive Secretary and/or the DBM be ordered to release to the CoA and to the public: (a) "the
complete schedule/list of legislators who have availed of their PDAF and VILP from the years
2003 to 2013, specifying the use of the funds, the project or activity and the recipient entities or
individuals, and all pertinent data thereto" (PDAF Use Schedule/List);254 and (b) "the use of the
Executive‘s lump-sum, discretionary funds, including the proceeds from the x x x Malampaya
Funds and remittances from the PAGCOR x x x from 2003 to 2013, specifying the x x x project or
activity and the recipient entities or individuals, and all pertinent data thereto"255 (Presidential
Pork Use Report). Petitioners‘ prayer is grounded on Section 28, Article II and Section 7, Article III
of the 1987 Constitution which read as follows:
ARTICLE II
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a
policy of full public disclosure of all its transactions involving public interest.
ARTICLE III Sec. 7.
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The right of the people to information on matters of public concern shall be recognized. Access to
official records, and to documents and papers pertaining to official acts, transactions, or decisions,
as well as to government research data used as basis for policy development, shall be afforded
the citizen, subject to such limitations as may be provided by law.
The Court denies petitioners‘ submission.
Case law instructs that the proper remedy to invoke the right to information is to file a petition for
mandamus. As explained in the case of Legaspi v. Civil Service Commission:256
While the manner of examining public records may be subject to reasonable regulation by the
government agency in custody thereof, the duty to disclose the information of public concern, and
to afford access to public records cannot be discretionary on the part of said agencies. Certainly,
its performance cannot be made contingent upon the discretion of such agencies. Otherwise, the
enjoyment of the constitutional right may be rendered nugatory by any whimsical exercise of
agency discretion. The constitutional duty, not being discretionary, its performance may be
compelled by a writ of mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us, the public right to be
enforced and the concomitant duty of the State are unequivocably set forth in the Constitution.
The decisive question on the propriety of the issuance of the writ of mandamus in this case is,
whether the information sought by the petitioner is within the ambit of the constitutional guarantee.
(Emphases supplied)
Corollarily, in the case of Valmonte v. Belmonte Jr.257 (Valmonte), it has been clarified that the
right to information does not include the right to compel the preparation of "lists, abstracts,
summaries and the like." In the same case, it was stressed that it is essential that the "applicant
has a well -defined, clear and certain legal right to the thing demanded and that it is the imperative
duty of defendant to perform the act required." Hence, without the foregoing substantiations, the
Court cannot grant a particular request for information. The pertinent portions of Valmonte are
hereunder quoted:258
Although citizens are afforded the right to information and, pursuant thereto, are entitled to
"access to official records," the Constitution does not accord them a right to compel custodians of
official records to prepare lists, abstracts, summaries and the like in their desire to acquire
information on matters of public concern.
It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a well-
defined, clear and certain legal right to the thing demanded and that it is the imperative duty of
defendant to perform the act required. The corresponding duty of the respondent to perform the
required act must be clear and specific Lemi v. Valencia, G.R. No. L-20768, November
29,1968,126 SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.
The request of the petitioners fails to meet this standard, there being no duty on the part of
respondent to prepare the list requested. (Emphases supplied)
In these cases, aside from the fact that none of the petitions are in the nature of mandamus
actions, the Court finds that petitioners have failed to establish a "a well-defined, clear and certain
legal right" to be furnished by the Executive Secretary and/or the DBM of their requested PDAF
Use Schedule/List and Presidential Pork Use Report. Neither did petitioners assert any law or
administrative issuance which would form the bases of the latter‘s duty to furnish them with the
documents requested. While petitioners pray that said information be equally released to the CoA,
it must be pointed out that the CoA has not been impleaded as a party to these cases nor has it
filed any petition before the Court to be allowed access to or to compel the release of any official
document relevant to the conduct of its audit investigations. While the Court recognizes that the
information requested is a matter of significant public concern, however, if only to ensure that the
parameters of disclosure are properly foisted and so as not to unduly hamper the equally
important interests of the government, it is constrained to deny petitioners‘ prayer on this score,
without prejudice to a proper mandamus case which they, or even the CoA, may choose to pursue
through a separate petition.
It bears clarification that the Court‘s denial herein should only cover petitioners‘ plea to be
furnished with such schedule/list and report and not in any way deny them, or the general public,
access to official documents which are already existing and of public record. Subject to
reasonable regulation and absent any valid statutory prohibition, access to these documents
should not be proscribed. Thus, in Valmonte, while the Court denied the application for mandamus
towards the preparation of the list requested by petitioners therein, it nonetheless allowed access
to the documents sought for by the latter, subject, however, to the custodian‘s reasonable
regulations,viz.:259
In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS,
subject to reasonable regulations that the latter may promulgate relating to the manner and hours
of examination, to the end that damage to or loss of the records may be avoided, that undue
interference with the duties of the custodian of the records may be prevented and that the right of
other persons entitled to inspect the records may be insured Legaspi v. Civil Service Commission,
supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387. The petition, as to the second and
third alternative acts sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by petitioners, i.e.,
"to furnish petitioners the list of the names of the Batasang Pambansa members belonging to the
UNIDO and PDP-Laban who were able to secure clean loans immediately before the February 7
election thru the intercession/marginal note of the then First Lady Imelda Marcos."
The Court, therefore, applies the same treatment here.
2. Petitioners’ Prayer to Include Matters in Congressional Deliberations.
Petitioners further seek that the Court "order the inclusion in budgetary deliberations with the
Congress of all presently, off-budget, lump sum, discretionary funds including but not limited to,
proceeds from the x x x Malampaya Fund, remittances from the PAGCOR and the PCSO or the
Executive‘s Social Funds."260
Suffice it to state that the above-stated relief sought by petitioners covers a matter which is
generally left to the prerogative of the political branches of government. Hence, lest the Court itself
overreach, it must equally deny their prayer on this score.
3. Respondents’ Prayer to Lift TRO; Consequential Effects of Decision.
The final issue to be resolved stems from the interpretation accorded by the DBM to the concept
of released funds. In response to the Court‘s September 10, 2013 TRO that enjoined the release
of the remaining PDAF allocated for the year 2013, the DBM issued Circular Letter No. 2013-8
dated September 27, 2013 (DBM Circular 2013-8) which pertinently reads as follows:
3.0 Nonetheless, PDAF projects funded under the FY 2013 GAA, where a Special Allotment
Release Order (SARO) has been issued by the DBM and such SARO has been obligated by the
implementing agencies prior to the issuance of the TRO, may continually be implemented and
disbursements thereto effected by the agencies concerned.
Based on the text of the foregoing, the DBM authorized the continued implementation and
disbursement of PDAF funds as long as they are: first, covered by a SARO; and, second, that said
SARO had been obligated by the implementing agency concerned prior to the issuance of the
Court‘s September 10, 2013 TRO.
Petitioners take issue with the foregoing circular, arguing that "the issuance of the SARO does not
yet involve the release of funds under the PDAF, as release is only triggered by the issuance of a
Notice of Cash Allocation [(NCA)]."261 As such, PDAF disbursements, even if covered by an
obligated SARO, should remain enjoined.
For their part, respondents espouse that the subject TRO only covers "unreleased and
unobligated allotments." They explain that once a SARO has been issued and obligated by the
implementing agency concerned, the PDAF funds covered by the same are already "beyond the
reach of the TRO because they cannot be considered as ‘remaining PDAF.‘" They conclude that
this is a reasonable interpretation of the TRO by the DBM.262
The Court agrees with petitioners in part.
At the outset, it must be observed that the issue of whether or not the Court‘s September 10, 2013
TRO should be lifted is a matter rendered moot by the present Decision. The unconstitutionality of
the 2013 PDAF Article as declared herein has the consequential effect of converting the
temporary injunction into a permanent one. Hence, from the promulgation of this Decision, the
release of the remaining PDAF funds for 2013, among others, is now permanently enjoined.
The propriety of the DBM‘s interpretation of the concept of "release" must, nevertheless, be
resolved as it has a practical impact on the execution of the current Decision. In particular, the
Court must resolve the issue of whether or not PDAF funds covered by obligated SAROs, at the
time this Decision is promulgated, may still be disbursed following the DBM‘s interpretation in
DBM Circular 2013-8.
On this score, the Court agrees with petitioners‘ posturing for the fundamental reason that funds
covered by an obligated SARO are yet to be "released" under legal contemplation. A SARO, as
defined by the DBM itself in its website, is "aspecific authority issued to identified agencies to incur
67
obligations not exceeding a given amount during a specified period for the purpose indicated. It
shall cover expenditures the release of which is subject to compliance with specific laws or
regulations, or is subject to separate approval or clearance by competent authority."263
Based on this definition, it may be gleaned that a SARO only evinces the existence of an
obligation and not the directive to pay. Practically speaking, the SARO does not have the direct
and immediate effect of placing public funds beyond the control of the disbursing authority. In fact,
a SARO may even be withdrawn under certain circumstances which will prevent the actual release
of funds. On the other hand, the actual release of funds is brought about by the issuance of the
NCA,264 which is subsequent to the issuance of a SARO. As may be determined from the
statements of the DBM representative during the Oral Arguments:265
Justice Bernabe: Is the notice of allocation issued simultaneously with the SARO?
xxxx
Atty. Ruiz: It comes after. The SARO, Your Honor, is only the go signal for the agencies to
obligate or to enter into commitments. The NCA, Your Honor, is already the go signal to the
treasury for us to be able to pay or to liquidate the amounts obligated in the SARO; so it comes
after. x x x The NCA, Your Honor, is the go signal for the MDS for the authorized government-
disbursing banks to, therefore, pay the payees depending on the projects or projects covered by
the SARO and the NCA.
Justice Bernabe: Are there instances that SAROs are cancelled or revoked?
Atty. Ruiz: Your Honor, I would like to instead submit that there are instances that the SAROs
issued are withdrawn by the DBM.
Justice Bernabe: They are withdrawn?
Atty. Ruiz: Yes, Your Honor x x x. (Emphases and underscoring supplied)
Thus, unless an NCA has been issued, public funds should not be treated as funds which have
been "released." In this respect, therefore, the disbursement of 2013 PDAF funds which are only
covered by obligated SAROs, and without any corresponding NCAs issued, must, at the time of
this Decision’s promulgation, be enjoined and consequently reverted to the unappropriated surplus
of the general fund. Verily, in view of the declared unconstitutionality of the 2013 PDAF Article, the
funds appropriated pursuant thereto cannot be disbursed even though already obligated, else the
Court sanctions the dealing of funds coming from an unconstitutional source.
This same pronouncement must be equally applied to (a) the Malampaya Funds which have been
obligated but not released – meaning, those merely covered by a SARO – under the phrase "and
for such other purposes as may be hereafter directed by the President" pursuant to Section 8 of
PD 910; and (b) funds sourced from the Presidential Social Fund under the phrase "to finance the
priority infrastructure development projects" pursuant to Section 12 of PD 1869, as amended by
PD 1993, which were altogether declared by the Court as unconstitutional. However, these funds
should not be reverted to the general fund as afore-stated but instead, respectively remain under
the Malampaya Funds and the Presidential Social Fund to be utilized for their corresponding
special purposes not otherwise declared as unconstitutional.
E. Consequential Effects of Decision.
As a final point, it must be stressed that the Court‘s pronouncement anent the unconstitutionality
of (a) the 2013 PDAF Article and its Special Provisions, (b) all other Congressional Pork Barrel
provisions similar thereto, and (c) the phrases (1) "and for such other purposes as may be
hereafter directed by the President" under Section 8 of PD 910, and (2) "to finance the priority
infrastructure development projects" under Section 12 of PD 1869, as amended by PD 1993, must
only be treated as prospective in effect in view of the operative fact doctrine.
To explain, the operative fact doctrine exhorts the recognition that until the judiciary, in an
appropriate case, declares the invalidity of a certain legislative or executive act, such act is
presumed constitutional and thus, entitled to obedience and respect and should be properly
enforced and complied with. As explained in the recent case of Commissioner of Internal Revenue
v. San Roque Power Corporation,266 the doctrine merely "reflects awareness that precisely
because the judiciary is the governmental organ which has the final say on whether or not a
legislative or executive measure is valid, a period of time may have elapsed before it can exercise
the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law
of its quality of fairness and justice then, if there be no recognition of what had transpired prior to
such adjudication."267 "In the language of an American Supreme Court decision: ‘The actual
existence of a statute, prior to such a determination of unconstitutionality, is an operative fact and
may have consequences which cannot justly be ignored.‘"268
For these reasons, this Decision should be heretofore applied prospectively.
Conclusion
The Court renders this Decision to rectify an error which has persisted in the chronicles of our
history. In the final analysis, the Court must strike down the Pork Barrel System as
unconstitutional in view of the inherent defects in the rules within which it operates. To recount,
insofar as it has allowed legislators to wield, in varying gradations, non-oversight, post-enactment
authority in vital areas of budget execution, the system has violated the principle of separation of
powers; insofar as it has conferred unto legislators the power of appropriation by giving them
personal, discretionary funds from which they are able to fund specific projects which they
themselves determine, it has similarly violated the principle of non-delegability of legislative power
; insofar as it has created a system of budgeting wherein items are not textualized into the
appropriations bill, it has flouted the prescribed procedure of presentment and, in the process,
denied the President the power to veto items ; insofar as it has diluted the effectiveness of
congressional oversight by giving legislators a stake in the affairs of budget execution, an aspect
of governance which they may be called to monitor and scrutinize, the system has equally
impaired public accountability ; insofar as it has authorized legislators, who are national officers, to
intervene in affairs of purely local nature, despite the existence of capable local institutions, it has
likewise subverted genuine local autonomy ; and again, insofar as it has conferred to the
President the power to appropriate funds intended by law for energy-related purposes only to
other purposes he may deem fit as well as other public funds under the broad classification of
"priority infrastructure development projects," it has once more transgressed the principle of non-
delegability.
For as long as this nation adheres to the rule of law, any of the multifarious unconstitutional
methods and mechanisms the Court has herein pointed out should never again be adopted in any
system of governance, by any name or form, by any semblance or similarity, by any influence or
effect. Disconcerting as it is to think that a system so constitutionally unsound has monumentally
endured, the Court urges the people and its co-stewards in government to look forward with the
optimism of change and the awareness of the past. At a time of great civic unrest and vociferous
public debate, the Court fervently hopes that its Decision today, while it may not purge all the
wrongs of society nor bring back what has been lost, guides this nation to the path forged by the
Constitution so that no one may heretofore detract from its cause nor stray from its course. After
all, this is the Court‘s bounden duty and no other‘s.
WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations
discussed in this Decision, the Court hereby declares as UNCONSTITUTIONAL: (a) the entire
2013 PDAF Article; (b) all legal provisions of past and present Congressional Pork Barrel Laws,
such as the previous PDAF and CDF Articles and the various Congressional Insertions, which
authorize/d legislators – whether individually or collectively organized into committees – to
intervene, assume or participate in any of the various post-enactment stages of the budget
execution, such as but not limited to the areas of project identification, modification and revision of
project identification, fund release and/or fund realignment, unrelated to the power of
congressional oversight; (c) all legal provisions of past and present Congressional Pork Barrel
Laws, such as the previous PDAF and CDF Articles and the various Congressional Insertions,
which confer/red personal, lump-sum allocations to legislators from which they are able to fund
specific projects which they themselves determine; (d) all informal practices of similar import and
effect, which the Court similarly deems to be acts of grave abuse of discretion amounting to lack
or excess of jurisdiction; and (e) the phrases (1) "and for such other purposes as may be hereafter
directed by the President" under Section 8 of Presidential Decree No. 910 and (2) "to finance the
priority infrastructure development projects" under Section 12 of Presidential Decree No. 1869, as
amended by Presidential Decree No. 1993, for both failing the sufficient standard test in violation
of the principle of non-delegability of legislative power.
Accordingly, the Court‘s temporary injunction dated September 10, 2013 is hereby declared to be
PERMANENT. Thus, the disbursement/release of the remaining PDAF funds allocated for the
year 2013, as well as for all previous years, and the funds sourced from (1) the Malampaya Funds
under the phrase "and for such other purposes as may be hereafter directed by the President"
pursuant to Section 8 of Presidential Decree No. 910, and (2) the Presidential Social Fund under
the phrase "to finance the priority infrastructure development projects" pursuant to Section 12 of
Presidential Decree No. 1869, as amended by Presidential Decree No. 1993, which are, at the
time this Decision is promulgated, not covered by Notice of Cash Allocations (NCAs) but only by
68
Special Allotment Release Orders (SAROs), whether obligated or not, are hereby ENJOINED. The See Concurring Opinion
remaining PDAF funds covered by this permanent injunction shall not be disbursed/released but MARVIC MARIO VICTOR F. LEONEN
instead reverted to the unappropriated surplus of the general fund, while the funds under the Associate Justice
Malampaya Funds and the Presidential Social Fund shall remain therein to be utilized for their CERTIFICATION
respective special purposes not otherwise declared as unconstitutional. I certify that the conclusions in the above Decision had been reached in consultation before the
On the other hand, due to improper recourse and lack of proper substantiation, the Court hereby cases were assigned to the writer of the opinion of the Court.
DENIES petitioners‘ prayer seeking that the Executive Secretary and/or the Department of Budget MARIA LOURDES P. A. SERENO
and Management be ordered to provide the public and the Commission on Audit complete Chief Justice
lists/schedules or detailed reports related to the availments and utilization of the funds subject of
these cases. Petitioners‘ access to official documents already available and of public record which Footnotes
are related to these funds must, however, not be prohibited but merely subjected to the *Dropped as a party per Memorandum dated October 17, 2013 filed by counsel for petitioners
custodian‘s reasonable regulations or any valid statutory prohibition on the same. This denial is Atty. Alfredo B. Molo III, et al. Rollo (G.R. No. 208566), p. 388.
without prejudice to a proper mandamus case which they or the Commission on Audit may choose ** No part.
to pursue through a separate petition. 1 The Federalist Papers, Federalist No. 20.
The Court also DENIES petitioners prayer to order the inclusion of the funds subject of these 2 Rollo (G.R. No. 208566), pp. 3-51; rollo (G.R. No. 208493), pp. 3-11; and rollo (G.R. No.
cases in the budgetary deliberations of Congress as the same is a matter left to the prerogative of 209251), pp. 2-8.
the political branches of government. 3 "’Pork barrel spending,‘ a term that traces its origins back to the era of slavery before the U.S.
Finally, the Court hereby DIRECTS all prosecutorial organs of the government to, within the Civil War, when slave owners occasionally would present a barrel of salt pork as a gift to their
bounds of reasonable dispatch, investigate and accordingly prosecute all government officials slaves. In the modern usage, the term refers to congressmen scrambling to set aside money for
and/or private individuals for possible criminal offenses related to the irregular, improper and/or pet projects in their districts." (Drudge, Michael W. "’Pork Barrel‘ Spending Emerging as
unlawful disbursement/utilization of all funds under the Pork Barrel System. Presidential Campaign Issue," August 1, 2008
This Decision is immediately executory but prospective in effect. http://iipdigital.usembassy.gov/st/english/article/2008/08/20080801181504lcnirellep
SO ORDERED. 0.1261713.html#axzz2iQrI8mHM> [visited October 17, 2013].)
ESTELA M. PERLAS-BERNABE 4 Bernas, Joaquin G., S.J., The 1987 Constitution of the Republic of the Philippines: A
Associate Justice Commentary, 2003 Edition, p. 786, citing Bernas, "From Pork Barrel to Bronze Caskets," Today,
WE CONCUR: January 30, 1994.
See Concurring Opinion 5 Heaser, Jason, "Pulled Pork: The Three Part Attack on Non-Statutory Earmarks," Journal of
MARIA LOURDES P. A. SERENO Legislation, 35 J. Legis. 32 (2009). <http://heinonline.org/HOL/LandingPage?collection=&handle
Chief Justice =hein.journals/jleg35&div=6&id=&page=> (visited October 17, 2013).
See Concurring Opinion 6 Nograles, Prospero C. and Lagman, Edcel C., House of Representatives of the Philippines,
ANTONIO T. CARPIO "Understanding the ‘Pork Barrel,‘" p. 2.
Associate Justice <http://www.congress.gov.ph/download/14th/pork_barrel.pdf> (visited October 17, 2013).
NO PART 7 Chua, Yvonne T. and Cruz, Booma, B., "Pork is a Political, Not A Developmental, Tool."
PRESBITERO J. VELASCO, JR. <http://pcij.org/stories/2004/pork.html> [visited October 22, 2013].) See also rollo (G.R. No.
Associate Justice 208566), pp. 328-329.
I concur and also join the concurring opinion of Justice Carpio. 8 Morton, Jean, "What is a Pork Barrel?" Global Granary, Lifestyle Magazine and Common Place
TERESITA J. LEONARDO-DE CASTRO Book Online: Something for Everyone, August 19, 2013.
Associate Justice <http://www.globalgranary.org/2013/08/19/what-is-a-pork-barrel/#.UnrnhFNavcw > (visited
I join the Opinion of Justice Carpio, subject to my Concurring & Dissenting Opinion. October 17, 2013).
ARTURO D. BRION 9 Jison, John Raymond, "What does the 'pork barrel' scam suggest about the Philippine
Associate Justice government?" International Association for Political Science Students, September 10, 2013.
DIOSDADO M. PERALTA <http://www.iapss.org/ index.php/articles/item/93-what-does-the-pork-barrel-scam-suggest-about-
Associate Justice the-philippine-government> (visited October 17, 2013). See also Llanes, Jonathan, "Pork barrel –
LUCAS P. BERSAMIN Knowing the issue," Sunstar Baguio, October 23, 2013. <http://www.sunstar.com.ph/
Associate Justice baguio/opinion/2013/09/05/llanes-pork- barrel-knowing-issue-301598> (visited October 17, 2013).
MARIANO C. DEL CASTILLO 10 Entitled "AN ACT MAKING APPROPRIATIONS FOR PUBLIC WORKS," approved on March
Associate Justice 10, 1922.
I join the concurring opinion of J. A.T. Carpio of the ponencia 11 "Act 3044, the first pork barrel appropriation, essentially divided public works projects into two
ROBERTO A. ABAD types. The first type—national and other buildings, roads and bridges in provinces, and
Associate Justice lighthouses, buoys and beacons, and necessary mechanical equipment of lighthouses—fell
MARTIN S. VILLARAMA, JR. directly under the jurisdiction of the director of public works, for which his office received
Associate Justice appropriations. The second group—police barracks, normal school and other public buildings, and
JOSE PORTUGAL PEREZ certain types of roads and bridges, artesian wells, wharves, piers and other shore protection
Associate Justice works, and cable, telegraph, and telephone lines—is the forerunner of the infamous pork barrel.
JOSE CATRAL MENDOZA Although the projects falling under the second type were to be distributed at the discretion of the
Associate Justice secretary of commerce and communications, he needed prior approval from a joint committee
BIENVENIDO L. REYES elected by the Senate and House of Representatives. The nod of either the joint committee or a
Associate Justice committee member it had authorized was also required before the commerce and communications

69
secretary could transfer unspent portions of one item to another item." (Emphases supplied)
(Chua, Yvonne T. and Cruz, Booma, B., "Pork by any name," VERA Files, August 23, 2013.
<http://verafiles.org/pork-by-any-name/> [visited October 14, 2013]).
12 Sec. 3. The sums appropriated in paragraphs (c), (g), (l), and (s) of this Act shall be available
for immediate expenditure by the Director of Public Works, but those appropriated in the other
paragraphs shall be distributed in the discretion of the Secretary of Commerce and
Communications, subject to the approval of a joint committee elected by the Senate and the
House of Representatives. The committee from each House may authorize one of its members to
approve the distribution made by the Secretary of Commerce and Communications, who with the
approval of said joint committee, or of the authorized members thereof may, for the purposes of
said distribution, transfer unexpended portions of any item of appropriation. (Emphases supplied)
13 Those Section 1 (c), (g), (l), and (s) of Act 3044 "shall be available for immediate expenditure
by the Director of Public Works."
14 Section 3, Act 3044.
15 Chua, Yvonne T. and Cruz, Booma, B., "Pork by any name," VERA Files, August 23, 2013.
<http://verafiles.org/pork-by-any-name/> (visited October 14, 2013).
16 Id.
17 Id.
18 Id.
19 Nograles, Prospero C. and Lagman, Edcel C., House of Representatives of the Philippines,
"Understanding the ‘Pork Barrel,‘" <http://www.congress.gov.ph/download/ 14th/pork_barrel.pdf >
(visited October 17, 2013).
20 Chua, Yvonne T. and Cruz, Booma, B., "Pork by any name," VERA Files, August 23, 2013.
<http://verafiles.org/pork-by-any-name/> (visited October 14, 2013).
21 Id.
22 Priority Development Assistance Fund (PDAF) and Various Infrastructures including Local
Projects (VILP), Special Audits Office Report No. 2012-03, August 14, 2013 (CoA Report), p. 2.
23 Ilagan, Karol, "Data A Day; CIA, CDF, PDAF? Pork is pork is pork," Moneypolitics, A Date
Journalism Project for the Philippine Center for Investigative Journalism, August 1, 2013
<http://moneypolitics.pcij.org/data-a-day/cia-cdf-pdaf-pork-is-pork-is-pork/> (visited October 14,
2013).
24 Republic Act No. (RA) 6831.
25 Special Provision 1, Article XLIV, RA 7078 (1991 CDF Article), and Special Provision 1, Article
XLII (1992), RA 7180 (1992 CDF Article) are similarly worded as follows: Special Provision 1.
Use and Release of Funds. The amount herein appropriated shall be used for infrastructure and
other priority projects and activities upon approval by the President of the Philippines and shall be
released directly to the appropriate implementing agency [(x x x for 1991)], subject to the
submission of the required list of projects and activities. (Emphases supplied)
26 Chua, Yvonne T. and Cruz, Booma, B., "Pork by any name," VERA Files, August 23, 2013.
<http://verafiles.org/pork-by-any-name/> (visited October 14, 2013).
27 Id.
28 Special Provision 1, Article XXXVIII, RA 7645 (1993 CDF Article) provides:
Special Provision
1. Use and Release of Funds.
The amount herein appropriated shall be used for infrastructure and other priority projects and
activities as proposed and identified by officials concerned according to the following allocations:
Representatives, ₱12,500,000 each; Senators ₱18,000,000 each; Vice-President, ₱20,000,000.
The fund shall be automatically released quarterly by way of Advice of Allotment and Notice of
Cash Allocation directly to the assigned implementing agency not later than five (5) days after the
beginning of each quarter upon submission of the list of projects and activities by the officials
concerned. (Emphases supplied)
29 See Special Provision 1, 1993 CDF Article; id.
30 Special Provision 1, Article XLI, RA 7663 (1994 CDF Article) provides:
Special Provisions
1. Use and Release of Funds.
The amount herein appropriated shall be used for infrastructure, purchase of ambulances and
computers and other priority projects and activities, and credit facilities to qualified beneficiaries as
proposed and identified by officials concerned according to the following allocations:
Representatives, ₱12,500,000 each; Senators ₱18,000,000 each; Vice-President, ₱20,000,000;
PROVIDED, That, the said credit facilities shall be constituted as a revolving fund to be
administered by a government financial institution (GFI) as a trust fund for lending operations.
Prior years releases to local government units and national government agencies for this purpose
shall be turned over to the government financial institution which shall be the sole administrator of
credit facilities released from this fund.
The fund shall be automatically released quarterly by way of Advice of Allotments and Notice of
Cash Allocation directly to the assigned implementing agency not later than five (5) days after the
beginning of each quarter upon submission of the list of projects and activities by the officials
concerned. (Emphases supplied)
31 Special Provision 1, Article XLII, RA 7845 (1995 CDF Article) provides:
Special Provisions
1. Use and Release of Funds.
The amount herein appropriated shall be used for infrastructure, purchase of equipment and other
priority projects and activities as proposed and identified by officials concerned according to the
following allocations: Representatives, ₱12,500,000 each; Senators ₱18,000,000 each; Vice-
President, ₱20,000,000.
The fund shall be automatically released semi-annually by way of Advice of Allotment and Notice
of Cash Allocation directly to the designated implementing agency not later than five (5) days after
the beginning of each semester upon submission of the list of projects and activities by the
officials concerned. (Emphases supplied)
32 Special Provision 1, Article XLII, RA 8174 (1996 CDF Article) provides:
Special Provisions
1. Use and Release of Fund.
The amount herein appropriated shall be used for infrastructure, purchase of equipment and other
priority projects and activities, including current operating expenditures, except creation of new
plantilla positions, as proposed and identified by officials concerned according to the following
allocations: Representatives, Twelve Million Five Hundred Thousand Pesos (₱12,500,000) each;
Senators, Eighteen Million Pesos (₱18,000,000) each; Vice-President, Twenty Million Pesos
(₱20,000,000).
The Fund shall be released semi-annually by way of Special Allotment Release Order and Notice
of Cash Allocation directly to the designated implementing agency not later than thirty (30) days
after the beginning of each semester upon submission of the list of projects and activities by the
officials concerned. (Emphases supplied)
33 Special Provision 2 of the 1994 CDF Article, Special Provision 2 of the 1995 CDF Article and
Special Provision 2 of the 1996 CDF Article are similarly worded as follows:
2. Submission of [Quarterly (1994)/Semi-Annual (1995 and 1996)] Reports. The Department of
Budget and Management shall submit within thirty (30) days after the end of each [quarter
(1994)/semester (1995 and 1996)] a report to the House Committee on Appropriations and the
Senate Committee on Finance on the releases made from this Fund. The report shall include the
listing of the projects, locations, implementing agencies [stated (order of committees interchanged
in 1994 and 1996)] and the endorsing officials. (Emphases supplied)
34 Special Provision 2, Article XLII, RA 8250 (1997 CDF Article) provides:
Special Provisions
xxxx
2. Publication of Countrywide Development Fund Projects. Within thirty (30) days after the signing
of this Act into law, the Members of Congress and the Vice-President shall, in consultation with the
implementing agency concerned, submit to the Department of Budget and Management the list of
fifty percent (50%) of projects to be funded from the allocation from the Countrywide Development
Fund which shall be duly endorsed by the Senate President and the Chairman of the Committee
on Finance in the case of the Senate and the Speaker of the House of Representatives and the
Chairman of the Committee on Appropriations in the case of the House of Representatives, and
the remaining fifty percent (50%) within six (6) months thereafter. The list shall identify the specific
projects, location, implementing agencies, and target beneficiaries and shall be the basis for the
release of funds. The said list shall be published in a newspaper of general circulation by the
Department of Budget and Management. No funds appropriated herein shall be disbursed for
projects not included in the list herein required. (Emphases supplied)
35 See Special Provision 2, 1997 CDF Article; id.
70
36 Special Provision 2, Article XLII, RA 8522 (1998 CDF Article) provides: Special Provision
Special Provisions 1. Use and Release of the Fund. The amount herein appropriated shall be used to fund priority
xxxx programs and projects or to fund the required counterpart for foreign-assisted programs and
2. Publication of Countrywide Development Fund Projects. x x x PROVIDED, That said publication projects: PROVIDED, That such amount shall be released directly to the implementing agency or
is not a requirement for the release of funds. x x x x (Emphases supplied) Local Government Unit concerned: PROVIDED, FURTHER, That the allocations authorized herein
37 Chua, Yvonne T. and Cruz, Booma, B., "Pork by any name," VERA Files, August 23, 2013. may be realigned to any expense class, if deemed necessary: PROVIDED, FURTHERMORE,
<http://verafiles.org/pork-by-any-name/> (visited October 14, 2013). That a maximum of ten percent (10%) of the authorized allocations by district may be used for the
38 Id. procurement of rice and other basic commodities which shall be purchased from the National
49 Rollo (G.R. No. 208566), pp. 335-336, citing Parreño, Earl, "Perils of Pork," Philippine Center Food Authority.
for Investigative Journalism, June 3-4, 1998. Available at <http://pcij.org/stories/1998/pork.html> 51 Special Provision 1, Article XVIII, RA 9206 provides:
40 Id. Special Provision No. 1 – Restriction on the Delegation of Project Implementation The
41 Id. implementation of the projects funded herein shall not be delegated to other agencies, except
42 RA 8745 entitled "AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE those projects to be implemented by the Engineering Brigades of the AFP and inter-department
GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FROM JANUARY ONE TO projects undertaken by other offices and agencies including local government units with
DECEMBER THIRTY ONE, NINETEEN HUNDRED NINETY NINE, AND FOR OTHER demonstrated capability to actually implement the projects by themselves upon consultation with
PURPOSES." the Members of Congress concerned. In all cases the DPWH shall exercise technical supervision
43 Special Provision 1, Article XLII, Food Security Program Fund, RA 8745 provides: over projects. (Emphasis supplied)
Special Provision 52 Special Provision 3, Article XLII, RA 9206 provides:
1. Use and Release of Fund. The amount herein authorized shall be used to support the Food Special Provision No. 3 – Submission of the List of School Buildings Within 30 days after the
Security Program of the government, which shall include farm-to-market roads, post harvest signing of this Act into law, (DepEd) after consultation with the representative of the legislative
facilities and other agricultural related infrastructures. Releases from this fund shall be made district concerned, shall submit to DBM the list of 50% of school buildings to be constructed every
directly to the implementing agency subject to prior consultation with the Members of Congress municipality x x x. The list as submitted shall be the basis for the release of funds. (Emphasis
concerned. (Emphases supplied) supplied)
44 Special Provision 1, Article XLIX, 53 Rollo (G.R. No. 208566), p. 557.
Lingap Para sa Mahihirap 54 Special Provision 1, Article L, RA 9336 (2005 PDAF Article) provides:
Program Fund, RA 8745 provides: Special Provision(s)
Special Provision 1. Use and Release of the Fund. The amount appropriated herein shall be used to fund priority
1. Use and Release of Fund. The amount herein appropriated for the Lingap Para sa Mahihirap programs and projects under the ten point agenda of the national government and shall be
Program Fund shall be used exclusively to satisfy the minimum basic needs of poor communities released directly to the implementing agencies as indicated hereunder, to wit:
and disadvantaged sectors: PROVIDED, That such amount shall be released directly to the PARTICULARS
implementing agency upon prior consultation with the Members of Congress concerned. PROGRAM/PROJECT
(Emphases supplied) IMPLEMENTING
45 Special Provision 1, Article L, Rural/Urban Development Infrastructure Program Fund, RA 8745 AGENCY
provides: A. Education
Special Provision Purchase of IT Equipment
1. Use and Release of Fund. The amount herein authorized shall be used to fund infrastructure DepEd/TESDA/ CHED/SUCs/LGUs
requirements of the rural/urban areas which shall be released directly to the implementing agency
upon prior consultation with the respective Members of Congress. (Emphases supplied) Scholarship
46 Special Provision 1, Article XLIX, RA 8760 (2000 PDAF Article) provides: TESDA/CHED/
Special Provision SUCs/LGUs
1. Use and release of the Fund. The amount herein appropriated shall be used to fund priority B. Health
programs and projects as indicated under Purpose 1: PROVIDED, That such amount shall be Assistance to Indigent Patients Confined at the Hospitals Under DOH Including Specialty
released directly to the implementing agency concerned upon prior consultation with the Hospitals
respective Representative of the District: PROVIDED, FURTHER, That the herein allocation may DOH/Specialty
be realigned as necessary to any expense category: PROVIDED, FINALLY, That no amount shall Hospitals
be used to fund personal services and other personal benefits. (Emphases supplied)
47 See Special Provision 1, 2000 PDAF Article; id. Assistance to Indigent Patients at the Hospitals Devolved to LGUs and RHUs
48 Section 25 (7), Article VI, of the 1987 Philippine Constitution (1987 Constitution) provides that LGUs
"if, by the end of any fiscal year, the Congress shall have failed to pass the general appropriations
bill for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be Insurance Premium
deemed reenacted and shall remain in force and effect until the general appropriations bill is Philhealth
passed by the Congress." (Emphasis supplied) C. Livelihood/ CIDSS
49 Special Provision 1, Article L, RA 9162 (2002 PDAF Article) provides: Small & Medium Enterprise/Livelihood
1. Use and Release of the Fund. The amount herein appropriated shall be used to fund priority DTI/TLRC/DA/CDA
programs and projects or to fund counterpart for foreign-assisted programs and projects:
PROVIDED, That such amount shall be released directly to the implementing agency or Local Comprehensive Integrated Delivery of Social Services
Government Unit concerned. (Emphases supplied) DSWD
50 Special Provision 1, Article XLVII, RA 9206, 2003 GAA (2003 PDAF Article) provides: D. Rural Electrification

71
Barangay/Rural Electrification
DOE/NEA
E. Water Supply
Construction of Water System
DPWH
Installation of Pipes/Pumps/Tanks
LGUs
F. Financial Assistance
Specific Programs and Projects to Address the Pro-Poor Programs of Government
LGUs
G. Public Work
Construction/Repair/ Rehabilitation of the following: Roads and Bridges/Flood Control/School
buildings Hospitals Health Facilities/Public Markets/Multi-Purpose Buildings/Multi-Purpose
Pavements
DPWH
H. Irrigation
Construction/Repair/ Rehabilitation of Irrigation Facilities
DA-NIA
(Emphasis supplied)
55 Id.
56 Rollo (G.R. No. 208566), p. 558.
57 See Special Provision 1, Article XLVII, RA 9401.
58 See Special Provision 1, Article XLVI, RA 9498.
59 See Special Provision 1, Article XLIX, RA 9524.
60 See Special Provision 1, Article XLVII, RA 9970.
61 For instance, Special Provisions 2 and 3, Article XLIII, RA 9336 providing for the 2005 DepEd
School Building Program, and Special Provisions 1 and 16, Article XVIII, RA 9401 providing for the
2007 DPWH Regular Budget respectively state: 2005 DepEd School Building Program Special
Provision No. 2 – Allocation of School Buildings: The amount allotted under Purpose 1 shall be
apportioned as follows: (1) fifty percent (50%) to be allocated pro-rata according to each legislative
districts student population x x x; (2) forty percent (40%) to be allocated only among those
legislative districts with classroom shortages x x x; (3) ten percent (10%) to be allocated in
accordance x x x.
Special Provision No. 3 – Submission of the List of School Buildings: Within 30 days after the
signing of this Act into law, the DepEd after consultation with the representative of the legislative
districts concerned, shall submit to DBM the list of fifty percent (50%) of school buildings to be
constructed in every municipality x x x. The list as submitted shall be the basis for the release of
funds x x x. (Emphases supplied)
2007 DPWH Regular Budget
Special Provision No. 1 – Restriction on Delegation of Project Implementation: The
implementation of the project funded herein shall not be delegated to other agencies, except those
projects to be implemented by the AFP Corps of Engineers, and inter-department projects to be
undertaken by other offices and agencies, including local government units (LGUs) with
demonstrated capability to actually implement the project by themselves upon consultation with
the representative of the legislative district concerned x x x.
Special Provision No. 16 – Realignment of Funds: The Secretary of Public Works and Highways is
authorized to realign funds released from appropriations x x x from one project/scope of work to
another: PROVIDED, that x x x (iii) the request is with the concurrence of the legislator concerned
x x x. (Emphasis supplied)
62 Rollo (G.R. No. 208566) , p. 559, citing Section 2.A of RA 9358, otherwise known as the
"Supplemental Budget for 2006."
63 Id. at 559-560.
64 "As a primary aspect of the Philippine Government's public procurement reform agenda, the
Government Procurement Policy Board (GPPB) was established by virtue of Republic Act No.
9184 (R.A. 9184) as an independent inter-agency body that is impartial, transparent and effective,
with private sector representation. As established in Section 63 of R.A. 9184, the GPPB shall have
the following duties and responsibilities: 1. To protect national interest in all matters affecting
public procurement, having due regard to the country's regional and international obligations; 2. To
formulate and amend public procurement policies, rules and regulations, and amend, whenever
necessary, the implementing rules and regulations Part A (IRR-A); 3. To prepare a generic
procurement manual and standard bidding forms for procurement; 4. To ensure the proper
implementation by the procuring entities of the Act, its IRR-A and all other relevant rules and
regulations pertaining to public procurement; 5. To establish a sustainable training program to
develop the capacity of Government procurement officers and employees, and to ensure the
conduct of regular procurement training programs by the procuring entities; and 6. To conduct an
annual review of the effectiveness of the Act and recommend any amendments thereto, as may
be necessary.
x x x x" <http://www.gppb.gov.ph/about_us/gppb.html> (visited October 23, 2013).
65 Entitled "AMENDMENT OF SECTION 53 OF THE IMPLEMENTING RULES AND
REGULATIONS PART A OF REPUBLIC ACT 9184 AND PRESCRIBING GUIDELINES ON
PARTICIPATION OF NON-GOVERNMENTAL ORGANIZATIONS IN PUBLIC PROCUREMENT,"
approved June 29, 2007.
66 Entitled "AN ACT PROVIDING FOR THE MODERNIZATION, STANDARDIZATION AND
REGULATION OF THE PROCUREMENT ACTIVITIES OF THE GOVERNMENT AND FOR
OTHER PURPOSES."
67 Sec. 48. Alternative Methods. - Subject to the prior approval of the Head of the Procuring Entity
or his duly authorized representative, and whenever justified by the conditions provided in this Act,
the Procuring Entity may, in order to promote economy and efficiency, resort to any of the
following alternative methods of Procurement:
xxxx
(e) Negotiated Procurement - a method of Procurement that may be resorted under the
extraordinary circumstances provided for in Section 53 of this Act and other instances that shall be
specified in the IRR, whereby the Procuring Entity directly negotiates a contract with a technically,
legally and financially capable supplier, contractor or consultant.
xxxx
68 As defined in Section 5(o) of RA 9184, the term "Procuring Entity" refers to any branch,
department, office, agency, or instrumentality of the government, including state universities and
colleges, government-owned and/or - controlled corporations, government financial institutions,
and local government units procuring Goods, Consulting Services and Infrastructure Projects.
69 Rollo (G.R. No. 208566), p. 564, citing GPPB Resolution 12-2007.
70 Special Provision 2, Article XLIV, RA 10147 (2011 PDAF Article) provides:
2. Allocation of Funds. The total projects to be identified by legislators and the Vice-President shall
not exceed the following amounts:
a. Total of Seventy Million Pesos (₱70,000,000) broken down into Forty Million Pesos
(₱40,000,000) for Infrastructure Projects and Thirty Million Pesos (₱30,000,000) for soft projects
of Congressional Districts or Party List Representatives;
b. Total of Two Hundred Million Pesos (₱200,000,000) broken down into One Hundred Million
Pesos (₱100,000,000) for Infrastructure Projects and One Hundred Million Pesos (₱100,000,000)
for soft projects of Senators and the Vice President.
71 See Special Provision 4, 2011 PDAF Article.
72 Special Provision 2, Article XLIV, RA 10155 (2012 PDAF Article) provides: 2. Project
Identification. Identification of projects and/or designation of beneficiaries shall conform to the
priority list, standard or design prepared by each implementing agency. Furthermore, preference
shall be given to projects located in the 4th to 6th class municipalities or indigents identified under
the National Household Targeting System for Poverty Reduction by the DSWD.
For this purpose, the implementing agency shall submit to Congress said priority list, standard or
design within ninety (90) days from effectivity of this Act. (Emphasis supplied)
73 RA 10352, passed and approved by Congress on December 19, 2012 and signed into law by
the President on December 19, 2012. Special Provision 2, Article XLIV, RA 10352 (2013 PDAF
Article) provides:
2. Project Identification. Identification of projects and/or designation of beneficiaries shall conform
to the priority list, standard or design prepared by each implementing agency: PROVIDED, That
preference shall be given to projects located in the 4th to 6th class municipalities or indigents
identified under the NHTS-PR by the DSWD. For this purpose, the implementing agency shall
72
submit to Congress said priority list, standard or design within ninety (90) days from effectivity of
this Act. (Emphasis supplied)
74 The permissive treatment of the priority list requirement in practice was revealed during the
Oral Arguments (TSN, October 10, 2013, p. 143):
Justice Leonen: x x x In Section 2 meaning, Special Provision 2, it mentions priority list of
implementing agencies. Have the implementing agencies indeed presented priority list to the
Members of Congress before disbursement?
Solicitor General Jardeleza: My understanding is, is not really, Your Honor. Justice Leonen: So, in
other words, the PDAF was expended without the priority list requirements of the implementing
agencies?
Solicitor General Jardeleza: That is so much in the CoA Report, Your Honor.
75 See Special Provision 3 of the 2012 PDAF Article and Special Provision 3 of the 2013 PDAF
Article.
76 Special Provision 6 of the 2012 PDAF Article provides:
6. Realignment of Funds. Realignment under this Fund may only be allowed once. The
Secretaries of Agriculture, Education, Energy, Environment and Natural Resources, Health,
Interior and Local Government, Public Works and Highways, and Social Welfare and Development
are also authorized to approve realignment from one project/scope to another within the allotment
received from this Fund, subject to the following: (i) for infrastructure projects, realignment is within
the same implementing unit and same project category as the original project; (ii) allotment
released has not yet been obligated for the original project/scope of work; and (iii) request is with
the concurrence of the legislator concerned. The DBM must be informed in writing of any
realignment approved within five (5) calendar days from its approval.
Special Provision 4 of the 2013 PDAF Article provides:
4. Realignment of Funds. Realignment under this Fund may only be allowed once. The
Secretaries of Agriculture, Education, Energy, Interior and Local Government, Labor and
Employment, Public Works and Highways, Social Welfare and Development and Trade and
Industry are also authorized to approve realignment from one project/scope to another within the
allotment received from this Fund, subject to the following: (i) for infrastructure projects,
realignment is within the same implementing unit and same project category as the original
project; (ii) allotment released has not yet been obligated for the original project/scope of work;
and (iii) request is with the concurrence of the legislator concerned. The DBM must be informed in
writing of any realignment approved within five (5) calendar days from approval thereof:
PROVIDED, That any realignment under this Fund shall be limited within the same classification
of soft or hard programs/projects listed under Special Provision 1 hereof: PROVIDED, FURTHER,
That in case of realignments, modifications and revisions of projects to be implemented by LGUs,
the LGU concerned shall certify that the cash has not yet been disbursed and the funds have been
deposited back to the BTr.
Any realignment, modification and revision of the project identification shall be submitted to the
House Committee on Appropriations and the Senate Committee on Finance, for favorable
endorsement to the DBM or the implementing agency, as the case may be. (Emphases supplied)
77 Special Provision 1 of the 2013 PDAF Article provides:
Special Provision(s) 1. Use of Fund. The amount appropriated herein shall be used to fund the
following priority programs and projects to be implemented by the corresponding agencies:
xxxx
PROVIDED, That this Fund shall not be used for the payment of Personal Services expenditures:
PROVIDED, FURTHER, That all procurement shall comply with the provisions of R.A. No. 9184
and its Revised Implementing Rules and Regulations: PROVIDED, FINALLY, That for
infrastructure projects, LGUs may only be identified as implementing agencies if they have the
technical capability to implement the same. (Emphasis supplied)
78 Special Provision 2 of the 2013 PDAF Article provides:
2. Project Identification. x x x.
xxxx
All programs/projects, except for assistance to indigent patients and scholarships, identified by a
member of the House of Representatives outside of his/her legislative district shall have the
written concurrence of the member of the House of Representatives of the recipient or beneficiary
legislative district, endorsed by the Speaker of the House of Representatives.
79 See Special Provision 4 of the 2013 PDAF Article; supra note 76.
80 Sec. 8.
Appropriations. The sum of Five Million Pesos out of any available funds from the National
Treasury is hereby appropriated and authorized to be released for the organization of the Board
and its initial operations. Henceforth, funds sufficient to fully carry out the functions and objectives
of the Board shall be appropriated every fiscal year in the General Appropriations Act.
All fees, revenues and receipts of the Board from any and all sources including receipts from
service contracts and agreements such as application and processing fees, signature bonus,
discovery bonus, production bonus; all money collected from concessionaires, representing
unspent work obligations, fines and penalties under the Petroleum Act of 1949; as well as the
government share representing royalties, rentals, production share on service contracts and
similar payments on the exploration, development and exploitation of energy resources, shall form
part of a Special Fund to be used to finance energy resource development and exploitation
programs and projects of the government and for such other purposes as may be hereafter
directed by the President. (Emphasis supplied)
81 Entitled "CREATING AN ENERGY DEVELOPMENT BOARD, DEFINING ITS POWERS AND
FUNCTIONS, PROVIDING FUNDS, THEREFOR, AND FOR OTHER PURPOSES."
82 See First Whereas Clause of PD 910.
83 See <http://malampaya.com/> (visited October 17, 2013).
84 Sec. 12. Special Condition of Franchise. — After deducting five (5%) percent as Franchise Tax,
the Fifty (50%) percent share of the Government in the aggregate gross earnings of the
Corporation from this Franchise shall be immediately set aside and allocated to fund the following
infrastructure and socio-civil projects within the Metropolitan Manila Area:
(a) Flood Control
(b) Sewerage and Sewage
(c) Nutritional Control
(d) Population Control
(e) Tulungan ng Bayan Centers
(f) Beautification
(g) Kilusang Kabuhayan at Kaunlaran (KKK) projects; provided, that should the aggregate gross
earning be less than ₱150,000,000.00, the amount to be allocated to fund the above-mentioned
project shall be equivalent to sixty (60%) percent of the aggregate gross earning.
In addition to the priority infrastructure and socio-civic projects with the Metropolitan Manila
specifically enumerated above, the share of the Government in the aggregate gross earnings
derived by the Corporate from this Franchise may also be appropriated and allocated to fund and
finance infrastructure and/or socio-civic projects throughout the Philippines as may be directed
and authorized by the Office of the President of the Philippines.
85 Entitled "CONSOLIDATING AND AMENDING PRESIDENTIAL DECREE NOS. 1067-A, 1067-
B, 1067-C, 1399 AND 1632, RELATIVE TO THE FRANCHISE AND POWERS OF THE
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR)."
86 Entitled "AMENDING SECTION TWELVE OF PRESIDENTIAL DECREE NO. 1869-
CONSOLIDATING AND AMENDING PRESIDENTIAL DECREE NOS. 1067-A, 1067-B, 1067-C,
1399 AND 1632, R ELATIVE TO THE F RANCHISE AND POWERS OF THE PHILIPPINE
AMUSEMENT AND G AMING CORPORATION (PAGCOR)." While the parties have confined their
discussion to Section 12 of PD 1869, the Court takes judicial notice of its amendment and perforce
deems it apt to resolve the constitutionality of the amendatory provision.
87 Section 12 of PD 1869, as amended by PD 1993, now reads:
Sec. 12. Special Condition of Franchise. — After deducting five (5%) percent as Franchise Tax,
the Fifty (50%) percent share of the government in the aggregate gross earnings of the
Corporation from this Franchise, or 60% if the aggregate gross earnings be less than
₱150,000,000.00 shall immediately be set aside and shall accrue to the General Fund to finance
the priority infrastructure development projects and to finance the restoration of damaged or
destroyed facilities due to calamities, as may be directed and authorized by the Office of the
President of the Philippines.
88 Rollo (G.R. No. 208566), p. 301.
89 CDF/PDAF ALLOCATION FROM 1990 -2013.
1990…………… ₱2,300,000,000.00
1991…………… P 2,300,000,000.00
1992…………… P 2,480,000,000.00
73
1993…………… P 2,952,000,000.00 Livelihood Resource Center (TLRC)/Technology Resource Center (TRC), National Livelihood
1994…………… P 2,977,000,000.00 Development Corporation (NLDC), National Agribusiness Corporation (NABCOR), and the
1995…………… P 3,002,000,000.00 Zamboanga del Norte Agricultural College (ZNAC) Rubber Estate Corporation (ZREC). CoA
1996…………… P 3,014,500,000.00 Chairperson‘s Memorandum. Rollo (G.R. No. 208566), p. 546. See also CoA Report, p. 14.
1997…………… P 2,583,450,000.00 102 Id.
1998…………… P 2,324,250,000.00 103 Id. at 546-547.
1999…………… P 1,517,800,000.00 (Food Security Program Fund) 104 Carvajal, Nancy, ―Malampaya fund lost ₱900M in JLN racket‖, Philippine Daily Inquirer, July
…………… P 2,500,000,000.00 (Lingap Para Sa Mahihirap Program Fund) 16, 2013 <http://newsinfo.inquirer.net/445585/malampaya-fund-lost-p900m-in-jln-racket> (visited
…………… P 5,458,277,000.00 (Rural/Urban Development Infrastructure Program Fund) October 21, 2013.)
2000…………… P 3,330,000,000.00 105 TSN, October 8, 2013, p. 119.
2001…………… 2000 GAA re-enacted 106 Rollo (G.R. No. 208493), pp. 9 and 341.
2002…………… P 5,677,500,000.00 107 The Court observes that petitioners have not presented sufficient averments on the
2003…………… P 8,327,000,000.00 remittances from the Philippine Charity Sweepstakes Office‖ nor have defined the scope of "the
2004…………… 2003 GAA re-enacted Executive‘s Lump Sum Discretionary Funds" (See rollo [G.R. No. 208566], pp. 47-49) which
2005…………… P 6,100,000,000.00 appears to be too broad and all-encompassing. Also, while Villegas filed a Supplemental Petition
2006…………… 2005 GAA re-enacted dated October 1, 2013 (Supplemental Petition, see rollo [G.R. No. 208566], pp. 213-220, and pp.
2007…………… P 11,445,645,000.00 462-464) particularly presenting their arguments on the Disbursement Acceleration Program, the
2008…………… P 7,892,500,000.00 same is the main subject of G.R. Nos. 209135, 209136, 209155, 209164, 209260, 209287,
2009…………… P 9,665,027,000.00 209442, 209517, and 209569 and thus, must be properly resolved therein. Hence, for these
2010…………… P 10,861,211,000.00 reasons, insofar as the Presidential Pork Barrel is concerned, the Court is constrained not to delve
2011…………… P 24,620,000,000.00 on any issue related to the above-mentioned funds and consequently confine its discussion only
2012…………… P 24,890,000,000.00 with respect to the issues pertaining to the Malampaya Funds and the Presidential Social Fund.
2013…………… P 24,790,000,000.00 108 Rollo (G.R. No. 208566), pp. 48-49.
90 "Pork as a tool for political patronage, however, can extend as far as the executive branch. It is 109 Id. at 48.
no accident, for instance, that the release of the allocations often coincides with the passage of a 110 To note, Villegas‘ Supplemental Petition was filed on October 2, 2013.
Palace-sponsored bill. 111 Rollo, (G.R. No. 208566), p. 342; and rollo (G.R. No. 209251), pp. 6-7.
That pork funds have grown by leaps and bounds in the last decade can be traced to presidents in 112 Re-docketed as G.R. No. 209251 upon Nepomuceno‘s payment of docket fees on October
need of Congress support. The rise in pork was particularly notable during the Ramos 16, 2013 as reflected on the Official Receipt No. 0079340. Rollo (G.R. No. 209251) p. 409.
administration, when the president and House Speaker Jose de Venecia, Jr. used generous fund 113 Rollo (G.R. No. 208566) p. 97.
releases to convince congressmen to support Malacañang-initiated legislation. The Ramos era, in 114 G.R. Nos. 113105, 113174, 113766 & 113888, August 19, 1994, 235 SCRA 506.
fact, became known as the ‘golden age of pork.‘ 115 Supra note 95.
Through the years, though, congressmen have also taken care to look after their very own. More 116 Entitled "CREATING AN ENERGY DEVELOPMENT BOARD, DEFINING ITS POWERS AND
often than not, pork-barrel funds are funneled to projects in towns and cities where the lawmakers' FUNCTIONS, PROVIDING FUNDS, THEREFOR, AND FOR OTHER PURPOSES."
own relatives have been elected to public office; thus, pork is a tool for building family power as 117 Joya v. Presidential Commission on Good Government, G.R. No. 96541, August 24, 1993,
well. COA has come across many instances where pork-funded projects ended up directly 225 SCRA 568, 575.
benefiting no less than the lawmaker or his or her relatives."(CHUA, YVONNE T. and CRUZ, 118 Biraogo v. Philippine Truth Commission of 2010, G.R. No. 192935, December 7, 2010, 637
BOOMA, "Pork is a Political, Not A Developmental, Tool." <http://pcij.org/stories/2004/pork.html> SCRA 78, 148.
[visited October 22, 2013].) 119 Joya v. Presidential Commission on Good Government, supra note 117, at 575.
91 With reports from Inquirer Research and Salaverria, Leila, "Candazo, first whistle-blower on 120 Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council, G.R. Nos.
pork barrel scam, dies; 61," Philippine Daily Inquirer, August 20, 2013, <http://newsinfo. 178552, 178554, 178581, 178890, 179157, and 179461, October 5, 2010, 632 SCRA 146, 175.
inquirer.net/469439/candazo-first-whistle-blower-on-pork-barrel-scam-dies-61> (visited October 121 Province of North Cotabato v. Government of the Republic of the Philippines Peace Panel on
21, 2013.) Ancestral Domain (GRP), G.R. Nos. 183591, 183752, 183893, 183951, and 183962, October 14,
92 Id. 2008, 568 SCRA 402, 450.
93 Id. 122 Id. at 450-451.
94 Id. 123 Francisco, Jr. v. Toll Regulatory Board, G.R. No. 166910, 169917, 173630, and 183599,
95 Lawyers Against Monopoly and Poverty (LAMP) v. Secretary of Budget and Management, G.R. October 19, 2010, 633 SCRA 470, 493, citing Province of North Cotabato v. Government of the
No. 164987, April 24, 2012, 670 SCRA 373, 387. Republic of the Philippines Peace Panel on Ancestral Domain (GRP), G.R. Nos. 183591, 183752,
96 Carvajal, Nancy, " NBI probes ₱10-B scam," Philippine Daily Inquirer, July 12, 2013 183893, 183951, and 183962, October 14, 2008, 568 SCRA 402, 405.
<http://newsinfo.inquirer.net/443297/nbi-probes-p10-b-scam> (visited October 21, 2013). 124 Id. at 492, citing Muskrat v. U.S., 219 U.S. 346 (1913).
97 Id. 125 Baldo, Jr. v. Commision on Elections, G.R. No. 176135, June 16, 2009, 589 SCRA 306, 310.
98 See NBI Executive Summary. <http://www.gov.ph/2013/09/16/executive-summary-by-the-nbi- 126 TSN, October 10, 2013, pp. 79-81.
on-the- pdaf-complaints-filed-against-janet-lim-napoles-et-al/> (visited October 22, 2013). 127 Section 17, Article VII of the 1987 Constitution reads: Sec. 17. The President shall have
99 Pursuant to Office Order No. 2010-309 dated May 13, 2010. control of all the executive departments, bureaus, and offices. He shall ensure that the laws be
100 During the Oral Arguments, the CoA Chairperson referred to the VILP as "the source of the so faithfully executed.
called HARD project, hard portion x x x "under the title the Budget of the DPWH." TSN, October 8, 128 Sec. 38. Suspension of Expenditure of Appropriations. – Except as otherwise provided in the
2013, p. 69. General Appropriations Act and whenever in his judgment the public interest so requires, the
101 These implementing agencies included the Department of Agriculture, DPWH and the President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop
Department of Social Welfare and Development (DSWD). The GOCCs included Technology and further expenditure of funds allotted for any agency, or any other expenditure authorized in the

74
General Appropriations Act, except for personal services appropriations used for permanent
officials and employees.
129 Mattel, Inc. v. Francisco, G.R. No. 166886, July 30, 2008, 560 SCRA 504, 514, citing
Constantino v. Sandiganbayan (First Division), G.R. Nos. 140656 and 154482, September 13,
2007, 533 SCRA 205, 219-220.
130 Rollo (G.R. No. 208566), p. 292.
131 G.R. No. 198457, August 13, 2013.
132 TSN, October 10, 2013, p. 134.
133 Section 22, Article VII of the 1987 Constitution provides:
Sec. 22. The President shall submit to the Congress within thirty days from the opening of every
regular session, as the basis of the general appropriations bill, a budget of expenditures and
sources of financing, including receipts from existing and proposed revenue measures.
134 Rollo (G.R. No. 208566), p. 294.
135 Id. at 5.
136 G.R. No. 159085, February 3, 2004, 421 SCRA 656.
137 Id. at 665.
138 See Francisco, Jr. v. Toll Regulatory Board, supra note 123, at 492.
139 369 US 186 82, S. Ct. 691, L. Ed. 2d. 663 [1962].
140 Rollo (G.R. No. 208566), pp. 295-296.
141 Tañada v. Cuenco, 100 Phil. 1101 (1957) unreported case.
142 406 Phil. 1 (2001).
143 Id. at 42-43.
144 Angara v. Electoral Commission, 63 Phil. 139, 158 (1936).
145 La Bugal- B’laan Tribal Association, Inc. v. Sec. Ramos, 465 Phil. 860, 890 (2004).
146 Rollo (G.R. No. 208566), p. 349.
147 Public Interest Center, Inc. v. Honorable Vicente Q. Roxas, in his capacity as Presiding
Judge, RTC of Quezon City, Branch 227, G.R. No. 125509, January 31, 2007, 513 SCRA 457,
470.
148 Social Justice Society (SJS) v. Dangerous Drugs Board, G.R. No. 157870, November 3,
2008, 570 SCRA 410, 421.
149 TSN, October 8, 2013, pp. 184-185.
150 People v. Vera, 65 Phil. 56, 89 (1937).
151 See Lanuza v. CA, G.R. No. 131394, March 28, 2005, 454 SCRA 54, 61-62.
152 ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines.
153 Chinese Young Men’s Christian Association o f the Philippine Islands v. Remington Steel
Corporation, G.R. No. 159422, March 28, 2008, 550 SCRA 180, 197-198.
154 Philconsa v. Enriquez, supra note 114, at 522.
155 G.R. No. 166715, August 14, 2008, 562 SCRA 251.
156 Rollo (G.R. No. 208566), p. 325.
157 Id.
158 Id. at 329.
159 Id. at 339.
160 Id. at 338.
161 See note 107.
162 Angara v. Electoral Commission, supra note 144, at 139.
163 Id. at 157.
164 Section 1, Article VI, 1987 Constitution.
165 Section 1, Article VII, 1987 Constitution.
166 Section 1, Article VIII, 1987 Constitution.
167 Angara v. Electoral Commission, supra note 144, at 156.
168 Government of the Philippine Islands v. Springer, 277 U.S. 189, 203 (1928).
169 Re: COA Opinion on the Computation of the Appraised Value of the Properties Purchased by
the Retired Chief/Associate Justices of the Supreme Court, A.M. No. 11-7-10-SC, July 31, 2012,
678 SCRA 1, 9-10, citing Carl Baar, Separate But Subservient: Court Budgeting In The American
States 149-52 (1975), cited in Jeffrey Jackson, Judicial Independence, Adequate Court Funding,
and Inherent Judicial Powers, 52 Md. L. Rev. 217 (1993).
170 Id. at 10, citing Jeffrey Jackson, Judicial Independence, Adequate Court Funding, and
Inherent Judicial Powers, 52 Md. L. Rev. 217 (1993).
171 See Nixon v. Administrator of General Services, 433 U.S. 425, 441-446 and 451-452 (1977)
and United States v. Nixon, 418 U.S. 683 (1974), cited in Justice Powell‘s concurring opinion in
Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983).
172 See Youngstown Sheet & Tube Co. v. Sawyer 343 U.S. 579, 587 (1952), Springer v.
Philippine Islands, 277 U.S. 189, 203 (1928) cited in Justice Powell’s concurring opinion in
Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983).
173 273 Phil. 443 (1991).
174 Id. at 461. "3. Budget Execution. Tasked on the Executive, the third phase of the budget
process covers the various operational aspects of budgeting. The establishment of obligation
authority ceilings, the evaluation of work and financial plans for individual activities, the continuing
review of government fiscal position, the regulation of funds releases, the implementation of cash
payment schedules, and other related activities comprise this phase of the budget cycle."
175 Biraogo v. Philippine Truth Commission of 2010, supra note 118, at 158.
176 Guingona, Jr. v. Carague, supra note 173, at 460-461.
177 Abakada Guro Party List v. Purisima, supra note 155, at 294-296.
178 Id. at 287.
179 Rollo (G.R. No. 208566), p. 179.
180 Id. at 29.
181 Id. at 24.
182 Id. at 86.
183 Id. at 308.
184 Id.
185 See CDF Articles for the years 1991, 1992, 1993, 1994, 1995, 1996, 1997, and 1998.
186 See PDAF Article for the year 2000 which was re-enacted in 2001. See also the following
1999 CIAs: "Food Security Program Fund," the " Lingap Para Sa Mahihirap Program Fund," and
the "Rural/Urban Development Infrastructure Program Fund." See further the 1997 DepEd School
Building Fund.
187 See PDAF Article for the years 2005, 2006, 2007, 2008, 2009, 2010, 2011, and 2013.
188 Also, in Section 2.1 of DBM Circular No. 547 dated January 18, 2013 (DBM Circular 547-13),
or the "Guidelines on the Release of Funds Chargeable Against the Priority Development
Assistance Fund for FY 2013," it is explicitly stated that the "PDAF shall be used to fund priority
programs and projects identified by the Legislators from the Project Menu." (Emphasis supplied)
189 To note, Special Provision 4 cannot – as respondents submit – refer to realignment of projects
since the same provision subjects the realignment to the condition that the "allotment released has
not yet been obligated for the original project/scope of work". The foregoing proviso should be
read as a textual reference to the savings requirement stated under Section 25(5), Article VI of the
1987 Constitution which pertinently provides that "x x x the President, the President of the Senate,
the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the
heads of Constitutional Commissions may, by law, be authorized to augment any item in the
general appropriations law for their respective offices from savings in other items of their
respective appropriations. In addition, Sections 4.2.3, 4.2.4 and 4.3.3 of DBM Circular 547-13, the
implementing rules of the 2013 PDAF Article, respectively require that: (a) "the allotment is still
valid or has not yet lapsed"; (b) "requests for realignment of unobligated allotment as of December
31, 2012 treated as continuing appropriations in FY 2013 shall be submitted to the DBM not later
than June 30, 2013"; and (c) requests for realignment shall be supported with, among others, a
"certification of availability of funds." As the letter of the law and the guidelines related thereto
evoke the legal concept of savings, Special Provision 4 must be construed to be a provision on
realignment of PDAF funds, which would necessarily but only incidentally include the projects for
which the funds have been allotted to. To construe it otherwise would effectively allow PDAF funds
to be realigned outside the ambit of the foregoing provision, thereby sanctioning a constitutional
aberration.
190 Aside from the sharing of the executive‘s realignment authority with legislators in violation of
the separation of powers principle, it must be pointed out that Special Provision 4, insofar as it
confers fund realignment authority to department secretaries, is already unconstitutional by itself.
As recently held in Nazareth v. Villar (Nazareth), G.R. No. 188635, January 29, 2013, 689 SCRA
385, 403-404, Section 25(5), Article VI of the 1987 Constitution, limiting the authority to augment,
75
is "strictly but reasonably construed as exclusive" in favor of the high officials named therein. As
such, the authority to realign funds allocated to the implementing agencies is exclusively vested in
the President, viz.:
It bears emphasizing that the exception in favor of the high officials named in Section 25(5), Article
VI of the Constitution limiting the authority to transfer savings only to augment another item in the
GAA is strictly but reasonably construed as exclusive. As the Court has expounded in Lokin, Jr. v.
Commission on Elections:
When the statute itself enumerates the exceptions to the application of the general rule, the
exceptions are strictly but reasonably construed. The exceptions extend only as far as their
language fairly warrants, and all doubts should be resolved in favor of the general provision rather
than the exceptions. Where the general rule is established by a statute with exceptions, none but
the enacting authority can curtail the former. Not even the courts may add to the latter by
implication, and it is a rule that an express exception excludes all others, although it is always
proper in determining the applicability of the rule to inquire whether, in a particular case, it accords
with reason and justice.
The appropriate and natural office of the exception is to exempt something from the scope of the
general words of a statute, which is otherwise within the scope and meaning of such general
words. Consequently, the existence of an exception in a statute clarifies the intent that the statute
shall apply to all cases not excepted. Exceptions are subject to the rule of strict construction;
hence, any doubt will be resolved in favor of the general provision and against the exception.
Indeed, the liberal construction of a statute will seem to require in many circumstances that the
exception, by which the operation of the statute is limited or abridged, should receive a restricted
construction. (Emphases and underscoring supplied)
The cogence of the Nazareth dictum is not enfeebled by an invocation of the doctrine of qualified
political agency (otherwise known as the "alter ego doctrine") for the bare reason that the same is
not applicable when the Constitution itself requires the President himself to act on a particular
matter, such as that instructed under Section 25(5), Article VI of the Constitution. As held in the
landmark case of Villena v. Secretary of Interior (67 Phil. 451 [1987]), constitutional imprimatur is
precisely one of the exceptions to the application of the alter ego doctrine, viz.:
After serious reflection, we have decided to sustain the contention of the government in this case
on the board proposition, albeit not suggested, that under the presidential type of government
which we have adopted and considering the departmental organization established and continued
in force by paragraph 1, section 12, Article VII, of our Constitution, all executive and administrative
organizations are adjuncts of the Executive Department, the heads of the various executive
departments are assistants and agents of the Chief Executive, and except in cases where the
Chief Executive is required by the Constitution or the law to act in person or the exigencies of the
situation demand that he act personally, the multifarious executive and administrative functions of
the Chief Executive are performed by and through the executive departments, and the acts of the
secretaries of such departments, performed and promulgated in the regular course of business,
are, unless disapproved or reprobated by the Chief Executive, presumptively the acts of the Chief
Executive. (Emphases and underscoring supplied; citations omitted)
191 Abakada Guro Party List v. Purisima, supra note 155, at 294-296.
192 TSN, October 10, 2013, pp. 16, 17, 18, and 23.
193 TSN, October 10, 2013, pp. 72-73.
194 Aside from its conceptual origins related to the separation of powers principle, Corwin, in his
commentary on Constitution of the United States made the following observations:
At least three distinct ideas have contributed to the development of the principle that legislative
power cannot be delegated. One is the doctrine of separation of powers: Why go to the trouble of
separating the three powers of government if they can straightway remerge on their own motion?
The second is the concept of due process of law, which precludes the transfer of regulatory
functions to private persons. Lastly, there is the maxim of agency "Delegata potestas non potest
delegari," which John Locke borrowed and formulated as a dogma of political science . . . Chief
Justice Taft offered the following explanation of the origin and limitations of this idea as a postulate
of constitutional law: "The well-known maxim ‘delegata potestas non potest delefari,‘ applicable to
the law of agency in the general common law, is well understood and has had wider application in
the construction of our Federal and State Constitutions than it has in private law . . . The Federal
and State Constitutions than it has in private law . . . The Federal Constitution and State
Constitutions of this country divide the governmental power into three branches . . . In carrying out
that constitutional division . . . it is a breach of the National fundamental law if Congress gives up
its legislative power and transfers it to the President, or to the Judicial branch, or if by law it
attempts to invest itself or its members with either executive power of judicial power. This is not to
say that the three branches are not co-ordinate parts of one government and that each in the field
of its duties may not invoke government and that each in the field of its duties may not invoke the
action of the two other branches in so far as the action invoked shall not be an assumption of the
constitutional field of action of another branch. In determining what it may do in seeking assistance
from another branch, the extent and character of that assistance must be fixed according to
common sense and the inherent necessities of the governmental coordination. (Emphases
supplied)
195 Section 1, Article VI, 1987 Constitution.
196 See Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 702 (1919).
197 See Section 23(2), Article VI of the 1987 Constitution.
198 See Section 28(2), Article VI of the 1987 Constitution.
199 Abakada Guro Party List v. Purisima, supra note 155, at 288.
200 169 Phil. 437, 447-448 (1977).
201 Philippine Constitution Association v. Enriquez, supra note 114, at 522.
202 Bengzon v. Secretary of Justice and Insular Auditor, 62 Phil. 912, 916 (1936).
203 Angara v. Electoral Commission, supra note 144, at 156.
204 Abakada Guro Party List v. Purisima, supra note 155, at 287.
205 Id. at 292.
206 Bengzon v. Secretary of Justice and Insular Auditor, supra note 202, at 916-917.
207 "Log-rolling legislation refers to the process in which several provisions supported by an
individual legislator or minority of legislators are combined into a single piece of legislation
supported by a majority of legislators on a quid pro quo basis: no one provision may command
majority support, but the total package will.” See Rollo (G.R. No. 208566), p. 420, citing Briffault,
Richard, ―The Item Veto in State Courts,‖ 66 Temp. L. Rev. 1171, 1177 (1993).
208 Passarello, Nicholas, "The Item Veto and the Threat of Appropriations Bundling in Alaska," 30
Alaska Law Review 128 (2013), citing Black‘s Law Dictionary 1700 (9th ed. 2009).
<http://scholarship.law.duke.edu/alr/vol30/iss1/5> (visited October 23, 2013).
209 Immigration and Naturalization Service v. Chadha, 462 U.S. 919 (1983).
210 299 U.S. 410 (1937).
211 To note, in Gonzales v. Macaraig, Jr. (G.R. No. 87636, November 19, 1990, 191 SCRA 452,
465), citing Commonwealth v. Dodson (11 S.E., 2d 120, 176 Va. 281), the Court defined an item
of appropriation as "an indivisible sum of money dedicated to a stated purpose." In this relation,
Justice Carpio astutely explained that an "item" is indivisible because the amount cannot be
divided for any purpose other than the specific purpose stated in the item.
212 Rollo (G.R. No. 208566), p. 421.
213 Id.
214 Id. at 316.
215 Id. at 421.
216 Id. at 566.
217 Id. at 567.
218 "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. 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.‘" (Biraogo v. Philippine Truth Commission of 2010, supra note 118, 177; citations
omitted)
219 Rollo (G.R. No. 208566), p. 406.
220 Id. at 407.
221 Bernas, Joaquin G., S.J., The 1987 Constitution of the Republic of the Philippines: A
Commentary, 2003 Edition, p. 1108.
222 Abakada Guro Party List v. Purisima, supra note 155.
76
223 See Section 22, Article VI, 1987 Constitution.
224 See Section 21, Article VI, 1987 Constitution.
225 Rollo (G.R. No. 208493), p. 9.
226 See Pamatong v. Commission on Elections, G.R. No. 161872, April 13, 2004, 427 SCRA 96,
100-101.
227 Entitled "AN ACT PROVIDING FOR A LOCAL GOVERNMENT CODE OF 1991."
228 230 Phil. 379, 387-388 (1986).
229 Id.
230 Rollo (G.R. No. 208566), pp. 95-96.
231 Philconsa v. Enriquez, supra note 114, at 523.
232 Nograles, Prospero C. and Lagman, Edcel C., House of Representatives of the Philippines,
"Understanding the ‘Pork Barrel,‘" <http://www.congress.gov.ph/download/ 14th/pork_barrel.pdf >
(visited October 17, 2013).
233 <http://www.gov.ph/2013/08/23/english-statement-of-president-aquino-on-the-abolition-of-
pdaf-august-23-2013/> (visited October 22, 2013).
234 Section 106 of the LGC provides:
Sec. 106. Local Development Councils. – (a) Each local government unit shall have a
comprehensive multi-sectoral development plan to be initiated by its development council and
approved by its sanggunian. For this purpose, the development council at the provincial, city,
municipal, or barangal level, shall assist the corresponding sanggunian in setting the direction of
economic and social development, and coordinating development efforts within its territorial
jurisdiction.
235 See Section 109 of the LGC.
236 Rollo (G.R. No. 208566), p. 423.
237 Id. at 427.
238 Id. at 439-440.
239 Id. at 434 and 441.
240 See Guingona, Jr. v. Carague, supra note 173, where the Court upheld the constitutionality of
certain automatic appropriation laws for debt servicing although said laws did not readily indicate
the exact amounts to be paid considering that "the amounts nevertheless are made certain by the
legislative parameters provided in the decrees"; hence, "the Executive is not of unlimited
discretion as to the amounts to be disbursed for debt servicing." To note, such laws vary in great
degree with the way the 2013 PDAF Article works considering that: (a) individual legislators and
not the executive make the determinations; (b) the choice of both the amount and the project are
to be subsequently made after the law is passed and upon the sole discretion of the legislator,
unlike in Guingona, Jr. where the amount to be appropriated is dictated by the contingency
external to the discretion of the disbursing authority; and (c) in Guingona, Jr. there is no effective
control of the funds since as long as the contingency arises money shall be automatically
appropriated therefor, hence what is left is merely law execution and not legislative discretion.
241 Id. at 462.
242 23 Nev. 25 (1895).
243 Rollo (G.R. No. 208566), p. 438.
244 Id. at 300.
245 The project identifications made by the Executive should always be in the nature of law
enforcement and, hence, for the sole purpose of enforcing an existing appropriation law. In
relation thereto, it may exercise its rule-making authority to greater particularize the guidelines for
such identifications which, in all cases, should not go beyond what the delegating law provides.
Also, in all cases, the Executive‘s identification or rule-making authority, insofar as the field of
appropriations is concerned, may only arise if there is a valid appropriation law under the
parameters as above-discussed.
246 Abakada Guro Party List v. Purisima, supra note 155.
247 See Bernas, Joaquin G., S.J., The 1987 Constitution of the Republic of the Philippines: A
Commentary, 2009 Edition, pp. 686-687, citing Pelaez v. Auditor General, 15 SCRA 569, 576-577
(1965).
248 Id. at 277.
249 § 438 Ejusdem Generis ("of the same kind"); specific words; 82 C.J.S. Statutes § 438.
250 Rollo (G.R. No. 208566), p. 437, citing § 438 Ejusdem Generis ("of the same kind"); specific
words; 82 C.J.S. Statutes § 438.
251 Based on a July 5, 2011 posting in the government’s website
<http://www.gov.ph/2011/07/05/budget-secretary-abad-clarifies-nature-of-malampaya-fund/>;
attached as Annex "A" to the Petitioners‘ Memorandum), the Malampaya Funds were also used
for non-energy related projects, to wit:
The rest of the 98.73 percent or ₱19.39 billion was released for non-energy related projects: 1) in
2006, ₱1 billion for the Armed Forces Modernization Fund; 2) in 2008, ₱4 billion for the
Department of Agriculture; 3) in 2009, a total of ₱14.39 billion to various agencies, including:
₱7.07 billion for the Department of Public Works and Highways; ₱2.14 billion for the Philippine
National Police; ₱1.82 billion for [the Department of Agriculture]; ₱1.4 billion for the National
Housing Authority; and ₱900 million for the Department of Agrarian Reform.
252 For academic purposes, the Court expresses its disagreement with petitioners‘ argument that
the previous version of Section 12 of PD 1869 constitutes an undue delegation of legislative power
since it allows the President to broadly determine the purpose of the Presidential Social Fund‘s
use and perforce must be declared unconstitutional. Quite the contrary, the 1st paragraph of the
said provision clearly indicates that the Presidential Social Fund shall be used to finance specified
types of priority infrastructure and socio-civic projects, namely, Flood Control, Sewerage and
Sewage, Nutritional Control, Population Control, Tulungan ng Bayan Centers, Beautification and
Kilusang Kabuhayan at Kaunlaran (KKK) projects located within the Metropolitan Manila area.
However, with regard to the stated geographical-operational limitation, the 2nd paragraph of the
same provision nevertheless allows the Presidential Social Fund to finance "priority infrastructure
and socio-civic projects throughout the Philippines as may be directed and authorized by the
Office of the President of the Philippines." It must, however, be qualified that the 2nd paragraph
should not be construed to mean that the Office of the President may direct and authorize the use
of the Presidential Social Fund to any kind of infrastructure and socio-civic project throughout the
Philippines. Pursuant to the maxim of noscitur a sociis , (meaning, that a word or phrase‘s "correct
construction may be made clear and specific by considering the company of words in which it is
founded or with which it is associated"; see Chavez v. Judicial and Bar Council, G.R. No. 202242,
July 17, 2012, 676 SCRA 579, 598-599) the 2nd paragraph should be construed only as an
expansion of the geographical-operational limitation stated in the 1st paragraph of the same
provision and not a grant of carte blanche authority to the President to veer away from the project
types specified thereunder. In other words, what the 2nd paragraph merely allows is the use of the
Presidential Social Fund for Flood Control, Sewerage and Sewage, Nutritional Control, Population
Control, Tulungan ng Bayan Centers, Beautification and Kilusang Kabuhayan at Kaunlaran (KKK)
projects even though the same would be located outside the Metropolitan Manila area. To deem it
otherwise would be tantamount to unduly expanding the rule-making authority of the President in
violation of the sufficient standard test and, ultimately, the principle of non-delegability of
legislative power.
253 Black‘s Law Dictionary (7th Ed., 1999), p. 784.
254 Rollo (G.R. No. 208566), pp. 48-49.
255 Id.
256 234 Phil. 521, 533-534 (1987).
257 252 Phil. 264 (1989).
258 Id. at 279
259 Id. at 278.
260 Rollo (G.R. No. 208566), p. 463.
261 Id. at 459-462.
262 Id. at 304-305.
263 <http://www.dbm.gov.ph/wp-content/uploads/BESE/BESE2013/Glossary.pdf> (visited
November 4, 2013).
264 Notice of Cash Allocation (NCA). Cash authority issued by the DBM to central, regional and
provincial offices and operating units through the authorized government servicing banks of the
MDS,* to cover the cash requirements of the agencies.
*MDS stands for Modified Disbursement Scheme. It is a procedure whereby disbursements by NG
agencies chargeable against the account of the Treasurer of the Philippines are effected through
GSBs.**
** GSB stands for Government Servicing Banks. (Id.)
265 TSN, October 10, 2013, pp. 35-36.
77
266 Commissioner of Internal Revenue v. San Roque Power Corporation, G.R. No. 187485, The controversy arose when respondent Government Service Insurance System (GSIS), pursuant
October 8, 2013, citing Serrano de Agbayani v. Philippine National Bank, 148 Phil. 443, 447-448 to the privatization program of the Philippine Government under Proclamation No. 50 dated 8
(1971). December 1986, decided to sell through public bidding 30% to 51% of the issued and outstanding
267 Id. shares of respondent MHC. The winning bidder, or the eventual "strategic partner," is to provide
268 Id. management expertise and/or an international marketing/reservation system, and financial support
to strengthen the profitability and performance of the Manila Hotel.2 In a close bidding held on 18
September 1995 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. . . .
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS . . . .
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 Berhad 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.4 In a
subsequent letter dated 10 October 1995 petitioner sent a manager's 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 . . .5 which 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.
7. Republic of the Philippines On 18 October 1995 the Court issued a temporary restraining order enjoining respondents from
SUPREME COURT perfecting and consummating the sale to the Malaysian firm.
Manila On 10 September 1996 the instant case was accepted by the Court En Banc after it was referred
EN BANC 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.
G.R. No. 122156 February 3, 1997 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
MANILA PRINCE HOTEL petitioner, 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
vs. 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.6 Petitioner also argues that
since 51% of the shares of the MHC carries with it the ownership of the business of the hotel
GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA HOTEL
which is owned by respondent GSIS, a government-owned and controlled corporation, the hotel
CORPORATION, COMMITTEE ON PRIVATIZATION and OFFICE OF THE GOVERNMENT
business of respondent GSIS being a part of the tourism industry is unquestionably a part of the
CORPORATE COUNSEL, respondents.
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
BELLOSILLO, J.:
Constitution, applies.7
The FiIipino First Policy enshrined in the 1987 Constitution, i.e., in the grant of rights, privileges,
It is also the thesis of petitioner that since Manila Hotel is part of the national patrimony and its
and concessions covering the national economy and patrimony, the State shall give preference to
business also unquestionably part of the national economy petitioner should be preferred after it
qualified Filipinos,1 is in oked by petitioner in its bid to acquire 51% of the shares of the Manila
has matched the bid offer of the Malaysian firm. For the bidding rules mandate that if for any
Hotel Corporation (MHC) which owns the historic Manila Hotel. Opposing, respondents maintain
reason, the Highest Bidder cannot be awarded the Block of Shares, GSIS may offer this to the
that the provision is not self-executing but requires an implementing legislation for its enforcement.
other Qualified Bidders that have validly submitted bids provided that these Qualified Bidders are
Corollarily, they ask whether the 51% shares form part of the national economy and patrimony
willing to match the highest bid in terms of price per share.8
covered by the protective mantle of the Constitution.
78
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) . . . 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. 10 It prescribes the 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. 11 Under the doctrine of 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. 12 A provision
which lays down a general principle, such 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.14 This can be
cataclysmic. That is why the prevailing view is, as it has always been, that —
. . . in case of doubt, the Constitution should be considered self-executing rather than non-self-
executing . . . . 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-vis Filipinos 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 the setting up of other financial structures,
et cetera (emphasis 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 other 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. 17 Subsequent legislation however does not 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. 18 The argument is flawed. If 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
79
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 20 speaks of constitutional
provisions on personal dignity, 21 the sanctity of family life, 22 the vital role of the youth in nation-
building 23 the promotion of social justice, 24 and the values of education. 25 Tolentino v.
Secretary of Finance 26 refers to the constitutional provisions on social justice and human rights
27 and on education. 28 Lastly, Kilosbayan, Inc. v. Morato 29 cites provisions on the promotion of
general welfare, 30 the sanctity of family life, 31 the vital role of the youth in nation-building 32 and
the promotion of total human liberation and development. 33 A reading of these provisions indeed
clearly 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 the
legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the 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 34 explains
— MR. NOLLEDO. The amendment will read: "IN THE GRANT OF RIGHTS, PRIVILEGES AND
The patrimony of the Nation that should be conserved and developed refers not only to out rich
natural resources but also to the cultural heritage of out 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. 35 When the
Constitution 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
1930's. 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. 37 During World 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 fro their final stand.
Thereafter, in the 1950's and 1960's, 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.
xxx xxx xxx
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
xxx xxx xxx
MR. RODRIGO. Before we vote, may I request that the amendment be read again.
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 GlVE 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 . . . This provision was never found in previous
Constitutions . . . .
80
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 counter productive 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" end 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 [if] 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. 47 Certainly, the constitutional mandate itself is reason 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 petitioner's
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
81
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 . . . in connection with a temporary injunction issued by the
Court's 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 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 nation's 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 Manila Hotel — and all that it stands for —
is sold to a non-Filipino? How much of national pride will vanish if the nation's 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
clearances and to do such other acts and deeds as may be necessary for purpose.
SO ORDERED.
Regalado, Davide, Jr., Romero, Kapunan, Francisco and Hermosisima, Jr., JJ., concur.
Separate Opinions
PADILLA, J., concurring:
I concur with the ponencia of Mr. Justice Bellosillo. At the same time, I would like to expound a bit
more on the concept of national patrimony as including within its scope and meaning institutions
such as the Manila Hotel.
It is argued by petitioner that the Manila Hotel comes under "national patrimony" over which
qualified Filipinos have the preference, in ownership and operation. The Constitutional provision
on point states:
xxx xxx xxx
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall Give preference to qualified Filipinos.1
Petitioner's argument, I believe, is well taken. Under the 1987 Constitution, "national patrimony"
consists of the natural resources provided by Almighty God (Preamble) in our territory (Article I)
consisting of land, sea, and air.2 study of the 1935 Constitution, where the concept of "national
patrimony" originated, would show that its framers decided to adopt the even more comprehensive
expression "Patrimony of the Nation" in the belief that the phrase encircles a concept embracing
not only their natural resources of the country but practically everything that belongs to the Filipino
people, the tangible and the material as well as the intangible and the spiritual assets and
possessions of the people. It is to be noted that the framers did not stop with conservation. They
knew that conservation alone does not spell progress; and that this may be achieved only through
development as a correlative factor to assure to the people not only the exclusive ownership, but
also the exclusive benefits of their national patrimony).3
Moreover, the concept of national patrimony has been viewed as referring not only to our rich
natural resources but also to the cultural heritage of our
race.4
There is no doubt in my mind that the Manila Hotel is very much a part of our national patrimony
and, as such, deserves constitutional protection as to who shall own it and benefit from its
operation. This institution has played an important role in our nation's history, having been the
venue of many a historical event, and serving as it did, and as it does, as the Philippine Guest
House for visiting foreign heads of state, dignitaries, celebrities, and others.5
It is therefore our duty to protect and preserve it for future generations of Filipinos. As President
Manuel L. Quezon once said, we must exploit the natural resources of our country, but we should
do so with. an eye to the welfare of the future generations. In other words, the leaders of today are
the trustees of the patrimony of our race. To preserve our national patrimony and reserve it for
Filipinos was the intent of the distinguished gentlemen who first framed our Constitution. Thus, in
debating the need for nationalization of our lands and natural resources, one expounded that we
should "put more teeth into our laws, and; not make the nationalization of our lands and natural
resources a subject of ordinary legislation but of constitutional enactment"6 To quote further: "Let
not our children be mere tenants and trespassers in their own country. Let us preserve and
bequeath to them what is rightfully theirs, free from all foreign liens and encumbrances".7
Now, a word on preference. In my view "preference to qualified Filipinos", to be meaningful, must
refer not only to things that are peripheral, collateral, or tangential. It must touch and affect the
very "heart of the existing order." In the field of public bidding in the acquisition of things that
pertain to the national patrimony, preference to qualified Filipinos must allow a qualified Filipino to
match or equal the higher bid of a non-Filipino; the preference shall not operate only when the
bids of the qualified Filipino and the non-Filipino are equal in which case, the award should
undisputedly be made to the qualified Filipino. The Constitutional preference should give the
qualified Filipino an opportunity to match or equal the higher bid of the non-Filipino bidder if the
preference of the qualified Filipino bidder is to be significant at all.
It is true that in this present age of globalization of attitude towards foreign investments in our
country, stress is on the elimination of barriers to foreign trade and investment in the country.
82
While government agencies, including the courts should re-condition their thinking to such a trend,
and make it easy and even attractive for foreign investors to come to our shores, yet we should
not preclude ourselves from reserving to us Filipinos certain areas where our national identity,
culture and heritage are involved. In the hotel industry, for instance, foreign investors have
established themselves creditably, such as in the Shangri-La, the Nikko, the Peninsula, and
Mandarin Hotels. This should not stop us from retaining 51% of the capital stock of the Manila
Hotel Corporation in the hands of Filipinos. This would be in keeping with the intent of the Filipino
people to preserve our national patrimony, including our historical and cultural heritage in the
hands of Filipinos.
VITUG, J., concurring:
I agree with Mr. Justice Josue N. Bellosillo on his clear-cut statements, shared by Mr. Justice
Reynato S. Puno in a well written separate (dissenting) opinion, that:
First, the provision in our fundamental law which provides that "(I)n the grant of rights, privileges,
and concessions covering the national economy and patrimony, the State shall give preference to
qualified Filipinos"1 is self-executory. The provision verily does not need, although it can obviously
be amplified or regulated by, an enabling law or a set of rules.
Second, the term "patrimony" does not merely refer to the country's natural resources but also to
its cultural heritage. A "historical landmark," to use the words of Mr. Justice Justo P. Torres, Jr.,
Manila Hotel has now indeed become part of Philippine heritage.
Third, the act of the Government Service Insurance System ("GSIS"), a government entity which
derives its authority from the State, in selling 51% of its share in MHC should be considered an act
of the State subject to the Constitutional mandate.
On the pivotal issue of the degree of "preference to qualified Filipinos," I find it somewhat difficult
to take the same path traversed by the forceful reasoning of Justice Puno. In the particular case
before us, the only meaningful preference, it seems, would really be to allow the qualified Filipino
to match the foreign bid for, as a particular matter, I cannot see any bid that literally calls for
millions of dollars to be at par (to the last cent) with another. The magnitude of the magnitude of
the bids is such that it becomes hardly possible for the competing bids to stand exactly "equal"
which alone, under the dissenting view, could trigger the right of preference.
It is most unfortunate that Renong Berhad has not been spared this great disappointment, a
letdown that it did not deserve, by a simple and timely advise of the proper rules of bidding along
with the peculiar constitutional implications of the proposed transaction. It is also regrettable that
the Court at time is seen, to instead, be the refuge for bureaucratic inadequate which create the
perception that it even takes on non-justiciable controversies.
All told, I am constrained to vote for granting the petition.
MENDOZA, J., concurring in the judgment:
I take the view that in the context of the present controversy the only way to enforce the
constitutional mandate that "[i]n the grant of rights, privileges and concessions covering the
national patrimony the State shall give preference to qualified Filipinos"1 is to allow petitioner
Philippine corporation to equal the bid of the Malaysian firm Renong Berhad for the purchase of
the controlling shares of stocks in the Manila Hotel Corporation. Indeed, it is the only way a
qualified Filipino of Philippine corporation can be given preference in the enjoyment of a right,
privilege or concession given by the State, by favoring it over a foreign national corporation.
Under the rules on public bidding of the Government Service and Insurance System, if petitioner
and the Malaysian firm had offered the same price per share, "priority [would be given] to the
bidder seeking the larger ownership interest in MHC,"2 so that petitioner bid for more shares, it
would be preferred to the Malaysian corporation for that reason and not because it is a Philippine
corporation. Consequently, it is only in cases like the present one, where an alien corporation is
the highest bidder, that preferential treatment of the Philippine corporation is mandated not by
declaring it winner but by allowing it "to match the highest bid in terms of price per share" before it
is awarded the shares of stocks.3 That, to me, is what "preference to qualified Filipinos" means in
the context of this case — by favoring Filipinos whenever they are at a disadvantage vis-a-vis
foreigners.
This was the meaning given in Co Chiong v. Cuaderno4 to a 1947 statute giving "preference to
Filipino citizens in the lease of public market stalls."5 This Court upheld the cancellation of existing
leases covering market stalls occupied by persons who were not Filipinos and the award
thereafter of the stalls to qualified Filipino vendors as ordered by the Department of Finance.
Similarly, in Vda. de Salgado v. De la Fuente,6 this Court sustained the validity of a municipal
ordinance passed pursuant to the statute (R.A. No. 37), terminating existing leases of public
market stalls and granting preference to Filipino citizens in the issuance of new licenses for the
occupancy of the stalls. In Chua Lao v. Raymundo,7 the preference granted under the statute was
held to apply to cases in which Filipino vendors sought the same stalls occupied by alien vendors
in the public markets even if there were available other stalls as good as those occupied by aliens.
"The law, apparently, is applicable whenever there is a conflict of interest between Filipino
applicants and aliens for lease of stalls in public markets, in which situation the right to preference
immediately arises."8
Our legislation on the matter thus antedated by a quarter of a century efforts began only in the
1970s in America to realize the promise of equality, through affirmative action and reverse
discrimination programs designed to remedy past discrimination against colored people in such
areas as employment, contracting and licensing.9 Indeed, in vital areas of our national economy,
there are situations in which the only way to place Filipinos in control of the national economy as
contemplated in the Constitution 10 is to give them preferential treatment where they can at least
stand on equal footing with aliens.
There need be no fear that thus preferring Filipinos would either invite foreign retaliation or deprive
the country of the benefit of foreign capital or know-how. We are dealing here not with common
trades of common means of livelihood which are open to aliens in our midst, 11 but with the sale
of government property, which is like the grant of government largess of benefits and concessions
covering the national economy" and therefore no one should begrudge us if we give preferential
treatment to our citizens. That at any rate is the command of the Constitution. For the Manila Hotel
is a business owned by the Government. It is being privatized. Privatization should result in the
relinquishment of the business in favor of private individuals and groups who are Filipino citizens,
not in favor of aliens.
Nor should there be any doubt that by awarding the shares of stocks to petitioner we would be
trading competence and capability for nationalism. Both petitioner and the Malaysian firm are
qualified, having hurdled the prequalification process. 12 It is only the result of the public bidding
that is sought to be modified by enabling petitioner to up its bid to equal the highest bid.
Nor, finally, is there any basis for the suggestion that to allow a Filipino bidder to match the highest
bid of an alien could encourage speculation, since all that a Filipino entity would then do would be
not to make a bid or make only a token one and, after it is known that a foreign bidder has
submitted the highest bid, make an offer matching that of the foreign firm. This is not possible
under the rules on public bidding of the GSIS. Under these rules there is a minimum bid required
(P36.87 per share for a range of 9 to 15 million shares). 13 Bids below the minimum will not be
considered. On the other hand, if the Filipino entity, after passing the prequalification process,
does not submit a bid, he will not be allowed to match the highest bid of the foreign firm because
this is a privilege allowed only to those who have "validly submitted bids." 14 The suggestion is, to
say the least, fanciful and has no basis in fact.
For the foregoing reasons, I vote to grant the petition.
TORRES, JR., J., separate opinion:
Constancy in law is not an attribute of a judicious mind. I say this as we are not confronted in the
case at bar with legal and constitutional issues — and yet I am driven so to speak on the side of
history. The reason perhaps is due to the belief that in the words of Justice Oliver Wendell
Holmes, Jr., a "page of history is worth a volume of logic."
I will, however, attempt to share my thoughts on whether the Manila Hotel has a historical and
cultural aspect within the meaning of the constitution and thus, forming part of the "patrimony of
the nation".
Section 10, Article XII of the 1987 Constitution provides:
xxx xxx xxx
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national goals
and priorities.
The foregoing provisions should be read in conjunction with Article II of the same Constitution
pertaining to "Declaration of Principles and State Policies" which ordain —
The State shall develop a self-reliant and independent national economy effectively by Filipinos.
(Sec. 19).
83
Interestingly, the matter of giving preference to "qualified Filipinos" was one of the highlights in the
1987 Constitution Commission proceedings thus:
xxx xxx xxx
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 fully controlled by Filipinos (Vol. III, Records of the Constitutional Commission, p. 608).
MR. MONSOD. We also wanted to add, as Commissioner Villegas said, this committee and this
body already approved what is known as the Filipino First policy which was suggested by
Commissioner de Castro. So that it is now in our Constitution (Vol. IV, Records of the
Constitutional Commission, p. 225).
Commissioner Jose Nolledo explaining the provision adverted to above, said:
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 the Filipinos
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". (Vol. III, p. 616, Records of the Constitutional Commission).
The nationalistic provisions of the 1987 Constitution reflect the history and spirit of the Malolos
Constitution of 1898, the 1935 Constitution and the 1973 Constitutions. That we have no reneged
on this nationalist policy is articulated in one of the earliest case, this Court said —
The nationalistic tendency is manifested in various provisions of the Constitution. . . . It cannot
therefore be said that a law imbued with the same purpose and spirit underlying many of the
provisions of the Constitution is unreasonable, invalid or unconstitutional (Ichong, et al. vs.
Hernandez, et al., 101 Phil. 1155).
I subscribe to the view that history, culture, heritage, and traditions are not legislated and is the
product of events, customs, usages and practices. It is actually a product of growth and
acceptance by the collective mores of a race. It is the spirit and soul of a people.
The Manila Hotel is part of our history, culture and heritage. Every inch of the Manila Hotel is
witness to historic events (too numerous to mention) which shaped our history for almost 84 years.
As I intimated earlier, it is not my position in this opinion, to examine the single instances of the
legal largese which have given rise to this controversy. As I believe that has been exhaustively
discussed in the ponencia. Suffice it to say at this point that the history of the Manila Hotel should
not be placed in the auction block of a purely business transaction, where profits subverts the
cherished historical values of our people.
As a historical landmark in this "Pearl of the Orient Seas", it has its enviable tradition which, in the
words of the philosopher Salvador de Madarriaga tradition is "more of a river than a stone, it keeps
flowing, and one must view the flowing , and one must view the flow of both directions. If you look
towards the hill from which the river flows, you see tradition in the form of forceful currents that
push the river or people towards the future, and if you look the other way, you progress."
Indeed, tradition and progress are the same, for progress depends on the kind of tradition. Let us
not jettison the tradition of the Manila Hotel and thereby repeat our colonial history.
I grant, of course the men of the law can see the same subject in different lights.
I remember, however, a Spanish proverb which says — "He is always right who suspects that he
makes mistakes". On this note, I say that if I have to make a mistake, I would rather err upholding
the belief that the Filipino be first under his Constitution and in his own land.
I vote GRANT the petition.
PUNO, J., dissenting:
This is a. petition for prohibition and mandamus filed by the Manila Prince Hotel Corporation, a
domestic corporation, to stop the Government Service Insurance System (GSIS) from selling the
controlling shares of the Manila Hotel Corporation to a foreign corporation. Allegedly, the sale
violates the second paragraph of section 10, Article XII of the Constitution.
Respondent GSIS is a government-owned and controlled corporation. It is the sole owner of the
Manila Hotel which it operates through its subsidiary, the Manila Hotel Corporation. Manila Hotel
was included in the privatization program of the government. In 1995, GSIS proposed to sell to
interested buyers 30% to 51% of its shares, ranging from 9,000,000 to 15,300,000 shares, in the
Manila Hotel Corporation. After the absence of bids at the first public bidding, the block of shares
offered for sale was increased from a maximum of 30% to 51%. Also, the winning bidder, or the
eventual "strategic partner" of the GSIS was required to "provide management expertise and/or an
international marketing/reservation system, and financial support to strengthen the profitability and
performance of the Manila Hotel"1 The proposal was approved by respondent Committee on
Privatization.
In July 1995, a conference was held where prequalification documents and the bidding rules were
furnished interested parties. Petitioner Manila Prince Hotel, a domestic corporation, and Renong
Berhad, Malaysian firm with ITT Sheraton as operator, prequalified.2
The bidding rules and procedures entitled "Guidelines and Procedures: Second Prequalification
and Public Bidding of the MHC Privatization" provide:
I INTRODUCTION AND HIGHLIGHTS
DETERMINING THE WINNING BIDDER/STRATEGIC PARTNER
The party that accomplishes the steps set forth below will be declared the Winning
Bidder/Strategic Partner and will be awarded the Block of Shares:
First — Pass the prequalification process;
Second — Submit the highest bid on a price per share basis for the Block of Shares;
Third — Negotiate and execute the necessary contracts with GSIS/MHC not later than October
23, 1995;
xxx xxx xxx
IV GUIDELINES FOR PREQUALIFICATION
A. PARTIES WHO MAP APPLY FOR PREQUALIFICATION
The Winning Bidder/Strategic Partner will be expected 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 this context, the GSIS is inviting to the prequalification
process any local and/or foreign corporation, consortium/joint venture or juridical entity with at
least one of the following qualifications:
a. Proven management .expertise in the hotel industry; or
b. Significant equity ownership (i.e. board representation) in another hotel company; or
c. Overall management and marketing expertise to successfully operate the Manila Hotel.
Parties interested in bidding for MHC should be able to provide access to the requisite
management expertise and/or international marketing/reservation system for The Manila Hotel.
xxx xxx xxx
D. PREQUALIFICATION DOCUMENTS
xxx xxx xxx
E. APPLICATION PROCEDURE
1. DOCUMENTS AVAILABLE AT THE REGISTRATION OFFICE
The prequalification documents can be secured at the Registration Office between 9:00 AM to
4:00 PM during working days within the period specified in Section III. Each set of documents
consists of the following:
a. Guidelines and Procedures: Second Prequalification and Public Bidding of the MHC
Privatization
b. Confidential Information Memorandum: The Manila Hotel Corporation
c. Letter of Invitation. to the Prequalification and Bidding Conference
xxx xxx xxx
4. PREQUALIFICATION AND BIDDING CONFERENCE
A prequalification and bidding conference will be held at The Manila Hotel on the date specified in
Section III to allow the Applicant to seek clarifications and further information regarding the
guidelines and procedures. Only those who purchased the prequalification documents will be
allowed in this conference. Attendance to this conference is strongly advised, although the
Applicant will not be penalized if it does not attend.
5. SUBMISSION OF PREQUALIFICATION DOCUMENTS
The applicant should submit 5 sets of the prequalification documents (1 original set plus 4 copies)
at the Registration Office between 9:00 AM to 4:00 PM during working days within the period
specified in Section III.
F. PREQUALIFICATION PROCESS
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1. The Applicant will be evaluated by the PBAC with the assistance of the TEC based on the
Information Package and other information available to the PBAC.
2. If the Applicant is a Consortium/Joint Venture, the evaluation will consider the overall
qualifications of the group, taking into account the contribution of each member to the venture.
3. The decision of the PBAC with respect to the results of the PBAC evaluation will be final.
4. The Applicant shall be evaluated according to the criteria set forth below:
a. Business management expertise, track record, and experience
b. Financial capability.
c. Feasibility and acceptability of the proposed strategic plan for the Manila Hotel
5. The PBAC will shortlist such number of Applicants as it may deem appropriate.
6. The parties that prequalified in the first MHC public bidding — ITT Sheraton, Marriot
International Inc., Renaissance Hotels International Inc., consortium of RCBC Capital/Ritz Carlton
— may participate in the Public Bidding without having to undergo the prequalification process
again.
G. SHORTLIST OF QUALIFIED BIDDERS
1. A notice of prequalification results containing the shortlist of Qualified Bidders will be posted at
the Registration Office at the date specified in Section III.
2. In the case of a Consortium/Joint Venture, the withdrawal by member whose qualification was a
material consideration for being included in the shortlist is ground for disqualification of the
Applicant.
V. GUIDELINES FOR THE PUBLIC BIDDING
A. PARTIES WHO MAY PARTICIPATE IN THE PUBLIC BIDDING
All parties in the shortlist of Qualified Bidders will be eligible to participate in the Public Bidding.
B. BLOCK OF SHARES
A range of Nine Million (9,000,000) to Fifteen Million Three Hundred Thousand (15,300,000)
shares of stock representing Thirty Percent to Fifty-One Percent (30%-51%) of the issued and
outstanding shares of MHC, will be offered in the Public Bidding by the GSIS. The Qualified
Bidders will have the Option of determining the number of shares within the range to bid for. The
range is intended to attract bidders with different preferences and objectives for the operation and
management of The Manila Hotel.
C. MINIMUM BID REQUIRED ON A PRICE PER SHARE BASIS
1. Bids will be evaluated on a price per share basis. The minimum bid required on a price per
share basis for the Block of Shares is Thirty-Six Pesos and Sixty-Seven Centavos (P36.67).
2. Bids should be in the Philippine currency payable to the GSIS.
3. Bids submitted with an equivalent price per share below the minimum required will not
considered.
D. TRANSFER COSTS
xxx xxx xxx
E. OFFICIAL BID FORM
1. Bids must be contained in the prescribed Official Bid Form, a copy of which is attached as
Annex IV. The Official Bid Form must be properly accomplished in all details; improper
accomplishment may be a sufficient basis for disqualification.
2. During the Public Bidding, the Qualified Bidder will submit the Official Bid Form, which will
indicate the offered purchase price, in a sealed envelope marked "OFFICIAL BID."
F. SUPPORTING DOCUMENTS
During the Public Bidding, the following documents should be submitted along with the bid in a
separate envelop marked "SUPPORTING DOCUMENTS":
1. WRITTEN AUTHORITY TO BID (UNDER OATH).
If the Qualified Bidder is a corporation, the representative of the Qualified Bidder should submit a
Board resolution which adequately authorizes such representative to bid for and in behalf of the
corporation with full authority to perform such acts necessary or requisite to bind the Qualified
Bidder.
If the Qualified Bidder is a Consortium/Joint Venture, each member of the Consortium/Joint
venture should submit a Board resolution authorizing one of its members and such member's
representative to make the bid on behalf of the group with full authority to perform such acts
necessary or requisite to bind the Qualified Bidder.
2. BID SECURITY
a. The Qualified Bidder should deposit Thirty-Three Million Pesos (P33,000,00), in Philippine
currency as Bid Security in the form of:
i. Manager's check or unconditional demand draft payable to the "Government Service Insurance
System" and issued by a reputable banking institution duly licensed to do business in the
Philippines and acceptable to GSIS; or
ii. Standby-by letter of credit issued by a reputable banking institution acceptable to the GSIS.
b. The GSIS will reject a bid if:
i. The bid does not have Bid Security; or
ii. The Bid Security accompanying the bid is for less than the required amount.
c. If the Bid Security is in the form of a manager's check or unconditional demand draft, the
interest earned on the Bid Security will be for the account of GSIS.
d. If the Qualified Bidder becomes the winning Bidder/Strategic Partner, the Bid Security will be
applied as the downpayment on the Qualified Bidder's offered purchase price.
e. The Bid Security of the Qualified Bidder will be returned immediately after the Public Bidding if
the Qualified Bidder is not declared the Highest Bidder.
f. The Bid Security will be returned by October 23, 1995 if the Highest Bidder is unable to
negotiate and execute with GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other types of contract specified by the Highest Bidder
in its strategic plan for The Manila Hotel.
g. The Bid Security of the Highest Bidder will be forfeited in favor of GSIS if the Highest Bidder,
after negotiating and executing the Management Contract, International Marketing/Reservation
System Contract specified by the Highest Bidder or other types of contract in its strategic plan for
The Manila Hotel, fails or refuses to:
i. Execute the Stock Purchase and Sale Agreement with GSIS not later than October 23, 1995; or
ii. Pay the full amount of the offered purchase price not later than October 23, 1995; or
iii. Consummate the sale of the Block of Shares for any other reason.
G. SUBMISSION OF BIDS
1. The Public Bidding will be held on September 7, 1995 at the following location:
New GSIS Headquarters Building
Financial Center, Reclamation Area
Roxas Boulevard, Pasay City, Metro Manila.
2. The Secretariat of the PBAC will be stationed at the Public Bidding to accept any and all bids
and supporting requirements. Representatives from the Commission on Audit and COP will be
invited to witness the proceedings.
3. The Qualified Bidder should submit its bid using the Official Bid Form. The accomplished
Official Bid Form should be submitted in a sealed envelope marked "OFFICIAL BID."
4. The Qualified Bidder should submit the following documents in another sealed envelope
marked "SUPPORTING BID DOCUMENTS"
a. Written Authority Bid
b. Bid Security
5. The two sealed envelopes marked "OFFICIAL BID" and "SUPPORTING BID DOCUMENTS"
must be submitted simultaneously to the Secretariat between 9:00 AM and 2:00 PM, Philippine
Standard Time, on the date of the Public Bidding. No bid shall be accepted after the closing time.
Opened or tampered bids shall not be accepted.
6. The Secretariat will log and record the actual time of submission of the two sealed envelopes.
The actual time of submission will also be indicated by the Secretariat on the face of the two
envelopes.
7. After Step No. 6, the two sealed envelopes will be dropped in the corresponding bid boxes
provided for the purpose. These boxes will be in full view of the invited public.
H. OPENING AND READING OF BIDS
1. After the closing time of 2:00 PM on the date of the Public Bidding, the PBAC will open all
sealed envelopes marked "SUPPORTING BID DOCUMENTS" for screening, evaluation and
acceptance. Those who submitted incomplete/insufficient documents or document/s which is/are
not substantially in the form required by PBAC will be disqualified. The envelope containing their
Official Bid Form will be immediately returned to the disqualified bidders.
2. The sealed envelopes marked "OFFICIAL BID" will be opened at 3:00 PM. The name of the
bidder and the amount of its bid price will be read publicly as the envelopes are opened.
85
3. Immediately following the reading of the bids, the PBAC will formally announce the highest bid
and the Highest Bidder.
4. The highest bid will be, determined on a price per share basis. In the event of a tie wherein two
or more bids have the same equivalent price per share, priority will be given to the bidder seeking
the larger ownership interest in MHC.
5. The Public Bidding will be declared a failed bidding in case:
a. No single bid is submitted within the prescribed period; or
b. There is only one (1) bid that is submitted and acceptable to the PBAC.
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 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 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. If the Highest Bidder is intending to
provide only financial support to The Manila Hotel, a separate institution may enter into the
aforementioned contract/s with GSIS/MHC.
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS, a copy
of which will be distributed to each of the Qualified Bidder after the prequalification process is
completed.
2. In the event that the Highest Bidder chooses a Management Contract for The Manila Hotel, the
maximum levels for the management fee structure that GSIS/MHC are prepared to accept in the
Management Contract are as follows:
a. Basic management fee: Maximum of 2.5% of gross revenues.(1)
b. Incentive fee: Maximum of 8.0% of gross operating profit(1) after deducting undistributed
overhead expenses and the basic management fee.
c. Fixed component of the international marketing/reservation system fee: Maximum of 2.0% of
gross room revenues.(1) The Applicant should indicate in its Information Package if it is wishes to
charge this fee.
Note (1): As defined in the uniform system of account for hotels.
The GSIS/MHC have indicated above the acceptable parameters for the hotel management fees
to facilitate the negotiations with the Highest Bidder for the Management Contract after the Public
Bidding.
A Qualified Bidder envisioning a Management Contract for The Manila Hotel should determine
whether or not the management fee structure above is acceptable before submitting their
prequalification documents to GSIS.
J. BLOCK SALE TO THE OTHER QUALIFIED BIDDERS
1. 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
are willing to match the highest bid in terms of price per share.
2. The order of priority among the interested Qualified Bidders will be in accordance wit the
equivalent price per share of their respective bids in their public Bidding, i.e., first and second
priority will be given to the Qualified Bidders that submitted the second and third highest bids on
the price per share basis, respectively, and so on.
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 contract with GSIS/MHC not later than October 23, 1995; and
b. Requisite approvals from the GSIS/MHC and COP/OGCC are obtained.
I. FULL PAYMENT FOR THE BLOCK OF SHARES
1. Upon execution of the necessary contracts with GSIS/MHC, the Winning Bidder/Strategic
Partner must fully pay, not later than October 23, 1995, the offered purchase price for the Block of
Shares after deducting the Bid Security applied as downpayment.
2. All payments should be made in the form of a Manager's Check or unconditional Demand Draft,
payable to the "Government Service Insurance System," issued by a reputable banking institution
licensed to do business in the Philippines and acceptable to GSIS.
M. GENERAL CONDITIONS
1. The GSIS unconditionally reserves the right to reject any or all applications, waive any formality
therein, or accept such application as maybe considered most advantageous to the GSIS. The
GSIS similarly reserves the right to require the submission of any additional information from the
Applicant as the PBAC may deem necessary.
2. The GSIS further reserves the right to call off the Public Bidding prior to acceptance of the bids
and call for a new public bidding under amended rules, and without any liability whatsoever to any
or all the Qualified Bidders, except the obligation to return the Bid Security.
3. The GSIS reserves the right to reset the date of the prequalification/bidding conference, the
deadline for the submission of the prequalification documents, the date of the Public Bidding or
other pertinent activities at least three (3) calendar days prior to the respective deadlines/target
dates.
4. The GSIS sells only whatever rights, interest and participation it has on the Block of Shares.
5. All documents and materials submitted by the Qualified Bidders, except the Bid Security, may
be returned upon request.
6. The decision of the PBAC/GSIS on the results of the Public Bidding is final. The Qualified
Bidders, by participating in the Public Bidding, are deemed to have agreed to accept and abide by
these results.
7. The GSIS will be held free and harmless form any liability, suit or allegation arising out of the
Public Bidding by the Qualified Bidders who have participated in the Public Bidding.3
The second public bidding was held on September 18, 1995. Petitioner bidded P41.00 per share
for 15,300,000 shares and Renong Berhad bidded P44.00 per share also for 15,300,000 shares.
The GSIS declared Renong Berhad the highest bidder and immediately returned petitioner's bid
security.
On September 28, 1995, ten days after the bidding, petitioner wrote to GSIS offering to match the
bid price of Renong Berhad. It requested that the award be made to itself citing the second
paragraph of Section 10, Article XII of the Constitution. It sent a manager's check for thirty-three
million pesos (P33,000,000.00) as bid security.
Respondent GSIS, then in the process of negotiating with Renong Berhad the terms and
conditions of the contract and technical agreements in the operation of the hotel, refused to
entertain petitioner's request.
Hence, petitioner filed the present petition. We issued a temporary restraining order on October
18, 1995.
Petitioner anchors its plea on the second paragraph of Article XII, Section 10 of the Constitution4
on the "National Economy and Patrimony" which provides:
xxx xxx xxx
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
xxx xxx xxx
The vital issues can be summed up as follows:
(1) Whether section 10, paragraph 2 of Article XII of the Constitution is a self-executing provision
and does not need implementing legislation to carry it into effect;
(2) Assuming section 10 paragraph 2 of Article XII is self-executing whether the controlling shares
of the Manila Hotel Corporation form part of our patrimony as a nation;
(3) Whether GSIS is included in the term "State," hence, mandated to implement section 10,
paragraph 2 of Article XII of the Constitution;
(4) Assuming GSIS is part of the State, whether it failed to give preference to petitioner, a qualified
Filipino corporation, over and above Renong Berhad, a foreign corporation, in the sale of the
controlling shares of the Manila Hotel Corporation;
(5) Whether petitioner is estopped from questioning the sale of the shares to Renong Berhad, a
foreign corporation.
Anent the first issue, it is now familiar learning that a Constitution provides the guiding policies and
principles upon which is built the substantial foundation and general framework of the law and
government.5 As a rule, its provisions are deemed self-executing and can be enforced without
further legislative action.6 Some of its provisions, however, can be implemented only through
appropriate laws enacted by the Legislature, hence not self-executing.
To determine whether a particular provision of a Constitution is self-executing is a hard row to hoe.
The key lies on the intent of the framers of the fundamental law oftentimes submerged in its
language. A searching inquiry should be made to find out if the provision is intended as a present
86
enactment, complete in itself as a definitive law, or if it needs future legislation for completion and
enforcement.7 The inquiry demands a micro-analysis of the text and the context of the provision in
question.8
Courts as a rule consider the provisions of the Constitution as self-executing,9 rather than as
requiring future legislation for their enforcement. 10 The reason is not difficult to discern. For if
they are not treated as self-executing, the mandate of the fundamental law ratified by the
sovereign people can be easily ignored and nullified by Congress. 11 Suffused with wisdom of the
ages is the unyielding rule that legislative actions may give breath to constitutional rights but
congressional in action should not suffocate them. 12
Thus, we have treated as self-executing the provisions in the Bill of Rights on arrests, searches
and seizures, 13 the rights of a person under custodial investigation, 14 the rights of an accused,
15 and the privilege against self-incrimination, 16 It is recognize a that legislation is unnecessary
to enable courts to effectuate constitutional provisions guaranteeing the fundamental rights of life,
liberty and the protection of property. 17 The same treatment is accorded to constitutional
provisions forbidding the taking or damaging of property for public use without just
compensation.18
Contrariwise, case law lays down the rule that a constitutional provision is not self-executing
where it merely announces a policy and its language empowers the Legislature to prescribe the
means by which the policy shall be carried into effect. 19 Accordingly, we have held that the
provisions in Article II of our Constitution entitled "Declaration of Principles and State Policies"
should generally be construed as mere statements of principles of the State. 20 We have also
ruled that some provisions of Article XIII on "Social Justice and Human Rights," 21 and Article XIV
on "Education Science and Technology, Arts, Culture end Sports" 22 cannot be the basis of
judicially enforceable rights. Their enforcement is addressed to the discretion of Congress though
they provide the framework for legislation 23 to effectuate their policy content. 24
Guided by this map of settled jurisprudence, we now consider whether Section 10, Article XII of
the 1987 Constitution is self-executing or not. It reads:
Sec. 10. The Congress shall, upon recommendation of the 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.
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national
jurisdiction and in accordance with its national goals and priorities.
The first paragraph directs Congress to reserve certain areas of investments in the country 25 to
Filipino citizens or to corporations sixty per
cent 26 of whose capital stock is owned by Filipinos. It further commands Congress to enact laws
that will encourage the formation and operation of one hundred percent Filipino-owned
enterprises. In checkered contrast, the second paragraph orders the entire State to give
preference to qualified Filipinos in the grant of rights and privileges covering the national economy
and patrimony. The third paragraph also directs the State to regulate foreign investments in line
with our national goals and well-set priorities.
The first paragraph of Section 10 is not self-executing. By its express text, there is a categorical
command for Congress to enact laws restricting foreign ownership in certain areas of investments
in the country and to encourage the formation and operation of wholly-owned Filipino enterprises.
The right granted by the provision is clearly still in esse. Congress has to breathe life to the right
by means of legislation. Parenthetically, this paragraph was plucked from section 3, Article XIV of
the 1973 Constitution. 27 The provision in the 1973 Constitution affirmed our ruling in the
landmark case of Lao Ichong v. Hernandez, 28 where we upheld the discretionary authority of
Congress to Filipinize certain areas of investments. 29 By reenacting the 1973 provision, the first
paragraph of section 10 affirmed the power of Congress to nationalize certain areas of
investments in favor of Filipinos.
The second and third paragraphs of Section 10 are different. They are directed to the State and
not to Congress alone which is but one of the three great branches of our government. Their
coverage is also broader for they cover "the national economy and patrimony" and "foreign
investments within [the] national jurisdiction" and not merely "certain areas of investments."
Beyond debate, they cannot be read as granting Congress the exclusive power to implement by
law the policy of giving preference to qualified Filipinos in the conferral of rights and privileges
covering our national economy and patrimony. Their language does not suggest that any of the
State agency or instrumentality has the privilege to hedge or to refuse its implementation for any
reason whatsoever. Their duty to implement is unconditional and it is now. The second and the
third paragraphs of Section 10, Article XII are thus self-executing.
This submission is strengthened by Article II of the Constitution entitled "Declaration of Principles
and State Policies." Its Section 19 provides that "[T]he State shall develop a self-reliant and
independent national economy effectively controlled by Filipinos." It engrafts the all-important
Filipino First policy in our fundamental law and by the use of the mandatory word "shall," directs its
enforcement by the whole State without any pause or a half- pause in time.
The second issue is whether the sale of a majority of the stocks of the Manila Hotel Corporation
involves the disposition of part of our national patrimony. The records of the Constitutional
Commission show that the Commissioners entertained the same view as to its meaning.
According to Commissioner Nolledo, "patrimony" refers not only to our rich natural resources but
also to the cultural heritage of our race. 30 By this yardstick, the sale of Manila Hotel falls within
the coverage of the constitutional provision giving preferential treatment to qualified Filipinos in the
grant of rights involving our national patrimony. The unique value of the Manila Hotel to our history
and culture cannot be viewed with a myopic eye. The value of the hotel goes beyond pesos and
centavos. As chronicled by Beth Day Romulo, 31 the hotel first opened on July 4, 1912 as a first-
class hotel built by the American Insular Government for Americans living in, or passing through,
Manila while traveling to the Orient. Indigenous materials and Filipino craftsmanship were utilized
in its construction, For sometime, it was exclusively used by American and Caucasian travelers
and served as the "official guesthouse" of the American Insular Government for visiting foreign
dignitaries. Filipinos began coming to the Hotel as guests during the Commonwealth period. When
the Japanese occupied Manila, it served as military headquarters and lodging for the highest-
ranking officers from Tokyo. It was at the Hotel and the Intramuros that the Japanese made their
last stand during the Liberation of Manila. After the war, the Hotel again served foreign guests and
Filipinos alike. Presidents and kings, premiers and potentates, as well as glamorous international
film and sports celebrities were housed in the Hotel. It was also the situs of international
conventions and conferences. In the local scene, it was the venue of historic meetings, parties and
conventions of political parties. The Hotel has reaped and continues reaping numerous
recognitions and awards from international hotel and travel award-giving bodies, a fitting
acknowledgment of Filipino talent and ingenuity. These are judicially cognizable facts which
cannot be bent by a biased mind.
The Hotel may not, as yet, have been declared a national cultural treasure pursuant to Republic
Act No. 4846 but that does not exclude it from our national patrimony. Republic Act No. 4846,
"The Cultural Properties Preservation and Protection Act," merely provides a procedure whereby a
particular cultural property may be classified a "national cultural treasure" or an "important cultural
property. 32 Approved on June 18, 1966 and amended by P.D. 374 in 1974, the law is limited in
its reach and cannot be read as the exclusive law implementing section 10, Article XII of the 1987
Constitution. To be sure, the law does not equate cultural treasure and cultural property as
synonymous to the phrase "patrimony of the nation."
The third issue is whether the constitutional command to the State includes the respondent GSIS.
A look at its charter will reveal that GSIS is a government-owned and controlled corporation that
administers funds that come from the monthly contributions of government employees and the
government. 33 The funds are held in trust for a distinct purpose which cannot be disposed of
indifferently. 34 They are to be used to finance the retirement, disability and life insurance benefits
of the employees and the administrative and operational expenses of the GSIS, 35 Excess funds,
however, are allowed to be invested in business and other ventures for the benefit of the
employees.36 It is thus contended that the GSIS investment in the Manila Hotel Corporation is a
simple business venture, hence, an act beyond the contemplation of section 10, paragraph 2 of
Article XII of the Constitution.
The submission is unimpressive. The GSIS is not a pure private corporation. It is essentially a
public corporation created by Congress and granted an original charter to serve a public purpose.
It is subject to the jurisdictions of the Civil Service Commission 37 and the Commission on Audit.
38 As state-owned and controlled corporation, it is skin-bound to adhere to the policies spelled out
87
in the general welfare of the people. One of these policies is the Filipino First policy which the
people elevated as a constitutional command.
The fourth issue demands that we look at the content of phrase "qualified Filipinos" and their
"preferential right." The Constitution desisted from defining their contents. This is as it ought to be
for a Constitution only lays down flexible policies and principles which can bent to meet today's
manifest needs and tomorrow's unmanifested demands. Only a constitution strung with elasticity
can grow as a living constitution.
Thus, during the deliberations in the Constitutional Commission, Commissioner Nolledo to define
the phrase brushed aside a suggestion to define the phrase "qualified Filipinos." He explained that
present and prospective "laws" will take care of the problem of its interpretation, viz:
xxx xxx xxx
THE PRESIDENT. What is the suggestion 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 over aliens?
MR. NOLLEDO. Madam President, I think that is understood. We use the word "QUALIFIED"
because the existing laws or the prospective laws will always lay down conditions under which
business map be done, for example, qualifications on capital, qualifications on the setting up of
other financial structures, et cetera.
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO Yes.
MR. RODRIGO. If we say, "PREFERENCE TO QUALIFIED FILIPINOS," it can be understood as
giving preference to qualified Filipinos as against Filipinos who are not qualified.
MR. NOLLEDO. Madam President, that was the intention of the proponents. The committee has
accepted the amendment.
xxx xxx xxx
As previously discussed, the constitutional command to enforce the Filipino First policy is
addressed to the State and not to Congress alone. Hence, the word "laws" should not be
understood as limited to legislations but all state actions which include applicable rules and
regulations adopted by agencies and instrumentalities of the State in the exercise of their rule-
making power. In the case at bar, the bidding rules and regulations set forth the standards to
measure the qualifications of bidders Filipinos and foreigners alike. It is not seriously disputed that
petitioner qualified to bid as did Renong Berhad. 39
Thus, we come to the critical issue of the degree of preference which GSIS should have accorded
petitioner, a qualified Filipino, over Renong Berhad, a foreigner, in the purchase of the controlling
shares of the Manila Hotel. Petitioner claims that after losing the bid, this right of preference gives
it a second chance to match the highest bid of Renong Berhad.
With due respect, I cannot sustain petitioner's submission. I prescind from the premise that the
second paragraph of section 10, Article XII of the Constitution is pro-Pilipino but not anti-alien. It is
pro-Filipino for it gives preference to Filipinos. It is not, however, anti-alien per se for it does not
absolutely bar aliens in the grant of rights, privileges and concessions covering the national
economy and patrimony. Indeed, in the absence of qualified Filipinos, the State is not prohibited
from granting these rights, privileges and concessions to foreigners if the act will promote the weal
of the nation.
In implementing the policy articulated in section 10, Article XII of the Constitution, the stellar task
of our State policy-makers is to maintain a creative tension between two desiderata — first, the
need to develop our economy and patrimony with the help of foreigners if necessary, and, second,
the need to keep our economy controlled by Filipinos. Rightfully, the framers of the Constitution
did not define the degree of the right of preference to be given to qualified Filipinos. They knew
that for the right to serve the general welfare, it must have a malleable content that can be
adjusted by our policy-makers to meet the changing needs of our people. In fine, the right of
preference of qualified Filipinos is to be determined by degree as time dictates and circumstances
warrant. The lesser the need for alien assistance, the greater the degree of the right of preference
can be given to Filipinos and vice verse.
Again, it should be stressed that the right and the duty to determine the degree of this privilege at
any given time is addressed to the entire State. While under our constitutional scheme, the right
primarily belongs to Congress as the lawmaking department of our government, other branches of
government, and all their agencies and instrumentalities, share the power to enforce this state
policy. Within the limits of their authority, they can act or promulgate rules and regulations defining
the degree of this right of preference in cases where they have to make grants involving the
national economy and judicial duty. On the other hand, our duty is to strike down acts of the state
that violate the policy.
To date, Congress has not enacted a law defining the degree of the preferential right.
Consequently, we must turn to the rules and regulations of on respondents Committee
Privatization and GSIS to determine the degree of preference that petitioner is entitled to as a
qualified Filipino in the subject sale. A tearless look at the rules and regulations will show that they
are silent on the degree of preferential right to be accorded qualified Filipino bidder. Despite their
silence, however, they cannot be read to mean that they do not grant any degree of preference to
petitioner for paragraph 2, section 10, Article XII of the Constitution is deemed part of said rules
and regulations. Pursuant to legal hermeneutics which demand that we interpret rules to save
them from unconstitutionality, I submit that the right of preference of petitioner arises only if it tied
the bid of Benong Berhad. In that instance, all things stand equal, and bidder, as a qualified
Pilipino bidder, should be preferred.
It is with deep regret that I cannot subscribe to the view that petitioner has a right to match the bid
of Renong Berhad. Petitioner's submission must be supported by the rules but even if we examine
the rules inside-out .thousand times, they can not justify the claimed right. Under the rules, the
right to match the highest bid arises only "if for any reason, the highest bidder cannot be awarded
block of shares . . ." No reason has arisen that will prevent the award to Renong Berhad. It
qualified as bidder. It complied with the procedure of bidding. It tendered the highest bid. It was
declared as the highest bidder by the GSIS and the rules say this decision is final. It deserves the
award as a matter of right for the rules clearly did not give to the petitioner as a qualified Filipino
privilege to match the higher bid of a foreigner. What the rules did not grant, petitioner cannot
demand. Our symphaties may be with petitioner but the court has no power to extend the latitude
and longtitude of the right of preference as defined by the rules. The parameters of the right of
preference depend on galaxy of facts and factors whose determination belongs to the province of
the policy-making branches and agencies of the State. We are duty-bound to respect that
determination even if we differ with the wisdom of their judgment. The right they grant may be little
but we must uphold the grant for as long as the right of preference is not denied. It is only when a
State action amounts to a denial of the right that the Court can come in and strike down the denial
as unconstitutional.
Finally, I submit that petitioner is estopped from assailing the winning bid of Renong Berhad.
Petitioner was aware of the rules and regulations of the bidding. It knew that the rules and
regulations do not provide that a qualified Filipino bidder can match the winning bid submitting an
inferior bid. It knew that the bid was open to foreigners and that foreigners qualified even during
the first bidding. Petitioner cannot be allowed to repudiate the rules which it agreed to respect. It
cannot be allowed to obey the rules when it wins and disregard them when it loses. If sustained,
petitioners' stance will wreak havoc on he essence of bidding. Our laws, rules and regulations
require highest bidding to raise as much funds as possible for the government to maximize its
capacity to deliver essential services to our people. This is a duty that must be discharged by
Filipinos and foreigners participating in a bidding contest and the rules are carefully written to
attain this objective. Among others, bidders are prequalified to insure their financial capability. The
bidding is secret and the bids are sealed to prevent collusion among the parties. This objective will
be undermined if we grant petitioner that privilege to know the winning bid and a chance to match
it. For plainly, a second chance to bid will encourage a bidder not to strive to give the highest bid
in the first bidding.
We support the Filipino First policy without any reservation. The visionary nationalist Don Claro M.
Recto has warned us that the greatest tragedy that can befall a Filipino is to be an alien in his own
land. The Constitution has embodied Recto's counsel as a state policy. But while the Filipino First
policy requires that we incline to a Filipino, it does not demand that we wrong an alien. Our policy
makers can write laws and rules giving favored treatment to the Filipino but we are not free to be
unfair to a foreigner after writing the laws and the rules. After the laws are written, they must be
obeyed as written, by Filipinos and foreigners alike. The equal protection clause of the
Constitution protects all against unfairness. We can be pro-Filipino without unfairness to foreigner.
I vote to dismiss the petition.
Narvasa, C.J., and Melo, J., concur.
88
PANGANIBAN, J., dissenting:
I regret I cannot join the majority. To the incisive Dissenting Opinion of Mr. Justice Reynato S.
Puno, may I just add
1. The majority contends the Constitution should be interpreted to mean that, after a bidding
process is concluded, the losing Filipino bidder should be given the right to equal the highest
foreign bid, and thus to win. However, the Constitution [Sec. 10 (2), Art. XII] simply states that "in
the grant of rights . . . covering the national economy and patrimony, the State shall give
preference to qualified Filipinos." The majority concedes that there is no law defining the extent or
degree of such preference. Specifically, no statute empowers a losing Filipino bidder to increase
his bid and equal that of the winning foreigner. In the absence of such empowering law, the
majority's strained interpretation, I respectfully submit constitutes unadulterated judicial legislation,
which makes bidding a ridiculous sham where no Filipino can lose and where no foreigner can
win. Only in the Philippines!.
2. Aside from being prohibited by the Constitution, such judicial is short-sighted and, viewed
properly, gravely prejudicial to long-term Filipino interest. It encourages other countries — in the
guise of reverse comity or worse, unabashed retaliation — to discriminate against us in their own
jurisdictions by authorizing their own nationals to similarly equal and defeat the higher bids of
Filipino enterprises solely, while on the other hand, allowing similar bids of other foreigners to
remain unchallenged by their nationals. The majority's thesis will thus marginalize Filipinos as
pariahs in the global marketplace with absolute no chance of winning any bidding outside our
country. Even authoritarian regimes and hermit kingdoms have long ago found out unfairness,
greed and isolation are self-defeating and in the long-term, self-destructing.
The moral lesson here is simple: Do not do unto other what you dont want other to do unto you.
3. In the absence of a law specifying the degree or extent of the "Filipino First" policy of the
Constitution, the constitutional preference for the "qualified Filipinos" may be allowed only where
all the bids are equal. In this manner, we put the Filipino ahead without self-destructing him and
without being unfair to the foreigner.
In short, the Constitution mandates a victory for the qualified Filipino only when the scores are
tied. But not when the ballgame is over and the foreigner clearly posted the highest score.
Separate Opinions
PADILLA, J., concurring:
I concur with the ponencia of Mr. Justice Bellosillo. At the same time, I would like to expound a bit
more on the concept of national patrimony as including within its scope and meaning institutions
such as the Manila Hotel.
It is argued by petitioner that the Manila Hotel comes under "national patrimony" over which
qualified Filipinos have the preference, in ownership and operation. The Constitutional provision
on point states:
xxx xxx xxx
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall Give preference to qualified Filipinos.1
Petitioner's argument, I believe, is well taken. Under the 1987 Constitution, "national patrimony"
consists of the natural resources provided by Almighty God (Preamble) in our territory (Article I)
consisting of land, sea, and air.2 study of the 1935 Constitution, where the concept of "national
patrimony" originated, would show that its framers decided to adopt the even more comprehensive
expression "Patrimony of the Nation" in the belief that the phrase encircles a concept embracing
not only their natural resources of the country but practically everything that belongs to the Filipino
people, the tangible and the material as well as the intangible and the spiritual assets and
possessions of the people. It is to be noted that the framers did not stop with conservation. They
knew that conservation alone does not spell progress; and that this may be achieved only through
development as a correlative factor to assure to the people not only the exclusive ownership, but
also the exclusive benefits of their national patrimony).3
Moreover, the concept of national patrimony has been viewed as referring not only to our rich
natural resources but also to the cultural heritage of our
race.4
There is no doubt in my mind that the Manila Hotel is very much a part of our national patrimony
and, as such, deserves constitutional protection as to who shall own it and benefit from its
operation. This institution has played an important role in our nation's history, having been the
venue of many a historical event, and serving as it did, and as it does, as the Philippine Guest
House for visiting foreign heads of state, dignitaries, celebrities, and others.5
It is therefore our duty to protect and preserve it for future generations of Filipinos. As President
Manuel L. Quezon once said, we must exploit the natural resources of our country, but we should
do so with. an eye to the welfare of the future generations. In other words, the leaders of today are
the trustees of the patrimony of our race. To preserve our national patrimony and reserve it for
Filipinos was the intent of the distinguished gentlemen who first framed our Constitution. Thus, in
debating the need for nationalization of our lands and natural resources, one expounded that we
should "put more teeth into our laws, and; not make the nationalization of our lands and natural
resources a subject of ordinary legislation but of constitutional enactment"6 To quote further: "Let
not our children be mere tenants and trespassers in their own country. Let us preserve and
bequeath to them what is rightfully theirs, free from all foreign liens and encumbrances".7
Now, a word on preference. In my view "preference to qualified Filipinos", to be meaningful, must
refer not only to things that are peripheral, collateral, or tangential. It must touch and affect the
very "heart of the existing order." In the field of public bidding in the acquisition of things that
pertain to the national patrimony, preference to qualified Filipinos must allow a qualified Filipino to
match or equal the higher bid of a non-Filipino; the preference shall not operate only when the
bids of the qualified Filipino and the non-Filipino are equal in which case, the award should
undisputedly be made to the qualified Filipino. The Constitutional preference should give the
qualified Filipino an opportunity to match or equal the higher bid of the non-Filipino bidder if the
preference of the qualified Filipino bidder is to be significant at all.
It is true that in this present age of globalization of attitude towards foreign investments in our
country, stress is on the elimination of barriers to foreign trade and investment in the country.
While government agencies, including the courts should re-condition their thinking to such a trend,
and make it easy and even attractive for foreign investors to come to our shores, yet we should
not preclude ourselves from reserving to us Filipinos certain areas where our national identity,
culture and heritage are involved. In the hotel industry, for instance, foreign investors have
established themselves creditably, such as in the Shangri-La, the Nikko, the Peninsula, and
Mandarin Hotels. This should not stop us from retaining 51% of the capital stock of the Manila
Hotel Corporation in the hands of Filipinos. This would be in keeping with the intent of the Filipino
people to preserve our national patrimony, including our historical and cultural heritage in the
hands of Filipinos.
VITUG, J., concurring:
I agree with Mr. Justice Josue N. Bellosillo on his clear-cut statements, shared by Mr. Justice
Reynato S. Puno in a well written separate (dissenting) opinion, that:
First, the provision in our fundamental law which provides that "(I)n the grant of rights, privileges,
and concessions covering the national economy and patrimony, the State shall give preference to
qualified Filipinos"1 is self-executory. The provision verily does not need, although it can obviously
be amplified or regulated by, an enabling law or a set of rules.
Second, the term "patrimony" does not merely refer to the country's natural resources but also to
its cultural heritage. A "historical landmark," to use the words of Mr. Justice Justo P. Torres, Jr.,
Manila Hotel has now indeed become part of Philippine heritage.
Third, the act of the Government Service Insurance System ("GSIS"), a government entity which
derives its authority from the State, in selling 51% of its share in MHC should be considered an act
of the State subject to the Constitutional mandate.
On the pivotal issue of the degree of "preference to qualified Filipinos," I find it somewhat difficult
to take the same path traversed by the forceful reasoning of Justice Puno. In the particular case
before us, the only meaningful preference, it seems, would really be to allow the qualified Filipino
to match the foreign bid for, as a particular matter, I cannot see any bid that literally calls for
millions of dollars to be at par (to the last cent) with another. The magnitude of the magnitude of
the bids is such that it becomes hardly possible for the competing bids to stand exactly "equal"
which alone, under the dissenting view, could trigger the right of preference.
It is most unfortunate that Renong Berhad has not been spared this great disappointment, a
letdown that it did not deserve, by a simple and timely advise of the proper rules of bidding along
with the peculiar constitutional implications of the proposed transaction. It is also regrettable that
the Court at time is seen, to instead, be the refuge for bureaucratic inadequate which create the
perception that it even takes on non-justiciable controversies.
All told, I am constrained to vote for granting the petition.
89
MENDOZA, J., concurring in the judgment:
I take the view that in the context of the present controversy the only way to enforce the
constitutional mandate that "[i]n the grant of rights, privileges and concessions covering the
national patrimony the State shall give preference to qualified Filipinos"1 is to allow petitioner
Philippine corporation to equal the bid of the Malaysian firm Renong Berhad for the purchase of
the controlling shares of stocks in the Manila Hotel Corporation. Indeed, it is the only way a
qualified Filipino of Philippine corporation can be given preference in the enjoyment of a right,
privilege or concession given by the State, by favoring it over a foreign national corporation.
Under the rules on public bidding of the Government Service and Insurance System, if petitioner
and the Malaysian firm had offered the same price per share, "priority [would be given] to the
bidder seeking the larger ownership interest in MHC,"2 so that petitioner bid for more shares, it
would be preferred to the Malaysian corporation for that reason and not because it is a Philippine
corporation. Consequently, it is only in cases like the present one, where an alien corporation is
the highest bidder, that preferential treatment of the Philippine corporation is mandated not by
declaring it winner but by allowing it "to match the highest bid in terms of price per share" before it
is awarded the shares of stocks.3 That, to me, is what "preference to qualified Filipinos" means in
the context of this case — by favoring Filipinos whenever they are at a disadvantage vis-a-vis
foreigners.
This was the meaning given in Co Chiong v. Cuaderno4 to a 1947 statute giving "preference to
Filipino citizens in the lease of public market stalls."5 This Court upheld the cancellation of existing
leases covering market stalls occupied by persons who were not Filipinos and the award
thereafter of the stalls to qualified Filipino vendors as ordered by the Department of Finance.
Similarly, in Vda. de Salgado v. De la Fuente,6 this Court sustained the validity of a municipal
ordinance passed pursuant to the statute (R.A. No. 37), terminating existing leases of public
market stalls and granting preference to Filipino citizens in the issuance of new licenses for the
occupancy of the stalls. In Chua Lao v. Raymundo,7 the preference granted under the statute was
held to apply to cases in which Filipino vendors sought the same stalls occupied by alien vendors
in the public markets even if there were available other stalls as good as those occupied by aliens.
"The law, apparently, is applicable whenever there is a conflict of interest between Filipino
applicants and aliens for lease of stalls in public markets, in which situation the right to preference
immediately arises."8
Our legislation on the matter thus antedated by a quarter of a century efforts began only in the
1970s in America to realize the promise of equality, through affirmative action and reverse
discrimination programs designed to remedy past discrimination against colored people in such
areas as employment, contracting and licensing.9 Indeed, in vital areas of our national economy,
there are situations in which the only way to place Filipinos in control of the national economy as
contemplated in the Constitution 10 is to give them preferential treatment where they can at least
stand on equal footing with aliens.
There need be no fear that thus preferring Filipinos would either invite foreign retaliation or deprive
the country of the benefit of foreign capital or know-how. We are dealing here not with common
trades of common means of livelihood which are open to aliens in our midst, 11 but with the sale
of government property, which is like the grant of government largess of benefits and concessions
covering the national economy" and therefore no one should begrudge us if we give preferential
treatment to our citizens. That at any rate is the command of the Constitution. For the Manila Hotel
is a business owned by the Government. It is being privatized. Privatization should result in the
relinquishment of the business in favor of private individuals and groups who are Filipino citizens,
not in favor of aliens.
Nor should there be any doubt that by awarding the shares of stocks to petitioner we would be
trading competence and capability for nationalism. Both petitioner and the Malaysian firm are
qualified, having hurdled the prequalification process. 12 It is only the result of the public bidding
that is sought to be modified by enabling petitioner to up its bid to equal the highest bid.
Nor, finally, is there any basis for the suggestion that to allow a Filipino bidder to match the highest
bid of an alien could encourage speculation, since all that a Filipino entity would then do would be
not to make a bid or make only a token one and, after it is known that a foreign bidder has
submitted the highest bid, make an offer matching that of the foreign firm. This is not possible
under the rules on public bidding of the GSIS. Under these rules there is a minimum bid required
(P36.87 per share for a range of 9 to 15 million shares). 13 Bids below the minimum will not be
considered. On the other hand, if the Filipino entity, after passing the prequalification process,
does not submit a bid, he will not be allowed to match the highest bid of the foreign firm because
this is a privilege allowed only to those who have "validly submitted bids." 14 The suggestion is, to
say the least, fanciful and has no basis in fact.
For the foregoing reasons, I vote to grant the petition.
TORRES, JR., J., separate opinion:
Constancy in law is not an attribute of a judicious mind. I say this as we are not confronted in the
case at bar with legal and constitutional issues — and yet I am driven so to speak on the side of
history. The reason perhaps is due to the belief that in the words of Justice Oliver Wendell
Holmes, Jr., a "page of history is worth a volume of logic."
I will, however, attempt to share my thoughts on whether the Manila Hotel has a historical and
cultural aspect within the meaning of the constitution and thus, forming part of the "patrimony of
the nation".
Section 10, Article XII of the 1987 Constitution provides:
xxx xxx xxx
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national goals
and priorities.
The foregoing provisions should be read in conjunction with Article II of the same Constitution
pertaining to "Declaration of Principles and State Policies" which ordain —
The State shall develop a self-reliant and independent national economy effectively by Filipinos.
(Sec. 19).
Interestingly, the matter of giving preference to "qualified Filipinos" was one of the highlights in the
1987 Constitution Commission proceedings thus:
xxx xxx xxx
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 fully controlled by Filipinos (Vol. III, Records of the Constitutional Commission, p. 608).
MR. MONSOD. We also wanted to add, as Commissioner Villegas said, this committee and this
body already approved what is known as the Filipino First policy which was suggested by
Commissioner de Castro. So that it is now in our Constitution (Vol. IV, Records of the
Constitutional Commission, p. 225).
Commissioner Jose Nolledo explaining the provision adverted to above, said:
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 the Filipinos
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". (Vol. III, p. 616, Records of the Constitutional Commission).
The nationalistic provisions of the 1987 Constitution reflect the history and spirit of the Malolos
Constitution of 1898, the 1935 Constitution and the 1973 Constitutions. That we have no reneged
on this nationalist policy is articulated in one of the earliest case, this Court said —
The nationalistic tendency is manifested in various provisions of the Constitution. . . . It cannot
therefore be said that a law imbued with the same purpose and spirit underlying many of the
provisions of the Constitution is unreasonable, invalid or unconstitutional (Ichong, et al. vs.
Hernandez, et al., 101 Phil. 1155).
I subscribe to the view that history, culture, heritage, and traditions are not legislated and is the
product of events, customs, usages and practices. It is actually a product of growth and
acceptance by the collective mores of a race. It is the spirit and soul of a people.
The Manila Hotel is part of our history, culture and heritage. Every inch of the Manila Hotel is
witness to historic events (too numerous to mention) which shaped our history for almost 84 years.
As I intimated earlier, it is not my position in this opinion, to examine the single instances of the
legal largese which have given rise to this controversy. As I believe that has been exhaustively
discussed in the ponencia. Suffice it to say at this point that the history of the Manila Hotel should
90
not be placed in the auction block of a purely business transaction, where profits subverts the
cherished historical values of our people.
As a historical landmark in this "Pearl of the Orient Seas", it has its enviable tradition which, in the
words of the philosopher Salvador de Madarriaga tradition is "more of a river than a stone, it keeps
flowing, and one must view the flowing , and one must view the flow of both directions. If you look
towards the hill from which the river flows, you see tradition in the form of forceful currents that
push the river or people towards the future, and if you look the other way, you progress."
Indeed, tradition and progress are the same, for progress depends on the kind of tradition. Let us
not jettison the tradition of the Manila Hotel and thereby repeat our colonial history.
I grant, of course the men of the law can see the same subject in different lights.
I remember, however, a Spanish proverb which says — "He is always right who suspects that he
makes mistakes". On this note, I say that if I have to make a mistake, I would rather err upholding
the belief that the Filipino be first under his Constitution and in his own land.
I vote GRANT the petition.
PUNO, J., dissenting:
This is a. petition for prohibition and mandamus filed by the Manila Prince Hotel Corporation, a
domestic corporation, to stop the Government Service Insurance System (GSIS) from selling the
controlling shares of the Manila Hotel Corporation to a foreign corporation. Allegedly, the sale
violates the second paragraph of section 10, Article XII of the Constitution.
Respondent GSIS is a government-owned and controlled corporation. It is the sole owner of the
Manila Hotel which it operates through its subsidiary, the Manila Hotel Corporation. Manila Hotel
was included in the privatization program of the government. In 1995, GSIS proposed to sell to
interested buyers 30% to 51% of its shares, ranging from 9,000,000 to 15,300,000 shares, in the
Manila Hotel Corporation. After the absence of bids at the first public bidding, the block of shares
offered for sale was increased from a maximum of 30% to 51%. Also, the winning bidder, or the
eventual "strategic partner" of the GSIS was required to "provide management expertise and/or an
international marketing/reservation system, and financial support to strengthen the profitability and
performance of the Manila Hotel"1 The proposal was approved by respondent Committee on
Privatization.
In July 1995, a conference was held where prequalification documents and the bidding rules were
furnished interested parties. Petitioner Manila Prince Hotel, a domestic corporation, and Renong
Berhad, Malaysian firm with ITT Sheraton as operator, prequalified.2
The bidding rules and procedures entitled "Guidelines and Procedures: Second Prequalification
and Public Bidding of the MHC Privatization" provide:
I INTRODUCTION AND HIGHLIGHTS
DETERMINING THE WINNING BIDDER/STRATEGIC PARTNER
The party that accomplishes the steps set forth below will be declared the Winning
Bidder/Strategic Partner and will be awarded the Block of Shares:
First — Pass the prequalification process;
Second — Submit the highest bid on a price per share basis for the Block of Shares;
Third — Negotiate and execute the necessary contracts with GSIS/MHC not later than October
23, 1995;
xxx xxx xxx
IV GUIDELINES FOR PREQUALIFICATION
A. PARTIES WHO MAP APPLY FOR PREQUALIFICATION
The Winning Bidder/Strategic Partner will be expected 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 this context, the GSIS is inviting to the prequalification
process any local and/or foreign corporation, consortium/joint venture or juridical entity with at
least one of the following qualifications:
a. Proven management .expertise in the hotel industry; or
b. Significant equity ownership (i.e. board representation) in another hotel company; or
c. Overall management and marketing expertise to successfully operate the Manila Hotel.
Parties interested in bidding for MHC should be able to provide access to the requisite
management expertise and/or international marketing/reservation system for The Manila Hotel.
xxx xxx xxx
D. PREQUALIFICATION DOCUMENTS
xxx xxx xxx
E. APPLICATION PROCEDURE
1. DOCUMENTS AVAILABLE AT THE REGISTRATION OFFICE
The prequalification documents can be secured at the Registration Office between 9:00 AM to
4:00 PM during working days within the period specified in Section III. Each set of documents
consists of the following:
a. Guidelines and Procedures: Second Prequalification and Public Bidding of the MHC
Privatization
b. Confidential Information Memorandum: The Manila Hotel Corporation
c. Letter of Invitation. to the Prequalification and Bidding Conference
xxx xxx xxx
4. PREQUALIFICATION AND BIDDING CONFERENCE
A prequalification and bidding conference will be held at The Manila Hotel on the date specified in
Section III to allow the Applicant to seek clarifications and further information regarding the
guidelines and procedures. Only those who purchased the prequalification documents will be
allowed in this conference. Attendance to this conference is strongly advised, although the
Applicant will not be penalized if it does not attend.
5. SUBMISSION OF PREQUALIFICATION DOCUMENTS
The applicant should submit 5 sets of the prequalification documents (1 original set plus 4 copies)
at the Registration Office between 9:00 AM to 4:00 PM during working days within the period
specified in Section III.
F. PREQUALIFICATION PROCESS
1. The Applicant will be evaluated by the PBAC with the assistance of the TEC based on the
Information Package and other information available to the PBAC.
2. If the Applicant is a Consortium/Joint Venture, the evaluation will consider the overall
qualifications of the group, taking into account the contribution of each member to the venture.
3. The decision of the PBAC with respect to the results of the PBAC evaluation will be final.
4. The Applicant shall be evaluated according to the criteria set forth below:
a. Business management expertise, track record, and experience
b. Financial capability.
c. Feasibility and acceptability of the proposed strategic plan for the Manila Hotel
5. The PBAC will shortlist such number of Applicants as it may deem appropriate.
6. The parties that prequalified in the first MHC public bidding — ITT Sheraton, Marriot
International Inc., Renaissance Hotels International Inc., consortium of RCBC Capital/Ritz Carlton
— may participate in the Public Bidding without having to undergo the prequalification process
again.
G. SHORTLIST OF QUALIFIED BIDDERS
1. A notice of prequalification results containing the shortlist of Qualified Bidders will be posted at
the Registration Office at the date specified in Section III.
2. In the case of a Consortium/Joint Venture, the withdrawal by member whose qualification was a
material consideration for being included in the shortlist is ground for disqualification of the
Applicant.
V. GUIDELINES FOR THE PUBLIC BIDDING
A. PARTIES WHO MAY PARTICIPATE IN THE PUBLIC BIDDING
All parties in the shortlist of Qualified Bidders will be eligible to participate in the Public Bidding.
B. BLOCK OF SHARES
A range of Nine Million (9,000,000) to Fifteen Million Three Hundred Thousand (15,300,000)
shares of stock representing Thirty Percent to Fifty-One Percent (30%-51%) of the issued and
outstanding shares of MHC, will be offered in the Public Bidding by the GSIS. The Qualified
Bidders will have the Option of determining the number of shares within the range to bid for. The
range is intended to attract bidders with different preferences and objectives for the operation and
management of The Manila Hotel.
C. MINIMUM BID REQUIRED ON A PRICE PER SHARE BASIS
1. Bids will be evaluated on a price per share basis. The minimum bid required on a price per
share basis for the Block of Shares is Thirty-Six Pesos and Sixty-Seven Centavos (P36.67).
2. Bids should be in the Philippine currency payable to the GSIS.
3. Bids submitted with an equivalent price per share below the minimum required will not
considered.
91
D. TRANSFER COSTS
xxx xxx xxx
E. OFFICIAL BID FORM
1. Bids must be contained in the prescribed Official Bid Form, a copy of which is attached as
Annex IV. The Official Bid Form must be properly accomplished in all details; improper
accomplishment may be a sufficient basis for disqualification.
2. During the Public Bidding, the Qualified Bidder will submit the Official Bid Form, which will
indicate the offered purchase price, in a sealed envelope marked "OFFICIAL BID."
F. SUPPORTING DOCUMENTS
During the Public Bidding, the following documents should be submitted along with the bid in a
separate envelop marked "SUPPORTING DOCUMENTS":
1. WRITTEN AUTHORITY TO BID (UNDER OATH).
If the Qualified Bidder is a corporation, the representative of the Qualified Bidder should submit a
Board resolution which adequately authorizes such representative to bid for and in behalf of the
corporation with full authority to perform such acts necessary or requisite to bind the Qualified
Bidder.
If the Qualified Bidder is a Consortium/Joint Venture, each member of the Consortium/Joint
venture should submit a Board resolution authorizing one of its members and such member's
representative to make the bid on behalf of the group with full authority to perform such acts
necessary or requisite to bind the Qualified Bidder.
2. BID SECURITY
a. The Qualified Bidder should deposit Thirty-Three Million Pesos (P33,000,00), in Philippine
currency as Bid Security in the form of:
i. Manager's check or unconditional demand draft payable to the "Government Service Insurance
System" and issued by a reputable banking institution duly licensed to do business in the
Philippines and acceptable to GSIS; or
ii. Standby-by letter of credit issued by a reputable banking institution acceptable to the GSIS.
b. The GSIS will reject a bid if:
i. The bid does not have Bid Security; or
ii. The Bid Security accompanying the bid is for less than the required amount.
c. If the Bid Security is in the form of a manager's check or unconditional demand draft, the
interest earned on the Bid Security will be for the account of GSIS.
d. If the Qualified Bidder becomes the winning Bidder/Strategic Partner, the Bid Security will be
applied as the downpayment on the Qualified Bidder's offered purchase price.
e. The Bid Security of the Qualified Bidder will be returned immediately after the Public Bidding if
the Qualified Bidder is not declared the Highest Bidder.
f. The Bid Security will be returned by October 23, 1995 if the Highest Bidder is unable to
negotiate and execute with GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other types of contract specified by the Highest Bidder
in its strategic plan for The Manila Hotel.
g. The Bid Security of the Highest Bidder will be forfeited in favor of GSIS if the Highest Bidder,
after negotiating and executing the Management Contract, International Marketing/Reservation
System Contract specified by the Highest Bidder or other types of contract in its strategic plan for
The Manila Hotel, fails or refuses to:
i. Execute the Stock Purchase and Sale Agreement with GSIS not later than October 23, 1995; or
ii. Pay the full amount of the offered purchase price not later than October 23, 1995; or
iii. Consummate the sale of the Block of Shares for any other reason.
G. SUBMISSION OF BIDS
1. The Public Bidding will be held on September 7, 1995 at the following location:
New GSIS Headquarters Building
Financial Center, Reclamation Area
Roxas Boulevard, Pasay City, Metro Manila.
2. The Secretariat of the PBAC will be stationed at the Public Bidding to accept any and all bids
and supporting requirements. Representatives from the Commission on Audit and COP will be
invited to witness the proceedings.
3. The Qualified Bidder should submit its bid using the Official Bid Form. The accomplished
Official Bid Form should be submitted in a sealed envelope marked "OFFICIAL BID."
4. The Qualified Bidder should submit the following documents in another sealed envelope
marked "SUPPORTING BID DOCUMENTS"
a. Written Authority Bid
b. Bid Security
5. The two sealed envelopes marked "OFFICIAL BID" and "SUPPORTING BID DOCUMENTS"
must be submitted simultaneously to the Secretariat between 9:00 AM and 2:00 PM, Philippine
Standard Time, on the date of the Public Bidding. No bid shall be accepted after the closing time.
Opened or tampered bids shall not be accepted.
6. The Secretariat will log and record the actual time of submission of the two sealed envelopes.
The actual time of submission will also be indicated by the Secretariat on the face of the two
envelopes.
7. After Step No. 6, the two sealed envelopes will be dropped in the corresponding bid boxes
provided for the purpose. These boxes will be in full view of the invited public.
H. OPENING AND READING OF BIDS
1. After the closing time of 2:00 PM on the date of the Public Bidding, the PBAC will open all
sealed envelopes marked "SUPPORTING BID DOCUMENTS" for screening, evaluation and
acceptance. Those who submitted incomplete/insufficient documents or document/s which is/are
not substantially in the form required by PBAC will be disqualified. The envelope containing their
Official Bid Form will be immediately returned to the disqualified bidders.
2. The sealed envelopes marked "OFFICIAL BID" will be opened at 3:00 PM. The name of the
bidder and the amount of its bid price will be read publicly as the envelopes are opened.
3. Immediately following the reading of the bids, the PBAC will formally announce the highest bid
and the Highest Bidder.
4. The highest bid will be, determined on a price per share basis. In the event of a tie wherein two
or more bids have the same equivalent price per share, priority will be given to the bidder seeking
the larger ownership interest in MHC.
5. The Public Bidding will be declared a failed bidding in case:
a. No single bid is submitted within the prescribed period; or
b. There is only one (1) bid that is submitted and acceptable to the PBAC.
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 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 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. If the Highest Bidder is intending to
provide only financial support to The Manila Hotel, a separate institution may enter into the
aforementioned contract/s with GSIS/MHC.
b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS, a copy
of which will be distributed to each of the Qualified Bidder after the prequalification process is
completed.
2. In the event that the Highest Bidder chooses a Management Contract for The Manila Hotel, the
maximum levels for the management fee structure that GSIS/MHC are prepared to accept in the
Management Contract are as follows:
a. Basic management fee: Maximum of 2.5% of gross revenues.(1)
b. Incentive fee: Maximum of 8.0% of gross operating profit(1) after deducting undistributed
overhead expenses and the basic management fee.
c. Fixed component of the international marketing/reservation system fee: Maximum of 2.0% of
gross room revenues.(1) The Applicant should indicate in its Information Package if it is wishes to
charge this fee.
Note (1): As defined in the uniform system of account for hotels.
The GSIS/MHC have indicated above the acceptable parameters for the hotel management fees
to facilitate the negotiations with the Highest Bidder for the Management Contract after the Public
Bidding.
A Qualified Bidder envisioning a Management Contract for The Manila Hotel should determine
whether or not the management fee structure above is acceptable before submitting their
prequalification documents to GSIS.
J. BLOCK SALE TO THE OTHER QUALIFIED BIDDERS
92
1. 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
are willing to match the highest bid in terms of price per share.
2. The order of priority among the interested Qualified Bidders will be in accordance wit the
equivalent price per share of their respective bids in their public Bidding, i.e., first and second
priority will be given to the Qualified Bidders that submitted the second and third highest bids on
the price per share basis, respectively, and so on.
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 contract with GSIS/MHC not later than October 23, 1995; and
b. Requisite approvals from the GSIS/MHC and COP/OGCC are obtained.
I. FULL PAYMENT FOR THE BLOCK OF SHARES
1. Upon execution of the necessary contracts with GSIS/MHC, the Winning Bidder/Strategic
Partner must fully pay, not later than October 23, 1995, the offered purchase price for the Block of
Shares after deducting the Bid Security applied as downpayment.
2. All payments should be made in the form of a Manager's Check or unconditional Demand Draft,
payable to the "Government Service Insurance System," issued by a reputable banking institution
licensed to do business in the Philippines and acceptable to GSIS.
M. GENERAL CONDITIONS
1. The GSIS unconditionally reserves the right to reject any or all applications, waive any formality
therein, or accept such application as maybe considered most advantageous to the GSIS. The
GSIS similarly reserves the right to require the submission of any additional information from the
Applicant as the PBAC may deem necessary.
2. The GSIS further reserves the right to call off the Public Bidding prior to acceptance of the bids
and call for a new public bidding under amended rules, and without any liability whatsoever to any
or all the Qualified Bidders, except the obligation to return the Bid Security.
3. The GSIS reserves the right to reset the date of the prequalification/bidding conference, the
deadline for the submission of the prequalification documents, the date of the Public Bidding or
other pertinent activities at least three (3) calendar days prior to the respective deadlines/target
dates.
4. The GSIS sells only whatever rights, interest and participation it has on the Block of Shares.
5. All documents and materials submitted by the Qualified Bidders, except the Bid Security, may
be returned upon request.
6. The decision of the PBAC/GSIS on the results of the Public Bidding is final. The Qualified
Bidders, by participating in the Public Bidding, are deemed to have agreed to accept and abide by
these results.
7. The GSIS will be held free and harmless form any liability, suit or allegation arising out of the
Public Bidding by the Qualified Bidders who have participated in the Public Bidding.3
The second public bidding was held on September 18, 1995. Petitioner bidded P41.00 per share
for 15,300,000 shares and Renong Berhad bidded P44.00 per share also for 15,300,000 shares.
The GSIS declared Renong Berhad the highest bidder and immediately returned petitioner's bid
security.
On September 28, 1995, ten days after the bidding, petitioner wrote to GSIS offering to match the
bid price of Renong Berhad. It requested that the award be made to itself citing the second
paragraph of Section 10, Article XII of the Constitution. It sent a manager's check for thirty-three
million pesos (P33,000,000.00) as bid security.
Respondent GSIS, then in the process of negotiating with Renong Berhad the terms and
conditions of the contract and technical agreements in the operation of the hotel, refused to
entertain petitioner's request.
Hence, petitioner filed the present petition. We issued a temporary restraining order on October
18, 1995.
Petitioner anchors its plea on the second paragraph of Article XII, Section 10 of the Constitution4
on the "National Economy and Patrimony" which provides:
xxx xxx xxx
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
xxx xxx xxx
The vital issues can be summed up as follows:
(1) Whether section 10, paragraph 2 of Article XII of the Constitution is a self-executing provision
and does not need implementing legislation to carry it into effect;
(2) Assuming section 10 paragraph 2 of Article XII is self-executing whether the controlling shares
of the Manila Hotel Corporation form part of our patrimony as a nation;
(3) Whether GSIS is included in the term "State," hence, mandated to implement section 10,
paragraph 2 of Article XII of the Constitution;
(4) Assuming GSIS is part of the State, whether it failed to give preference to petitioner, a qualified
Filipino corporation, over and above Renong Berhad, a foreign corporation, in the sale of the
controlling shares of the Manila Hotel Corporation;
(5) Whether petitioner is estopped from questioning the sale of the shares to Renong Berhad, a
foreign corporation.
Anent the first issue, it is now familiar learning that a Constitution provides the guiding policies and
principles upon which is built the substantial foundation and general framework of the law and
government.5 As a rule, its provisions are deemed self-executing and can be enforced without
further legislative action.6 Some of its provisions, however, can be implemented only through
appropriate laws enacted by the Legislature, hence not self-executing.
To determine whether a particular provision of a Constitution is self-executing is a hard row to hoe.
The key lies on the intent of the framers of the fundamental law oftentimes submerged in its
language. A searching inquiry should be made to find out if the provision is intended as a present
enactment, complete in itself as a definitive law, or if it needs future legislation for completion and
enforcement.7 The inquiry demands a micro-analysis of the text and the context of the provision in
question.8
Courts as a rule consider the provisions of the Constitution as self-executing,9 rather than as
requiring future legislation for their enforcement. 10 The reason is not difficult to discern. For if
they are not treated as self-executing, the mandate of the fundamental law ratified by the
sovereign people can be easily ignored and nullified by Congress. 11 Suffused with wisdom of the
ages is the unyielding rule that legislative actions may give breath to constitutional rights but
congressional in action should not suffocate them. 12
Thus, we have treated as self-executing the provisions in the Bill of Rights on arrests, searches
and seizures, 13 the rights of a person under custodial investigation, 14 the rights of an accused,
15 and the privilege against self-incrimination, 16 It is recognize a that legislation is unnecessary
to enable courts to effectuate constitutional provisions guaranteeing the fundamental rights of life,
liberty and the protection of property. 17 The same treatment is accorded to constitutional
provisions forbidding the taking or damaging of property for public use without just
compensation.18
Contrariwise, case law lays down the rule that a constitutional provision is not self-executing
where it merely announces a policy and its language empowers the Legislature to prescribe the
means by which the policy shall be carried into effect. 19 Accordingly, we have held that the
provisions in Article II of our Constitution entitled "Declaration of Principles and State Policies"
should generally be construed as mere statements of principles of the State. 20 We have also
ruled that some provisions of Article XIII on "Social Justice and Human Rights," 21 and Article XIV
on "Education Science and Technology, Arts, Culture end Sports" 22 cannot be the basis of
judicially enforceable rights. Their enforcement is addressed to the discretion of Congress though
they provide the framework for legislation 23 to effectuate their policy content. 24
Guided by this map of settled jurisprudence, we now consider whether Section 10, Article XII of
the 1987 Constitution is self-executing or not. It reads:
Sec. 10. The Congress shall, upon recommendation of the 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.
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national
jurisdiction and in accordance with its national goals and priorities.
93
The first paragraph directs Congress to reserve certain areas of investments in the country 25 to
Filipino citizens or to corporations sixty per
cent 26 of whose capital stock is owned by Filipinos. It further commands Congress to enact laws
that will encourage the formation and operation of one hundred percent Filipino-owned
enterprises. In checkered contrast, the second paragraph orders the entire State to give
preference to qualified Filipinos in the grant of rights and privileges covering the national economy
and patrimony. The third paragraph also directs the State to regulate foreign investments in line
with our national goals and well-set priorities.
The first paragraph of Section 10 is not self-executing. By its express text, there is a categorical
command for Congress to enact laws restricting foreign ownership in certain areas of investments
in the country and to encourage the formation and operation of wholly-owned Filipino enterprises.
The right granted by the provision is clearly still in esse. Congress has to breathe life to the right
by means of legislation. Parenthetically, this paragraph was plucked from section 3, Article XIV of
the 1973 Constitution. 27 The provision in the 1973 Constitution affirmed our ruling in the
landmark case of Lao Ichong v. Hernandez, 28 where we upheld the discretionary authority of
Congress to Filipinize certain areas of investments. 29 By reenacting the 1973 provision, the first
paragraph of section 10 affirmed the power of Congress to nationalize certain areas of
investments in favor of Filipinos.
The second and third paragraphs of Section 10 are different. They are directed to the State and
not to Congress alone which is but one of the three great branches of our government. Their
coverage is also broader for they cover "the national economy and patrimony" and "foreign
investments within [the] national jurisdiction" and not merely "certain areas of investments."
Beyond debate, they cannot be read as granting Congress the exclusive power to implement by
law the policy of giving preference to qualified Filipinos in the conferral of rights and privileges
covering our national economy and patrimony. Their language does not suggest that any of the
State agency or instrumentality has the privilege to hedge or to refuse its implementation for any
reason whatsoever. Their duty to implement is unconditional and it is now. The second and the
third paragraphs of Section 10, Article XII are thus self-executing.
This submission is strengthened by Article II of the Constitution entitled "Declaration of Principles
and State Policies." Its Section 19 provides that "[T]he State shall develop a self-reliant and
independent national economy effectively controlled by Filipinos." It engrafts the all-important
Filipino First policy in our fundamental law and by the use of the mandatory word "shall," directs its
enforcement by the whole State without any pause or a half- pause in time.
The second issue is whether the sale of a majority of the stocks of the Manila Hotel Corporation
involves the disposition of part of our national patrimony. The records of the Constitutional
Commission show that the Commissioners entertained the same view as to its meaning.
According to Commissioner Nolledo, "patrimony" refers not only to our rich natural resources but
also to the cultural heritage of our race. 30 By this yardstick, the sale of Manila Hotel falls within
the coverage of the constitutional provision giving preferential treatment to qualified Filipinos in the
grant of rights involving our national patrimony. The unique value of the Manila Hotel to our history
and culture cannot be viewed with a myopic eye. The value of the hotel goes beyond pesos and
centavos. As chronicled by Beth Day Romulo, 31 the hotel first opened on July 4, 1912 as a first-
class hotel built by the American Insular Government for Americans living in, or passing through,
Manila while traveling to the Orient. Indigenous materials and Filipino craftsmanship were utilized
in its construction, For sometime, it was exclusively used by American and Caucasian travelers
and served as the "official guesthouse" of the American Insular Government for visiting foreign
dignitaries. Filipinos began coming to the Hotel as guests during the Commonwealth period. When
the Japanese occupied Manila, it served as military headquarters and lodging for the highest-
ranking officers from Tokyo. It was at the Hotel and the Intramuros that the Japanese made their
last stand during the Liberation of Manila. After the war, the Hotel again served foreign guests and
Filipinos alike. Presidents and kings, premiers and potentates, as well as glamorous international
film and sports celebrities were housed in the Hotel. It was also the situs of international
conventions and conferences. In the local scene, it was the venue of historic meetings, parties and
conventions of political parties. The Hotel has reaped and continues reaping numerous
recognitions and awards from international hotel and travel award-giving bodies, a fitting
acknowledgment of Filipino talent and ingenuity. These are judicially cognizable facts which
cannot be bent by a biased mind.
The Hotel may not, as yet, have been declared a national cultural treasure pursuant to Republic
Act No. 4846 but that does not exclude it from our national patrimony. Republic Act No. 4846,
"The Cultural Properties Preservation and Protection Act," merely provides a procedure whereby a
particular cultural property may be classified a "national cultural treasure" or an "important cultural
property. 32 Approved on June 18, 1966 and amended by P.D. 374 in 1974, the law is limited in
its reach and cannot be read as the exclusive law implementing section 10, Article XII of the 1987
Constitution. To be sure, the law does not equate cultural treasure and cultural property as
synonymous to the phrase "patrimony of the nation."
The third issue is whether the constitutional command to the State includes the respondent GSIS.
A look at its charter will reveal that GSIS is a government-owned and controlled corporation that
administers funds that come from the monthly contributions of government employees and the
government. 33 The funds are held in trust for a distinct purpose which cannot be disposed of
indifferently. 34 They are to be used to finance the retirement, disability and life insurance benefits
of the employees and the administrative and operational expenses of the GSIS, 35 Excess funds,
however, are allowed to be invested in business and other ventures for the benefit of the
employees.36 It is thus contended that the GSIS investment in the Manila Hotel Corporation is a
simple business venture, hence, an act beyond the contemplation of section 10, paragraph 2 of
Article XII of the Constitution.
The submission is unimpressive. The GSIS is not a pure private corporation. It is essentially a
public corporation created by Congress and granted an original charter to serve a public purpose.
It is subject to the jurisdictions of the Civil Service Commission 37 and the Commission on Audit.
38 As state-owned and controlled corporation, it is skin-bound to adhere to the policies spelled out
in the general welfare of the people. One of these policies is the Filipino First policy which the
people elevated as a constitutional command.
The fourth issue demands that we look at the content of phrase "qualified Filipinos" and their
"preferential right." The Constitution desisted from defining their contents. This is as it ought to be
for a Constitution only lays down flexible policies and principles which can bent to meet today's
manifest needs and tomorrow's unmanifested demands. Only a constitution strung with elasticity
can grow as a living constitution.
Thus, during the deliberations in the Constitutional Commission, Commissioner Nolledo to define
the phrase brushed aside a suggestion to define the phrase "qualified Filipinos." He explained that
present and prospective "laws" will take care of the problem of its interpretation, viz:
xxx xxx xxx
THE PRESIDENT. What is the suggestion 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 over aliens?
MR. NOLLEDO. Madam President, I think that is understood. We use the word "QUALIFIED"
because the existing laws or the prospective laws will always lay down conditions under which
business map be done, for example, qualifications on capital, qualifications on the setting up of
other financial structures, et cetera.
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO Yes.
MR. RODRIGO. If we say, "PREFERENCE TO QUALIFIED FILIPINOS," it can be understood as
giving preference to qualified Filipinos as against Filipinos who are not qualified.
MR. NOLLEDO. Madam President, that was the intention of the proponents. The committee has
accepted the amendment.
xxx xxx xxx
As previously discussed, the constitutional command to enforce the Filipino First policy is
addressed to the State and not to Congress alone. Hence, the word "laws" should not be
understood as limited to legislations but all state actions which include applicable rules and
regulations adopted by agencies and instrumentalities of the State in the exercise of their rule-
making power. In the case at bar, the bidding rules and regulations set forth the standards to
measure the qualifications of bidders Filipinos and foreigners alike. It is not seriously disputed that
petitioner qualified to bid as did Renong Berhad. 39
Thus, we come to the critical issue of the degree of preference which GSIS should have accorded
petitioner, a qualified Filipino, over Renong Berhad, a foreigner, in the purchase of the controlling
94
shares of the Manila Hotel. Petitioner claims that after losing the bid, this right of preference gives
it a second chance to match the highest bid of Renong Berhad.
With due respect, I cannot sustain petitioner's submission. I prescind from the premise that the
second paragraph of section 10, Article XII of the Constitution is pro-Pilipino but not anti-alien. It is
pro-Filipino for it gives preference to Filipinos. It is not, however, anti-alien per se for it does not
absolutely bar aliens in the grant of rights, privileges and concessions covering the national
economy and patrimony. Indeed, in the absence of qualified Filipinos, the State is not prohibited
from granting these rights, privileges and concessions to foreigners if the act will promote the weal
of the nation.
In implementing the policy articulated in section 10, Article XII of the Constitution, the stellar task
of our State policy-makers is to maintain a creative tension between two desiderata — first, the
need to develop our economy and patrimony with the help of foreigners if necessary, and, second,
the need to keep our economy controlled by Filipinos. Rightfully, the framers of the Constitution
did not define the degree of the right of preference to be given to qualified Filipinos. They knew
that for the right to serve the general welfare, it must have a malleable content that can be
adjusted by our policy-makers to meet the changing needs of our people. In fine, the right of
preference of qualified Filipinos is to be determined by degree as time dictates and circumstances
warrant. The lesser the need for alien assistance, the greater the degree of the right of preference
can be given to Filipinos and vice verse.
Again, it should be stressed that the right and the duty to determine the degree of this privilege at
any given time is addressed to the entire State. While under our constitutional scheme, the right
primarily belongs to Congress as the lawmaking department of our government, other branches of
government, and all their agencies and instrumentalities, share the power to enforce this state
policy. Within the limits of their authority, they can act or promulgate rules and regulations defining
the degree of this right of preference in cases where they have to make grants involving the
national economy and judicial duty. On the other hand, our duty is to strike down acts of the state
that violate the policy.
To date, Congress has not enacted a law defining the degree of the preferential right.
Consequently, we must turn to the rules and regulations of on respondents Committee
Privatization and GSIS to determine the degree of preference that petitioner is entitled to as a
qualified Filipino in the subject sale. A tearless look at the rules and regulations will show that they
are silent on the degree of preferential right to be accorded qualified Filipino bidder. Despite their
silence, however, they cannot be read to mean that they do not grant any degree of preference to
petitioner for paragraph 2, section 10, Article XII of the Constitution is deemed part of said rules
and regulations. Pursuant to legal hermeneutics which demand that we interpret rules to save
them from unconstitutionality, I submit that the right of preference of petitioner arises only if it tied
the bid of Benong Berhad. In that instance, all things stand equal, and bidder, as a qualified
Pilipino bidder, should be preferred.
It is with deep regret that I cannot subscribe to the view that petitioner has a right to match the bid
of Renong Berhad. Petitioner's submission must be supported by the rules but even if we examine
the rules inside-out .thousand times, they can not justify the claimed right. Under the rules, the
right to match the highest bid arises only "if for any reason, the highest bidder cannot be awarded
block of shares . . ." No reason has arisen that will prevent the award to Renong Berhad. It
qualified as bidder. It complied with the procedure of bidding. It tendered the highest bid. It was
declared as the highest bidder by the GSIS and the rules say this decision is final. It deserves the
award as a matter of right for the rules clearly did not give to the petitioner as a qualified Filipino
privilege to match the higher bid of a foreigner. What the rules did not grant, petitioner cannot
demand. Our symphaties may be with petitioner but the court has no power to extend the latitude
and longtitude of the right of preference as defined by the rules. The parameters of the right of
preference depend on galaxy of facts and factors whose determination belongs to the province of
the policy-making branches and agencies of the State. We are duty-bound to respect that
determination even if we differ with the wisdom of their judgment. The right they grant may be little
but we must uphold the grant for as long as the right of preference is not denied. It is only when a
State action amounts to a denial of the right that the Court can come in and strike down the denial
as unconstitutional.
Finally, I submit that petitioner is estopped from assailing the winning bid of Renong Berhad.
Petitioner was aware of the rules and regulations of the bidding. It knew that the rules and
regulations do not provide that a qualified Filipino bidder can match the winning bid submitting an
inferior bid. It knew that the bid was open to foreigners and that foreigners qualified even during
the first bidding. Petitioner cannot be allowed to repudiate the rules which it agreed to respect. It
cannot be allowed to obey the rules when it wins and disregard them when it loses. If sustained,
petitioners' stance will wreak havoc on he essence of bidding. Our laws, rules and regulations
require highest bidding to raise as much funds as possible for the government to maximize its
capacity to deliver essential services to our people. This is a duty that must be discharged by
Filipinos and foreigners participating in a bidding contest and the rules are carefully written to
attain this objective. Among others, bidders are prequalified to insure their financial capability. The
bidding is secret and the bids are sealed to prevent collusion among the parties. This objective will
be undermined if we grant petitioner that privilege to know the winning bid and a chance to match
it. For plainly, a second chance to bid will encourage a bidder not to strive to give the highest bid
in the first bidding.
We support the Filipino First policy without any reservation. The visionary nationalist Don Claro M.
Recto has warned us that the greatest tragedy that can befall a Filipino is to be an alien in his own
land. The Constitution has embodied Recto's counsel as a state policy. But while the Filipino First
policy requires that we incline to a Filipino, it does not demand that we wrong an alien. Our policy
makers can write laws and rules giving favored treatment to the Filipino but we are not free to be
unfair to a foreigner after writing the laws and the rules. After the laws are written, they must be
obeyed as written, by Filipinos and foreigners alike. The equal protection clause of the
Constitution protects all against unfairness. We can be pro-Filipino without unfairness to foreigner.
I vote to dismiss the petition.
Narvasa, C.J., and Melo, J., concur.
PANGANIBAN, J., dissenting:
I regret I cannot join the majority. To the incisive Dissenting Opinion of Mr. Justice Reynato S.
Puno, may I just add
1. The majority contends the Constitution should be interpreted to mean that, after a bidding
process is concluded, the losing Filipino bidder should be given the right to equal the highest
foreign bid, and thus to win. However, the Constitution [Sec. 10 (2), Art. XII] simply states that "in
the grant of rights . . . covering the national economy and patrimony, the State shall give
preference to qualified Filipinos." The majority concedes that there is no law defining the extent or
degree of such preference. Specifically, no statute empowers a losing Filipino bidder to increase
his bid and equal that of the winning foreigner. In the absence of such empowering law, the
majority's strained interpretation, I respectfully submit constitutes unadulterated judicial legislation,
which makes bidding a ridiculous sham where no Filipino can lose and where no foreigner can
win. Only in the Philippines!.
2. Aside from being prohibited by the Constitution, such judicial is short-sighted and, viewed
properly, gravely prejudicial to long-term Filipino interest. It encourages other countries — in the
guise of reverse comity or worse, unabashed retaliation — to discriminate against us in their own
jurisdictions by authorizing their own nationals to similarly equal and defeat the higher bids of
Filipino enterprises solely, while on the other hand, allowing similar bids of other foreigners to
remain unchallenged by their nationals. The majority's thesis will thus marginalize Filipinos as
pariahs in the global marketplace with absolute no chance of winning any bidding outside our
country. Even authoritarian regimes and hermit kingdoms have long ago found out unfairness,
greed and isolation are self-defeating and in the long-term, self-destructing.
The moral lesson here is simple: Do not do unto other what you dont want other to do unto you.
3. In the absence of a law specifying the degree or extent of the "Filipino First" policy of the
Constitution, the constitutional preference for the "qualified Filipinos" may be allowed only where
all the bids are equal. In this manner, we put the Filipino ahead without self-destructing him and
without being unfair to the foreigner.
In short, the Constitution mandates a victory for the qualified Filipino only when the scores are
tied. But not when the ballgame is over and the foreigner clearly posted the highest score.
Footnotes
1 See Sec. 10, par. 2, Art. XII, 1987 Constitution
2 Par I. Introduction and Highlights; Guidelines and Procedures: Second Prequailifications and
Public Bidding of the MHC Privatization; Annex "A," Consolidated Reply to Comments of
Respondents; Rollo, p. 142.
95
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 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.
18 Sec. 10, first par., reads: The Congress shall, upon recommendation of the 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. O'Malley, 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.
24 Sec. 1, Art. XIII (Social Justice and Human Rights), provides that [t]he Congress 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.
25 Sec. 2, Art. XIV (Education, Science and Technology, Arts, Culture, and Sports), 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 indegenous 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. 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 Webster's 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 Ramaswani 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 President 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 Choonvan and Prem Tinsulanonda of Thailand, Prime Minister Benazir Bhutto
of Pakistan, President Vaclav Havel of Czech Republic, Gen. Norman Schwarzcopf of U.S.A,
President Ernesto Perez Balladares of Panama, Prime Minister Adolfas Slezevicius of Lithuania,
President Akbar Hashemi Rafsanjani of Iran, 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 of Enforcement of Industrial Property
Rights held 23 October 1995 at New World Hotel, Makati City.
96
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.
PADILLA, J., concurring:
1 Article XII, Section 10, par. 2, 1987 Constitution.
2 Padilla, The 1987 Constitution of the Republic of the Philippines, Volume III, p. 89.
3 Sinco, Philippine Political Law, 11th ed, p. 112.
4 Nolledo, The New Constitution of the Philippines, Announced, 1990 ed., p. 72.
5 Memorandum for Petitioner, p. 1.
6 Laurel, Proceedings of the Philippine Constitutional Convention (1934-1935), p. 507.
7 Id., p. 562.
VITUG, J., concurring:
1 Second par. Section 10, Art. XII, 1987 Constitution.
MENDOZA, J., concurring:
1 Art. XII, §10, second paragraph.
2 GUIDELINES AND PROCEDURES: SECOND PREQUALIFICATION AND PUBLIC BIDDING
OF THE MHC PRIVATIZATION (hereafter referred to as GUIDELINES), Part. V, par. H(4)..
3 Id.
4 83 Phil. 242 (1949).
5 R.A. No. 37, §1.
6 87 Phil. 343 (1950).
7 104 Phil. 302 (1958).
8 Id, at 309.
9 For an excellent analysis of American cases on reverse discrimination in these areas, see
GERALD GUNTHER, CONSTITUTIONAL LAW 780-819 (1991).
10 Art. II, §19: "The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos." (Emphasis added)
11 See Villegas v. Hiu Chiung Tsai Pao Ho, 86 SCRA 270 (1978) (invalidating an ordinance
imposing a flat fee of P500 on aliens for the privilege of earning a livelihood).
12 Petitioner passed the criteria set forth in the GUIDELINES, Part IV, par. F(4), of the GSIS,
relating to the following:
a. Business management expertise, tract record, and experience
b. Financial capability
c. Feasibility and acceptability of the proposed strategic plan for the Manila Hotel.
13 GUIDELINES, Part V, par. (1)(3), in relation to Part. I.
14 Id., Part V, par. V (1).
PUNO, J., dissenting:
1 Introduction and Highlights, Guidelines and Procedures: Second Prequalification and Public
Bidding of the MHC Privatization, Annex "A" to Petitioner's Consolidated Reply to Comments of
Respondents, Rollo, p. 142.
2 The four bidders who previously prequalified for the first bidding, namely, ITT Sheraton, Marriot
International, Inc., Renaissance Hotel International, Inc., and the consortium of RCBC and the Ritz
Carlton, were deemed prequalified for the second bidding.
3 Annex "A" to the Consolidated Reply to Comments of Respondents, Rollo, pp. 140-155.
4 Former Chief Justice Enrique Fernando and Commissioner Joaquin Bernas were invited by the
Court as amicus curiae to shed light on its meaning.
5 Lopez v. de los Reyes, 55 Phil. 170, 190 [1930].
6 16 Am Jur 2d, Constitutional Law, Sec. 139 p. 510 [1979 ed. ]; 6 R.C.L. Sec. 52 p. 57 [1915];
see also Willis v. St. Paul Sanitation Co. 48 Minn. 140, 50 N.W. 1110, 31 A.J.R. 626, 16 L.R.A.
281 [1892]; State ex rel. Schneider v. Kennedy, 587 P. 2d 844, 225 Kan [1978].
7 Willis v. St. Paul Sanitation, supra, at 1110-1111; see also Cooley, A Treatise on Constitutional
Limitations 167, vol. 1 [1927].
8 16 C.J.S., Constitutional Law, Sec. 48, p. 100.
9 Cooley, supra, at 171; 6 R.C.L. Sec. 53, pp. 57-58; Brice v. McDow, 116 S.C. 324, 108 S.E. 84,
87 [1921]; see also Gonzales, Philippine Constitutional Law p. 26 [1969].
10 16 C.J.S., Constitutional Law, Sec. 48, p. 101.
11 Way v. Barney, 116 Minn. 285, 133 N.W. 801, 804 38 L.R.A. (N.S.) 648, Ann. Cas. 1913 A,
719 [1911]; Brice v. McDow, supra, at 87; Morgan v. Board of Supervisors, 67 Ariz. 133, 192 P. 2d
236, 241 [1948]; Gonzales, supra..
12 Ninth Decennial Digest Part I, Constitutional Law, (Key No. 28), p. 1638.
13 Article III, Section 2; see Webb v. de Leon, 247 SCRA 652 [1995]; People v. Saycon, 236
SCRA 325 (1994]; Allado v. Diokno, 232 SCRA 192 (1994]; Burgos v. Chief of Staff, 133 SCRA
800 [1984]; Yee Sue Kuy v. Almeda, 70 Phil. 141 [1940]; Pasion Vda. de Garcia v. Locsin, 65 Phil.
689 [1938]; and a host of other cases.
14 Article III, Section 12, pars. 1 to 3; People v. Alicando, 251 SCRA 293 [1995]; People v.
Bandula 232 SCRA 566 [1994]; People v. Nito 228 SCRA 442 [1993]; People v. Duero, 104 SCRA
379 [1981]; People v. Galit, 135 SCRA 465 [1985]; and a host of other cases.
15 Article III, Section 14; People v. Digno, 250 SCRA 237 [1995]; People v. Godoy, 250 SCRA
676 [1995]; People v. Colcol 219 SCRA [1993]; Borja v. Mendoza, 77 SCRA 422 [1977]; People v.
Dramayo, 42 SCRA 59 [1971]; and a host of other cases.
16 Galman v. Pamaran, 138 SCRA 274 [1985]; Chavez v. Court of Appeals 24 SCRA 663 [1968];
People v. Otadura, 86 Phil. 244 [1950]; Bermudez v. Castillo, 64 Phil, 485 [1937]; and a host of
other cases.
17 Harley v. Schuylkill County, 476 F. Supp, 191, 195-196 [1979]; Erdman v. Mitchell, 207 Pa. St.
79, 56 Atl. 327, 99 A.S.R. 783 63 L.R.A. 534 [1903]; see Ninth Decennial Digest Part I,
Constitutional Law, (Key No. 28), pp. 1638-1639.
18 City of Chicago v. George F. Harding Collection, 217 N.E. 2d 381, 383, 70 Ill. App. 2d 254
[1966]; People v. Buellton Dev. Co., 136 P. 2d 793, 796, 58 Cal. App. 2d 178 [1943]; Bordy v.
State, 7 N.W. 2d 632, 635, 142 Neb. 714 [1943]; Cohen v. City of Chicago, 36 N.E. 2d 220, 224,
377 Ill 221 [1941].
19 16 Am Jur 2d, Constitutional Law, Sec. 143, p. 514; 16 C.J.S. Constitutional Law, Sec. 48, p.
100; 6 R.C.L. Sec. 54, p. 59; see also State ex rel. Noe v. Knop La. App. 190 So. 135, 142 [1939];
State ex rel. Walker v. Board of Comm'rs. for Educational Lands and Funds, 3 N.W. 2d 196, 200,
141 Neb. 172 [1942]; Maddox v. Hunt, 83 P. 2d 553, 556, 83 Okl. 465 [1938].
20 Article II, Sections 11, 12 and 13 (Basco v. Phil. Amusements and Gaming Corporation, 197
SCRA 52, 68 [1991]); Sections 5, 12, 13 and 17 (Kilosbayan, Inc. v. Morato, 246 SCRA 540, 564
[1995]).
21 Article XIII, Section 13 (Basco, supra).
22 Article XIV, Section 2 (Basco, supra).
23 Kilosbayan v. Morato, supra, at 564.
24 Basco v. Phil. Amusements and Gaming Corporation, supra, at 68.
25 Congress had previously passed the Retail Trade Act (R.A. 1180); the Private Security Agency
Act (R.A. 5487; the law on engaging in the rice and corn industry (R.A. 3018, P.D. 194), etc.
26 Or such higher percentage as Congress may prescribe.
27 Article XIV, section 3 of the 1973 Constitution reads:
"Sec. 3. The Batasang Pambansa shall, upon recommendation of the National Economic and
Development Authority, reserve to citizens of the Philippines or to corporations or associations
wholly owned by such citizens, certain traditional areas of investments when the national interest
so dictates,"
28 101 Phil. 1155 [1957].
29 See Bernas, The Constitution of the Republic of the Philippines 450, vol. II [1988]. The Lao
Ichong case upheld the Filipinization of the retail trade and implied that particular areas of
business may be Filipinized without doing violence to the equal protection clause of the
Constitution.
30 Nolledo The New Constitution of the Philippines, Annotated, 1990 ed., p. 72. The word
"patrimony" first appeared in the preamble of the 1935 Constitution and was understood to cover
everything that belongs to the Filipino people, the tangible and the material as well as the
intangible and the spiritual assets and possessions of the nation (Sinco, Philippine Political Law,
Principles and Concepts [1962 ed.], p. 112; Speech of Delegate of Conrado Benitez defending the
draft preamble of the 1935 Constitution in Laurel, Proceedings of the Constitutional Convention,
vol. III, p. 325 [1966]).
31 Commissioned by the Manila Hotel Corporation for the Diamond Jubilee celebration of the
Hotel in 1987; see The Manila Hotel: The Heart and Memory of a City.any
32 Section 7 of R.A. 4846 provides:
97
Sec. 7. In the designation of a particular cultural property as a .national cultural treasure," the
following procedure shall be observed:
(a) Before the actual designation, the owner, if the property is privately owned, shall be notified at
least fifteen days prior to the intended designation, and he shall be invited to attend the
deliberation and given a chance to be heard. Failure on the part of the owner to attend the
deliberation shall not bar the panel to render its decision. Decision shall be given by the panel
within a week after its deliberation. In the event that the owner desires to seek reconsideration of
the designation made by the panel, he may do so within thirty days from the date that the decision
has been rendered. If no request for reconsideration is filed after this period, the designation is
then considered final and executory. Any request for reconsideration filed within thirty days and
subsequently again denied by the panel, may be further appealed to another panel chairmanned
by the Secretary of Education with two experts as members appointed by the Secretary of
Education. Their decision shall final and binding.
(b) Within each kind or class of objects, only the rare and unique objects may be designated as
"National Cultural Treasures." The remainder, if any shall be treated as cultural property.
xxx xxx xxx
33 P.D. 1146, Sec, 5; P.D, 1146, known as "The Revised Government Service Insurance Act of
1977" amended Commonwealth Act No. 186, the "Government Service Insurance Act" of 1936.
34 Beronilla v. Government Service Insurance System, 36 SCRA 44, 53 [1970]; Social Security 8.
System Employees Association v. Soriano, 7 SCRA 1016, 1023 [1963].
35 Id., secs. 28 and 29. [G.R. No. 101370. September 2, 1993.]
36 Id., Sec. 30.
37 Constitution, Article IX (B), section 2 (1).
NATIONAL HOUSING CORPORATION, Petitioner,
38 Constitution, Article IX (D), section 2 (1).
39 It is meet to note that our laws do not debar foreigners from engaging in the hotel business.
v.
Republic Act No. 7042, entitled the "Foreign Investments Act of 1991" was enacted by Congress
to "attract, promote and welcome . . . foreign investments . . . in activities which significantly
contribute to national industrialization and socio-economic development to the extent that foreign COMMISSION ON AUDIT and ARTURO D. DADUFALZ A, in his capacity as COA
investment is allowed by the Constitution and relevant laws." The law contains a list, called the Director, Technical Services Office, Respondents.
Negative List specifying areas of economic activity where foreign participation is limited or
prohibited. Areas of economic activity not included in the Negative List are open to foreign Government Corporate Counsel for petitioner
participation up to one hundred per cent (Sees. 6 and 7). Foreigners now own and run a great
number of our five-star hotels. The Solicitor General for Respondents.

DECISION

PUNO, J.:

Foreign loans usually obligate the debtor country to hire expatriate consultants. This part of the
package makes these loans more onerous. The petition at bar assails the disallowance by the
respondent COA of a contract extending the services of a foreign consultant on the ground that his
work could well be performed by Filipinos. It cannot succeed.chanrobles.com:cralaw:red

There are no uncertainties on the facts of the case. Our government forged an agreement on
financial cooperation with the Republic of Germany. On April 10, 1981, a Loan and Project
Agreement was executed between the Republic of the Philippines as "Borrower" and the National
Housing Authority (NHA) as "Project Sponsor" on the one hand, and the Kreditanstalt Fur
Weideraufbau (KFW) on the other hand, for Urban Housing Dagat-Dagatan Project II A/B. 1 The
agreement empowered the NHA and the KFW to determine the details of the project as well as the
goods and services to be financed from the loan. They hired the services of Engineer Brian W.
Murdoch of Kinhill Pty. Ltd. (Kinhill), a foreign corporation organized under the laws of Australia.

In 1987, the KFW proposed to extend the contract of Engr. Murdoch for another year. The NHA
Board of Directors approved only a 3-month extension, from March 9 to June 9, 1987. 2 It also
directed its management to make representations with KFW to replace Engr. Murdoch with a local

98
consultant after June 9, 1987 if the project would still be unfinished. The 3-month consultancy
contract was submitted to the National Economic Development Authority (NEDA) for approval. 3
On April 1, 1987, NEDA approved the contract with the following
observations:jgc:chanrobles.com.ph
"This Office has no objection to the approval of the contract. His (NHA-General Manager) attention
is called however on the previous observations made by this Office in the review of previous
extension of services of Engr. Murdoch that Engr. Murdoch has been the consultant of NHA since
August 1978 or about 8 years now and that considering the relatively simple supervision work
required for the finishing stages of the Dagat-Dagatan Project, NHA should have considered hiring
local consultant. It is expected that this extension of services of Engr. Murdoch is the last and that
NHA shall make representations with KFW to substitute a qualified local consultant for Engr.
Murdoch after expiration of the contract if a consultant for the project is still necessary."cralaw
virtua1aw library
On April 10, 1987, NHA and Kinhill executed the consultancy contract (original) covering the
months of March 9 to June 9, 1987. It involved the amount of US $30,800.00 (foreign cost) and
P123,690.00 (local cost).
The 3-month contract, however, did not satisfy KFW. It wanted a 12-month contract. In June 1987,
it got what it wanted. NHA and Kinhill signed a First Supplemental Contract. It extended the
consultancy contract for nine (9) more months from June 9, 1987 to March 8, 1988. Its total cost
was US $85,500.00 (foreign cost) and P332,850.00 (local cost).
The Urban Housing Dagat-Dagatan Project II was not completed as scheduled. On December 15,
1987, a request was made for an extension of the Loan Agreement for another year. KFW agreed
provided the consultancy contract with Kinhill would be extended until the end of December 1988.
NHA did not appear to have much choice. On May 8, 1988, it signed a Second Supplemental
Contract extending the contract of Kinhill for another eight (8) months, from April 4 to December 4,
1988. Its total cost was US $78,500.00 (foreign) and P315,000.00 (local).chanrobles lawlibrary :
rednad
The Loan Agreement was supposed to have expired on December 4, 1988. Nonetheless, there
was another request for its extension for a period of six (6) months. KFW had no objection but
again conditioned its approval on the extension of the consultancy services of Kinhill also for a
period of six (6) months. This resulted in the signing on February 23, 1987 of the Third
Supplemental Contract which extended Kinhill’s consultancy services from January 4 to July 3,
1989. Its cost was US $58,200.00 (foreign) and P250,000.00 (local).
NHA’s legal difficulties started when the Third Supplemental Contract was reviewed in post audit
by the Technical Services Office (TSO). The contract was disallowed in view of the following
findings:jgc:chanrobles.com.ph
"This has reference to the review of the Third Supplemental Contract dated February 23, 1989
involving the amount of US$58,200.00 (foreign cost) plus P250,000.00 (local cost) in the contract
amount and covering an extension of six (6) months issued in favor of Kinhill Pty. Ltd. relative to
the Consulting Services for Technical Assistance to National Housing Authority (NHA) under the
Kreditanstalt Fuer Wiederaufbau (KFW) Loan for Dagat-Dagatan Project.
"Please be informed that the Consultant’s monthly rate was established as reasonable, however,
the review conducted disclosed the following observations:chanrob1es virtual 1aw library
a. Based on submitted documents, it was noted that this supplemental contract has no approval
from KFW and the Secretary of Public Works and Highways as required in Article III, Paragraph
3.02 of the contract and Section 3 of Executive Order No. 164 dated May 5, 1987.
b. The output requirements are not specified and there is no PERT/CPM 4 Network Diagram or
equivalent program of work, thus there is no clear basis for NHA’s evaluation of the consultant’s
accomplishment for purposes of payment. (Note: Appendix "AA" only reflects objectives).
c. There is no contract provision for liquidated damages in case of delay in project completion
attributed to direct fault of the consultant.
"In addition we reiterate our opinion that the KFW components of the Dagat-Dagatan Project
involves simple design and construction procedures and it being in its finishing stage, requires
simple engineering advisory services that can be undertaken by NHA or DPWH in-house technical
staff or at the most a local consultant. However, perusal of the documents submitted showed NHA
was compelled to continue the consultancy services of Kinhill, otherwise, NHA cannot get
reimbursement from the KFW loan to pay their contractors. (underscoring supplied).
"It was also noted that in this supplemental contract the Management did not take into
consideration the results of our review made on the previous contracts contained in our
Memorandum dated September 7, 1988.
"In view of the above observation, it is recommended that the contract be disallowed in audit.
"Likewise, it is informed that the review of the selection and the manner of award and the
evaluation concerning all reimburseable direct expense of the consultant are left with the Auditor.
"Attention is invited to the attached Consultancy Contract Review dated April 11, 1989, which is
self-explanatory.
"sgd. EDITHA A. DE LA CRUZ
Assistant Commissioner
Officer-in-Charge
Technical Services Office"
On November 26, 1990, NHA requested for reconsideration. It offered the following
explanations:jgc:chanrobles.com.ph
"ISSUE NO. 1. — This Supplemental Contract has no approval from KFW and the Secretary of the
Public Works and Highways.
"ANSWER: 1.1. — On KFW approval, attached for your reference is a copy of KFW telex of no
objection, dated December 22, 1988 "EXHIBIT A." The reply, action of KFW is usually
communicated thru telex. Perusal of all previous consultancy contracts would support this.
Furthermore, let it be informed that it was KFW’s requirement why this consultancy Contract was
engaged despite our earlier manifestation that we hire local consultants "EXHIBIT B."cralaw
virtua1aw library
1.2 — On the approval by the Secretary of the Department of Public Works and Highways . . . the
Third Supplemental Agreement was approved by the NHA Board under Resolution No. 1231 5 of
March 13, 1987 (sic) "EXHIBIT C."cralaw virtua1aw library
It may be pointed out at this juncture, that the main reason why the consultancy had to be
extended was due to the delay in the completion of the KFW-Funded River Bank Improvement
Works, which was directly implemented by the Department of Public Works and Highways, hence,
the presence of the foreign consultant was with the knowledge and acquiescence of the DPWH.
"ISSUE NO. 2. — The output requirements are not specified . . . or equivalent program of work . .
.thus there is no clear basis for . . . payment.
99

"ANSWER: In the original Consultancy Contract, as well as the First and the Second
Supplemental Contract Agreements, the main basis for determining the consultant’s responsibility
have been defined in the Terms of Reference which specified the technical assistance to be
provided by the Consultant to the National Housing Authority under the KFW Loan Agreement, to
wit:chanrob1es virtual 1aw library
Assistance to the National Housing Authority for the Dagat-Dagatan Project in the form of
engineering designs, contract documentation, project programming, supervision and monitoring
procedures, evaluation and concurrence on contractor’s billings and institutional arrangements
with regards associated agencies. In addition, responsibility will include all associated functions
necessary for the timely and satisfactory completion of the revetment works along the river banks
in which the Department of Public Works and Highways is the responsible agency.
In this respect, since it is a prerequisite that all billings to be processed for payment to the
contractors have to be certified by the consultant, it is the direct responsibility of the consultant to
monitor, the consultant to monitor, verify and evaluate all the aspects of the project
implementation for contracts funded by KFW Loan. This process will assure the NHA and KFW
that disbursement are effected only to cover works accomplishment in accordance with plans and
specifications.chanrobles virtual lawlibrary
"ISSUE NO. 3 — There is no contract provision for liquidated damages in case of delay in project
completion attributed to the fault of the consultant.
"ANSWER: We reiterate in full our previous explanation for this particular
observation:jgc:chanrobles.com.ph
"It is confirmed that there is no contract provision for liquidated damages. However, there is a
contract provision for termination for default or for convenience of NHA. Further, considering that
the contract has already expired and there has been no record of consultant’s faults or delays in
the project implementation, the required provision on liquidated damages has become moot and
academic."cralaw virtua1aw library
"With respect to your opinion that the KFW components of the Dagat-Dagatan involve simple
design and construction procedures, etc., let this be of record that we are 100% in accord with
your observation. However, the hiring of an expartriate consultant is mandated under the Loan
Agreement to which NHA must adhere to, unless otherwise authorized." (Italics ours).
On February 28, 1991, TSO Director Arthur Dadufalza denied the reconsideration. He
opined:jgc:chanrobles.com.ph
"1. Although not stated in the contract that there is no need for the approval of the DPWH
Secretary, Section 3 of Executive Order No. 164 dated May 5, 1987 requires the said approval.
"2. The consultant’s responsibility which they mentioned, as specified in the Terms of Reference
was general. The output requirements are not specified and there is no PERT/CPM Network
Diagram or equivalent program of work, hence, we still believed that there is still no basis for
NHA’s evaluation of the consultant’s accomplishments for purposes of payment.
"3. It was confirmed by NHA that there is really no contract provision for liquidated damages. It so
happened that the contract has expired and there has been no record of consultant’s fault or
delay, thus, the required provision may be considered moot and academic. However, it is
recommended that for future projects, the provisions should be specified/stipulated.
"4. The main reason for the disallowance is that there is no more need for a foreign consultant in
the final project stage since the remaining work components of the Dagat-Dagatan Project which
involved simple design and construction procedure and it being in the finishing stage, required
simple advisory services that can be undertaken by NHA or DPWH in-house technical staff or at
the most, a local consultant. The findings was further reinforced by the statements of the NEDA in
the attached 1st Indorsement dated April 1, 1987 . . . bearing on its no objection to the approval of
the original contract:jgc:chanrobles.com.ph
"x x x."cralaw virtua1aw library
"The NHA agreed and is 100% in accord with the observation. However, we do not find in the
documents/records submitted that NHA has made stronger representation with the KFW for the
hiring of a local consultant (or at all) as required by the NEDA." (Italics ours).
On May 15, 1991, the COA, in its Decision No. 1895, affirmed Director Dadufalza’s findings except
as regards the lack of provision for liquidated damages which was considered moot and
academic.
NHA filed the instant petition for certiorari where it raises the following
issues:jgc:chanrobles.com.ph
"a. Whether or not the COA acted beyond its constitutionally granted powers by disallowing a duly
entered contract, valid, regular, with all the formalities of law.
"b. Corollary to the above, is whether or not COA acted beyond its constitutionally granted powers
by disallowing a contract on the basis of its self-proclaimed and considered defects on the contract
not otherwise provided for in its sets of regulations promulgated pursuant to the mandate of the
Constitution.
"c. Whether or not COA, by virtue of the powers granted to it under the Constitution, substitute its
own judgment or disposition in lieu of the decision of the management or governing body of
government entities."cralaw virtua1aw library
The petition lacks merit.
The power of the Commission on Audit to audit and examine government expenditures is
enshrined in Section 2 (1), Article IX-D of the 1987 Constitution, viz.:jgc:chanrobles.com.ph
"Section 2. (1) The Commission on Audit shall have the power, authority, and duty to examine,
audit and settle all accounts pertaining to the revenue and receipts of, and expenditures or uses of
funds and property, owned or held in trust by, or pertaining to, the Government, or any of its
subdivision, agencies, or instrumentalities, including government-owned or controlled corporations
with original charters, or on a post audit basis: (a) constitutional bodies, commissions, and offices
that have been granted the fiscal autonomy under this Constitution; . . ."cralaw virtua1aw library
The Constitution also granted to COA the power to "promulgate accounting and auditing rules and
regulations, including those for the prevention and disallowance of irregular, unnecessary,
excessive, extravagant, or unconscionable expenditures, or uses of government funds and
properties." 6
Pursuant to the said constitutional mandate, COA promulgated Circular No. 88-55-A dated
September 8, 1985 defining the term "unnecessary" expenditures, viz.:jgc:chanrobles.com.ph
"The term pertains to expenditures which could not pass the test of prudence or the diligence of a
good father of a family, thereby denoting non-responsiveness to the exigencies of the service.
Unnecessary expenditures are those not supportive of the implementation of the objectives and
mission of the agency relative to the nature of its operation. This would also include incurrence of
expenditure not dictated by the demands of good government, and those the utility of which
cannot be ascertained at a specific time. An expenditure that is not essential or that which can be
dispensed with without loss or damage to property is considered unnecessary. The mission and
thrust of the agency incurring the expenditures must be considered in determining whether or not
an expenditure is necessary." (Italics ours).
100
In Caltex Philippines, Inc. v. COA, 7 We recognized the authority of COA to disallow irregular,
unnecessary, excessive, extravagant or unconscionable (IUEEU) expenditures. We ruled: "Since
the COA is responsible for the enforcement of the rules and regulations, it goes without saying
that failure to comply with them is a ground for disapproving the payment of the proposed
expenditure."cralaw virtua1aw library
There can be no dispute on the proposition that the continued extension of the services of Engr.
Murdoch as a foreign consultant constitutes at the very least an unnecessary expense.
Crystal clear from the records is that the nature of the terminal phase of the Dagat-Dagatan
project does not require the expertise of a foreign consultant. As early as April 1, 1987, the
necessity of extending the services of Engr. Murdoch has been questioned by NEDA "considering
the relatively simple supervision work required for the final stages of the project." 8 This
observation was echoed by COA in its post audit review of the First and Second Supplemental
Contracts, 9 viz:jgc:chanrobles.com.ph
"In addition, it is our opinion that the KFW components of the Dagat-Dagatan Project involves
simple design and construction procedures, and it being in its finishing stage, requires simple
advisory services that can be undertaken by NHA or DPWH in-house technical staff or at the most
a local consultant. Hence, the NHA should have made stronger representations with the KFW for
the hiring of a local consultant (or none at all) as required by NEDA."cralaw virtua1aw library
Petitioner itself has taken the position that the services of Engr. Murdoch can be dispensed with
and can well be done by Filipinos. In 1987, petitioner’s Board already directed its management to
make representations with KFW to replace Engr. Murdoch with a Filipino consultant if the project
would still be unfinished. Again, in its memorandum dated November 26, 1990, petitioner
categorically admitted that the KFW components of the Dagat-dagatan Project involved simple
designs and construction procedures which could easily be handled by a local consultant. Despite
all these admissions, petitioner proceeded to extend the unnecessary services of Engr. Murdoch
as it consummated the disputed Third Supplemental Contract. The amount of money that was
spent for the unnecessary services of Engr. Murdoch speaks for itself.chanrobles law library
Petitioner argues that the renewal of the loan agreement with the KFW would have been
jeopardized if it did not agree to the extension of the services of Engr. Murdoch. The short answer
to this argument is that the imperative necessity to comply with the command of our Constitution
prohibiting unnecessary expenses of public funds is beyond compromise. No amount of the
almighty dollar can justify anybody, especially foreigners, to mangle the mandates of our
fundamental law. The postulates of our Constitution are not mere platitudes which we should
honor only in rhetorics but not in reality. In fine, the power to contract a foreign loan does not carry
with it the authority to bargain away the ideals of our Constitution.
IN VIEW WHEREOF, the petition for certiorari is dismissed.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero,
Nocon, Bellosillo, Melo, Quiason and Vitug, JJ., concur.
Endnotes:
1. Rollo, p. 184. DM 12,000,000 (twelve million Deutches Mark) was originally alloted for the
project. This was increased to DM16,000,000 in a Supplemental Loan Agreement.
2. Resolution No. 1231 dated March 13, 1987.
3. Rollo, p. 91.
4. Performance Evaluation and Review Technique/Critical Path Method.
5. The Third Supplemental Agreement was approved by the NHA Board under Resolution No.
1621 dated January 10, 1989. Resolution No. 1231 dated March 13, 1987 refers to NHA Board of
Directors’ approval of the April 10, 1987 original consultancy contract.
6. Section 2 (2), Article IX-D, 1987 Constitution.
7. G.R. No. 92585, May 8, 1992, 208 SCRA 726, 746.
8. Rollo, p. 92.
9. Rollo, p. 203.
9. EN BANC
G.R. No. 104768 July 21, 2003
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
SANDIGANBAYAN, MAJOR GENERAL JOSEPHUS Q. RAMAS and
ELIZABETH DIMAANO, Respondents.
DECISION
CARPIO, J.:
The Case
Before this Court is a petition for review on certiorari seeking to set aside the Resolutions of the
Sandiganbayan (First Division)1 dated 18 November 1991 and 25 March 1992 in Civil Case No.
0037. The first Resolution dismissed petitioner’s Amended Complaint and ordered the return of
the confiscated items to respondent Elizabeth Dimaano, while the second Resolution denied
petitioner’s Motion for Reconsideration. Petitioner prays for the grant of the reliefs sought in its
Amended Complaint, or in the alternative, for the remand of this case to the Sandiganbayan (First
Division) for further proceedings allowing petitioner to complete the presentation of its evidence.
Antecedent Facts
Immediately upon her assumption to office following the successful EDSA Revolution, then
President Corazon C. Aquino issued Executive Order No. 1 ("EO No. 1") creating the Presidential
Commission on Good Government ("PCGG"). EO No. 1 primarily tasked the PCGG to recover all
ill-gotten wealth of former President Ferdinand E. Marcos, his immediate family, relatives,
subordinates and close associates. EO No. 1 vested the PCGG with the power "(a) to conduct
investigation as may be necessary in order to accomplish and carry out the purposes of this order"
and the power "(h) to promulgate such rules and regulations as may be necessary to carry out the
purpose of this order." Accordingly, the PCGG, through its then Chairman Jovito R. Salonga,
created an AFP Anti-Graft Board ("AFP Board") tasked to investigate reports of unexplained
wealth and corrupt practices by AFP personnel, whether in the active service or retired.2
101
Based on its mandate, the AFP Board investigated various reports of alleged unexplained wealth
of respondent Major General Josephus Q. Ramas ("Ramas"). On 27 July 1987, the AFP Board
issued a Resolution on its findings and recommendation on the reported unexplained wealth of
Ramas. The relevant part of the Resolution reads:
III. FINDINGS and EVALUATION:
Evidence in the record showed that respondent is the owner of a house and lot located at 15-
Yakan St., La Vista, Quezon City. He is also the owner of a house and lot located in Cebu City.
The lot has an area of 3,327 square meters.
The value of the property located in Quezon City may be estimated modestly at ₱700,000.00.
The equipment/items and communication facilities which were found in the premises of Elizabeth
Dimaano and were confiscated by elements of the PC Command of Batangas were all covered by
invoice receipt in the name of CAPT. EFREN SALIDO, RSO Command Coy, MSC, PA. These
items could not have been in the possession of Elizabeth Dimaano if not given for her use by
respondent Commanding General of the Philippine Army.
Aside from the military equipment/items and communications equipment, the raiding team was
also able to confiscate money in the amount of ₱2,870,000.00 and $50,000 US Dollars in the
house of Elizabeth Dimaano on 3 March 1986.
Affidavits of members of the Military Security Unit, Military Security Command, Philippine Army,
stationed at Camp Eldridge, Los Baños, Laguna, disclosed that Elizabeth Dimaano is the mistress
of respondent. That respondent usually goes and stays and sleeps in the alleged house of
Elizabeth Dimaano in Barangay Tengga, Itaas, Batangas City and when he arrives, Elizabeth
Dimaano embraces and kisses respondent. That on February 25, 1986, a person who rode in a
car went to the residence of Elizabeth Dimaano with four (4) attache cases filled with money and
owned by MGen Ramas.
Sworn statement in the record disclosed also that Elizabeth Dimaano had no visible means of
income and is supported by respondent for she was formerly a mere secretary.
Taking in toto the evidence, Elizabeth Dimaano could not have used the military equipment/items
seized in her house on March 3, 1986 without the consent of respondent, he being the
Commanding General of the Philippine Army. It is also impossible for Elizabeth Dimaano to claim
that she owns the ₱2,870,000.00 and $50,000 US Dollars for she had no visible source of income.
This money was never declared in the Statement of Assets and Liabilities of respondent. There
was an intention to cover the existence of these money because these are all ill-gotten and
unexplained wealth. Were it not for the affidavits of the members of the Military Security Unit
assigned at Camp Eldridge, Los Baños, Laguna, the existence and ownership of these money
would have never been known.
The Statement of Assets and Liabilities of respondent were also submitted for scrutiny and
analysis by the Board’s consultant. Although the amount of ₱2,870,000.00 and $50,000 US
Dollars were not included, still it was disclosed that respondent has an unexplained wealth of
₱104,134. 60.
IV. CONCLUSION:
In view of the foregoing, the Board finds that a prima facie case exists against respondent for ill-
gotten and unexplained wealth in the amount of ₱2,974,134.00 and $50,000 US Dollars.
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried
for violation of RA 3019, as amended, otherwise known as "Anti-Graft and Corrupt Practices Act"
and RA 1379, as amended, otherwise known as "The Act for the Forfeiture of Unlawfully Acquired
Property."3
Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic Act No. 1379 ("RA
No. 1379") 4 against Ramas.
Before Ramas could answer the petition, then Solicitor General Francisco I. Chavez filed an
Amended Complaint naming the Republic of the Philippines ("petitioner"), represented by the
PCGG, as plaintiff and Ramas as defendant. The Amended Complaint also impleaded Elizabeth
Dimaano ("Dimaano") as co-defendant.
The Amended Complaint alleged that Ramas was the Commanding General of the Philippine
Army until 1986. On the other hand, Dimaano was a confidential agent of the Military Security
Unit, Philippine Army, assigned as a clerk-typist at the office of Ramas from 1 January 1978 to
February 1979. The Amended Complaint further alleged that Ramas "acquired funds, assets and
properties manifestly out of proportion to his salary as an army officer and his other income from
legitimately acquired property by taking undue advantage of his public office and/or using his
power, authority and influence as such officer of the Armed Forces of the Philippines and as a
subordinate and close associate of the deposed President Ferdinand Marcos."5
The Amended Complaint also alleged that the AFP Board, after a previous inquiry, found
reasonable ground to believe that respondents have violated RA No. 1379.6 The Amended
Complaint prayed for, among others, the forfeiture of respondents’ properties, funds and
equipment in favor of the State.
Ramas filed an Answer with Special and/or Affirmative Defenses and Compulsory Counterclaim to
the Amended Complaint. In his Answer, Ramas contended that his property consisted only of a
residential house at La Vista Subdivision, Quezon City, valued at ₱700,000, which was not out of
proportion to his salary and other legitimate income. He denied ownership of any mansion in Cebu
City and the cash, communications equipment and other items confiscated from the house of
Dimaano.
Dimaano filed her own Answer to the Amended Complaint. Admitting her employment as a clerk-
typist in the office of Ramas from January-November 1978 only, Dimaano claimed ownership of
the monies, communications equipment, jewelry and land titles taken from her house by the
Philippine Constabulary raiding team.
After termination of the pre-trial,7 the court set the case for trial on the merits on 9-11 November
1988.
On 9 November 1988, petitioner asked for a deferment of the hearing due to its lack of preparation
for trial and the absence of witnesses and vital documents to support its case. The court reset the
hearing to 17 and 18 April 1989.
On 13 April 1989, petitioner filed a motion for leave to amend the complaint in order "to charge the
delinquent properties with being subject to forfeiture as having been unlawfully acquired by
defendant Dimaano alone x x x."8
Nevertheless, in an order dated 17 April 1989, the Sandiganbayan proceeded with petitioner’s
presentation of evidence on the ground that the motion for leave to amend complaint did not state
when petitioner would file the amended complaint. The Sandiganbayan further stated that the
subject matter of the amended complaint was on its face vague and not related to the existing
complaint. The Sandiganbayan also held that due to the time that the case had been pending in
court, petitioner should proceed to present its evidence.
After presenting only three witnesses, petitioner asked for a postponement of the trial.
On 28 September 1989, during the continuation of the trial, petitioner manifested its inability to
proceed to trial because of the absence of other witnesses or lack of further evidence to present.
Instead, petitioner reiterated its motion to amend the complaint to conform to the evidence already
presented or to change the averments to show that Dimaano alone unlawfully acquired the monies
or properties subject of the forfeiture.
The Sandiganbayan noted that petitioner had already delayed the case for over a year mainly
because of its many postponements. Moreover, petitioner would want the case to revert to its
preliminary stage when in fact the case had long been ready for trial. The Sandiganbayan ordered
petitioner to prepare for presentation of its additional evidence, if any.
During the trial on 23 March 1990, petitioner again admitted its inability to present further
evidence. Giving petitioner one more chance to present further evidence or to amend the
complaint to conform to its evidence, the Sandiganbayan reset the trial to 18 May 1990. The
102
Sandiganbayan, however, hinted that the re-setting was without prejudice to any action that
private respondents might take under the circumstances.
However, on 18 May 1990, petitioner again expressed its inability to proceed to trial because it
had no further evidence to present. Again, in the interest of justice, the Sandiganbayan granted
petitioner 60 days within which to file an appropriate pleading. The Sandiganbayan, however,
warned petitioner that failure to act would constrain the court to take drastic action.
Private respondents then filed their motions to dismiss based on Republic v. Migrino.9 The Court
held in Migrino that the PCGG does not have jurisdiction to investigate and prosecute military
officers by reason of mere position held without a showing that they are "subordinates" of former
President Marcos.
On 18 November 1991, the Sandiganbayan rendered a resolution, the dispositive portion of which
states:
WHEREFORE, judgment is hereby rendered dismissing the Amended Complaint, without
pronouncement as to costs. The counterclaims are likewise dismissed for lack of merit, but the
confiscated sum of money, communications equipment, jewelry and land titles are ordered
returned to Elizabeth Dimaano.
The records of this case are hereby remanded and referred to the Hon. Ombudsman, who has
primary jurisdiction over the forfeiture cases under R.A. No. 1379, for such appropriate action as
the evidence warrants. This case is also referred to the Commissioner of the Bureau of Internal
Revenue for a determination of any tax liability of respondent Elizabeth Dimaano in connection
herewith.
SO ORDERED.
On 4 December 1991, petitioner filed its Motion for Reconsideration.
In answer to the Motion for Reconsideration, private respondents filed a Joint
Comment/Opposition to which petitioner filed its Reply on 10 January 1992.
On 25 March 1992, the Sandiganbayan rendered a Resolution denying the Motion for
Reconsideration.
Ruling of the Sandiganbayan
The Sandiganbayan dismissed the Amended Complaint on the following grounds:
(1.) The actions taken by the PCGG are not in accordance with the rulings of the Supreme Court
in Cruz, Jr. v. Sandiganbayan10 and Republic v. Migrino11 which involve the same issues.
(2.) No previous inquiry similar to preliminary investigations in criminal cases was conducted
against Ramas and Dimaano.
(3.) The evidence adduced against Ramas does not constitute a prima facie case against him.
(4.) There was an illegal search and seizure of the items confiscated.
The Issues
Petitioner raises the following issues:
A. RESPONDENT COURT SERIOUSLY ERRED IN CONCLUDING THAT PETITIONER’S
EVIDENCE CANNOT MAKE A CASE FOR FORFEITURE AND THAT THERE WAS NO
SHOWING OF CONSPIRACY, COLLUSION OR RELATIONSHIP BY CONSANGUINITY OR
AFFINITY BY AND BETWEEN RESPONDENT RAMAS AND RESPONDENT DIMAANO
NOTWITHSTANDING THE FACT THAT SUCH CONCLUSIONS WERE CLEARLY UNFOUNDED
AND PREMATURE, HAVING BEEN RENDERED PRIOR TO THE COMPLETION OF THE
PRESENTATION OF THE EVIDENCE OF THE PETITIONER.
B. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ACTIONS TAKEN BY
THE PETITIONER, INCLUDING THE FILING OF THE ORIGINAL COMPLAINT AND THE
AMENDED COMPLAINT, SHOULD BE STRUCK OUT IN LINE WITH THE RULINGS OF THE
SUPREME COURT IN CRUZ, JR. v. SANDIGANBAYAN, 194 SCRA 474 AND REPUBLIC v.
MIGRINO, 189 SCRA 289, NOTWITHSTANDING THE FACT THAT:
1. The cases of Cruz, Jr. v. Sandiganbayan, supra, and Republic v. Migrino, supra, are clearly not
applicable to this case;
2. Any procedural defect in the institution of the complaint in Civil Case No. 0037 was cured and/or
waived by respondents with the filing of their respective answers with counterclaim; and
3. The separate motions to dismiss were evidently improper considering that they were filed after
commencement of the presentation of the evidence of the petitioner and even before the latter
was allowed to formally offer its evidence and rest its case;
C. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ARTICLES AND
THINGS SUCH AS SUMS OF MONEY, COMMUNICATIONS EQUIPMENT, JEWELRY AND
LAND TITLES CONFISCATED FROM THE HOUSE OF RESPONDENT DIMAANO WERE
ILLEGALLY SEIZED AND THEREFORE EXCLUDED AS EVIDENCE.12
The Court’s Ruling
First Issue: PCGG’s Jurisdiction to Investigate Private Respondents
This case involves a revisiting of an old issue already decided by this Court in Cruz, Jr. v.
Sandiganbayan13 and Republic v. Migrino.14
The primary issue for resolution is whether the PCGG has the jurisdiction to investigate and cause
the filing of a forfeiture petition against Ramas and Dimaano for unexplained wealth under RA No.
1379.
We hold that PCGG has no such jurisdiction.
The PCGG created the AFP Board to investigate the unexplained wealth and corrupt practices of
AFP personnel, whether in the active service or retired.15 The PCGG tasked the AFP Board to
make the necessary recommendations to appropriate government agencies on the action to be
taken based on its findings.16 The PCGG gave this task to the AFP Board pursuant to the
PCGG’s power under Section 3 of EO No. 1 "to conduct investigation as may be necessary in
order to accomplish and to carry out the purposes of this order." EO No. 1 gave the PCGG specific
responsibilities, to wit:
SEC. 2. The Commission shall be charged with the task of assisting the President in regard to the
following matters:
(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates, whether located in the Philippines
or abroad, including the takeover and sequestration of all business enterprises and entities owned
or controlled by them, during his administration, directly or through nominees, by taking undue
advantage of their public office and/ or using their powers, authority, influence, connections or
relationship.
(b) The investigation of such cases of graft and corruption as the President may assign to the
Commission from time to time.
x x x.
The PCGG, through the AFP Board, can only investigate the unexplained wealth and corrupt
practices of AFP personnel who fall under either of the two categories mentioned in Section 2 of
EO No. 1. These are: (1) AFP personnel who have accumulated ill-gotten wealth during the
administration of former President Marcos by being the latter’s immediate family, relative,
subordinate or close associate, taking undue advantage of their public office or using their powers,
influence x x x;17 or (2) AFP personnel involved in other cases of graft and corruption provided
the President assigns their cases to the PCGG.18
Petitioner, however, does not claim that the President assigned Ramas’ case to the PCGG.
Therefore, Ramas’ case should fall under the first category of AFP personnel before the PCGG
could exercise its jurisdiction over him. Petitioner argues that Ramas was undoubtedly a
subordinate of former President Marcos because of his position as the Commanding General of
the Philippine Army. Petitioner claims that Ramas’ position enabled him to receive orders directly
from his commander-in-chief, undeniably making him a subordinate of former President Marcos.
We hold that Ramas was not a "subordinate" of former President Marcos in the sense
contemplated under EO No. 1 and its amendments.
Mere position held by a military officer does not automatically make him a "subordinate" as this
term is used in EO Nos. 1, 2, 14 and 14-A absent a showing that he enjoyed close association
with former President Marcos. Migrino discussed this issue in this wise:
A close reading of EO No. 1 and related executive orders will readily show what is contemplated
within the term ‘subordinate.’ The Whereas Clauses of EO No. 1 express the urgent need to
recover the ill-gotten wealth amassed by former President Ferdinand E. Marcos, his immediate
family, relatives, and close associates both here and abroad.
EO No. 2 freezes ‘all assets and properties in the Philippines in which former President Marcos
and/or his wife, Mrs. Imelda Marcos, their close relatives, subordinates, business associates,
dummies, agents, or nominees have any interest or participation.’
Applying the rule in statutory construction known as ejusdem generis that is-
‘[W]here general words follow an enumeration of persons or things by words of a particular and
specific meaning, such general words are not to be construed in their widest extent, but are to be
held as applying only to persons or things of the same kind or class as those specifically
103
mentioned [Smith, Bell & Co, Ltd. vs. Register of Deeds of Davao, 96 Phil. 53, 58, citing Black on
Interpretation of Laws, 2nd Ed., 203].’
[T]he term "subordinate" as used in EO Nos. 1 & 2 refers to one who enjoys a close association
with former President Marcos and/or his wife, similar to the immediate family member, relative,
and close associate in EO No. 1 and the close relative, business associate, dummy, agent, or
nominee in EO No. 2.
xxx
It does not suffice, as in this case, that the respondent is or was a government official or employee
during the administration of former President Marcos. There must be a prima facie showing that
the respondent unlawfully accumulated wealth by virtue of his close association or relation with
former Pres. Marcos and/or his wife. (Emphasis supplied)
Ramas’ position alone as Commanding General of the Philippine Army with the rank of Major
General19 does not suffice to make him a "subordinate" of former President Marcos for purposes
of EO No. 1 and its amendments. The PCGG has to provide a prima facie showing that Ramas
was a close associate of former President Marcos, in the same manner that business associates,
dummies, agents or nominees of former President Marcos were close to him. Such close
association is manifested either by Ramas’ complicity with former President Marcos in the
accumulation of ill-gotten wealth by the deposed President or by former President Marcos’
acquiescence in Ramas’ own accumulation of ill-gotten wealth if any.
This, the PCGG failed to do.
Petitioner’s attempt to differentiate the instant case from Migrino does not convince us. Petitioner
argues that unlike in Migrino, the AFP Board Resolution in the instant case states that the AFP
Board conducted the investigation pursuant to EO Nos. 1, 2, 14 and 14-A in relation to RA No.
1379. Petitioner asserts that there is a presumption that the PCGG was acting within its
jurisdiction of investigating crony-related cases of graft and corruption and that Ramas was truly a
subordinate of the former President. However, the same AFP Board Resolution belies this
contention. Although the Resolution begins with such statement, it ends with the following
recommendation:
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried
for violation of RA 3019, as amended, otherwise known as "Anti-Graft and Corrupt Practices Act"
and RA 1379, as amended, otherwise known as "The Act for the Forfeiture of Unlawfully Acquired
Property."20
Thus, although the PCGG sought to investigate and prosecute private respondents under EO Nos.
1, 2, 14 and 14-A, the result yielded a finding of violation of Republic Acts Nos. 3019 and 1379
without any relation to EO Nos. 1, 2, 14 and 14-A. This absence of relation to EO No. 1 and its
amendments proves fatal to petitioner’s case. EO No. 1 created the PCGG for a specific and
limited purpose, and necessarily its powers must be construed to address such specific and
limited purpose.
Moreover, the resolution of the AFP Board and even the Amended Complaint do not show that the
properties Ramas allegedly owned were accumulated by him in his capacity as a "subordinate" of
his commander-in-chief. Petitioner merely enumerated the properties Ramas allegedly owned and
suggested that these properties were disproportionate to his salary and other legitimate income
without showing that Ramas amassed them because of his close association with former
President Marcos. Petitioner, in fact, admits that the AFP Board resolution does not contain a
finding that Ramas accumulated his wealth because of his close association with former President
Marcos, thus:
10. While it is true that the resolution of the Anti-Graft Board of the New Armed Forces of the
Philippines did not categorically find a prima facie evidence showing that respondent Ramas
unlawfully accumulated wealth by virtue of his close association or relation with former President
Marcos and/or his wife, it is submitted that such omission was not fatal. The resolution of the Anti-
Graft Board should be read in the context of the law creating the same and the objective of the
investigation which was, as stated in the above, pursuant to Republic Act Nos. 3019 and 1379 in
relation to Executive Order Nos. 1, 2, 14 and 14-a;21 (Emphasis supplied)
Such omission is fatal. Petitioner forgets that it is precisely a prima facie showing that the ill-gotten
wealth was accumulated by a "subordinate" of former President Marcos that vests jurisdiction on
PCGG. EO No. 122 clearly premises the creation of the PCGG on the urgent need to recover all
ill-gotten wealth amassed by former President Marcos, his immediate family, relatives,
subordinates and close associates. Therefore, to say that such omission was not fatal is clearly
contrary to the intent behind the creation of the PCGG.
In Cruz, Jr. v. Sandiganbayan,23 the Court outlined the cases that fall under the jurisdiction of the
PCGG pursuant to EO Nos. 1, 2,24 14,25 14-A:26
A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation with Sections 1, 2 and
3 of Executive Order No. 14, shows what the authority of the respondent PCGG to investigate and
prosecute covers:
(a) the investigation and prosecution of the civil action for the recovery of ill-gotten wealth under
Republic Act No. 1379, accumulated by former President Marcos, his immediate family, relatives,
subordinates and close associates, whether located in the Philippines or abroad, including the
take-over or sequestration of all business enterprises and entities owned or controlled by them,
during his administration, directly or through his nominees, by taking undue advantage of their
public office and/or using their powers, authority and influence, connections or relationships; and
(b) the investigation and prosecution of such offenses committed in the acquisition of said ill-
gotten wealth as contemplated under Section 2(a) of Executive Order No. 1.
However, other violations of the Anti-Graft and Corrupt Practices Act not otherwise falling under
the foregoing categories, require a previous authority of the President for the respondent PCGG to
investigate and prosecute in accordance with Section 2 (b) of Executive Order No. 1. Otherwise,
jurisdiction over such cases is vested in the Ombudsman and other duly authorized investigating
agencies such as the provincial and city prosecutors, their assistants, the Chief State Prosecutor
and his assistants and the state prosecutors. (Emphasis supplied)
The proper government agencies, and not the PCGG, should investigate and prosecute forfeiture
petitions not falling under EO No. 1 and its amendments. The preliminary investigation of
unexplained wealth amassed on or before 25 February 1986 falls under the jurisdiction of the
Ombudsman, while the authority to file the corresponding forfeiture petition rests with the Solicitor
General.27 The Ombudsman Act or Republic Act No. 6770 ("RA No. 6770") vests in the
Ombudsman the power to conduct preliminary investigation and to file forfeiture proceedings
involving unexplained wealth amassed after 25 February 1986.28
After the pronouncements of the Court in Cruz, the PCGG still pursued this case despite the
absence of a prima facie finding that Ramas was a "subordinate" of former President Marcos. The
petition for forfeiture filed with the Sandiganbayan should be dismissed for lack of authority by the
PCGG to investigate respondents since there is no prima facie showing that EO No. 1 and its
amendments apply to respondents. The AFP Board Resolution and even the Amended Complaint
state that there are violations of RA Nos. 3019 and 1379. Thus, the PCGG should have
recommended Ramas’ case to the Ombudsman who has jurisdiction to conduct the preliminary
investigation of ordinary unexplained wealth and graft cases. As stated in Migrino:
[But] in view of the patent lack of authority of the PCGG to investigate and cause the prosecution
of private respondent for violation of Rep. Acts Nos. 3019 and 1379, the PCGG must also be
enjoined from proceeding with the case, without prejudice to any action that may be taken by the
proper prosecutory agency. The rule of law mandates that an agency of government be allowed to
exercise only the powers granted to it.
Petitioner’s argument that private respondents have waived any defect in the filing of the forfeiture
petition by submitting their respective Answers with counterclaim deserves no merit as well.
Petitioner has no jurisdiction over private respondents. Thus, there is no jurisdiction to waive in the
first place. The PCGG cannot exercise investigative or prosecutorial powers never granted to it.
PCGG’s powers are specific and limited. Unless given additional assignment by the President,
PCGG’s sole task is only to recover the ill-gotten wealth of the Marcoses, their relatives and
cronies.29 Without these elements, the PCGG cannot claim jurisdiction over a case.
Private respondents questioned the authority and jurisdiction of the PCGG to investigate and
prosecute their cases by filing their Motion to Dismiss as soon as they learned of the
pronouncement of the Court in Migrino. This case was decided on 30 August 1990, which explains
why private respondents only filed their Motion to Dismiss on 8 October 1990. Nevertheless, we
have held that the parties may raise lack of jurisdiction at any stage of the proceeding.30 Thus, we
hold that there was no waiver of jurisdiction in this case. Jurisdiction is vested by law and not by
the parties to an action.31
Consequently, the petition should be dismissed for lack of jurisdiction by the PCGG to conduct the
preliminary investigation. The Ombudsman may still conduct the proper preliminary investigation
for violation of RA No. 1379, and if warranted, the Solicitor General may file the forfeiture petition
104
with the Sandiganbayan.32 The right of the State to forfeit unexplained wealth under RA No. 1379
is not subject to prescription, laches or estoppel.33
Second Issue: Propriety of Dismissal of Case
Before Completion of Presentation of Evidence
Petitioner also contends that the Sandiganbayan erred in dismissing the case before completion of
the presentation of petitioner’s evidence.
We disagree.
Based on the findings of the Sandiganbayan and the records of this case, we find that petitioner
has only itself to blame for non-completion of the presentation of its evidence. First, this case has
been pending for four years before the Sandiganbayan dismissed it. Petitioner filed its Amended
Complaint on 11 August 1987, and only began to present its evidence on 17 April 1989. Petitioner
had almost two years to prepare its evidence. However, despite this sufficient time, petitioner still
delayed the presentation of the rest of its evidence by filing numerous motions for postponements
and extensions. Even before the date set for the presentation of its evidence, petitioner filed, on
13 April 1989, a Motion for Leave to Amend the Complaint.34 The motion sought "to charge the
delinquent properties (which comprise most of petitioner’s evidence) with being subject to
forfeiture as having been unlawfully acquired by defendant Dimaano alone x x x."
The Sandiganbayan, however, refused to defer the presentation of petitioner’s evidence since
petitioner did not state when it would file the amended complaint. On 18 April 1989, the
Sandiganbayan set the continuation of the presentation of evidence on 28-29 September and 9-11
October 1989, giving petitioner ample time to prepare its evidence. Still, on 28 September 1989,
petitioner manifested its inability to proceed with the presentation of its evidence. The
Sandiganbayan issued an Order expressing its view on the matter, to wit:
The Court has gone through extended inquiry and a narration of the above events because this
case has been ready for trial for over a year and much of the delay hereon has been due to the
inability of the government to produce on scheduled dates for pre-trial and for trial documents and
witnesses, allegedly upon the failure of the military to supply them for the preparation of the
presentation of evidence thereon. Of equal interest is the fact that this Court has been held to task
in public about its alleged failure to move cases such as this one beyond the preliminary stage,
when, in view of the developments such as those of today, this Court is now faced with a situation
where a case already in progress will revert back to the preliminary stage, despite a five-month
pause where appropriate action could have been undertaken by the plaintiff Republic.35
On 9 October 1989, the PCGG manifested in court that it was conducting a preliminary
investigation on the unexplained wealth of private respondents as mandated by RA No. 1379.36
The PCGG prayed for an additional four months to conduct the preliminary investigation. The
Sandiganbayan granted this request and scheduled the presentation of evidence on 26-29 March
1990. However, on the scheduled date, petitioner failed to inform the court of the result of the
preliminary investigation the PCGG supposedly conducted. Again, the Sandiganbayan gave
petitioner until 18 May 1990 to continue with the presentation of its evidence and to inform the
court of "what lies ahead insofar as the status of the case is concerned x x x."37 Still on the date
set, petitioner failed to present its evidence. Finally, on 11 July 1990, petitioner filed its Re-
Amended Complaint.38 The Sandiganbayan correctly observed that a case already pending for
years would revert to its preliminary stage if the court were to accept the Re-Amended Complaint.
Based on these circumstances, obviously petitioner has only itself to blame for failure to complete
the presentation of its evidence. The Sandiganbayan gave petitioner more than sufficient time to
finish the presentation of its evidence. The Sandiganbayan overlooked petitioner’s delays and yet
petitioner ended the long-string of delays with the filing of a Re-Amended Complaint, which would
only prolong even more the disposition of the case.
Moreover, the pronouncements of the Court in Migrino and Cruz prompted the Sandiganbayan to
dismiss the case since the PCGG has no jurisdiction to investigate and prosecute the case against
private respondents. This alone would have been sufficient legal basis for the Sandiganbayan to
dismiss the forfeiture case against private respondents.
Thus, we hold that the Sandiganbayan did not err in dismissing the case before completion of the
presentation of petitioner’s evidence.
Third Issue: Legality of the Search and Seizure
Petitioner claims that the Sandiganbayan erred in declaring the properties confiscated from
Dimaano’s house as illegally seized and therefore inadmissible in evidence. This issue bears a
significant effect on petitioner’s case since these properties comprise most of petitioner’s evidence
against private respondents. Petitioner will not have much evidence to support its case against
private respondents if these properties are inadmissible in evidence.
On 3 March 1986, the Constabulary raiding team served at Dimaano’s residence a search warrant
captioned "Illegal Possession of Firearms and Ammunition." Dimaano was not present during the
raid but Dimaano’s cousins witnessed the raid. The raiding team seized the items detailed in the
seizure receipt together with other items not included in the search warrant. The raiding team
seized these items: one baby armalite rifle with two magazines; 40 rounds of 5.56 ammunition;
one pistol, caliber .45; communications equipment, cash consisting of ₱2,870,000 and
US$50,000, jewelry, and land titles.
Petitioner wants the Court to take judicial notice that the raiding team conducted the search and
seizure "on March 3, 1986 or five days after the successful EDSA revolution."39 Petitioner argues
that a revolutionary government was operative at that time by virtue of Proclamation No. 1
announcing that President Aquino and Vice President Laurel were "taking power in the name and
by the will of the Filipino people."40 Petitioner asserts that the revolutionary government effectively
withheld the operation of the 1973 Constitution which guaranteed private respondents’
exclusionary right.
Moreover, petitioner argues that the exclusionary right arising from an illegal search applies only
beginning 2 February 1987, the date of ratification of the 1987 Constitution. Petitioner contends
that all rights under the Bill of Rights had already reverted to its embryonic stage at the time of the
search. Therefore, the government may confiscate the monies and items taken from Dimaano and
use the same in evidence against her since at the time of their seizure, private respondents did
not enjoy any constitutional right.
Petitioner is partly right in its arguments.
The EDSA Revolution took place on 23-25 February 1986. As succinctly stated in President
Aquino’s Proclamation No. 3 dated 25 March 1986, the EDSA Revolution was "done in defiance of
the provisions of the 1973 Constitution."41 The resulting government was indisputably a
revolutionary government bound by no constitution or legal limitations except treaty obligations
that the revolutionary government, as the de jure government in the Philippines, assumed under
international law.
The correct issues are: (1) whether the revolutionary government was bound by the Bill of Rights
of the 1973 Constitution during the interregnum, that is, after the actual and effective take-over of
power by the revolutionary government following the cessation of resistance by loyalist forces up
to 24 March 1986 (immediately before the adoption of the Provisional Constitution); and (2)
whether the protection accorded to individuals under the International Covenant on Civil and
Political Rights ("Covenant") and the Universal Declaration of Human Rights ("Declaration")
remained in effect during the interregnum.
We hold that the Bill of Rights under the 1973 Constitution was not operative during the
interregnum. However, we rule that the protection accorded to individuals under the Covenant and
the Declaration remained in effect during the interregnum.
During the interregnum, the directives and orders of the revolutionary government were the
supreme law because no constitution limited the extent and scope of such directives and orders.
With the abrogation of the 1973 Constitution by the successful revolution, there was no municipal
law higher than the directives and orders of the revolutionary government. Thus, during the
interregnum, a person could not invoke any exclusionary right under a Bill of Rights because there
was neither a constitution nor a Bill of Rights during the interregnum. As the Court explained in
Letter of Associate Justice Reynato S. Puno:42
A revolution has been defined as "the complete overthrow of the established government in any
country or state by those who were previously subject to it" or as "a sudden, radical and
fundamental change in the government or political system, usually effected with violence or at
least some acts of violence." In Kelsen's book, General Theory of Law and State, it is defined as
that which "occurs whenever the legal order of a community is nullified and replaced by a new
order . . . a way not prescribed by the first order itself."
It was through the February 1986 revolution, a relatively peaceful one, and more popularly known
as the "people power revolution" that the Filipino people tore themselves away from an existing
regime. This revolution also saw the unprecedented rise to power of the Aquino government.
From the natural law point of view, the right of revolution has been defined as "an inherent right of
a people to cast out their rulers, change their policy or effect radical reforms in their system of
government or institutions by force or a general uprising when the legal and constitutional
105
methods of making such change have proved inadequate or are so obstructed as to be
unavailable." It has been said that "the locus of positive law-making power lies with the people of
the state" and from there is derived "the right of the people to abolish, to reform and to alter any
existing form of government without regard to the existing constitution."
xxx
It is widely known that Mrs. Aquino’s rise to the presidency was not due to constitutional
processes; in fact, it was achieved in violation of the provisions of the 1973 Constitution as a
Batasang Pambansa resolution had earlier declared Mr. Marcos as the winner in the 1986
presidential election. Thus it can be said that the organization of Mrs. Aquino’s Government which
was met by little resistance and her control of the state evidenced by the appointment of the
Cabinet and other key officers of the administration, the departure of the Marcos Cabinet officials,
revamp of the Judiciary and the Military signaled the point where the legal system then in effect,
had ceased to be obeyed by the Filipino. (Emphasis supplied)
To hold that the Bill of Rights under the 1973 Constitution remained operative during the
interregnum would render void all sequestration orders issued by the Philippine Commission on
Good Government ("PCGG") before the adoption of the Freedom Constitution. The sequestration
orders, which direct the freezing and even the take-over of private property by mere executive
issuance without judicial action, would violate the due process and search and seizure clauses of
the Bill of Rights.
During the interregnum, the government in power was concededly a revolutionary government
bound by no constitution. No one could validly question the sequestration orders as violative of the
Bill of Rights because there was no Bill of Rights during the interregnum. However, upon the
adoption of the Freedom Constitution, the sequestered companies assailed the sequestration
orders as contrary to the Bill of Rights of the Freedom Constitution.
In Bataan Shipyard & Engineering Co. Inc. vs. Presidential Commission on Good Government,43
petitioner Baseco, while conceding there was no Bill of Rights during the interregnum, questioned
the continued validity of the sequestration orders upon adoption of the Freedom Constitution in
view of the due process clause in its Bill of Rights. The Court ruled that the Freedom Constitution,
and later the 1987 Constitution, expressly recognized the validity of sequestration orders, thus:
If any doubt should still persist in the face of the foregoing considerations as to the validity and
propriety of sequestration, freeze and takeover orders, it should be dispelled by the fact that these
particular remedies and the authority of the PCGG to issue them have received constitutional
approbation and sanction. As already mentioned, the Provisional or "Freedom" Constitution
recognizes the power and duty of the President to enact "measures to achieve the mandate of the
people to . . . (r)ecover ill-gotten properties amassed by the leaders and supporters of the previous
regime and protect the interest of the people through orders of sequestration or freezing of assets
or accounts." And as also already adverted to, Section 26, Article XVIII of the 1987 Constitution
treats of, and ratifies the "authority to issue sequestration or freeze orders under Proclamation No.
3 dated March 25, 1986."
The framers of both the Freedom Constitution and the 1987 Constitution were fully aware that the
sequestration orders would clash with the Bill of Rights. Thus, the framers of both constitutions
had to include specific language recognizing the validity of the sequestration orders. The following
discourse by Commissioner Joaquin G. Bernas during the deliberations of the Constitutional
Commission is instructive:
FR. BERNAS: Madam President, there is something schizophrenic about the arguments in
defense of the present amendment.
For instance, I have carefully studied Minister Salonga’s lecture in the Gregorio Araneta University
Foundation, of which all of us have been given a copy. On the one hand, he argues that
everything the Commission is doing is traditionally legal. This is repeated by Commissioner
Romulo also. Minister Salonga spends a major portion of his lecture developing that argument. On
the other hand, almost as an afterthought, he says that in the end what matters are the results and
not the legal niceties, thus suggesting that the PCGG should be allowed to make some legal
shortcuts, another word for niceties or exceptions.
Now, if everything the PCGG is doing is legal, why is it asking the CONCOM for special
protection? The answer is clear. What they are doing will not stand the test of ordinary due
process, hence they are asking for protection, for exceptions. Grandes malos, grandes remedios,
fine, as the saying stands, but let us not say grandes malos, grande y malos remedios. That is not
an allowable extrapolation. Hence, we should not give the exceptions asked for, and let me
elaborate and give three reasons:
First, the whole point of the February Revolution and of the work of the CONCOM is to hasten
constitutional normalization. Very much at the heart of the constitutional normalization is the full
effectivity of the Bill of Rights. We cannot, in one breath, ask for constitutional normalization and at
the same time ask for a temporary halt to the full functioning of what is at the heart of
constitutionalism. That would be hypocritical; that would be a repetition of Marcosian protestation
of due process and rule of law. The New Society word for that is "backsliding." It is tragic when we
begin to backslide even before we get there.
Second, this is really a corollary of the first. Habits tend to become ingrained. The committee
report asks for extraordinary exceptions from the Bill of Rights for six months after the convening
of Congress, and Congress may even extend this longer.
Good deeds repeated ripen into virtue; bad deeds repeated become vice. What the committee
report is asking for is that we should allow the new government to acquire the vice of disregarding
the Bill of Rights.
Vices, once they become ingrained, become difficult to shed. The practitioners of the vice begin to
think that they have a vested right to its practice, and they will fight tooth and nail to keep the
franchise. That would be an unhealthy way of consolidating the gains of a democratic revolution.
Third, the argument that what matters are the results and not the legal niceties is an argument that
is very disturbing. When it comes from a staunch Christian like Commissioner Salonga, a Minister,
and repeated verbatim by another staunch Christian like Commissioner Tingson, it becomes
doubly disturbing and even discombobulating. The argument makes the PCGG an auctioneer,
placing the Bill of Rights on the auction block. If the price is right, the search and seizure clause
will be sold. "Open your Swiss bank account to us and we will award you the search and seizure
clause. You can keep it in your private safe."
Alternatively, the argument looks on the present government as hostage to the hoarders of hidden
wealth. The hoarders will release the hidden health if the ransom price is paid and the ransom
price is the Bill of Rights, specifically the due process in the search and seizure clauses. So, there
is something positively revolving about either argument. The Bill of Rights is not for sale to the
highest bidder nor can it be used to ransom captive dollars. This nation will survive and grow
strong, only if it would become convinced of the values enshrined in the Constitution of a price that
is beyond monetary estimation.
For these reasons, the honorable course for the Constitutional Commission is to delete all of
Section 8 of the committee report and allow the new Constitution to take effect in full vigor. If
Section 8 is deleted, the PCGG has two options. First, it can pursue the Salonga and the Romulo
argument — that what the PCGG has been doing has been completely within the pale of the law.
If sustained, the PCGG can go on and should be able to go on, even without the support of
Section 8. If not sustained, however, the PCGG has only one honorable option, it must bow to the
majesty of the Bill of Rights.
The PCGG extrapolation of the law is defended by staunch Christians. Let me conclude with what
another Christian replied when asked to toy around with the law. From his prison cell, Thomas
More said, "I'll give the devil benefit of law for my nation’s safety sake." I ask the Commission to
give the devil benefit of law for our nation’s sake. And we should delete Section 8.
Thank you, Madam President. (Emphasis supplied)
Despite the impassioned plea by Commissioner Bernas against the amendment excepting
sequestration orders from the Bill of Rights, the Constitutional Commission still adopted the
amendment as Section 26,44 Article XVIII of the 1987 Constitution. The framers of the
Constitution were fully aware that absent Section 26, sequestration orders would not stand the test
of due process under the Bill of Rights.
Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force during the
interregnum, absent a constitutional provision excepting sequestration orders from such Bill of
Rights, would clearly render all sequestration orders void during the interregnum. Nevertheless,
even during the interregnum the Filipino people continued to enjoy, under the Covenant and the
Declaration, almost the same rights found in the Bill of Rights of the 1973 Constitution.
The revolutionary government, after installing itself as the de jure government, assumed
responsibility for the State’s good faith compliance with the Covenant to which the Philippines is a
signatory. Article 2(1) of the Covenant requires each signatory State "to respect and to ensure to
all individuals within its territory and subject to its jurisdiction the rights45 recognized in the present
106
Covenant." Under Article 17(1) of the Covenant, the revolutionary government had the duty to
insure that "[n]o one shall be subjected to arbitrary or unlawful interference with his privacy, family,
home or correspondence."
The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that "[n]o
one shall be arbitrarily deprived of his property." Although the signatories to the Declaration did not
intend it as a legally binding document, being only a declaration, the Court has interpreted the
Declaration as part of the generally accepted principles of international law and binding on the
State.46 Thus, the revolutionary government was also obligated under international law to observe
the rights47 of individuals under the Declaration.
The revolutionary government did not repudiate the Covenant or the Declaration during the
interregnum. Whether the revolutionary government could have repudiated all its obligations under
the Covenant or the Declaration is another matter and is not the issue here. Suffice it to say that
the Court considers the Declaration as part of customary international law, and that Filipinos as
human beings are proper subjects of the rules of international law laid down in the Covenant. The
fact is the revolutionary government did not repudiate the Covenant or the Declaration in the same
way it repudiated the 1973 Constitution. As the de jure government, the revolutionary government
could not escape responsibility for the State’s good faith compliance with its treaty obligations
under international law.
It was only upon the adoption of the Provisional Constitution on 25 March 1986 that the directives
and orders of the revolutionary government became subject to a higher municipal law that, if
contravened, rendered such directives and orders void. The Provisional Constitution adopted
verbatim the Bill of Rights of the 1973 Constitution.48 The Provisional Constitution served as a
self-limitation by the revolutionary government to avoid abuses of the absolute powers entrusted
to it by the people.
During the interregnum when no constitution or Bill of Rights existed, directives and orders issued
by government officers were valid so long as these officers did not exceed the authority granted
them by the revolutionary government. The directives and orders should not have also violated the
Covenant or the Declaration. In this case, the revolutionary government presumptively sanctioned
the warrant since the revolutionary government did not repudiate it. The warrant, issued by a
judge upon proper application, specified the items to be searched and seized. The warrant is thus
valid with respect to the items specifically described in the warrant.
However, the Constabulary raiding team seized items not included in the warrant. As admitted by
petitioner’s witnesses, the raiding team confiscated items not included in the warrant, thus:
Direct Examination of Capt. Rodolfo Sebastian
AJ AMORES
Q. According to the search warrant, you are supposed to seize only for weapons. What else, aside
from the weapons, were seized from the house of Miss Elizabeth Dimaano?
A. The communications equipment, money in Philippine currency and US dollars, some jewelries,
land titles, sir.
Q. Now, the search warrant speaks only of weapons to be seized from the house of Elizabeth
Dimaano. Do you know the reason why your team also seized other properties not mentioned in
said search warrant?
A. During the conversation right after the conduct of said raid, I was informed that the reason why
they also brought the other items not included in the search warrant was because the money and
other jewelries were contained in attaché cases and cartons with markings "Sony Trinitron", and I
think three (3) vaults or steel safes. Believing that the attaché cases and the steel safes were
containing firearms, they forced open these containers only to find out that they contained money.
xxx
Q. You said you found money instead of weapons, do you know the reason why your team seized
this money instead of weapons?
A. I think the overall team leader and the other two officers assisting him decided to bring along
also the money because at that time it was already dark and they felt most secured if they will
bring that because they might be suspected also of taking money out of those items, your
Honor.49
Cross-examination
Atty. Banaag
Q. Were you present when the search warrant in connection with this case was applied before the
Municipal Trial Court of Batangas, Branch 1?
A. Yes, sir.
Q. And the search warrant applied for by you was for the search and seizure of five (5) baby
armalite rifles M-16 and five (5) boxes of ammunition?
A. Yes, sir.
xxx
AJ AMORES
Q. Before you applied for a search warrant, did you conduct surveillance in the house of Miss
Elizabeth Dimaano?
A. The Intelligence Operatives conducted surveillance together with the MSU elements, your
Honor.
Q. And this party believed there were weapons deposited in the house of Miss Elizabeth
Dimaano?
A. Yes, your Honor.
Q. And they so swore before the Municipal Trial Judge?
A. Yes, your Honor.
Q. But they did not mention to you, the applicant for the search warrant, any other properties or
contraband which could be found in the residence of Miss Elizabeth Dimaano?
A. They just gave us still unconfirmed report about some hidden items, for instance, the
communications equipment and money. However, I did not include that in the application for
search warrant considering that we have not established concrete evidence about that. So when…
Q. So that when you applied for search warrant, you had reason to believe that only weapons
were in the house of Miss Elizabeth Dimaano?
A. Yes, your Honor.50
xxx
Q. You stated that a .45 caliber pistol was seized along with one armalite rifle M-16 and how many
ammunition?
A. Forty, sir.
Q. And this became the subject of your complaint with the issuing Court, with the fiscal’s office
who charged Elizabeth Dimaano for Illegal Possession of Firearms and Ammunition?
A. Yes, sir.
Q. Do you know what happened to that case?
A. I think it was dismissed, sir.
Q. In the fiscal’s office?
A. Yes, sir.
Q. Because the armalite rifle you seized, as well as the .45 caliber pistol had a Memorandum
Receipt in the name of Felino Melegrito, is that not correct?
A. I think that was the reason, sir.
Q. There were other articles seized which were not included in the search warrant, like for
instance, jewelries. Why did you seize the jewelries?
A. I think it was the decision of the overall team leader and his assistant to bring along also the
jewelries and other items, sir. I do not really know where it was taken but they brought along also
these articles. I do not really know their reason for bringing the same, but I just learned that these
were taken because they might get lost if they will just leave this behind.
xxx
Q. How about the money seized by your raiding team, they were not also included in the search
warrant?
A. Yes sir, but I believe they were also taken considering that the money was discovered to be
contained in attaché cases.1âwphi1 These attaché cases were suspected to be containing pistols
or other high powered firearms, but in the course of the search the contents turned out to be
money. So the team leader also decided to take this considering that they believed that if they will
just leave the money behind, it might get lost also.
Q. That holds true also with respect to the other articles that were seized by your raiding team, like
Transfer Certificates of Title of lands?
A. Yes, sir. I think they were contained in one of the vaults that were opened.51
It is obvious from the testimony of Captain Sebastian that the warrant did not include the monies,
communications equipment, jewelry and land titles that the raiding team confiscated. The search
warrant did not particularly describe these items and the raiding team confiscated them on its own
authority. The raiding team had no legal basis to seize these items without showing that these
107
items could be the subject of warrantless search and seizure.52 Clearly, the raiding team
exceeded its authority when it seized these items.
The seizure of these items was therefore void, and unless these items are contraband per se,53
and they are not, they must be returned to the person from whom the raiding seized them.
However, we do not declare that such person is the lawful owner of these items, merely that the
search and seizure warrant could not be used as basis to seize and withhold these items from the
possessor. We thus hold that these items should be returned immediately to Dimaano.
WHEREFORE, the petition for certiorari is DISMISSED. The questioned Resolutions of the
Sandiganbayan dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037, remanding
the records of this case to the Ombudsman for such appropriate action as the evidence may
warrant, and referring this case to the Commissioner of the Bureau of Internal Revenue for a
determination of any tax liability of respondent Elizabeth Dimaano, are AFFIRMED.
SO ORDERED.
Bellosillo, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr. and Azcuna, JJ., concur.
Davide, Jr., C.J., in the result. I concur with Mr. Justice Vitug in his concurring opinion.
Puno and Vitug, JJ., see separate opinion
Panganiban, J., in the result.
Quisumbing and Sandoval-Gutierrez, JJ., on official leave.
Ynares-Santiago, J., in the result. I concur in the separate opinion of J. Reynato Puno.
Tinga, J., separate opinion reserved.
Footnotes
1 Composed of Justices Regino Hermosisima, Jr., Francis Garchitorena and Cipriano del Rosario.
2 Republic v. Migrino, G.R. No. 89483, 30 August 1990, 189 SCRA 289.
3 Records of the Sandiganbayan [hereinafter Records], pp. 53-55.
4 "An Act Declaring Forfeiture in Favor of the State Any Property Found to Have Been Unlawfully
Acquired by Any Public Officer or Employee and Providing for the Proceedings Therefor."
5 Records, p. 14.
6 Ibid., p.16.
7 Ibid., p. 166.
8 Ibid., p. 286.
9 Supra, note 2.
10 G.R. No. 94595, 26 February 1991, 194 SCRA 474.
11 Supra, note 2.
12 Rollo, p. 21.
13 Supra, note 10.
14 Supra, note 2.
15 Republic v. Migrino, supra, note 2.
16 Supra, note 2.
17 Republic v. Migrino, supra, note 2.
18 Republic v. Sandiganbayan, G.R. No. 115906, 29 September 1994, 237 SCRA 242.
19 Presidential Decree No. 1769 "Amending PD 360 dated December 30, 1973 adjusting the
authorized grades in the command and staff structure of the AFP" dated 12 January 1981. The
ranking is as follows:
Chief of Staff, AFP General (0-10)
Vice Chief of Staff, AFP Lt. General (0-9)
Commander of Major Services, AFP Maj. General (0-8)
xxx.
20 Records, pp. 54-55.
21 Rollo, p. 27.
22 "WHEREAS, vast resources of the government have been amassed by former President
Ferdinand E. Marcos, his immediate family, relatives and close associates both here and abroad;
WHEREAS, there is an urgent need to recover all ill-gotten wealth;
xxx"
23 Supra, note 10.
24 "Regarding the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by
Former President Marcos, Mrs. Imelda Marcos, their Close Relatives, Subordinates, Business
Associates, Dummies, Agents or Nominees" dated 12 March 1986.
25 "Defining the Jurisdiction over Cases Involving the Ill-gotten Wealth of Former President
Ferdinand E. Marcos, Mrs. Imelda R. Marcos, Members of their Immediate Family, Close
Relatives, Subordinates, and/or Business Associates, Dummies, Agents and Nominees" dated 7
May 1986.
26 "Amending Executive Order No. 14" dated 18 August 1986.
27 Republic v. Sandiganbayan, G.R. No. 90529, 16 August 1991, 200 SCRA 667.
28 Section 15 (11), RA No. 6770.
29 Republic v. Migrino, supra, note 2.
30 Cudia v. CA, 348 Phil. 190 (1998).
31 Monsanto v. Zerna, G.R. No. 142501, 7 December 2001, 371 SCRA 664; Republic v. Estipular,
G.R. No. 136588, 20 July 2000, 336 SCRA 333.
32 Republic v. Migrino, supra, note 2.
33 Cojuangco, Jr. v. Presidential Commission on Good Gov’t., G.R. Nos. 92319-20, 2 October
1990, 190 SCRA 226.
34 Records, p. 285.
35 Records, p. 347.
36 Ibid., p. 346.
37 Ibid., p. 395.
38 Ibid., p. 422.
39 Rollo, p. 34.
40 Ibid.
41 Proclamation No. 3, "Provisional Constitution of the Republic of the Philippines," provides:
WHEREAS, the new government under President Corazon C. Aquino was installed through a
direct exercise of the power of the Filipino people assisted by units of the New Armed Forces of
the Philippines;
WHEREAS, the heroic action of the people was done in defiance of the provisions of the 1973
Constitution, as amended;
xxx. (Emphasis supplied)
See also Estrada v. Desierto, G.R. No. 146710-15 and G.R. No. 146738, 3 April 2001, 356 SCRA
108; Mun. of San Juan, Metro Manila v. Court of Appeals, 345 Phil. 220 (1997).
42 A.M. No. 90-11-2697-CA, 29 June 1992, 210 SCRA 589.
43 No. L-75885, 27 May 1987, 150 SCRA 181.
44 Section 26, Article XVIII of the 1987 Constitution provides:
Sec. 26. The authority to issue sequestration or freeze orders under Proclamation No. 3 dated
March 25, 1986 in relation to the recovery of ill-gotten wealth shall remain operative for not more
than eighteen months after the ratification of this Constitution. However, in the national interest, as
certified by the President, the Congress may extend said period.
A sequestration or freeze order shall be issued only upon showing of a prima facie case. The
order and the list of the sequestered or frozen properties shall forthwith be registered with the
proper court. For orders issued before the ratification of this Constitution, the corresponding
judicial action or proceeding shall be filed within six months from its ratification. For those issued
after such ratification, the judicial action or proceeding shall be commenced within six months from
the issuance thereof.
The sequestration or freeze order is deemed automatically lifted if no judicial action or proceeding
is commenced as herein provided.
45 Among the rights of individuals recognized in the Covenant are: (1) No one shall be arbitrarily
deprived of his life [Article 6(1)]; (2) No one shall be subjected to torture or to cruel, inhuman or
degrading treatment or punishment. [Article 7]; (3) Everyone has the right to liberty and security of
person. No one shall be subjected to arbitrary arrest or detention. No one shall be deprived of his
liberty except on such grounds and in accordance with such procedures as are established by law.
Anyone arrested or detained on a criminal charge shall be brought promptly before a judge or
other officer authorized by law to exercise judicial power and shall be entitled to trial within a
reasonable time or to release [Article 9(1 & 3)]; (4) Anyone who is arrested shall be informed, at
the time of the arrest, of the reasons for his arrest and shall be promptly informed of the charges
against him [Article 9(2)]; (5) Everyone lawfully within the territory of a State shall, within that
territory, have the right to liberty of movement and freedom to choose his residence. Everyone
shall be free to leave any country, including his own. No one shall be arbitrarily deprived of the
right to enter his own country [Article 12(1, 2 & 3)]; (6) Everyone charged with a criminal offense
108
shall have the right to be presumed innocent until proved guilty according to law [Article 14(2)]; (7)
Everyone shall have the right of freedom of thought, conscience and religion [Article 18(1)]; (8)
Everyone shall have the right to hold opinions without interference. Everyone shall have the right
to freedom of expression [Article 19(1 & 2)]; (9) The right of peaceful assembly shall be
recognized [Article 21]; (10) Everyone shall have the right of freedom of association with others
[Article 22(1)]; (11) All persons are equal before the law and are entitled without any discrimination
to the equal protection of the law [Article 26].
46 Andreu v. Commissioner of Immigration, 90 Phil. 347 (1951); Chirskoff v. Commissioner of
Immigration, 90 Phil. 256 (1951); Borovsky v. Commissioner of Immigration, 90 Phil. 107 (1951);
Mejoff v. Director of Prisons, 90 Phil. 70 (1951).
47 Among the rights enshrined in the Declaration are: (1) Everyone has the right to own property
alone or in association with others [Article 17(1)]; (2) Everyone has the right to take part in the
government of his country, directly or through freely chosen representatives [Article 21(1)]; (3)
Everyone has the right to work, to free choice of employment, to just and favorable conditions of
work and to protection against unemployment [Article 23(1)].
48 Section 1, Article I of the Provisional Constitution provides: "The provisions of xxx ARTICLE IV
(Bill of Rights) xxx of the 1973 Constitution, as amended, remain in force and effect and are
hereby adopted in toto as part of this provisional Constitution." (Emphasis supplied)
49 TSN, 18 April 1989, pp. 115-117.
50 Ibid., pp. 136-138.
51 Ibid., pp. 144-146.
52 Five generally accepted exceptions to the rule against warrantless search and seizure have
been judicially formulated as follows: (1) search incidental to a lawful arrest, (2) search of moving
vehicles, (3) seizure of evidence in plain view, (4) customs searches, and (5) waiver by the
accused themselves of their right against unreasonable search and seizure. (People v. Que Ming
Kha, G.R. No. 133265, 31 May 2002; Caballes v. Court of Appeals, G.R. No. 136292, 15 January
2002; People v. Lacerna, G.R. No. 109250, 5 September 1997, 278 SCRA 561).
53 People v. Lim, G.R. No. 141699, 7 August 2002; Del Rosario v. People, G.R. No. 142295, 31
May 2001, 358 SCRA 373.
The Lawphil Project - Arellano Law Foundation
SEPARATE OPINION
PUNO, J.:
While I concur in the result of the ponencia of Mr. Justice Carpio, the ruling on whether or not
private respondent Dimaano could invoke her rights against unreasonable search and seizure and
to the exclusion of evidence resulting therefrom compels this humble opinion. The ponencia states
that "(t)he correct issue is whether the Bill of Rights was operative during the interregnum from
February 26, 1986 (the day Corazon C. Aquino took her oath as President) to March 24, 1986
(immediately before the adoption of the Freedom Constitution)."1 The majority holds that the Bill of
Rights was not operative, thus private respondent Dimaano cannot invoke the right against
unreasonable search and seizure and the exclusionary right as her house was searched and her
properties were seized during the interregnum or on March 3, 1986. My disagreement is not with
the ruling that the Bill of Rights was not operative at that time, but with the conclusion that the
private respondent has lost and cannot invoke the right against unreasonable search and seizure
and the exclusionary right. Using a different lens in viewing the problem at hand, I respectfully
submit that the crucial issue for resolution is whether she can invoke these rights in the absence of
a constitution under the extraordinary circumstances after the 1986 EDSA Revolution. The
question boggles the intellect, and is interesting, to say the least, perhaps even to those not half-
interested in the law. But the question of whether the Filipinos were bereft of fundamental rights
during the one month interregnum is not as perplexing as the question of whether the world was
without a God in the three days that God the Son descended into the dead before He rose to life.
Nature abhors a vacuum and so does the law.
I. Prologue
The ponencia suggests that the Constitution, the Bill of Rights in particular, is the only source of
rights, hence in its absence, private respondent Dimaano cannot invoke her rights against
unreasonable search and seizure and to the exclusion of evidence obtained therefrom. Pushing
the ponencia’s line of reasoning to the extreme will result in the conclusion that during the one
month interregnum, the people lost their constitutionally guaranteed rights to life, liberty and
property and the revolutionary government was not bound by the strictures of due process of law.
Even before appealing to history and philosophy, reason shouts otherwise.
The ponencia recognized the EDSA Revolution as a "successful revolution"2 that installed the
Aquino government. There is no right to revolt in the 1973 Constitution, in force prior to February
23-25, 1986. Nonetheless, it is widely accepted that under natural law, the right of revolution is an
inherent right of the people. Thus, we justified the creation of a new legal order after the 1986
EDSA Revolution, viz:
"From the natural law point of view, the right of revolution has been defined as ‘an inherent right of
a people to cast out their rulers, change their policy or effect radical reforms in their system of
government or institutions by force or a general uprising when the legal and constitutional
methods of making such change have proved inadequate or are so obstructed as to be
unavailable.’ (H. Black, Handbook of American Constitutional Law II, 4th edition, 1927) It has been
said that ‘the locus of positive law-making power lies with the people of the state’ and from there is
derived ‘the right of the people to abolish, to reform and to alter any existing form of government
without regard to the existing constitution.’ (‘Political Rights as Political Questions, The Paradox of
Luther v. Borden’, 100 Harvard Law Review 1125, 1133 [1987])"3
It is my considered view that under this same natural law, private respondent Dimaano has a right
against unreasonable search and seizure and to exclude evidence obtained as a consequence of
such illegal act. To explain my thesis, I will first lay down the relevant law before applying it to the
facts of the case at bar. Tracking down the elusive law that will govern the case at bar will take us
to the labyrinths of philosophy and history. To be sure, the difficulty of the case at bar lies less in
the application of the law, but more in finding the applicable law. I shall take up the challenge even
if the route takes negotiating, but without trespassing, on political and religious thickets.
II. Natural Law and Natural Rights
As early as the Greek civilization, man has alluded to a higher, natural standard or law to which a
state and its laws must conform. Sophocles unmistakably articulates this in his poignant literary
piece, Antigone. In this mid-fifth century Athenian tragedy, a civil war divided two brothers, one
died defending Thebes, and the other, Polyneices, died attacking it. The king forbade Polyneices’
burial, commanding instead that his body be left to be devoured by beasts. But according to Greek
religious ideas, only a burial -even a token one with a handful of earth- could give repose to his
soul. Moved by piety, Polyneices’ sister, Antigone, disobeyed the command of the king and buried
the body. She was arrested. Brought before the king who asks her if she knew of his command
and why she disobeyed, Antigone replies:
". . .These laws were not ordained of Zeus,
And she who sits enthroned with gods below,
Justice, enacted not these human laws.
Nor did I deem that thou, a mortal man,
Couldst by a breath annul and override
The immutable unwritten laws of heaven.
They were not born today nor yesterday;
They die not; and none knoweth whence they sprang."4
Antigone was condemned to be buried alive for violating the order of the king.5
Aristotle also wrote in his Nicomachean Ethics: "Of political justice part is natural, part legal –
natural, that which everywhere has the same force and does not exist by people’s thinking this or
that; legal, that which is originally indifferent, but when it has been laid down is not indifferent, e.g.
that a prisoner’s ransom shall be mina, or that a goat and not two sheep shall be sacrificed, and
again all the laws that are passed for particular cases, . . ."6 Aristotle states that "(p)articular law is
that which each community lays down and applies to its own members: this is partly written and
partly unwritten. Universal law is the law of Nature. For there really is, as every one to some extent
divines, a natural justice and injustice that is binding on all men, even on those who have no
association or covenant with each other. It is this that Sophocles’ Antigone clearly means when
she says that the burial of Polyneices was a just act in spite of the prohibition: she means that it
was just by nature."7
Later, the Roman orator Cicero wrote of natural law in the first century B.C. in this wise:
"True law is right reason in agreement with nature; it is of universal application, unchanging and
everlasting; it summons to duty by its commands, and averts from wrongdoing by its prohibitions.
109
And it does not lay its commands or prohibitions upon good men in vain, though neither have any
effect on the wicked. It is a sin to try to alter this law, nor is it allowable to attempt to repeal any
part of it, and it is impossible to abolish it entirely. We cannot be freed from its obligations by
senate or people, and we need not look outside ourselves for an expounder or interpreter of it.
And there will not be different laws at Rome and at Athens, or different laws now and in the future,
but one eternal and unchangeable law will be valid for all nations and at all times, and there will be
one master and ruler, that is, God, over us all, for he is the author of this law, its promulgator, and
its enforcing judge. Whoever is disobedient is fleeing from himself and denying his human nature,
and by reason of this very fact he will suffer the worst penalties, even if he escapes what is
commonly considered punishment."8
This allusion to an eternal, higher, and universal natural law continues from classical antiquity to
this day. The face of natural law, however, has changed throughout the classical, medieval,
modern, and contemporary periods of history.
In the medieval times, shortly after 1139, Gratian published the Decretum, a collection and
reconciliation of the canon laws in force, which distinguished between divine or natural law and
human law. Similar to the writings of the earliest Church Fathers, he related this natural law to the
Decalogue and to Christ’s commandment of love of one’s neighbor. "The law of nature is that
which is contained in the Law and the Gospel, by which everyone is commanded to do unto others
as he would wish to be done unto him, and is prohibited from doing unto others that which he
would be unwilling to be done unto himself."9 This natural law precedes in time and rank all things,
such that statutes whether ecclesiastical or secular, if contrary to law, were to be held null and
void.10
The following century saw a shift from a natural law concept that was revelation-centered to a
concept related to man’s reason and what was discoverable by it, under the influence of Aristotle’s
writings which were coming to be known in the West. William of Auxerre acknowledged the human
capacity to recognize good and evil and God’s will, and made reason the criterion of natural law.
Natural law was thus id quod naturalis ratio sine omni deliberatione aut sine magna dictat esse
faciendum or "that which natural reason, without much or even any need of reflection, tells us what
we must do."11 Similarly, Alexander of Hales saw human reason as the basis for recognizing
natural law12 and St. Bonaventure wrote that what natural reason commands is called the natural
law.13 By the thirteenth century, natural law was understood as the law of right reason, coinciding
with the biblical law but not derived from it.14
Of all the medieval philosophers, the Italian St. Thomas Aquinas is indisputably regarded as the
most important proponent of traditional natural law theory. He created a comprehensive and
organized synthesis of the natural law theory which rests on both the classical (in particular,
Aristotelian philosophy) and Christian foundation, i.e., on reason and revelation.15 His version of
the natural law theory rests on his vision of the universe as governed by a single, self-consistent
and overarching system of law under the direction and authority of God as the supreme lawgiver
and judge.16 Aquinas defined law as "an ordinance of reason for the common good, made by him
who has care of the community, and promulgated."17 There are four kinds of laws in his natural
law theory: eternal, natural, human, and divine.
First, eternal law. To Aquinas, a law is a dictate of practical reason (which provides practical
directions on how one ought to act as opposed to "speculative reason" which provides
propositional knowledge of the way things are) emanating from the ruler who governs a perfect
community.18 Presupposing that Divine Providence rules the universe, and Divine Providence
governs by divine reason, then the rational guidance of things in God the Ruler of the universe has
the nature of a law. And since the divine reason’s conception of things is not subject to time but is
eternal, this kind of law is called eternal law.19 In other words, eternal law is that law which is a
"dictate" of God’s reason. It is the external aspect of God’s perfect wisdom, or His wisdom applied
to His creation.20 Eternal law consists of those principles of action that God implanted in creation
to enable each thing to perform its proper function in the overall order of the universe. The proper
function of a thing determines what is good and bad for it: the good consists of performing its
function while the bad consists of failing to perform it.21
Then, natural law. This consists of principles of eternal law which are specific to human beings as
rational creatures. Aquinas explains that law, as a rule and measure, can be in a person in two
ways: in one way, it can be in him that rules and measures; and in another way, in that which is
ruled and measured since a thing is ruled and measured in so far as it partakes of the rule or
measure. Thus, since all things governed by Divine Providence are regulated and measured by
the eternal law, then all things partake of or participate to a certain extent in the eternal law; they
receive from it certain inclinations towards their proper actions and ends. Being rational, however,
the participation of a human being in the Divine Providence, is most excellent because he
participates in providence itself, providing for himself and others. He participates in eternal reason
itself and through this, he possesses a natural inclination to right action and right end. This
participation of the rational creature in the eternal law is called natural law. Hence, the psalmist
says: "The light of Thy countenance, O Lord, is signed upon us, thus implying that the light of
natural reason, by which we discern what is good and what is evil, which is the function of the
natural law, is nothing else than an imprint on us of the Divine light. It is therefore evident that the
natural law is nothing else than the rational creature’s participation in the eternal law."22 In a few
words, the "natural law is a rule of reason, promulgated by God in man’s nature, whereby man can
discern how he should act."23
Through natural reason, we are able to distinguish between right and wrong; through free will, we
are able to choose what is right. When we do so, we participate more fully in the eternal law rather
than being merely led blindly to our proper end. We are able to choose that end and make our
compliance with eternal law an act of self-direction. In this manner, the law becomes in us a rule
and measure and no longer a rule and measure imposed from an external source.24 The question
that comes to the fore then is what is this end to which natural law directs rational creatures?
The first self-evident principle of natural law is that "good is to be pursued and done, and evil is to
be avoided. All other precepts of the natural law are based upon this, so that whatever the
practical reason naturally apprehends as man’s good (or evil) belongs to the precept of the natural
law as something to be done or avoided."25 Because good is to be sought and evil avoided, and
good is that which is in accord with the nature of a given creature or the performance of a
creature’s proper function, then the important question to answer is what is human nature or the
proper function of man. Those to which man has a natural inclination are naturally apprehended
by reason as good and must thus be pursued, while their opposites are evil which must be
avoided.26 Aquinas identifies the basic inclinations of man as follows:
"1. To seek the good, including his highest good, which is eternal happiness with God.27
2. To preserve himself in existence.
3. To preserve the species - that is, to unite sexually.
4. To live in community with other men.
5. To use his intellect and will - that is, to know the truth and to make his own decision."28
As living creatures, we have an interest in self-preservation; as animals, in procreation; and as
rational creatures, in living in society and exercising our intellectual and spiritual capacities in the
pursuit of knowledge."29 God put these inclinations in human nature to help man achieve his final
end of eternal happiness. With an understanding of these inclinations in our human nature, we can
determine by practical reason what is good for us and what is bad.30 In this sense, natural law is
an ordinance of reason.31 Proceeding from these inclinations, we can apply the natural law by
deduction, thus: good should be done; this action is good; this action should therefore be done.32
Concretely, it is good for humans to live peaceably with one another in society, thus this dictates
the prohibition of actions such as killing and stealing that harm society.33
From the precepts of natural law, human reason needs to proceed to the more particular
determinations or specialized regulations to declare what is required in particular cases
considering society’s specific circumstances. These particular determinations, arrived at by human
reason, are called human laws (Aquinas’ positive law). They are necessary to clarify the demands
of natural law. Aquinas identifies two ways by which something may be derived from natural law:
first, like in science, demonstrated conclusions are drawn from principles; and second, as in the
arts, general forms are particularized as to details like the craftsman determining the general form
of a house to a particular shape.34 Thus, according to Aquinas, some things are derived from
natural law by way of conclusion (such as "one must not kill" may be derived as a conclusion from
the principle that "one should do harm to no man") while some are derived by way of
determination (such as the law of nature has it that the evildoer should be punished, but that he be
punished in this or that way is not directly by natural law but is a derived determination of it).35
Aquinas says that both these modes of derivation are found in the human law. But those things
derived as a conclusion are contained in human law not as emanating therefrom exclusively, but
having some force also from the natural law. But those things which are derived in the second
manner have no other force than that of human law.36
110
Finally, there is divine law which is given by God, i.e., the Old Testament and the New Testament.
This is necessary to direct human life for four reasons. First, through law, man is directed to
proper actions towards his proper end. This end, which is eternal happiness and salvation, is not
proportionate to his natural human power, making it necessary for him to be directed not just by
natural and human law but by divinely given law. Secondly, because of uncertainty in human
judgment, different people form different judgments on human acts, resulting in different and even
contrary laws. So that man may know for certain what he ought to do and avoid, it was necessary
for man to be directed in his proper acts by a God-given law for it is certain that such law cannot
err. Thirdly, human law can only judge the external actions of persons. However, perfection of
virtue consists in man conducting himself right in both his external acts and in his interior motives.
The divine law thus supervenes to see and judge both dimensions. Fourthly, because human law
cannot punish or forbid all evils, since in aiming to do away with all evils it would do away with
many good things and would hinder the advancement of the common good necessary for human
development, divine law is needed.37 For example, if human law forbade backbiting gossip, in
order to enforce such a law, privacy and trust that is necessary between spouses and friends
would be severely restricted. Because the price paid to enforce the law would outweigh the
benefits, gossiping ought to be left to God to be judged and punished. Thus, with divine law, no
evil would remain unforbidden and unpunished.38
Aquinas’ traditional natural law theory has been advocated, recast and restated by other scholars
up to the contemporary period.39 But clearly, what has had a pervading and lasting impact on the
Western philosophy of law and government, particularly on that of the United States of America
which heavily influenced the Philippine system of government and constitution, is the modern
natural law theory.
In the traditional natural law theory, among which was Aquinas’, the emphasis was placed on
moral duties of man -both rulers and subjects- rather than on rights of the individual citizen.
Nevertheless, from this medieval theoretical background developed modern natural law theories
associated with the gradual development in Europe of modern secular territorial state. These
theories increasingly veered away from medieval theological trappings40 and gave particular
emphasis to the individual and his natural rights.41
One far-reaching school of thought on natural rights emerged with the political philosophy of the
English man, John Locke. In the traditional natural law theory such as Aquinas’, the monarchy was
not altogether disfavored because as Aquinas says, "the rule of one man is more useful than the
rule of the many" to achieve "the unity of peace."42 Quite different from Aquinas, Locke
emphasized that in any form of government, "ultimate sovereignty rested in the people and all
legitimate government was based on the consent of the governed."43 His political theory was
used to justify resistance to Charles II over the right of succession to the English throne and the
Whig Revolution of 1688-89 by which James II was dethroned and replaced by William and Mary
under terms which weakened the power of the crown and strengthened the power of the
Parliament.44
Locke explained his political theory in his major work, Second Treatise of Government, originally
published in 1690,45 where he adopted the modern view that human beings enjoyed natural rights
in the state of nature, before the formation of civil or political society. In this state of nature, it is
self-evident that all persons are naturally in a "state of perfect freedom to order their actions, and
dispose of their possessions and persons, as they think fit, within the bounds of the law of nature,
without asking leave or depending upon the will of any other man."46 Likewise, in the state of
nature, it was self-evident that all persons were in a state of equality, "wherein all the power and
jurisdiction is reciprocal, no one having more than another; there being nothing more evident, than
that creatures of the same species and rank, promiscuously born to all the same advantages of
nature, and the use of the same faculties, should also be equal one amongst another without
subordination or subjection . . ."47 Locke quickly added, however, that though all persons are in a
state of liberty, it is not a state of license for the "state of nature has a law of nature to govern it,
which obliges every one: and reason, which is that law, teaches all mankind, who will but consult
it, that being all equal and independent, no one ought to harm another in his life health, liberty, or
possessions. . ."48 Locke also alludes to an "omnipotent, and infinitely wise maker" whose
"workmanship they (mankind) are, made to last during his (the maker’s) . . .pleasure."49 In other
words, through reason, with which human beings arrive at the law of nature prescribing certain
moral conduct, each person can realize that he has a natural right and duty to ensure his own
survival and well-being in the world and a related duty to respect the same right in others, and
preserve mankind.50 Through reason, human beings are capable of recognizing the need to treat
others as free, independent and equal as all individuals are equally concerned with ensuring their
own lives, liberties and properties.51 In this state of nature, the execution of the law of nature is
placed in the hands of every individual who has a right to punish transgressors of the law of nature
to an extent that will hinder its violation.52 It may be gathered from Locke’s political theory that the
rights to life, health, liberty and property are natural rights, hence each individual has a right to be
free from violent death, from arbitrary restrictions of his person and from theft of his property.53 In
addition, every individual has a natural right to defend oneself from and punish those who violate
the law of nature.
But although the state of nature is somewhat of an Eden before the fall, there are two harsh
"inconveniences" in it, as Locke puts them, which adversely affect the exercise of natural rights.
First, natural law being an unwritten code of moral conduct, it might sometimes be ignored if the
personal interests of certain individuals are involved. Second, without any written laws, and
without any established judges or magistrates, persons may be judges in their own cases and self-
love might make them partial to their side. On the other hand, ill nature, passion and revenge
might make them too harsh to the other side. Hence, "nothing but confusion and disorder will
follow."54 These circumstances make it necessary to establish and enter a civil society by mutual
agreement among the people in the state of nature, i.e., based on a social contract founded on
trust and consent. Locke writes:
"The only way whereby any one divests himself of his natural liberty, and puts on the bonds of civil
society, is by agreeing with other men to join and unite into a community for their comfortable,
safe, and peaceable living one amongst another, in a secure enjoyment of their properties (used in
the broad sense, referring to life, liberty and property) and a greater security against any, that are
not of it."55
This collective agreement then culminated in the establishment of a civil government.
Three important consequences of Locke’s theory on the origin of civil government and its
significance to the natural rights of individual subjects should be noted. First, since it was the
precariousness of the individual’s enjoyment of his natural and equal right to life, liberty, and
property that justified the establishment of civil government, then the "central, overriding purpose
of civil government was to protect and preserve the individual’s natural rights. For just as the
formation by individuals of civil or political society had arisen from their desire to ‘unite for the
mutual Preservation of their Lives, Liberties and Estates, which I (Locke) call by the general name,
Property,’56 so, too, did the same motive underlie - in the second stage of the social contract -
their collective decision to institute civil government."57 Locke thus maintains, again using the
term "property" in the broad sense, that, "(t)he great and chief end, therefore, of men’s uniting into
common-wealths, and putting themselves under government, is the preservation of their
property."58 Secondly, the central purpose that has brought a civil government into existence, i.e.,
the protection of the individual’s natural rights, sets firm limits on the political authority of the civil
government. A government that violates the natural rights of its subjects has betrayed their trust,
vested in it when it was first established, thereby undermining its own authority and losing its claim
to the subjects’ obedience. Third and finally, individual subjects have a right of last resort to
collectively resist or rebel against and overthrow a government that has failed to discharge its duty
of protecting the people’s natural rights and has instead abused its powers by acting in an
arbitrary or tyrannical manner. The overthrow of government, however, does not lead to
dissolution of civil society which came into being before the establishment of civil government.59
Locke’s ideas, along with other modern natural law and natural rights theories, have had a
profound impact on American political and legal thought. American law professor Philip
Hamburger observes that American natural law scholars generally agree "that natural law
consisted of reasoning about humans in the state of nature (or absence of government)" and tend
"to emphasize that they were reasoning from the equal freedom of humans and the need of
humans to preserve themselves."60 As individuals are equally free, they did not have the right to
infringe the equal rights of others; even self-preservation typically required individuals to cooperate
so as to avoid doing unto others what they would not have others do unto them.61 With Locke’s
theory of natural law as foundation, these American scholars agree on the well-known analysis of
how individuals preserved their liberty by forming government, i.e., that in order to address the
insecurity and precariousness of one’s life, liberty and property in the state of nature, individuals,
in accordance with the principle of self-preservation, gave up a portion of their natural liberty to
civil government to enable it "to preserve the residue."62 "People must cede to [government]
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some of their natural rights, in order to vest it with powers."63 That individuals "give up a part of
their natural rights to secure the rest" in the modern natural law sense is said to be "an old
hackneyed and well known principle"64 thus:
"That Man, on entering into civil society, of necessity, sacrifices a part of his natural liberty, has
been pretty universally taken for granted by writers on government. They seem, in general, not to
have admitted a doubt of the truth of the proposition. One feels as though it was treading on
forbidden ground, to attempt a refutation of what has been advanced by a Locke, a Bacari[a], and
some other writers and statesmen."65
But, while Locke’s theory showed the necessity of civil society and government, it was careful to
assert and protect the individual’s rights against government invasion, thus implying a theory of
limited government that both restricted the role of the state to protect the individual’s fundamental
natural rights to life, liberty and property and prohibited the state, on moral grounds, from violating
those rights.66 The natural rights theory, which is the characteristic American interpretation of
natural law, serves as the foundation of the well-entrenched concept of limited government in the
United States. It provides the theoretical basis of the formulation of limits on political authority vis-
à-vis the superior right of the individual which the government should preserve.67
Locke’s ideas undoubtedly influenced Thomas Jefferson, the eminent statesman and "philosopher
of the (American) revolution and of the first constitutional order which free men were permitted to
establish."68 Jefferson espoused Locke’s theory that man is free in the state of nature. But while
Locke limited the authority of the state with the doctrine of natural rights, Jefferson’s originality was
in his use of this doctrine as basis for a fundamental law or constitution established by the
people.69 To obviate the danger that the government would limit natural liberty more than
necessary to afford protection to the governed, thereby becoming a threat to the very natural
liberty it was designed to protect, people had to stipulate in their constitution which natural rights
they sacrificed and which not, as it was important for them to retain those portions of their natural
liberty that were inalienable, that facilitated the preservation of freedom, or that simply did not
need to be sacrificed.70 Two ideas are therefore fundamental in the constitution: one is the
regulation of the form of government and the other, the securing of the liberties of the people.71
Thus, the American Constitution may be understood as comprising three elements. First, it creates
the structure and authority of a republican form of government; second, it provides a division of
powers among the different parts of the national government and the checks and balances of
these powers; and third, it inhibits government’s power vis-à-vis the rights of individuals, rights
existent and potential, patent and latent. These three parts have one prime objective: to uphold
the liberty of the people.72
But while the constitution guarantees and protects the fundamental rights of the people, it should
be stressed that it does not create them. As held by many of the American Revolution patriots,
"liberties do not result from charters; charters rather are in the nature of declarations of pre-
existing rights."73 John Adams, one of the patriots, claimed that natural rights are founded "in the
frame of human nature, rooted in the constitution of the intellect and moral world."74 Thus, it is
said of natural rights vis-à-vis the constitution:
". . . (t)hey exist before constitutions and independently of them. Constitutions enumerate such
rights and provide against their deprivation or infringement, but do not create them. It is supposed
that all power, all rights, and all authority are vested in the people before they form or adopt a
constitution. By such an instrument, they create a government, and define and limit the powers
which the constitution is to secure and the government respect. But they do not thereby invest the
citizens of the commonwealth with any natural rights that they did not before possess."75
(emphasis supplied)
A constitution is described as follows:
"A Constitution is not the beginning of a community, nor the origin of private rights; it is not the
fountain of law, nor the incipient state of government; it is not the cause, but consequence, of
personal and political freedom; it grants no rights to the people, but is the creature of their power,
the instrument of their convenience. Designed for their protection in the enjoyment of the rights
and powers which they possessed before the Constitution was made, it is but the framework of the
political government, and necessarily based upon the preexisting condition of laws, rights, habits
and modes of thought. There is nothing primitive in it; it is all derived from a known source. It
presupposes an organized society, law, order, propriety, personal freedom, a love of political
liberty, and enough of cultivated intelligence to know how to guard against the encroachments of
tyranny."76 (emphasis supplied)
That Locke’s modern natural law and rights theory was influential to those who framed and ratified
the United States constitution and served as its theoretical foundation is undeniable.77 In a letter
in which George Washington formally submitted the Constitution to Congress in September 1787,
he spoke of the difficulties of drafting the document in words borrowed from the standard
eighteenth-century natural rights analysis:
"Individuals entering into society, must give up a share of liberty to preserve the rest. The
magnitude of the sacrifice must depend as well on situation and circumstance, as on the object to
be obtained. It is at all times difficult to draw with precision the line between those rights which
must be surrendered, and those which may be reserved . . . ."78 (emphasis supplied)
Natural law is thus to be understood not as a residual source of constitutional rights but instead,
as the reasoning that implied the necessity to sacrifice natural liberty to government in a written
constitution. Natural law and natural rights were concepts that explained and justified written
constitutions.79
With the establishment of civil government and a constitution, there arises a conceptual distinction
between natural rights and civil rights, difficult though to define their scope and delineation. It has
been proposed that natural rights are those rights that "appertain to man in right of his
existence."80 These were fundamental rights endowed by God upon human beings, "all those
rights of acting as an individual for his own comfort and happiness, which are not injurious to the
natural rights of others."81 On the other hand, civil rights are those that "appertain to man in right
of his being a member of society."82 These rights, however, are derived from the natural rights of
individuals since:
"Man did not enter into society to become worse off than he was before, nor to have fewer rights
than he had before, but to have those rights better secured. His natural rights are the foundation of
all his rights."83
Civil rights, in this sense, were those natural rights – particularly rights to security and protection –
which by themselves, individuals could not safeguard, rather requiring the collective support of
civil society and government. Thus, it is said:
"Every civil right has for its foundation, some natural right pre-existing in the individual, but to the
enjoyment of which his individual power is not, in all cases, sufficiently competent."84
The distinction between natural and civil rights is "between that class of natural rights which man
retains after entering into society, and those which he throws into the common stock as a member
of society."85 The natural rights retained by the individuals after entering civil society were "all the
intellectual rights, or rights of the mind,"86 i.e., the rights to freedom of thought, to freedom of
religious belief and to freedom of expression in its various forms. The individual could exercise
these rights without government assistance, but government has the role of protecting these
natural rights from interference by others and of desisting from itself infringing such rights.
Government should also enable individuals to exercise more effectively the natural rights they had
exchanged for civil rights –like the rights to security and protection - when they entered into civil
society.87
American natural law scholars in the 1780s and early 1790s occasionally specified which rights
were natural and which were not. On the Lockean assumption that the state of nature was a
condition in which all humans were equally free from subjugation to one another and had no
common superior, American scholars tended to agree that natural liberty was the freedom of
individuals in the state of nature.88 Natural rights were understood to be simply a portion of this
undifferentiated natural liberty and were often broadly categorized as the rights to life, liberty, and
property; or life, liberty and the pursuit of happiness. More specifically, they identified as natural
rights the free exercise of religion, freedom of conscience,89 freedom of speech and press, right
to self-defense, right to bear arms, right to assemble and right to one’s reputation.90 In contrast,
certain other rights, such as habeas corpus and jury rights, do not exist in the state of nature, but
exist only under the laws of civil government or the constitution because they are essential for
restraining government.91 They are called civil rights not only in the sense that they are protected
by constitutions or other laws, but also in the sense that they are acquired rights which can only
exist under civil government.92
In his Constitutional Law, Black states that natural rights may be used to describe those rights
which belong to man by virtue of his nature and depend upon his personality. "His existence as an
individual human being, clothed with certain attributes, invested with certain capacities, adapted to
certain kind of life, and possessing a certain moral and physical nature, entitles him, without the
aid of law, to such rights as are necessary to enable him to continue his existence, develop his
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faculties, pursue and achieve his destiny."93 An example of a natural right is the right to life. In an
organized society, natural rights must be protected by law, "and although they owe to the law
neither their existence nor their sacredness, yet they are effective only when recognized and
sanctioned by law."94 Civil rights include natural rights as they are taken into the sphere of law.
However, there are civil rights which are not natural rights such as the right of trial by jury. This
right is not founded in the nature of man, nor does it depend on personality, but it falls under the
definition of civil rights which are the rights secured by the constitution to all its citizens or
inhabitants not connected with the organization or administration of government which belong to
the domain of political rights. "Natural rights are the same all the world over, though they may not
be given the fullest recognition under all governments. Civil rights which are not natural rights will
vary in different states or countries."95
From the foregoing definitions and distinctions, we can gather that the inclusions in and exclusions
from the scope of natural rights and civil rights are not well-defined. This is understandable
because these definitions are derived from the nature of man which, in its profundity, depth, and
fluidity, cannot simply and completely be grasped and categorized. Thus, phrases such as "rights
appertain(ing) to man in right of his existence", or "rights which are a portion of man’s
undifferentiated natural liberty, broadly categorized as the rights to life, liberty, and property; or life,
liberty and the pursuit of happiness", or "rights that belong to man by virtue of his nature and
depend upon his personality" serve as guideposts in identifying a natural right. Nevertheless,
although the definitions of natural right and civil right are not uniform and exact, we can derive
from the foregoing definitions that natural rights exist prior to constitutions, and may be contained
in and guaranteed by them. Once these natural rights enter the constitutional or statutory sphere,
they likewise acquire the character of civil rights in the broad sense (as opposed to civil rights
distinguished from political rights), without being stripped of their nature as natural rights. There
are, however, civil rights which are not natural rights but are merely created and protected by the
constitution or other law such as the right to a jury trial.
Long after Locke conceived of his ideas of natural rights, civil society, and civil government, his
concept of natural rights continued to flourish in the modern and contemporary period. About a
hundred years after the Treatise of Government, Locke’s natural law and rights theory was
restated by the eighteenth-century political thinker and activist, Thomas Paine. He wrote his
classic text, The Rights of Man, Part 1 where he argued that the central purpose of all
governments was to protect the natural and imprescriptible rights of man. Citing the 1789 French
Declaration of the Rights of Man and of Citizens, Paine identified these rights as the right to
liberty, property, security and resistance of oppression. All other civil and political rights - such as
to limits on government, to freedom to choose a government, to freedom of speech, and to fair
taxation - were derived from those fundamental natural rights.96
Paine inspired and actively assisted the American Revolution and defended the French
Revolution. His views were echoed by the authors of the American and the French declarations
that accompanied these democratic revolutions.97 The American Declaration of Independence of
July 4, 1776, the revolutionary manifesto of the thirteen newly-independent states of America that
were formerly colonies of Britain, reads:
"We hold these Truths to be self-evident, that all Men are created equal, that they are endowed by
their Creator with certain inalienable Rights, that among these are Life, Liberty, and the Pursuit of
Happiness. That to secure these Rights, Governments are instituted among Men, deriving their
just Powers from the Consent of the Governed, that whenever any Form of Government becomes
destructive of these Ends, it is the Right of the People to alter or to abolish it, and to institute new
Government, laying its Foundation on such Principles, and organizing its Powers in such Form as
to them shall seem most likely to effect their Safety and Happiness."98 (emphasis supplied)
His phrase "rights of man" was used in the 1789 French Declaration of the Rights of Man and of
Citizens, proclaimed by the French Constituent Assembly in August 1789, viz:
"The representatives of the French people, constituted in a National Assembly, considering that
ignorance, oblivion or contempt of the Rights of Man are the only causes of public misfortunes and
of the corruption of governments, have resolved to lay down in a solemn Declaration, the natural,
inalienable and sacred Rights of Man, in order that this Declaration, being always before all the
members of the Social Body, should constantly remind them of their Rights and their Duties. . ."99
(emphasis supplied)
Thereafter, the phrase "rights of man" gradually replaced "natural rights" in the latter period of the
eighteenth century, thus removing the theological assumptions of medieval natural law theories.
After the American and French Revolutions, the doctrine of the rights of man became embodied
not only in succinct declarations of rights, but also in new constitutions which emphasized the
need to uphold the natural rights of the individual citizen against other individuals and particularly
against the state itself.100
Considerable criticism was, however, hurled against natural law and natural rights theories,
especially by the logical positivist thinkers, as these theories were not empirically verifiable.
Nevertheless, the concept of natural rights or rights of man regained force and influence in the
1940s because of the growing awareness of the wide scale violation of such rights perpetrated by
the Nazi dictatorship in Germany. The British leader Winston Churchill and the American leader
Franklin Roosevelt stated in the preface of their Atlantic Charter in 1942 that "complete victory
over their enemies is essential to decent life, liberty, independence and religious freedom, and to
preserve human rights and justice, in their own land as well as in other lands." (emphasis
supplied) This time, natural right was recast in the idea of "human rights" which belong to every
human being by virtue of his or her humanity. The idea superseded the traditional concept of
rights based on notions of God-given natural law and of social contract. Instead, the refurbished
idea of "human rights" was based on the assumption that each individual person was entitled to an
equal degree of respect as a human being.101
With this historical backdrop, the United Nations Organization published in 1948 its Universal
Declaration of Human Rights (UDHR) as a systematic attempt to secure universal recognition of a
whole gamut of human rights. The Declaration affirmed the importance of civil and political rights
such as the rights to life, liberty, property; equality before the law; privacy; a fair trial; freedom of
speech and assembly, of movement, of religion, of participation in government directly or
indirectly; the right to political asylum, and the absolute right not to be tortured. Aside from these,
but more controversially, it affirmed the importance of social and economic rights.102 The UDHR
is not a treaty and its provisions are not binding law, but it is a compromise of conflicting
ideological, philosophical, political, economic, social and juridical ideas which resulted from the
collective effort of 58 states on matters generally considered desirable and imperative. It may be
viewed as a "blending (of) the deepest convictions and ideals of different civilizations into one
universal expression of faith in the rights of man."103
On December 16, 1966, the United Nations General Assembly adopted the International Covenant
on Economic, Social and Cultural Rights (ICESCR) and the International Covenant on Civil and
Political Rights (ICCPR) and the Optional Protocol to the Civil and Political Rights providing for the
mechanism of checking state compliance to the international human rights instruments such as
through a reportorial requirement among governments. These treaties entered into force on March
23, 1976104 and are binding as international law upon governments subscribing to them.
Although admittedly, there will be differences in interpreting particular statements of rights and
freedoms in these United Nations instruments "in the light of varied cultures and historical
traditions, the basis of the covenants is a common agreement on the fundamental objective of the
dignity and worth of the human person. Such agreement is implied in adherence to the (United
Nations) Charter and corresponds to the universal urge for freedom and dignity which strives for
expression, despite varying degrees of culture and civilization and despite the countervailing
forces of repression and authoritarianism."105
Human rights and fundamental freedoms were affirmed by the United Nations Organization in the
different instruments embodying these rights not just as a solemn protest against the Nazi-fascist
method of government, but also as a recognition that the "security of individual rights, like the
security of national rights, was a necessary requisite to a peaceful and stable world order."106
Moskowitz wrote:
"The legitimate concern of the world community with human rights and fundamental freedoms
stems in large part from the close relation they bear to the peace and stability of the world. World
War II and its antecedents, as well as contemporary events, clearly demonstrate the peril inherent
in the doctrine which accepts the state as the sole arbiter in questions pertaining to the rights and
freedoms of the citizen. The absolute power exercised by a government over its citizens is not
only a source of disorder in the international community; it can no longer be accepted as the only
guaranty of orderly social existence at home. But orderly social existence is ultimately a matter
which rests in the hands of the citizen. Unless the citizen can assert his human rights and
fundamental freedoms against his own government under the protection of the international
community, he remains at the mercy of the superior power."107
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Similar to natural rights and civil rights, human rights as the refurbished idea of natural right in the
1940s, eludes definition. The usual definition that it is the right which inheres in persons from the
fact of their humanity seemingly begs the question. Without doubt, there are certain rights and
freedoms so fundamental as to be inherent and natural such as the integrity of the person and
equality of persons before the law which should be guaranteed by all constitutions of all civilized
countries and effectively protected by their laws.108 It is nearly universally agreed that some of
those rights are religious toleration, a general right to dissent, and freedom from arbitrary
punishment.109 It is not necessarily the case, however, that what the law guarantees as a human
right in one country should also be guaranteed by law in all other countries. Some human rights
might be considered fundamental in some countries, but not in others. For example, trial by jury
which we have earlier cited as an example of a civil right which is not a natural right, is a basic
human right in the United States protected by its constitution, but not so in Philippine
jurisdiction.110 Similar to natural rights, the definition of human rights is derived from human
nature, thus understandably not exact. The definition that it is a "right which inheres in persons
from the fact of their humanity", however, can serve as a guideline to identify human rights. It
seems though that the concept of human rights is broadest as it encompasses a human person’s
natural rights (e.g., religious freedom) and civil rights created by law (e.g. right to trial by jury).
In sum, natural law and natural rights are not relic theories for academic discussion, but have had
considerable application and influence. Natural law and natural rights theories have played an
important role in the Declaration of Independence, the Abolition (anti-slavery) movement, and
parts of the modern Civil Rights movement.111 In charging Nazi and Japanese leaders with
"crimes against humanity" at the end of the Second World War, Allied tribunals in 1945 invoked
the traditional concept of natural law to override the defense that those charged had only been
obeying the laws of the regimes they served.112 Likewise, natural law, albeit called by another
name such as "substantive due process" which is grounded on reason and fairness, has served
as legal standard for international law, centuries of development in the English common law, and
certain aspects of American constitutional law.113 In controversies involving the Bill of Rights, the
natural law standards of "reasonableness" and "fairness" or "justified on balance" are used.
Questions such as these are common: "Does this form of government involvement with religion
endanger religious liberty in a way that seems unfair to some group? Does permitting this
restriction on speech open the door to government abuse of political opponents? Does this police
investigative practice interfere with citizens’ legitimate interests in privacy and security?"114
Undeniably, natural law and natural rights theories have carved their niche in the legal and political
arena.
III. Natural Law and Natural Rights
in Philippine Cases and the Constitution
A. Traces of Natural Law and
Natural Rights Theory in Supreme Court Cases
Although the natural law and natural rights foundation is not articulated, some Philippine cases
have made reference to natural law and rights without raising controversy. For example, in People
v. Asas,115 the Court admonished courts to consider cautiously an admission or confession of
guilt especially when it is alleged to have been obtained by intimidation and force. The Court said:
"(w)ithal, aversion of man against forced self-affliction is a matter of Natural Law."116 In People v.
Agbot,117 we did not uphold lack of instruction as an excuse for killing because we recognized the
"offense of taking one’s life being forbidden by natural law and therefore within instinctive
knowledge and feeling of every human being not deprived of reason."118 In Mobil Oil Philippines,
Inc. v. Diocares, et al.,119 Chief Justice Fernando acknowledged the influence of natural law in
stressing that the element of a promise is the basis of contracts. In Manila Memorial Park
Cemetery, Inc. v. Court of Appeals, et al.,120 the Court invoked the doctrine of estoppel which we
have repeatedly pronounced is predicated on, and has its origin in equity, which broadly defined,
is justice according to natural law. In Yu Con v. Ipil, et al.,121 we recognized the application of
natural law in maritime commerce.
The Court has also identified in several cases certain natural rights such as the right to liberty,122
the right of expatriation,123 the right of parents over their children which provides basis for a
parent’s visitorial rights over his illegitimate children,124 and the right to the fruits of one’s
industry.125
In Simon, Jr. et al. v. Commission on Human Rights,126 the Court defined human rights, civil
rights, and political rights. In doing so, we considered the United Nations instruments to which the
Philippines is a signatory, namely the UDHR which we have ruled in several cases as binding
upon the Philippines,127 the ICCPR and the ICESCR. Still, we observed that "human rights" is so
generic a term that at best, its definition is inconclusive. But the term "human rights" is closely
identified to the "universally accepted traits and attributes of an individual, along with what is
generally considered to be his inherent and inalienable rights, encompassing almost all aspects of
life,"128 i.e., the individual’s social, economic, cultural, political and civil relations.129 On the other
hand, we defined civil rights as referring to:
". . . those (rights) that belong to every citizen of the state or country, or, in a wider sense, to all
inhabitants, and are not connected with the organization or administration of government. They
include the rights to property, marriage, equal protection of the laws, freedom of contract, etc. Or,
as otherwise defined, civil rights are rights appertaining to a person by virtue of his citizenship in a
state or community. Such term may also refer, in its general sense, to rights capable of being
enforced or redressed in a civil action."130
Guarantees against involuntary servitude, religious persecution, unreasonable searches and
seizures, and imprisonment for debt are also identified as civil rights.131 The Court’s definition of
civil rights was made in light of their distinction from political rights which refer to the right to
participate, directly or indirectly, in the establishment or administration of government, the right of
suffrage, the right to hold public office, the right of petition and, in general, the rights appurtenant
to citizenship vis-a-vis the management of government.132
To distill whether or not the Court’s reference to natural law and natural rights finds basis in a
natural law tradition that has influenced Philippine law and government, we turn to Philippine
constitutional law history.
B. History of the Philippine Constitution
and the Bill of Rights
During the Spanish colonization of the Philippines, Filipinos ardently fought for their fundamental
rights. The Propaganda Movement spearheaded by our national hero Jose Rizal, Marcelo H. del
Pilar, and Graciano Lopez-Jaena demanded assimilation of the Philippines by Spain, and the
extension to Filipinos of rights enjoyed by Spaniards under the Spanish Constitution such as the
inviolability of person and property, specifically freedom from arbitrary action by officialdom
particularly by the Guardia Civil and from arbitrary detention and banishment of citizens. They
clamored for their right to liberty of conscience, freedom of speech and the press, freedom of
association, freedom of worship, freedom to choose a profession, the right to petition the
government for redress of grievances, and the right to an opportunity for education. They raised
the roof for an end to the abuses of religious corporations.133
With the Propaganda Movement having apparently failed to bring about effective reforms, Andres
Bonifacio founded in 1892 the secret society of the Katipunan to serve as the military arm of the
secessionist movement whose principal aim was to create an independent Filipino nation by
armed revolution.134 While preparing for separation from Spain, representatives of the movement
engaged in various constitutional projects that would reflect the longings and aspirations of the
Filipino people. On May 31, 1897, a republican government was established in Biak-na-Bato,
followed on November 1, 1897 by the unanimous adoption of the Provisional Constitution of the
Republic of the Philippines, popularly known as the Constitution of Biak-na-Bato, by the
revolution’s representatives. The document was an almost exact copy of the Cuban Constitution of
Jimaguayu,135 except for four articles which its authors Felix Ferrer and Isabelo Artacho added.
These four articles formed the constitution’s Bill of Rights and protected, among others, religious
liberty, the right of association, freedom of the press, freedom from imprisonment except by virtue
of an order issued by a competent court, and freedom from deprivation of property or domicile
except by virtue of judgment passed by a competent court of authority.136
The Biak-na-Bato Constitution was projected to have a life-span of two years, after which a final
constitution would be drafted. Two months after it was adopted, however, the Pact of Biak-na-Bato
was signed whereby the Filipino military leaders agreed to cease fighting against the Spaniards
and guaranteed peace for at least three years, in exchange for monetary indemnity for the Filipino
men in arms and for promised reforms. Likewise, General Emilio Aguinaldo, who by then had
become the military leader after Bonifacio’s death, agreed to leave the Philippines with other
Filipino leaders. They left for Hongkong in December 1897.
A few months later, the Spanish-American war broke out in April 1898. Upon encouragement of
American officials, Aguinaldo came back to the Philippines and set up a temporary dictatorial
government with himself as dictator. In June 1898, the dictatorship was terminated and Aguinaldo
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became the President of the Revolutionary Government.137 By this time, the relations between
the American troops and the Filipino forces had become precarious as it became more evident
that the Americans planned to stay. In September 1898, the Revolutionary Congress was
inaugurated whose primary goal was to formulate and promulgate a Constitution. The fruit of their
efforts was the Malolos Constitution which, as admitted by Felipe Calderon who drafted it, was
based on the constitutions of South American Republics138 while the Bill of Rights was
substantially a copy of the Spanish Constitution.139 The Bill of Rights included among others,
freedom of religion, freedom from arbitrary arrests and imprisonment, security of the domicile and
of papers and effects against arbitrary searches and seizures, inviolability of correspondence, due
process in criminal prosecutions, freedom of expression, freedom of association, and right of
peaceful petition for the redress of grievances. Its Article 28 stated that "(t)he enumeration of the
rights granted in this title does not imply the prohibition of any others not expressly stated."140
This suggests that natural law was the source of these rights.141 The Malolos Constitution was
short-lived. It went into effect in January 1899, about two months before the ratification of the
Treaty of Paris transferring sovereignty over the Islands to the United States. Within a month after
the constitution’s promulgation, war with the United States began and the Republic survived for
only about ten months. On March 23, 1901, American forces captured Aguinaldo and a week later,
he took his oath of allegiance to the United States.142
In the early months of the war against the United States, American President McKinley sent the
First Philippine Commission headed by Jacob Gould Schurman to assess the Philippine situation.
On February 2, 1900, in its report to the President, the Commission stated that the Filipino people
wanted above all a "guarantee of those fundamental human rights which Americans hold to be the
natural and inalienable birthright of the individual but which under Spanish domination in the
Philippines had been shamefully invaded and ruthlessly trampled upon."143 (emphasis supplied)
In response to this, President McKinley, in his Instruction of April 7, 1900 to the Second Philippine
Commission, provided an authorization and guide for the establishment of a civil government in
the Philippines and stated that "(u)pon every division and branch of the government of the
Philippines . . . must be imposed these inviolable rules . . ." These "inviolable rules" were almost
literal reproductions of the First to Ninth and the Thirteenth Amendment of the United States
Constitution, with the addition of the prohibition of bills of attainder and ex post facto laws in Article
1, Section 9 of said Constitution. The "inviolable rules" or Bill of Rights provided, among others,
that no person shall be deprived of life, liberty, or property without due process of law; that no
person shall be twice put in jeopardy for the same offense or be compelled to be a witness against
himself; that the right to be secure against unreasonable searches and seizures shall not be
violated; that no law shall be passed abridging the freedom of speech or of the press or of the
rights of the people to peaceably assemble and petition the Government for redress of grievances.
Scholars have characterized the Instruction as the "Magna Charta of the Philippines" and as a
"worthy rival of the Laws of the Indies."144
The "inviolable rules" of the Instruction were re-enacted almost exactly in the Philippine Bill of
1902,145 an act which temporarily provided for the administration of the affairs of the civil
government in the Philippine Islands,146 and in the Philippine Autonomy Act of 1916,147
otherwise known as the Jones Law, which was an act to declare the purpose of the people of the
United States as to the future of the Philippine Islands and to provide an autonomous government
for it.148 These three organic acts - the Instruction, the Philippine Bill of 1902, and the Jones Law
- extended the guarantees of the American Bill of Rights to the Philippines. In Kepner v. United
States,149 Justice Day prescribed the methodology for applying these "inviolable rules" to the
Philippines, viz: "(t)hese principles were not taken from the Spanish law; they were carefully
collated from our own Constitution, and embody almost verbatim the safeguards of that instrument
for the protection of life and liberty."150 Thus, the "inviolable rules" should be applied in the sense
"which has been placed upon them in construing the instrument from which they were taken."151
(emphasis supplied)
Thereafter, the Philippine Independence Law, popularly known as the Tydings-McDuffie Law of
1934, was enacted. It guaranteed independence to the Philippines and authorized the drafting of a
Philippine Constitution. The law provided that the government should be republican in form and
the Constitution to be drafted should contain a Bill of Rights.152 Thus, the Constitutional
Convention of 1934 was convened. In drafting the Constitution, the Convention preferred to be
generally conservative on the belief that to be stable and permanent, the Constitution must be
anchored on the experience of the people, "providing for institutions which were the natural
outgrowths of the national life."153 As the people already had a political organization buttressed
by national traditions, the Constitution was to sanctify these institutions tested by time and the
Filipino people’s experience and to confirm the practical and substantial rights of the people. Thus,
the institutions and philosophy adopted in the Constitution drew substantially from the organic acts
which had governed the Filipinos for more than thirty years, more particularly the Jones Law of
1916. In the absence of Philippine precedents, the Convention considered precedents of
American origin that might be suitable to our substantially American political system and to the
Filipino psychology and traditions.154 Thus, in the words of Claro M. Recto, President of the
Constitutional Convention, the 1935 Constitution was "frankly an imitation of the American
charter."155
Aside from the heavy American influence, the Constitution also bore traces of the Malolos
Constitution, the German Constitution, the Constitution of the Republic of Spain, the Mexican
Constitution, and the Constitutions of several South American countries, and the English unwritten
constitution. Though the Tydings-McDuffie law mandated a republican constitution and the
inclusion of a Bill of Rights, with or without such mandate, the Constitution would have
nevertheless been republican because the Filipinos were satisfied with their experience of a
republican government; a Bill of Rights would have nonetheless been also included because the
people had been accustomed to the role of a Bill of Rights in the past organic acts.156
The Bill of Rights in the 1935 Constitution was reproduced largely from the report of the
Convention’s committee on bill of rights. The report was mostly a copy of the Bill of Rights in the
Jones Law, which in turn was borrowed from the American constitution. Other provisions in the
report drew from the Malolos Constitution and the constitutions of the Republic of Spain, Italy and
Japan. There was a conscious effort to retain the phraseology of the well-known provisions of the
Jones Law because of the jurisprudence that had built around them. The Convention insistently
avoided including provisions in the Bill of Rights not tested in the Filipino experience.157 Thus,
upon submission of its draft bill of rights to the President of the Convention, the committee on bill
of rights stated:
"Adoption and adaptation have been the relatively facile work of your committee in the formulation
of a bill or declaration of rights to be incorporated in the Constitution of the Philippine Islands. No
attempt has been made to incorporate new or radical changes. . .
The enumeration of individual rights in the present organic law (Acts of Congress of July 1, 1902,
August 29, 1916) is considered ample, comprehensive and precise enough to safeguard the rights
and immunities of Filipino citizens against abuses or encroachments of the Government, its
powers or agents. . .
Modifications or changes in phraseology have been avoided, wherever possible. This is because
the principles must remain couched in a language expressive of their historical background,
nature, extent and limitations, as construed and expounded by the great statesmen and jurists that
have vitalized them."158 (emphasis supplied)
The 1935 Constitution was approved by the Convention on February 8, 1935 and signed on
February 19, 1935. On March 23, 1935, United States President Roosevelt affixed his signature
on the Constitution. By an overwhelming majority, the Filipino voters ratified it on May 14,
1935.159
Then dawned the decade of the 60s. There grew a clamor to revise the 1935 charter for it to be
more responsive to the problems of the country, specifically in the socio-economic arena and to
the sources of threats to the security of the Republic identified by then President Marcos. In 1970,
delegates to the Constitution Convention were elected, and they convened on June 1, 1971. In
their deliberations, "the spirit of moderation prevailed, and the . . . Constitution was hardly notable
for its novelty, much less a radical departure from our constitutional tradition."160 Our rights in the
1935 Constitution were reaffirmed and the government to which we have been accustomed was
instituted, albeit taking on a parliamentary rather than presidential form.161
The Bill of Rights in the 1973 Constitution had minimal difference from its counterpart in the 1935
Constitution. Previously, there were 21 paragraphs in one section, now there were twenty-three.
The two rights added were the recognition of the people’s right to access to official records and
documents and the right to speedy disposition of cases. To the right against unreasonable
searches and seizures, a second paragraph was added that evidence obtained therefrom shall be
inadmissible for any purpose in any proceeding.162
The 1973 Constitution went into effect on January 17, 1973 and remained the fundamental law
until President Corazon Aquino rose to power in defiance of the 1973 charter and upon the "direct
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exercise of the power of the Filipino people"163 in the EDSA Revolution of February 23-25, 1986.
On February 25, 1986, she issued Proclamation No. 1 recognizing that "sovereignty resides in the
people and all government authority emanates from them" and that she and Vice President
Salvador Laurel were "taking power in the name and by the will of the Filipino people."164 The old
legal order, constitution and enactments alike, was overthrown by the new administration.165 A
month thenceforth, President Aquino issued Proclamation No. 3, "Declaring National Policy to
Implement the Reforms Mandated by the People, Protecting their Basic Rights, Adopting a
Provisional Constitution, and Providing for an Orderly Transition to Government under a New
Constitution." The Provisional Constitution, otherwise known as the "Freedom Constitution"
adopted certain provisions of the 1973 Constitution, including the Bill of Rights which was adopted
in toto, and provided for the adoption of a new constitution within 60 days from the date of
Proclamation No. 3.166
Pursuant to the Freedom Constitution, the 1986 Constitutional Commission drafted the 1987
Constitution which was ratified and became effective on February 2, 1987.167 As in the 1935 and
1973 Constitutions, it retained a republican system of government, but emphasized and created
more channels for the exercise of the sovereignty of the people through recall, initiative,
referendum and plebiscite.168 Because of the wide-scale violation of human rights during the
dictatorship, the 1987 Constitution contains a Bill of Rights which more jealously safeguards the
people’s "fundamental liberties in the essence of a constitutional democracy", in the words of
ConCom delegate Fr. Joaquin Bernas, S.J.169 It declares in its state policies that "(t)he state
values the dignity of every human person and guarantees full respect for human rights."170 In
addition, it has a separate Article on Social Justice and Human Rights, under which, the
Commission on Human Rights was created.171
Considering the American model and origin of the Philippine constitution, it is not surprising that
Filipino jurists and legal scholars define and explain the nature of the Philippine constitution in
similar terms that American constitutional law scholars explain their constitution. Chief Justice
Fernando, citing Laski, wrote about the basic purpose of a civil society and government, viz:
"The basic purpose of a State, namely to assure the happiness and welfare of its citizens is kept
foremost in mind. To paraphrase Laski, it is not an end in itself but only a means to an end, the
individuals composing it in their separate and identifiable capacities having rights which must be
respected. It is their happiness then, and not its interest, that is the criterion by which its behavior
is to be judged; and it is their welfare, and not the force at its command, that sets the limits to the
authority it is entitled to exercise."172 (emphasis supplied)
Citing Hamilton, he also defines a constitution along the lines of the natural law theory as "a law
for the government, safeguarding (not creating) individual rights, set down in writing."173
(emphasis supplied) This view is accepted by Tañada and Fernando who wrote that the
constitution "is a written instrument organizing the government, distributing its powers and
safeguarding the rights of the people."174 Chief Justice Fernando also quoted Schwartz that "a
constitution is seen as an organic instrument, under which governmental powers are both
conferred and circumscribed. Such stress upon both grant and limitation of authority is
fundamental in American theory. ‘The office and purpose of the constitution is to shape and fix the
limits of governmental activity.’"175 Malcolm and Laurel define it according to Justice Miller’s
definition in his opus on the American Constitution176 published in 1893 as "the written instrument
by which the fundamental powers of government are established, limited and defined, and by
which those powers are distributed among the several departments for their safe and useful
exercise for the benefit of the body politic."177 The constitution exists to assure that in the
government’s discharge of its functions, the "dignity that is the birthright of every human being is
duly safeguarded."178
Clearly then, at the core of constitutionalism is a strong concern for individual rights179 as in the
modern period natural law theories. Justice Laurel as delegate to the 1934 Constitutional
Convention declared in a major address before the Convention:
"There is no constitution, worthy of the name, without a bill or declaration of rights. (It is) the
palladium of the people’s liberties and immunities, so that their persons, homes, their peace, their
livelihood, their happiness and their freedom may be safe and secure from an ambitious ruler, an
envious neighbor, or a grasping state."180
As Chairman of the Committee on the Declaration of Rights, he stated:
"The history of the world is the history of man and his arduous struggle for liberty. . . . It is the
history of those brave and able souls who, in the ages that are past, have labored, fought and bled
that the government of the lash - that symbol of slavery and despotism - might endure no more. It
is the history of those great self-sacrificing men who lived and suffered in an age of cruelty, pain
and desolation, so that every man might stand, under the protection of great rights and privileges,
the equal of every other man."181
Being substantially a copy of the American Bill of Rights, the history of our Bill of Rights dates
back to the roots of the American Bill of Rights. The latter is a charter of the individual’s liberties
and a limitation upon the power of the state182 which traces its roots to the English Magna Carta
of 1215, a first in English history for a written instrument to be secured from a sovereign ruler by
the bulk of the politically articulate community that intended to lay down binding rules of law that
the ruler himself may not violate. "In Magna Carta is to be found the germ of the root principle that
there are fundamental individual rights that the State -sovereign though it is - may not infringe."183
(emphasis supplied)
In Sales v. Sandiganbayan, et al.,184 quoting Allado v. Diokno,185 this Court ruled that the Bill of
Rights guarantees the preservation of our natural rights, viz:
"The purpose of the Bill of Rights is to protect the people against arbitrary and discriminatory use
of political power. This bundle of rights guarantees the preservation of our natural rights which
include personal liberty and security against invasion by the government or any of its branches or
instrumentalities."186 (emphasis supplied)
We need, however, to fine tune this pronouncement of the Court, considering that certain rights in
our Bill of Rights, for example habeas corpus, have been identified not as a natural right, but a civil
right created by law. Likewise, the right against unreasonable searches and seizures has been
identified in Simon as a civil right, without expounding however what civil right meant therein -
whether a natural right existing before the constitution and protected by it, thus acquiring the
status of a civil right; or a right created merely by law and non-existent in the absence of law. To
understand the nature of the right against unreasonable search and seizure and the corollary right
to exclusion of evidence obtained therefrom, we turn a heedful eye on the history, concept and
purpose of these guarantees.
IV. History of the Guarantee against
Unreasonable Search and Seizure and the
Right to Exclusion of Illegally Seized Evidence
in the United States and in the Philippines
The origin of the guarantee against unreasonable search and seizure in the Philippine
constitutions can be traced back to hundreds of years ago in a land distant from the Philippines.
Needless to say, the right is well-entrenched in history.
The power to search in England was first used as an instrument to oppress objectionable
publications.187 Not too long after the printing press was developed, seditious and libelous
publications became a concern of the Crown, and a broad search and seizure power developed to
suppress these publications.188 General warrants were regularly issued that gave all kinds of
people the power to enter and seize at their discretion under the authority of the Crown to enforce
publication licensing statutes.189 In 1634, the ultimate ignominy in the use of general warrants
came when the early "great illuminary of the common law,"190 and most influential of the Crown’s
opponents,191 Sir Edward Coke, while on his death bed, was subjected to a ransacking search
and the manuscripts of his Institutes were seized and carried away as seditious and libelous
publications.192
The power to issue general warrants and seize publications grew. They were also used to search
for and seize smuggled goods.193 The developing common law tried to impose limits on the
broad power to search to no avail. In his History of the Pleas of Crown, Chief Justice Hale stated
unequivocally that general warrants were void and that warrants must be used on "probable
cause" and with particularity.194 Member of Parliament, William Pitt, made his memorable and oft-
quoted speech against the unrestrained power to search:
"The poorest man may, in his cottage, bid defiance to all the forces of the Crown. It may be frail -
its roof may shake - the wind may blow through it - the storm may enter - the rain may enter; but
the King of England may not enter; all his force dares not cross the threshold of the ruined
tenement."195
Nevertheless, legislation authorizing general warrants continued to be passed.196
In the 16th century, writs of assistance, called as such because they commanded all officers of the
Crown to participate in their execution,197 were also common. These writs authorized searches
and seizures for enforcement of import duty laws.198 The "same powers and authorities" and the
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"like assistance" that officials had in England were given to American customs officers when
parliament extended the customs laws to the colonies. The abuse in the writs of assistance was
not only that they were general, but they were not returnable and once issued, lasted six months
past the life of the sovereign.199
These writs caused profound resentment in the colonies.200 They were predominantly used in
Massachusetts, the largest port in the colonies201 and the seat of the American revolution. When
the writs expired six months after the death of George II in October 1760,202 sixty-three Boston
merchants who were opposed to the writs retained James Otis, Jr. to petition the Superior Court
for a hearing on the question of whether new writs should be issued.203 Otis used the opportunity
to denounce England’s whole policy to the colonies and on general warrants.204 He pronounced
the writs of assistance as "the worst instrument of arbitrary power, the most destructive of English
liberty and the fundamental principles of law, that ever was found in an English law book" since
they placed "the liberty of every man in the hands of every petty officer."205 Otis was a visionary
and apparently made the first argument for judicial review and nullifying of a statute exceeding the
legislature’s power under the Constitution and "natural law."206 This famous debate in February
1761 in Boston was "perhaps the most prominent event which inaugurated the resistance of the
colonies to the oppressions of the mother country. ‘Then and there,’ said John Adams, ‘then and
there was the first scene of the first act of opposition to the arbitrary claims of Great Britain. Then
and there the child Independence was born.’"207 But the Superior Court nevertheless held that
the writs could be issued.208
Once the customs officials had the writs, however, they had great difficulty enforcing the customs
laws owing to rampant smuggling and mob resistance from the citizenry.209 The revolution had
begun. The Declaration of Independence followed. The use of general warrants and writs of
assistance in enforcing customs and tax laws was one of the causes of the American
Revolution.210
Back in England, shortly after the Boston debate, John Wilkes, a member of Parliament,
anonymously published the North Briton, a series of pamphlets criticizing the policies of the British
government.211 In 1763, one pamphlet was very bold in denouncing the government. Thus, the
Secretary of the State issued a general warrant to "search for the authors, printers, and publishers
of [the] seditious and treasonable paper."212 Pursuant to the warrant, Wilkes’ house was
searched and his papers were indiscriminately seized. He sued the perpetrators and obtained a
judgment for damages. The warrant was pronounced illegal "as totally subversive of the liberty"
and "person and property of every man in this kingdom."213
Seeing Wilkes’ success, John Entick filed an action for trespass for the search and seizure of his
papers under a warrant issued earlier than Wilkes’. This became the case of Entick v.
Carrington,214 considered a landmark of the law of search and seizure and called a familiar
"monument of English freedom".215 Lord Camden, the judge, held that the general warrant for
Entick’s papers was invalid. Having described the power claimed by the Secretary of the State for
issuing general search warrants, and the manner in which they were executed, Lord Camden
spoke these immortalized words, viz:
"Such is the power and therefore one would naturally expect that the law to warrant it should be
clear in proportion as the power is exorbitant. If it is law, it will be found in our books; if it is not to
be found there, it is not law.
The great end for which men entered into society was to secure their property. That right is
preserved sacred and incommunicable in all instances where it has not been taken away or
abridged by some public law for the good of the whole. The cases where this right of property is
set aside by positive law are various. Distresses, executions, forfeitures, taxes, etc., are all of this
description, wherein every man by common consent gives up that right for the sake of justice and
the general good. By the laws of England, every invasion of private property, be it ever so minute,
is a trespass. No man can set his foot upon my ground without my license but he is liable to an
action though the damage be nothing; which is proved by every declaration in trespass where the
defendant is called upon to answer for bruising the grass and even treading upon the soil. If he
admits the fact, he is bound to show by way of justification that some positive law has justified or
excused him. . . If no such excuse can be found or produced, the silence of the books is an
authority against the defendant and the plaintiff must have judgment. . ."216 (emphasis supplied)
The experience of the colonies on the writs of assistance which spurred the Boston debate and
the Entick case which was a "monument of freedom" that every American statesman knew during
the revolutionary and formative period of America, could be confidently asserted to have been "in
the minds of those who framed the Fourth Amendment to the Constitution, and were considered
as sufficiently explanatory of what was meant by unreasonable searches and seizures."217
The American experience with the writs of assistance and the Entick case were considered by the
United States Supreme Court in the first major case to discuss the scope of the Fourth
Amendment right against unreasonable search and seizure in the 1885 case of Boyd v. United
States, supra, where the court ruled, viz:
"The principles laid down in this opinion (Entick v. Carrington, supra) affect the very essence of
constitutional liberty and security. They reach farther than the concrete form of the case then
before the court, with its adventitious circumstances; they apply to all invasions, on the part of the
Government and its employees, of the sanctity of a man’s home and the privacies of life. It is not
the breaking of his doors and the rummaging of his drawers that constitutes the essence of the
offense; but it is the invasion of his indefeasible right of personal security, personal liberty and
private property, where that right has never been forfeited by his conviction of some public
offense; it is the invasion of this sacred right which underlies and constitutes the essence of Lord
Camden’s judgment."218 (emphasis supplied)
In another landmark case of 1914, Weeks v. United States,219 the Court, citing Adams v. New
York,220 reiterated that the Fourth Amendment was intended to secure the citizen in person and
property against the unlawful invasion of the sanctity of his home by officers of the law, acting
under legislative or judicial sanction.
With this genesis of the right against unreasonable searches and seizures and the jurisprudence
that had built around it, the Fourth Amendment guarantee was extended by the United States to
the Filipinos in succinct terms in President McKinley’s Instruction of April 7, 1900, viz:
". . . that the right to be secure against unreasonable searches and seizures shall not be
violated."221
This provision in the Instruction was re-enacted in Section 5 of the Philippine Bill of 1902, this time
with a provision on warrants, viz:
"That the right to be secure against unreasonable searches and seizures shall not be violated.
xxx xxx xxx
That no warrant shall issue except upon probable cause, supported by oath or affirmation, and
particularly describing the place to be searched and the person or things to be seized."222
The above provisions were reproduced verbatim in the Jones Law of 1916.
Then came the 1935 Constitution which provides in Article IV, Section 1(3), viz:
"Section 1(3). The right of the people to be secure in their persons, houses, papers, and effects
against unreasonable searches and seizures shall not be violated, and no warrants shall issue but
upon probable cause, to be determined by the judge after examination under oath or affirmation of
the complainant and the witnesses he may produce, and particularly describing the place to be
searched, and the persons or things to be seized."
Initially, the Constitutional Convention’s committee on bill of rights proposed an exact copy of the
Fourth Amendment of the United States Constitution in their draft, viz:
"The right of the people to be secure in their persons, houses, papers, and effects, against
unreasonable searches and seizures, shall not be violated, and no warrants shall issue but upon
probable cause, supported by oath or affirmation, and particularly describing the place to be
searched, and the persons or things to be seized."223
During the debates of the Convention, however, Delegate Vicente Francisco proposed to amend
the provision by inserting the phrase "to be determined by the judge after examination under oath
or affirmation of the complainant and the witness he may produce" in lieu of "supported by oath or
affirmation." His proposal was based on Section 98 of General Order No. 58 or the Code of
Criminal Procedure then in force in the Philippines which provided that: "(t)he judge or justice of
the peace must, before issuing the warrant, examine on oath or affirmation the complainant and
any witness he may produce and take their deposition in writing."224 The amendment was
accepted as it was a remedy against the evils pointed out in the debates, brought about by the
issuance of warrants, many of which were in blank, upon mere affidavits on facts which were
generally found afterwards to be false.225
When the Convention patterned the 1935 Constitution’s guarantee against unreasonable searches
and seizures after the Fourth Amendment, the Convention made specific reference to the Boyd
case and traced the history of the guarantee against unreasonable search and seizure back to the
issuance of general warrants and writs of assistance in England and the American colonies.226
From the Boyd case, it may be derived that our own Constitutional guarantee against
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unreasonable searches and seizures, which is an almost exact copy of the Fourth Amendment,
seeks to protect rights to security of person and property as well as privacy in one’s home and
possessions.
Almost 40 years after the ratification of the 1935 Constitution, the provision on the right against
unreasonable searches and seizures was amended in Article IV, Section 3 of the 1973
Constitution, viz:
"Sec. 3. The right of the people to be secure in their persons, houses, papers, and effects against
unreasonable searches and seizures of whatever nature and for any purpose shall not be violated,
and no search warrant or warrant of arrest shall issue except upon probable cause to be
determined by the judge, or such other responsible officer as may be authorized by law, after
examination under oath or affirmation of the complainant and the witnesses he may produce, and
particularly describing the place to be searched, and the persons or things to be seized."
Noticeably, there were three modifications of the 1935 counterpart, namely: (1) the clause was
made applicable to searches and seizures "of whatever nature and for any purpose"; (2) the
provision on warrants was expressly made applicable to both "search warrant or warrant of
arrest"; and (3) probable cause was made determinable not only by a judge, but also by "such
other officer as may be authorized by law."227 But the concept and purpose of the right remained
substantially the same.
As a corollary to the above provision on searches and seizures, the exclusionary rule made its
maiden appearance in Article IV, Section 4(2) of the Constitution, viz:
"Section 4 (1). The privacy of communication and correspondence shall be inviolable except upon
lawful order of the court, or when public safety and order require otherwise.
(2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any
purpose in any proceeding."
That evidence obtained in violation of the guarantee against unreasonable searches and seizures
is inadmissible was an adoption of the Court’s ruling in the 1967 case of Stonehill v. Diokno.228
Sections 3 and 4 of the 1973 Constitution were adopted in toto in Article I, Section 1 of the
Freedom Constitution which took effect on March 25, 1986, viz:
"Section 1. The provision of . . . ARTICLE IV (Bill of Rights) . . . of the 1973 Constitution, as
amended, remain in force and effect and are hereby adopted in toto as part of this Provisional
Constitution."229
Thereafter, pursuant to the Freedom Constitution, the 1987 Constitution was drafted and ratified
on February 2, 1987. Sections 2 and 3, Article III thereof provide:
"Section 2. The right of the people to be secure in their persons, houses, papers, and effects
against unreasonable searches and seizures of whatever nature and for any purpose shall be
inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to
be determined personally by a judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the place to be
searched and the persons or things to be seized.
xxx xxx xxx
Section 3 (1). The privacy of communication and correspondence shall be inviolable except upon
lawful order of the court, or when public safety and order requires otherwise as prescribed by law.
(2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any
purpose in any proceeding."
The significant modification of Section 2 is that probable cause may be determined only by a judge
and no longer by "such other responsible officer as may be authorized by law." This was a
reversion to the counterpart provision in the 1935 Constitution.
Parenthetically, in the international arena, the UDHR provides a similar protection in Article 12, viz:
"No one shall be subjected to arbitrary interference with his privacy, family, home or
correspondence, nor to attacks upon his honour and reputation. Everyone has the right to the
protection of the law against such interference or attacks."
The ICCPR similarly protects this human right in Article 17, viz:
"1. No one shall be subjected to arbitrary or unlawful interference with his privacy, family, home or
correspondence, nor to attacks upon his honour and reputation.
2. Everyone has the right to protection of the law against such interference or attacks."
In the United States, jurisprudence on the Fourth Amendment continued to grow from the Boyd
case. The United States Supreme Court has held that the focal concern of the Fourth Amendment
is to protect the individual from arbitrary and oppressive official conduct.230 It also protects the
privacies of life and the sanctity of the person from such interference.231 In later cases, there has
been a shift in focus: it has been held that the principal purpose of the guarantee is the protection
of privacy rather than property, "[f]or the Fourth Amendment protects people, not places."232 The
tests that have more recently been formulated in interpeting the provision focus on privacy rather
than intrusion of property such as the "constitutionally protected area" test in the 1961 case of
Silverman v. United States233 and the "reasonable expectation of privacy" standard in Katz v.
United States234 which held that the privacy of communication in a public telephone booth comes
under the protection of the Fourth Amendment.
Despite the shift in focus of the Fourth Amendment in American jurisdiction, the essence of this
right in Philippine jurisdiction has consistently been understood as respect for one’s personality,
property, home, and privacy. Chief Justice Fernando explains, viz:
"It is deference to one’s personality that lies at the core of this right, but it could be also looked
upon as a recognition of a constitutionally protected area, primarily one’s home, but not
necessarily excluding an office or a hotel room. (Cf. Hoffa v. United States, 385 US 293 [1966])
What is sought to be regarded is a man’s prerogative to choose who is allowed entry in his
residence, for him to retreat from the cares and pressures, even at times the oppressiveness of
the outside world, where he can truly be himself with his family. In that haven of refuge, his
individuality can assert itself not only in the choice of who shall be welcome but likewise in the
objects he wants around him. There the state, however powerful, does not as such have access
except under the circumstances noted, for in the traditional formulation, his house, however
humble, is his castle. (Cf. Cooley: ‘Near in importance to exemption from any arbitrary control of
the person is that maxim of the common law which secures to the citizen immunity in his home
against the prying eyes of the government, and protection in person, property, and papers against
even the process of the law, except in specified cases. The maxim that ‘every man’s house is his
castle,’ is made part of our constitutional law in the clauses prohibiting unreasonable searches and
seizures, and has always been looked upon as of high value to the citizen.’ (1 Constitutional
Limitations, pp. 610-611 [1927]) In the language of Justice Laurel, this provision is ‘intended to
bulwark individual security, home, and legitimate possessions’ (Rodriquez v. Vollamiel, 65 Phil.
230, 239 (1937). Laurel con.) Thus is protected ‘his personal privacy and dignity against
unwarranted intrusion by the State.’ There is to be no invasion ‘on the part of the government and
its employees of the sanctity of a man’s home and the privacies of life.’ (Boyd v. United States,
116 US 616, 630 [1886])"235 (emphasis supplied)
As early as 1904, the Court has affirmed the sanctity and privacy of the home in United States v.
Arceo,236 viz:
"The inviolability of the home is one of the most fundamental of all the individual rights declared
and recognized in the political codes of civilized nations. No one can enter into the home of
another without the consent of its owners or occupants.
The privacy of the home - the place of abode, the place where man with his family may dwell in
peace and enjoy the companionship of his wife and children unmolested by anyone, even the
king, except in rare cases - has always been regarded by civilized nations as one of the most
sacred personal rights to whom men are entitled. Both the common and the civil law guaranteed to
man the right to absolute protection to the privacy of his home. The king was powerful; he was
clothed with majesty; his will was the law, but, with few exceptions, the humblest citizen or subject
might shut the door of his humble cottage in the face of the monarch and defend his intrusion into
that privacy which was regarded as sacred as any of the kingly prerogatives. . .
‘A man’s house is his castle,’ has become a maxim among the civilized peoples of the earth. His
protection therein has become a matter of constitutional protection in England, America, and
Spain, as well as in other countries.
xxx xxx xxx
So jealously did the people of England regard this right to enjoy, unmolested, the privacy of their
houses, that they might even take the life of the unlawful intruder, if it be nighttime. This was also
the sentiment of the Romans expressed by Tully: ‘Quid enim sanctius quid omni religione
munitius, quam domus uniuscu jusque civium.’ "237 (emphasis supplied)
The Court reiterated this in the 1911 case of United States v. De Los Reyes, et al.,238 to
demonstrate the uncompromising regard placed upon the privacy of the home that cannot be
violated by unreasonable searches and seizures, viz:
"In the case of McClurg vs. Brenton (123 Iowa, 368), the court, speaking of the right of an officer to
enter a private house to search for the stolen goods, said:
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‘The right of the citizen to occupy and enjoy his home, however mean or humble, free from
arbitrary invasion and search, has for centuries been protected with the most solicitous care by
every court in the English-speaking world, from Magna Charta down to the present, and is
embodied in every bill of rights defining the limits of governmental power in our own republic.
‘The mere fact that a man is an officer, whether of high or low degree, gives him no more right
than is possessed by the ordinary private citizen to break in upon the privacy of a home and
subject its occupants to the indignity of a search for the evidence of crime, without a legal warrant
procured for that purpose. No amount of incriminating evidence, whatever its source, will supply
the place of such warrant. At the closed door of the home, be it palace or hovel, even blood-
hounds must wait till the law, by authoritative process, bids it open. . .’"239 (emphasis supplied)
It is not only respect for personality, privacy and property, but to the very dignity of the human
being that lies at the heart of the provision.
There is also public interest involved in the guarantee against unreasonable search and seizure.
The respect that government accords its people helps it elicit allegiance and loyalty of its citizens.
Chief Justice Fernando writes about the right against unreasonable search and seizure as well as
to privacy of communication in this wise:
"These rights, on their face, impart meaning and vitality to that liberty which in a constitutional
regime is a man’s birth-right. There is the recognition of the area of privacy normally beyond the
power of government to intrude. Full and unimpaired respect to that extent is accorded his
personality. He is free from the prying eyes of public officials. He is let alone, a prerogative even
more valued when the agencies of publicity manifest less and less diffidence in impertinent and
unwelcome inquiry into one’s person, his home, wherever he may be minded to stay, his
possessions, his communication. Moreover, in addition to the individual interest, there is a public
interest that is likewise served by these constitutional safeguards. They make it easier for state
authority to enlist the loyalty and allegiance of its citizens, with the unimpaired deference to one’s
dignity and standing as a human being, not only to his person as such but to things that may be
considered necessary appurtenances to a decent existence. A government that thus recognizes
such limits and is careful not to trespass on what is the domain subject to his sole control is likely
to prove more stable and enduring."240 (emphasis supplied)
In the 1967 case of Stonehill, et al. v. Diokno,241 this Court affirmed the sanctity of the home and
the privacy of communication and correspondence, viz:
"To uphold the validity of the warrants in question would be to wipe out completely one of the most
fundamental rights guaranteed in our Constitution, for it would place the sanctity of the domicile
and the privacy of communication and correspondence at the mercy of the whims, caprice or
passion of peace officers. This is precisely the evil sought to be remedied by the constitutional
provision above quoted - to outlaw the so-called general warrants. It is not difficult to imagine what
would happen, in times of keen political strife, when the party in power feels that the minority is
likely to wrest it, even though by legal means."242 (emphasis supplied)
Even after the 1961 Silverman and 1967 Katz cases in the United States, which emphasized
protection of privacy rather than property as the principal purpose of the Fourth Amendment, this
Court declared the avowed purposes of the guarantee in the 1981 case of People v. CFI of Rizal,
Branch IX, Quezon City,243 viz:
"The purpose of the constitutional guarantee against unreasonable searches and seizures is to
prevent violations of private security in person and property and unlawful invasion of the security
of the home by officers of the law acting under legislative or judicial sanction and to give remedy
against such usurpation when attempted. (Adams v. New York, 192 U.S. 858; Alvero v. Dizon, 76
Phil. 637 [1946]). The right to privacy is an essential condition to the dignity and happiness and to
the peace and security of every individual, whether it be of home or of persons and
correspondence. (Tañada and Carreon, Political Law of the Philippines, Vol. 2, 139 [1962]). The
constitutional inviolability of this great fundamental right against unreasonable searches and
seizures must be deemed absolute as nothing is closer to a man’s soul than the serenity of his
privacy and the assurance of his personal security. Any interference allowable can only be for the
best causes and reasons."244 (emphasis supplied)
Even if it were conceded that privacy and not property is the focus of the guarantee as shown by
the growing American jurisprudence, this Court has upheld the right to privacy and its central
place in a limited government such as the Philippines’, viz:
"The right to privacy as such is accorded recognition independently of its identification with liberty;
in itself, it is fully deserving of constitutional protection. The language of Prof. Emerson is
particularly apt: ‘The concept of limited government has always included the idea that
governmental powers stop short of certain intrusions into the personal life of the citizen. This is
indeed one of the basic distinctions between absolute and limited government. Ultimate and
pervasive control of the individual, in all aspects of his life, is the hallmark of the absolute state. In
contrast, a system of limited government safeguards a private sector, which belongs to the
individual, firmly distinguishing it from the public sector, which the state can control. Protection of
this private sector - protection, in other words, of the dignity and integrity of the individual- has
become increasingly important as modern society has developed. All the forces of technological
age - industrialization, urbanization, and organization - operate to narrow the area of privacy and
facilitate intrusion to it. In modern times, the capacity to maintain and support this enclave of
private life marks the difference between a democratic and a totalitarian society.’"245 (emphasis
supplied)
The right to privacy discussed in Justice Douglas’ dissent in the Hayden case is illuminating. We
quote it at length, viz:
"Judge Learned Hand stated a part of the philosophy of the Fourth Amendment in United States v.
Poller, 43 F2d 911, 914: ‘[I]t is only fair to observe that the real evil aimed at by the Fourth
Amendment is the search itself, that invasion of a man’s privacy which consists in rummaging
about among his effects to secure evidence against him. If the search is permitted at all, perhaps it
does not make so much difference what is taken away, since the officers will ordinarily not be
interested in what does not incriminate, and there can be no sound policy in protecting what does.
xxx xxx xxx
The constitutional philosophy is, I think, clear. The personal effects and possessions of the
individual (all contraband and the like excepted) are sacrosanct from prying eyes, from the long
arm of the law, from any rummaging by police. Privacy involves the choice of the individual to
disclose or to reveal what he believes, what he thinks, what he possesses. The article may be
nondescript work of art, a manuscript of a book, a personal account book, a diary, invoices,
personal clothing, jewelry, or whatnot. Those who wrote the Bill of Rights believed that every
individual needs both to communicate with others and to keep his affairs to himself. That dual
aspect of privacy means that the individual should have the freedom to select for himself the time
and circumstances when he will share his secrets with others and decide the extent of the sharing
(footnote omitted). This is his prerogative not the States’. The Framers, who were as
knowledgeable as we, knew what police surveillance meant and how the practice of rummaging
through one’s personal effects could destroy freedom.
xxx xxx xxx
I would . . . leave with the individual the choice of opening his private effects (apart from
contraband and the like) to the police and keeping their contents as secret and their integrity
inviolate. The existence of that choice is the very essence of the right of privacy.’"246 (emphasis
supplied)
Thus, in Griswold v. Connecticut,247 the United States Supreme Court upheld the right to marital
privacy and ruled that lawmakers could not make the use of contraceptives a crime and sanction
the search of marital bedrooms, viz:
"Would we allow the police to search the sacred precincts of marital bedrooms for telltale signs of
the use of contraceptives? The very idea is repulsive to the notions of privacy surrounding the
marriage relationship.
We deal with a right of privacy older than the Bill of Rights – older than our political parties, older
than our school system. Marriage is a coming together for better or for worse, hopefully enduring,
and intimate to the degree of being sacred. It is an association that promotes a way of life, not
causes; a harmony in living, not political faiths; a bilateral loyalty, not commercial or social
projects. Yet it is an association for as noble a purpose as any involved in our prior decisions."248
(emphasis supplied)
In relation to the right against unreasonable searches and seizures, private respondent Dimaano
likewise claims a right to the exclusionary rule, i.e., that evidence obtained from an unreasonable
search cannot be used in evidence against her. To determine whether this right is available to her,
we again examine the history, concept, and purpose of this right in both the American and
Philippine jurisdictions.
The exclusionary rule has had an uneven history in both the United States and Philippine
jurisdictions. In common law, the illegal seizure of evidence did not affect its admissibility because
of the view that physical evidence was the same however it was obtained. As distinguished from a
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coerced confession, the illegal seizure did not impeach the authenticity or reliability of physical
evidence. This view prevailed in American jurisdiction until the Supreme Court ruled in the 1914
Weeks case that evidence obtained in violation of the Fourth Amendment was inadmissible in
federal court as it amounted to theft by agents of the government. This came to be known as the
exclusionary rule and was believed to deter federal law enforcers from violating the Fourth
Amendment. In 1949, the Fourth Amendment was incorporated into the Due Process Clause
under the Fourteenth Amendment249 and made applicable in the state system in Wolf v.
Colorado,250 but the Court rejected to incorporate the exclusionary rule. At the time Wolf was
decided, 17 states followed the Weeks doctrine while 30 states did not.251 The Court reasoned:
"We cannot brush aside the experience of States which deem the incidence of such conduct by
the police too slight to call for a deterrent remedy not by way of disciplinary measures but by
overriding the relevant rules of evidence. There are, moreover, reasons for excluding evidence
unreasonably obtained by the federal police which are less compelling in the case of police under
State or local authority. The public opinion of a community can far more effectively be exerted
against oppressive conduct on the part of police directly responsible to the community itself than
can local opinion, sporadically aroused, be brought to bear upon remote authority pervasively
exerted throughout the country."252
This difference in treatment on the federal and state level of evidence obtained illegally resulted in
the "silver platter" doctrine. State law enforcement agents would provide federal officers with
illegally seized evidence, which was then admissible in federal court because, as with illegally
seized evidence by private citizens, federal officers were not implicated in obtaining it. Thus, it was
said that state law enforcers served up the evidence in federal cases in "silver platter." This
pernicious practice was stopped with the United States Supreme Court’s 1960 decision, Elkins v.
United States.253 Twelve years after Wolf, the United States Supreme Court reversed Wolf and
incorporated the exclusionary rule in the state system in Mapp v. Ohio254 because other means
of controlling illegal police behavior had failed.255 We quote at length the Mapp ruling as it had a
significant influence in the exclusionary rule in Philippine jurisdiction, viz:
". . . Today we once again examine the Wolf’s constitutional documentation of the right of privacy
free from unreasonable state intrusion, and after its dozen years on our books, are led by it to
close the only courtroom door remaining open to evidence secured by official lawlessness in
flagrant abuse of that basic right, reserved to all persons as a specific guarantee against that very
same unlawful conduct. . .
Since the Fourth Amendment’s right to privacy has been declared enforceable against the States
through the Due Process Clause of the Fourteenth, it is enforceable against them by the same
sanction of exclusion as it is used against the Federal Government. Were it otherwise, then just as
without the Weeks rule the assurance against unreasonable federal searches and seizures would
be a ‘form of words’, valueless and undeserving of mention in a perpetual charter of inestimable
human liberties, so too, without that rule the freedom from state invasions of privacy would be so
ephemeral and so neatly severed from its conceptual nexus with the freedom from all brutish
means of coercing evidence as not to permit this Court’s high regard as freedom ‘implicit in the
concept of ordered liberty.’ At that time that the Court held in Wolf that the amendment was
applicable to the States through the Due Process Clause, the cases of this court as we have seen,
had steadfastly held that as to federal officers the Fourth Amendment included the exclusion of the
evidence seized in violation of its provisions. Even Wolf ‘stoutly adhered’ to that proposition. The
right to privacy, when conceded operatively enforceable against the States, was not susceptible of
destruction by avulsion of the sanction upon which its protection and enjoyment had always been
deemed dependent under the Boyd, Weeks and Silverthorne Cases. Therefore, in extending the
substantive protections of due process to all constitutionally unreasonable searches - state or
federal - it was logically and constitutionally necessary that the exclusion doctrine - an essential
part of the right to privacy - be also insisted upon as an essential ingredient of the right newly
recognized by the Wolf case. In short, the admission of the new constitutional right by Wolf could
not consistently tolerate denial of its most important constitutional privilege, namely, the exclusion
of the evidence which an accused had been forced to give by reason of the unlawful seizure. To
hold otherwise is to grant the right but in reality to withhold its privilege and enjoyment. Only last
year the Court itself recognized that the purpose of the exclusionary rule ‘is to deter - to compel
respect for the constitutional guaranty in the only available way - by removing the incentive to
disregard it.’ (Elkins v. United States, 364 US at 217)
xxx xxx xxx
The ignoble shortcut to conviction left open to the State tends to destroy the entire system of
constitutional restraints on which the liberties of the people rest. (Cf. Marcus v. Search Warrant of
Property, 6 L ed 2d post, p. 1127) Having once recognized that the right to privacy embodied in
the Fourth Amendment is enforceable against the States, and that the right to be secure against
rude invasions of privacy by state officers is, therefore constitutional in origin, we can no longer
permit that right to remain an empty promise. Because it is enforceable in the same manner and to
like effect as other basic rights secured by its Due Process Clause, we can no longer permit it to
be revocable at the whim of any police officer who, in the name of law enforcement itself, chooses
to suspend its enjoyment. Our decision, founded on reason and truth, gives to the individual no
more than that which the Constitution guarantees him, to the police officer no less than that to
which honest law enforcement is entitled, and to the courts, that judicial integrity so necessary in
the true administration of justice."256 (emphasis supplied)
It is said that the exclusionary rule has three purposes. The major and most often invoked is the
deterrence of unreasonable searches and seizures as stated in Elkins v. United States257 and
quoted in Mapp: "(t)he rule is calculated to prevent, not repair. Its purpose is to deter – to compel
respect for constitutional guaranty in the only effective available way – by removing the incentive
to disregard it."258 Second is the "imperative of judicial integrity", i.e., that the courts do not
become "accomplices in the willful disobedience of a Constitution they are sworn to uphold . . . by
permitting unhindered governmental use of the fruits of such invasions. . . A ruling admitting
evidence in a criminal trial . . . has the necessary effect of legitimizing the conduct which produced
the evidence, while an application of the exclusionary rule withholds the constitutional
imprimatur."259 Third is the more recent purpose pronounced by some members of the United
States Supreme Court which is that "of assuring the people – all potential victims of unlawful
government conduct – that the government would not profit from its lawless behavior, thus
minimizing the risk of seriously undermining popular trust in government."260 The focus of
concern here is not the police but the public. This third purpose is implicit in the Mapp declaration
that "no man is to be convicted on unconstitutional evidence."261
In Philippine jurisdiction, the Court has likewise swung from one position to the other on the
exclusionary rule. In the 1920 case of Uy Kheytin v. Villareal,262 the Court citing Boyd, ruled that
"seizure or compulsory production of a man’s private papers to be used against him" was
tantamount to self-incrimination and was therefore "unreasonable search and seizure." This was a
proscription against "fishing expeditions." The Court restrained the prosecution from using the
books as evidence. Five years later or in 1925, we held in People v. Carlos263 that although the
Boyd and Silverthorne Lumber Co. and Silverthorne v. United States264 cases are authorities for
the doctrine that documents obtained by illegal searches were inadmissible in evidence in criminal
cases, Weeks modified this doctrine by adding that the illegality of the search and seizure should
have initially been directly litigated and established by a pre-trial motion for the return of the things
seized. As this condition was not met, the illegality of the seizure was not deemed an obstacle to
admissibility. The subject evidence was nevertheless excluded, however, for being hearsay.
Thereafter, in 1932, the Court did not uphold the defense of self-incrimination when "fraudulent
books, invoices and records" that had been seized were presented in evidence in People v.
Rubio.265 The Court gave three reasons: (1) the public has an interest in the proper regulation of
the party’s books; (2) the books belonged to a corporation of which the party was merely a
manager; and (3) the warrants were not issued to fish for evidence but to seize "instruments used
in the violation of [internal revenue] laws" and "to further prevent the perpetration of fraud."266
The exclusionary rule applied in Uy Kheytin was reaffirmed seventeen years thence in the 1937
case of Alvarez v. Court of First Instance267 decided under the 1935 Constitution. The Court ruled
that the seizure of books and documents for the purpose of using them as evidence in a criminal
case against the possessor thereof is unconstitutional because it makes the warrant unreasonable
and the presentation of evidence offensive of the provision against self-incrimination. At the close
of the Second World War, however, the Court, in Alvero v. Dizon,268 again admitted in evidence
documents seized by United States military officers without a search warrant in a prosecution by
the Philippine Government for treason. The Court reasoned that this was in accord with the Laws
and Customs of War and that the seizure was incidental to an arrest and thus legal. The issue of
self-incrimination was not addressed at all and instead, the Court pronounced that even if the
seizure had been illegal, the evidence would nevertheless be admissible following jurisprudence in
the United States that evidence illegally obtained by state officers or private persons may be used
by federal officers.269
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Then came Moncado v. People’s Court270 in 1948. The Court made a categorical declaration that
"it is established doctrine in the Philippines that the admissibility of evidence is not affected by the
illegality of the means used for obtaining it." It condemned the "pernicious influence" of Boyd and
totally rejected the doctrine in Weeks as "subversive of evidentiary rules in Philippine jurisdiction."
The ponencia declared that the prosecution of those guilty of violating the right against
unreasonable searches and seizures was adequate protection for the people. Thus it became
settled jurisprudence that illegally obtained evidence was admissible if found to be relevant to the
case271 until the 1967 landmark decision of Stonehill v. Diokno272 which overturned the
Moncado rule. The Court held in Stonehill, viz:
". . . Upon mature deliberation, however, we are unanimously of the opinion that the position taken
in the Moncado case must be abandoned. Said position was in line with the American common
law rule, that the criminal should not be allowed to go free merely ‘because the constable has
blundered,’ (People v. Defore, 140 NE 585) upon the theory that the constitutional prohibition
against unreasonable searches and seizures is protected by means other than the exclusion of
evidence unlawfully obtained (Wolf v. Colorado, 93 L.Ed. 1782), such as common-law action for
damages against the searching officer, against the party who procured the issuance of the search
warrant and against those assisting in the execution of an illegal search, their criminal punishment,
resistance, without liability to an unlawful seizure, and such other legal remedies as may be
provided by other laws.
However, most common law jurisdictions have already given up this approach and eventually
adopted the exclusionary rule, realizing that this is the only practical means of enforcing the
constitutional injunction against unreasonable searches and seizures."273
The Court then quoted the portion of the Mapp case which we have quoted at length above in
affirming that the exclusionary rule is part and parcel of the right against unreasonable searches
and seizures. The Stonehill ruling was incorporated in Article 4, Section 4(2) of the 1973
Constitution and carried over to Article 3, Section 3(2) of the 1987 Constitution.
V. Application of the Natural Law
Culled from History and Philosophy:
Are the Rights Against Unreasonable Search and Seizure
and to the Exclusion of Illegally Seized Evidence Natural Rights
which Private Respondent Dimaano Can Invoke?
In answering this question, Justice Goldberg’s concurring opinion in the Griswold case serves as a
helpful guidepost to determine whether a right is so fundamental that the people cannot be
deprived of it without undermining the tenets of civil society and government, viz:
"In determining which rights are fundamental, judges are not left at large to decide cases in light of
their personal and private notions. Rather, they must look to the ‘traditions and [collective]
conscience of our people’ to determine whether a principle is ‘so rooted [there] . . . as to be ranked
as fundamental.’ (Snyder v. Com. of Massachusetts, 291 U.S. 97, 105 (1934)). The inquiry is
whether a right involved ‘is of such character that it cannot be denied without violating those
‘fundamental principles of liberty and justice which lie at the base of all our civil and political
institutions.’ . . . Powell v. State of Alabama, 287 U.S. 45, 67 (1932)"274 (emphasis supplied)
In deciding a case, invoking natural law as solely a matter of the judge’s personal preference,
invites criticism that the decision is a performative contradiction and thus self-defeating. Critics
would point out that while the decision invokes natural law that abhors arbitrariness, that same
decision is tainted with what it abhors as it stands on the judge’s subjective and arbitrary choice of
a school of legal thought. Just as one judge will fight tooth and nail to defend the natural law
philosophy, another judge will match his fervor in defending a contrary philosophy he espouses.
However, invoking natural law because the history, tradition and moral fiber of a people
indubitably show adherence to it is an altogether different story, for ultimately, in our political and
legal tradition, the people are the source of all government authority, and the courts are their
creation. While it may be argued that the choice of a school of legal thought is a matter of opinion,
history is a fact against which one cannot argue - and it would not be turning somersault with
history to say that the American Declaration of Independence and the consequent adoption of a
constitution stood on a modern natural law theory foundation as this is "universally taken for
granted by writers on government."275 It is also well-settled in Philippine history that the American
system of government and constitution were adopted by our 1935 Constitutional Convention as a
model of our own republican system of government and constitution. In the words of Claro M.
Recto, President of the Convention, the 1935 Constitution is "frankly an imitation of the American
Constitution." Undeniably therefore, modern natural law theory, specifically Locke’s natural rights
theory, was used by the Founding Fathers of the American constitutional democracy and later also
used by the Filipinos.276 Although the 1935 Constitution was revised in 1973, minimal
modifications were introduced in the 1973 Constitution which was in force prior to the EDSA
Revolution. Therefore, it could confidently be asserted that the spirit and letter of the 1935
Constitution, at least insofar as the system of government and the Bill of Rights were concerned,
still prevailed at the time of the EDSA Revolution. Even the 1987 Constitution ratified less than a
year from the EDSA Revolution retained the basic provisions of the 1935 and 1973 Constitutions
on the system of government and the Bill of Rights, with the significant difference that it
emphasized respect for and protection of human rights and stressed that sovereignty resided in
the people and all government authority emanates from them.
Two facts are easily discernible from our constitutional history. First, the Filipinos are a freedom-
loving race with high regard for their fundamental and natural rights. No amount of subjugation or
suppression, by rulers with the same color as the Filipinos’ skin or otherwise, could obliterate their
longing and aspiration to enjoy these rights. Without the people’s consent to submit their natural
rights to the ruler,277 these rights cannot forever be quelled, for like water seeking its own course
and level, they will find their place in the life of the individual and of the nation; natural right, as
part of nature, will take its own course. Thus, the Filipinos fought for and demanded these rights
from the Spanish and American colonizers, and in fairly recent history, from an authoritarian ruler.
They wrote these rights in stone in every constitution they crafted starting from the 1899 Malolos
Constitution. Second, although Filipinos have given democracy its own Filipino face, it is
undeniable that our political and legal institutions are American in origin. The Filipinos adopted the
republican form of government that the Americans introduced and the Bill of Rights they extended
to our islands, and were the keystones that kept the body politic intact. These institutions sat well
with the Filipinos who had long yearned for participation in government and were jealous of their
fundamental and natural rights. Undergirding these institutions was the modern natural law theory
which stressed natural rights in free, independent and equal individuals who banded together to
form government for the protection of their natural rights to life, liberty and property. The sole
purpose of government is to promote, protect and preserve these rights. And when government
not only defaults in its duty but itself violates the very rights it was established to protect, it forfeits
its authority to demand obedience of the governed and could be replaced with one to which the
people consent. The Filipino people exercised this highest of rights in the EDSA Revolution of
February 1986.
I will not endeavor to identify every natural right that the Filipinos fought for in EDSA. The case at
bar merely calls us to determine whether two particular rights - the rights against unreasonable
search and seizure and to the exclusion of evidence obtained therefrom - have the force and
effect of natural rights which private respondent Dimaano can invoke against the government.
I shall first deal with the right against unreasonable search and seizure. On February 25, 1986, the
new president, Corazon Aquino, issued Proclamation No. 1 where she declared that she and the
vice president were taking power in the name and by the will of the Filipino people and pledged "to
do justice to the numerous victims of human rights violations."278 It is implicit from this pledge that
the new government recognized and respected human rights. Thus, at the time of the search on
March 3, 1986, it may be asserted that the government had the duty, by its own pledge, to uphold
human rights. This presidential issuance was what came closest to a positive law guaranteeing
human rights without enumerating them. Nevertheless, even in the absence of a positive law
granting private respondent Dimaano the right against unreasonable search and seizure at the
time her house was raided, I respectfully submit that she can invoke her natural right against
unreasonable search and seizure.
The right against unreasonable search and seizure is a core right implicit in the natural right to life,
liberty and property. Our well-settled jurisprudence that the right against unreasonable search and
seizure protects the people’s rights to security of person and property, to the sanctity of the home,
and to privacy is a recognition of this proposition. The life to which each person has a right is not a
life lived in fear that his person and property may be unreasonably violated by a powerful ruler.
Rather, it is a life lived with the assurance that the government he established and consented to,
will protect the security of his person and property. The ideal of security in life and property dates
back even earlier than the modern philosophers and the American and French revolutions, but
pervades the whole history of man. It touches every aspect of man’s existence, thus it has been
described, viz:
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"The right to personal security emanates in a person’s legal and uninterrupted enjoyment of his
life, his limbs, his body, his health, and his reputation. It includes the right to exist, and the right to
enjoyment of life while existing, and it is invaded not only by a deprivation of life but also of those
things which are necessary to the enjoyment of life according to the nature, temperament, and
lawful desires of the individual."279
The individual in the state of nature surrendered a portion of his undifferentiated liberty and agreed
to the establishment of a government to guarantee his natural rights, including the right to security
of person and property, which he could not guarantee by himself. Similarly, the natural right to
liberty includes the right of a person to decide whether to express himself and communicate to the
public or to keep his affairs to himself and enjoy his privacy. Justice Douglas reminds us of the
indispensability of privacy in the Hayden case, thus: "Those who wrote the Bill of Rights believed
that every individual needs both to communicate with others and to keep his affairs to himself." A
natural right to liberty indubitably includes the freedom to determine when and how an individual
will share the private part of his being and the extent of his sharing. And when he chooses to
express himself, the natural right to liberty demands that he should be given the liberty to be truly
himself with his family in his home, his haven of refuge where he can "retreat from the cares and
pressures, even at times the oppressiveness of the outside world," to borrow the memorable
words of Chief Justice Fernando. For truly, the drapes of a man’s castle are but an extension of
the drapes on his body that cover the essentials. In unreasonable searches and seizures, the
prying eyes and the invasive hands of the government prevent the individual from enjoying his
freedom to keep to himself and to act undisturbed within his zone of privacy. Finally, indispensable
to the natural right to property is the right to one’s possessions. Property is a product of one’s toil
and might be considered an expression and extension of oneself. It is what an individual deems
necessary to the enjoyment of his life. With unreasonable searches and seizures, one’s property
stands in danger of being rummaged through and taken away. In sum, as pointed out in De Los
Reyes, persons are subjected to indignity by an unreasonable search and seizure because at
bottom, it is a violation of a person’s natural right to life, liberty and property. It is this natural right
which sets man apart from other beings, which gives him the dignity of a human being.
It is understandable why Filipinos demanded that every organic law in their history guarantee the
protection of their natural right against unreasonable search and seizure and why the UDHR
treated this right as a human right. It is a right inherent in the right to life, liberty and property; it is
a right "appertain(ing) to man in right of his existence", a right that "belongs to man by virtue of his
nature and depends upon his personality", and not merely a civil right created and protected by
positive law. The right to protect oneself against unreasonable search and seizure, being a right
indispensable to the right to life, liberty and property, may be derived as a conclusion from what
Aquinas identifies as man’s natural inclination to self-preservation and self-actualization. Man
preserves himself by leading a secure life enjoying his liberty and actualizes himself as a rational
and social being in choosing to freely express himself and associate with others as well as by
keeping to and knowing himself. For after all, a reflective grasp of what it means to be human and
how one should go about performing the functions proper to his human nature can only be done
by the rational person himself in the confines of his private space. Only he himself in his own quiet
time can examine his life knowing that an unexamined life is not worth living.
Every organic law the Filipinos established (the Malolos, 1935, 1973, and 1987 Constitutions) and
embraced (the Instruction, Philippine Bill of 1902, and Jones Law) in the last century included a
provision guaranteeing the people’s right against unreasonable search and seizure because the
people ranked this right as fundamental and natural. Indeed, so fundamental and natural is this
right that the demand for it spurred the American revolution against the English Crown. It resulted
in the Declaration of Independence and the subsequent establishment of the American
Constitution about 200 years ago in 1789. A revolution is staged only for the most fundamental of
reasons - such as the violation of fundamental and natural rights - for prudence dictates that
"governments long established should not be changed for light and transient reasons."280
Considering that the right against unreasonable search and seizure is a natural right, the
government cannot claim that private respondent Dimaano is not entitled to the right for the
reason alone that there was no constitution granting the right at the time the search was
conducted. This right of the private respondent precedes the constitution, and does not depend on
positive law. It is part of natural rights. A violation of this right along with other rights stirred
Filipinos to revolutions. It is the restoration of the Filipinos’ natural rights that justified the
establishment of the Aquino government and the writing of the 1987 Constitution. I submit that
even in the absence of a constitution, private respondent Dimaano had a fundamental and natural
right against unreasonable search and seizure under natural law.
We now come to the right to the exclusion of evidence illegally seized. From Stonehill quoting
Mapp, we can distill that the exclusionary rule in both the Philippine and American jurisdictions is a
freedom "implicit in the concept of ordered liberty" for it is a necessary part of the guarantee
against unreasonable searches and seizures, which in turn is "an essential part of the right to
privacy" that the Constitution protects. If the exclusionary rule were not adopted, it would be to
"grant the right (against unreasonable search and seizure) but in reality to withhold its privilege
and enjoyment." Thus, the inevitable conclusion is that the exclusionary rule is likewise a natural
right that private respondent Dimaano can invoke even in the absence of a constitution
guaranteeing such right.
To be sure, the status of the exclusionary right as a natural right is admittedly not as indisputable
as the right against unreasonable searches and seizures which is firmly supported by philosophy
and deeply entrenched in history. On a lower tier, arguments have been raised on the
constitutional status of the exclusionary right. Some assert, on the basis of United States v.
Calandra,281 that it is only a "judicially-created remedy designed to safeguard Fourth Amendment
rights generally through its deterrent effect, rather than a personal constitutional right of the party
aggrieved."282 Along the same line, others contend that the right against unreasonable search
and seizure merely requires some effective remedy, and thus Congress may abolish or limit the
exclusionary right if it could replace it with other remedies of a comparable or greater deterrent
effect. But these contentions have merit only if it is conceded that the exclusionary rule is merely
an optional remedy for the purpose of deterrence.283
Those who defend the constitutional status of the exclusionary right, however, assert that there is
nothing in Weeks that says that it is a remedy284 or a manner of deterring police officers.285 In
Mapp, while the court discredited other means of enforcing the Fourth Amendment cited in Wolf,
the thrust of the opinion was broader. Justice Clarke opined that "no man is to be convicted on
unconstitutional evidence"286 and held that "the exclusionary rule is an essential part of both the
Fourth and Fourteenth Amendments."287
Formulated in the Aquinian concept of human law, the debate is whether the exclusionary right is
the first kind of human law which may be derived as a conclusion from the natural law precept that
one should do no harm to another man, in the same way that conclusions are derived from
scientific principles, in which case the exclusionary right has force from natural law and does not
depend on positive law for its creation; or if it is the second kind of human law which is derived by
way of determination of natural law, in the same way that a carpenter determines the shape of a
house, such that it is merely a judicially or legislatively chosen remedy or deterrent, in which case
the right only has force insofar as positive law creates and protects it.
In holding that the right against unreasonable search and seizure is a fundamental and natural
right, we were aided by philosophy and history. In the case of the exclusionary right, philosophy
can also come to the exclusionary right’s aid, along the lines of Justice Clarke’s proposition in the
Mapp case that no man shall be convicted on unconstitutional evidence. Similarly, the government
shall not be allowed to convict a man on evidence obtained in violation of a natural right (against
unreasonable search and seizure) for the protection of which, government and the law were
established. To rule otherwise would be to sanction the brazen violation of natural rights and allow
law enforcers to act with more temerity than a thief in the night for they can disturb one’s privacy,
trespass one’s abode, and steal one’s property with impunity. This, in turn, would erode the
people’s trust in government.
Unlike in the right against unreasonable search and seizure, however, history cannot come to the
aid of the exclusionary right. Compared to the right against unreasonable search and seizure, the
exclusionary right is still in its infancy stage in Philippine jurisdiction, having been etched only in
the 1973 Constitution after the 1967 Stonehill ruling which finally laid to rest the debate on whether
illegally seized evidence should be excluded. In the United States, the exclusionary right’s genesis
dates back only to the 1885 Boyd case on the federal level, and to the 1961 Mapp case in the
state level. The long period of non-recognition of the exclusionary right has not caused an
upheaval, much less a revolution, in both the Philippine and American jurisdictions. Likewise, the
UDHR, a response to violation of human rights in a particular period in world history, did not
include the exclusionary right. It cannot confidently be asserted therefore that history can attest to
its natural right status. Without the strength of history and with philosophy alone left as a leg to
stand on, the exclusionary right’s status as a fundamental and natural right stands on unstable
122
ground. Thus, the conclusion that it can be invoked even in the absence of a constitution also
rests on shifting sands.
Be that as it may, the exclusionary right is available to private respondent Dimaano as she
invoked it when it was already guaranteed by the Freedom Constitution and the 1987 Constitution.
The AFP Board issued its resolution on Ramas’ unexplained wealth only on July 27, 1987. The
PCGG’s petition for forfeiture against Ramas was filed on August 1, 1987 and was later amended
to name the Republic of the Philippines as plaintiff and to add private respondent Dimaano as co-
defendant. Following the petitioner’s stance upheld by the majority that the exclusionary right is a
creation of the Constitution, then it could be invoked as a constitutional right on or after the
Freedom Constitution took effect on March 25, 1986 and later, when the 1987 Constitution took
effect on February 2, 1987.
VI. Epilogue
The Filipino people have fought revolutions, by the power of the pen, the strength of the sword
and the might of prayer to claim and reclaim their fundamental rights. They set these rights in
stone in every constitution they established. I cannot believe and so hold that the Filipinos during
that one month from February 25 to March 24, 1986 were stripped naked of all their rights,
including their natural rights as human beings. With the extraordinary circumstances before,
during and after the EDSA Revolution, the Filipinos simply found themselves without a
constitution, but certainly not without fundamental rights. In that brief one month, they retrieved
their liberties and enjoyed them in their rawest essence, having just been freed from the claws of
an authoritarian regime. They walked through history with bare feet, unshod by a constitution, but
with an armor of rights guaranteed by the philosophy and history of their constitutional tradition.
Those natural rights inhere in man and need not be granted by a piece of paper.
To reiterate, the right against unreasonable search and seizure which private respondent Dimaano
invokes is among the sacred rights fought for by the Filipinos in the 1986 EDSA Revolution. It will
be a profanity to deny her the right after the fight had been won. It does not matter whether she
believed in the righteousness of the EDSA Revolution or she contributed to its cause as an
alleged ally of the dictator, for as a human being, she has a natural right to life, liberty and property
which she can exercise regardless of existing or non-existing laws and irrespective of the will or
lack of will of governments.
I wish to stress that I am not making the duty of the Court unbearably difficult by taking it to task
every time a right is claimed before it to determine whether it is a natural right which the
government cannot diminish or defeat by any kind of positive law or action. The Court need not
always twice measure a law or action, first utilizing the constitution and second using natural law
as a yardstick. However, the 1986 EDSA Revolution was extraordinary, one that borders the
miraculous. It was the first revolution of its kind in Philippine history, and perhaps even in the
history of this planet. Fittingly, this separate opinion is the first of its kind in this Court, where
history and philosophy are invoked not as aids in the interpretation of a positive law, but to
recognize a right not written in a papyrus but inheres in man as man. The unnaturalness of the
1986 EDSA revolution cannot dilute nor defeat the natural rights of man, rights that antedate
constitutions, rights that have been the beacon lights of the law since the Greek civilization.
Without respect for natural rights, man cannot rise to the full height of his humanity.
I concur in the result.
Footnotes
1 Decision, p. 26.
2 Id.
3 Letter of Associate Justice Reynato S. Puno, 210 SCRA 589 (1992), p. 597.
4 Kelly, J., A Short History of Western Legal Theory (1992), p. 20, citing Antigone, pp. 453-457.
5 Rice, C., Fifty Questions on the Natural Law (1993), p. 31.
6 Aristotle, Nicomachean Ethics, Book V in the Great Books of the Western World, vol. 9 (Robert
Maynard Hutchins, editor in chief, 1952), p. 382.
7 Aristotle, On Rhetoric, Book I, Chapter 13 in the Great Books of the Western World, vol. 9
(Robert Maynard Hutchins, editor in chief, 1952), p. 617.
8 Bix, B., "Natural Law Theory," p. 224 in D. Patterson, A Companion to Philosophy of Law and
Legal Theory (1996).
9 Kelly, J., supra, p. 142, citing Decretum, D. I.
10 Id., citing Decretum, D. 8. 2, 9 ad fin.
11 Id., citing Aurea Doctons fo. 169.
12 Id., citing Felix Fluckiger, Geschichte des Naturrechtes (1954), i. 426-8.
13 Id.
14 Kelly, J., supra, pp. 142-143.
15 Id., p. 143.
16 Altman, A., Arguing About Law (2001), p. 51.
17 Aquinas, T., Summa Theologica I, II, Q. 90, art. 1 in the Great Books of the Western World, vol.
20 (Robert Maynard Hutchins, editor in chief, 1952), p. 208.
18 Freinberg, J. and J. Coleman, Philosophy of Law (6th ed. 2000), p. 19.
19 Aquinas, T., Summa Theologica I, II, Q. 91, art. 1, p. 208.
20 Kelly, J., supra, p. 143.
21 Altman, A., supra, p. 52.
22 Aquinas, T., Summa Theologica I, II, Q. 91, art. 2, p. 208.
23 Rice, C., supra, p. 44.
24 Freinberg, J. and J. Coleman, supra, p. 23.
25 Aquinas, T., Summa Theologica I, II, Q. 94, art. 2, p. 222.
26 Id.
27 Rice, C., supra, p. 45, citing Summa Theologica, II, II, Q. 81, art. 6; see also Summa
Theologica, II, II, Q. 85, art. 1.
28 Id., citing T. E. Davitt, S.J., "St. Thomas Aquinas and the Natural Law", Origins of the Natural
Law Tradition (1954), pp. 26, 30-31; Rommen, The Natural Law, p. 49; Summa Theologica, I, II,
Q. 94, art. 2.
29 Freinberg, J. and J. Coleman, supra, p. 24.
30 Rice, C., supra, pp. 45-46.
31 Freinberg, J. and J. Coleman, supra, p. 24.
32 Rice, C., supra, pp. 45-46.
33 Altman, A., supra, p. 52.
34 Aquinas, T., Summa Theologica, I, II, Q. 95, art. 2.
35 Rice, C., supra, p. 24.
36 Freinberg, J. and J. Coleman, supra, p. 26; Altman, A., supra, p. 52.
37 Aquinas, T., Summa Theologica I, II, Q. 91, art. 4, p. 222.
38 Freinberg, J. and J. Coleman, supra, p. 30, citing Summa Theologica, I, II, Q. 91, art. 4.
39 An important restatement was made by John Finnis who wrote Natural Law and Natural Rights
published in 1980. He reinterpreted Aquinas whom he says has been much misunderstood. He
argues that the normative conclusions of natural law are not derived from observations of human
or any other nature but are based on a reflective grasp of what is self-evidently good for human
beings. "The basic forms of good grasped by practical understanding are what is good for human
beings with the nature they have." The following are basic goods: life (and health), knowledge,
play, aesthetic experience, sociability (friendship), practical reasonableness, and religion. (Bix, B.,
supra, pp. 228-229.) He claims that Aquinas considered that practical reasoning began "not by
understanding this nature from the outside . . . by way of psychological, anthropological or
metaphysical observations and judgments defining human nature, but by experiencing one’s
nature . . . from the inside, in the form of one’s inclinations." (Freeman, M.D.A. Lloyd’s Introduction
to Jurisprudence [1996], p. 84, citing J. Finnis, Natural Law and Natural Rights [1980], p. 34.)
Lon Fuller also adopted a natural law analysis of law and wrote that there is a test that a law must
pass before something could be properly called law. Unlike traditional natural law theories,
however, the test he applies pertains to function rather than moral content. He identified eight
requirements for a law to be called law, viz: "(1) laws should be general; (2) they should be
promulgated, that citizens might know the standards to which they are being held; (3) retroactive
rule-making and application should be minimized; (4) laws should be understandable; (5) they
should not be contradictory; (6) laws should not require conduct beyond the abilities of those
affected; (7) they should remain relatively constant through time; and (8) there should be a
congruence between the laws as announced and their actual administration." He referred to his
theory as "a procedural, as distinguished from a substantive natural law." (Bix, B., supra, pp. 231-
232.)
Ronald Dworkin also occasionally refers to his approach as a natural law theory. Dworkin
postulates that along with rules, legal systems also contain principles. Quite different from rules,
principles do not act in an all-or-nothing way. Rather principles have "weight", favoring one result
123
or another. There can be principles favoring contrary results on a single legal question. Examples 76 Watson, D., The Constitution of the United States (1910), vol. 1, pp. 108-109, citing Cooley’s
of these principles are "one should not be able to profit from one’s wrong" and "one is held to Constitutional Limitations, pp. 68-69.
intend all the foreseeable consequences of one’s actions." These legal principles are moral 77 Hamburger, P., supra, p. 955, citing N. Chipman, Sketches of the Principles of Government
propositions that are grounded (exemplified, quoted or somehow supported by) on past official (1793), p. 16.
acts such as text of statutes, judicial decisions, or constitutions. Thus, in "landmark" judicial 78 Id., p. 955, footnote 132, citing Letter from George Washington to the President of Congress, in
decisions where the outcome appears to be contrary to the relevant precedent, courts still hold 1 Documentary History of the Constitution (1983), p. 305.
that they were following the "real meaning" or "true spirit" of the law; or judges cite principles as 79 Id., p. 956.
the justification for modifying, creating exceptions in, or overturning legal rules. (Bix, B., supra, pp. 80 Jones, T., supra, p. 142, citing T. Paine, The Rights of Man (1969), p. 90.
234-235.) 81 Id.
40 Jones, T., Modern Political Thinkers and Ideas (2002), pp. 112-113. 82 Id.
41 d’Entreves, A., Natural Law (2nd ed., 1970), pp. 52 and 57. 83 Id.
42 Rice, C. supra, p. 68, citing Aquinas, De Regimine Principum (On the Governance of Rulers) 84 Id., p. 143, citing T. Paine, The Rights of Man (1969), p. 90.
(Gerald B. Phelan, transl., 1938), Book I, Chap. 2, 41.1. But Aquinas was also cautious of the 85 Id.
opportunity for tyranny of a king, thus he proposed that this power must be tempered, perhaps 86 Id.
similar to the modern day constitutional monarchy. (Rice, C. supra, pp. 68-69, citing Aquinas, De 87Id.
Regimine Principum (On the Governance of Rulers) (Gerald B. Phelan, transl., 1938), Book I, 88 Hamburger, P., supra, p. 918, citing J. Locke., Two Treatises of Government (1967), p. 322.
Chap. 6, 54.) 89 Id., p. 919, citing J. Madison, A Memorial and Remonstrance (ca June 20, 1785), in 8 The
43 Patterson, C., The Constitutional Principles of Thomas Jefferson (1953), p. 47. Papers of James Madison 298, 299.
44 Macpherson, C. Editor’s Introduction to J. Locke’s Second Treatise of Government (1980), pp. 90 Id., pp. 919-920, citing J. Witherspoon, An Annotated Edition of Lectures on Moral Philosophy
xx-xxi. (Lecture X) (Jack Scott ed.1982), pp. 122-128.
45 Locke, J., Second Treatise of Government (ed. C.B. Macpherson, 1980). 91 Id., pp. 920-921, citing J. Madison, Speech in House of Representatives (June 8, 1789), in
46 Id., Ch. II, Sec. 4 (ed. C.B. Macpherson, 1980), p. 8. Creating the Bill of Rights (1991), p. 81.
47 Id. 92 Id., pp. 921-922.
48 Id., Ch. II, Sec. 6, p. 9. 93 Black, H., supra, pp. 443-444.
49 Id. 94 Id., p. 444.
50 Jones, T., supra, p. 126. 95 Id., p. 445.
51 Id., pp. 126-127. 96 Jones, T., supra, p. 114.
52 Locke, J., supra, Ch II, Sec. 7, p. 9. 97 Id.
53 Jones, T., supra, p. 127. 98 Estrada v. Desierto, et al., 353 SCRA 452 (2001), Concurring Opinion of Justice Mendoza, p.
54 Locke, J., supra, Ch II, Sec. 13, p. 9; Jones, T., supra, p. 128. 549.
55 Id., Ch VIII, Sec. 95, p. 52. 99 d’Entreves, A., supra, p. 51.
56 Jones, T., supra, p. 128, citing J. Locke, Second Treatise, Ch. 9, sect. 123, p. 350. 100 Jones, T., supra, pp. 114-115.
57 Id., p. 128. 101 Id., p. 119.
58 Locke, J., supra, Ch IX, Sec. 124, p. 66. 102 Id.
59 Jones, T., supra, pp. 128-129. 103 Drost, P., Human Rights as Legal Rights (1951), pp. 32-33.
60 Hamburger, P., "Natural Rights, Natural Law, and American Constitutions," The Yale Law 104 Echegaray v. Secretary of Justice, et al., 297 SCRA 754 (1998).
Journal, vol. 102, no. 4, January 1993, p. 926. 105 Moskowitz, M., Human Rights and World Order (1958), pp. 80-83.
61 Id., p. 924. 106 Id., p. 157.
62 Id., pp. 930-931; see also Calder v. Bull, I L. Ed. 648 (1798). 107 Id., p. 164.
63 Id., footnote 70, citing J. Jay, The Federalist No. 2 (1961), p. 37. 108 Gutierrez, Jr., H., "Human Rights - An Overview" in The New Constitution and Human Rights
64 Id., footnote 70, citing Letter from William Pierce to St. George Tucker, GA. ST. GAZ., Sept. 28, (Fifth Lecture Series on the Constitution of the Philippines) (1979), p. 3.
1787, reprinted in 16 Documentary History of the Constitution (1983), p. 443. 109 Strauss, D. "The Role of a Bill of Rights", The University of Chicago Law Review, vol. 59, no.
65 Id., footnote 70, citing N. Chipman, Sketches of the Principles of Government (1793), p. 70. 1 (Winter 1992), p. 554.
66 Jones, T., supra, p. 114. 110 Gutierrez, Jr., H., supra, p. 3, citing Dorr v. United States, 195 US 138 (1904).
67 Haines, C., The Revival of Natural Law Concepts (1965), p. 58. 111 Bix, B., supra, p. 228.
68 Patterson, C., supra, pp. 27 and 49; see also Scott-Craig, T., "John Locke and Natural Right", 112 Jones, T., supra, p. 119.
p. 42 in Southern Methodist University Studies in Jurisprudence II: Natural Law and Natural Rights 113 Bix, B., supra, p. 228.
(A. Harding, ed., 1965). 114 Strauss, D., supra, p. 555.
69 Id., pp. 7-8. 115 70 Phil. 578 (1940).
70 Hamburger, P., supra, pp. 931-932. 116 Id., p. 582.
71 Black, H., Black’s Constitutional Law (2nd edition), p. 2. 117 106 SCRA 325 (1981).
72 Kurland, P. "The True Wisdom of the Bill of Rights", The University of Chicago Law Review, 118 People v. Agbot, supra, p. 333.
vol. 59, no. 1 (Winter 1992), pp. 7-8. 119 140 Phil 171 (1969).
73 Haines, C., supra, p. 55. 120 344 SCRA 769 (2000).
74 Id., p. 55, citing B.F. Wright, Jr., "American Interpretations of Natural Law", American Political 121 41 Phil. 770 (1916).
Science Review, xx (Aug. 1926), 524 ff. 122 People v. de los Santos, 200 SCRA 431 (1991).
75 Black, H., supra, p. 8. 123 Roa v. Insular Collector of Customs, 23 Phil. 315 (1917).
124 Silva v. Court of Appeals, et al., 275 SCRA 604 (1997).

124
125 Offshore Industries, Inc. v. NLRC, et al., 177 SCRA 50 (1989), citing Philippine Movie Pictures 168 Article X, Sec. 3 and Article XII, Sec. 4 of the 1987 Constitution.
Workers’ Association v. Premiere Productions, Inc., 92 Phil. 843 (1953). 169 Records of the Constitutional Commission, vol. I, p. 674.
126 229 SCRA 117 (1994). 170 Article II, Sec. 11 of the 1987 Constitution.
127 Fernando, E., Perspective on Human Rights: The Philippines in a Period of Crisis and 171 Article XIII of the 1987 Constitution; Simon, Jr. v. Commission on Human Rights, supra.
Transition (1979), pp. 1-2, citing Borovsky v. Commissioner of Immigration, et al., 90 Phil. 107 172 Fernando, E., The Bill of Rights (2nd ed. 1972), p. 3, citing Laski, The State in Theory and
(1951); Mejoff v. Director of Prisons, 90 Phil. 70 (1951); Chirskoff v. Commissioner of Immigration, Practice (1935), pp. 35-36.
et al., 90 Phil. 256 (1951); Andreu v. Commissioner of Immigration, et al., 90 Phil. 347 (1951). 173 Fernando, E. The Constitution of the Philippines (1974), p. 20, citing Hamilton,
128 Simon, Jr., et al. v. Commission on Human Rights, supra, p. 127. Constitutionalism in IV Encyclopedia of the Social Sciences (1928), p. 255.
129 Id., pp. 126-127. 174 Id., p. 20.
130 Id., pp. 132-133, citing Black’s Law Dictionary (6th edition, 1934), p. 1324; Handbook on 175 Id., p. 21, citing 1 Schwartz, Commentary on the Constitution of the United States, The
American Constitutional Law (4th ed., 1927), p. 524. Powers of Government (1963), pp. 1-2.
131 Id., pp. 132-133, citing Malcolm, The Constitutional Law of the Philippine Islands (2nd ed., 176 Id., p. 21, citing Lectures on the Constitution of the United States, p. 64.
1926), pp. 431-457. 177 Id., citing Malcolm and Laurel, Philippine Constitutional Law (1936), p. 6.
132 Id., p. 133, citing Black’s Law Dictionary (6th edition, 1934), p. 1325; Handbook on American 178 Id., p. 33.
Constitutional Law (4th ed., 1927), p. 524. 179 Fernando, E., Government Powers and Human Rights (1973), p. 5.
133 Bernas, J., A Historical and Juridical Study of the Philippine Bill of Rights (1971), pp. 2-3, 180 Fernando, E. The Constitution of the Philippines (1974), p. 34, citing III, S. Laurel,
citing C. Majul, The Political and Constitutional Ideas of the Philippine Revolution (1957), pp. 2-3. Proceedings of the Philippine Constitutional Convention (1966), p. 335.
134 Id., p. 2, citing Majul, supra, p. 3. 181 Id., p. 34, citing III, S. Laurel, Proceedings of the Philippine Constitutional Convention (1966),
135 Id., pp. 6-7, citing T. Agoncillo, Malolos: The Crisis of the Republic (1960), p. 19 and Majul, p. 648.
supra, p. 5, both authors citing de Veyra, The Constitution of Biak-na-Bato, 1 J. of the Phil 182 Black, H., Black’s Constitutional Law (2nd ed.), p. 8.
Historical Soc. I (1941). 183 Schwartz, B., The Great Rights of Mankind: A History of the American Bill of Rights (1977),
136 Id., p. 7, citing T. Agoncillo, supra, pp. 19-20. pp. 2-3.
137 Id., p. 8, citing Kalaw, The Constitutional Plan of the Philippine Revolution, I Phil. L. J., 204, 184 G.R. No. 143802, November 15, 2001.
206 (1914). 185 232 SCRA 192 (1994).
138 Id., p. 11, citing Kalaw, The Memoirs of Felipe Calderon (pts. 1-2), 4 Phil. Rev. 426, at 473 186 Sales v. Sandiganbayan, et al., supra, p. 15, citing Allado v. Diokno, 232 SCRA 192 (1994),
(1919). pp. 209-210.
139 Id., citing Malcolm, Constitutional Law of the Philippine Islands 117 (2nd ed. 1926). 187 Hall, Jr., J., Search and Seizure (1982), p. 13, citing Marcus v. Search Warrants of Property
140 Id., pp. 11-12, citing Planes Constitucionales Para Filipinas (T. Kalaw ed. 1934), p. 37. 367 US 717 (1961); Roaden v. Kentucky, 413 US 496 (1973); Lasson, The History and
141 Id., p. 12, citing Majul, supra, p. 179. Development of the Fourth Amendment to the Constitution of the United States (1937), pp. 23-24.
142 Id., p. 13. 188 Id., p. 13, citing Ladynski, Search and Seizure and the Supreme Court (1966), pp. 20-22.
143 Id., citing 1 Report of the (Schurman) Philippine Commission (1900), pp. 84-5. 189 Id., p. 14, citing Marcus v. Search Warrants, supra, pp. 724-727; Lasson, supra, pp. 24-29;
144 Id., pp. 13-14, citing G. Malcolm, Constitutional Law of the Philippine Islands (2nd ed. 1926), Ladynski, supra, p. 23.
p. 223. 190 Id., citing Ladynski, p. 23.
145 Id., p. 15. 191 Id., citing Lasson, pp. 31-32 and Ladynski, p. 23; footnote 19.
146 Gonzalez-Decano, A., The Exclusionary Rule and its Rationale (1997), p. 8. 192 Id.
147 Bernas, J., supra, p. 15. 193 Id., p. 14, citing Ladynski, p. 24.
148 Gonzalez-Decano, A., supra, p. 8. 194 Id., citing Lasson, pp. 33-34, Ladynski, p. 27.
149 11 Phil. 669 (1904). 195 Id., p. 15, citing Ladynski, p. 25.
150 Id., p. 692. 196 Id., citing Lasson, p. 37.
151 Id. 197 Id., p. 14, citing Ladynski, p. 22.
152 Bernas, J., supra, p. 17. 198 Id., citing Lasson, pp. 30-31; Ladynski, p. 23.
153 Aruego, J., The Framing of the Philippine Constitution, vol. 1 (1935), p. 93. 199 Id., p. 15, citing Lasson, p. 54 and Ladynski, p. 31.
154 Id., pp. 93-94. 200 Id., citing Ladynski, p. 31.
155 Fernando, E., Political Law (1953), p. 42. 201 Id., p. 15, citing Lasson, p. 55 and Ladynski, p. 31.
156 Aruego, supra, pp. 94-95. 202 Id., p. 16, citing Lasson, pp. 55-57 and Ladynski, p. 33, and Adams, J., 2 Legal Papers of
157 Id., pp. 93-95, 149-151. John Adams (1965), p. 112.
158 Id., pp. 149-150. 203 Id., citing Lasson, pp. 57-58 and Ladynski, p. 33.
159 Fernando, E., supra, p. 42. 204 Id., citing Lasson, p. 58 and Ladynski, p. 33.
160 Fernando, E., The Constitution of the Philippines (1974), pp. 3-7. 205 Boyd v. United States, 116 US 616, 625 (1885).
161 Id., pp. 6-7. 206 Hall, Jr., J., supra, p. 16.
162 Fernando, Perspective on Human Rights: The Philippines in a Period of Crisis and Transition 207 Boyd v. United States, supra.
(1979), pp. 24-26. 208 Hall, Jr., J., supra, p. 16, citing Petition of Lechmere, Adams, pp. 108-147.
163 Proclamation No. 3 (1986). 209 Id., p. 16, citing Lasson, pp. 67-73 and Ladynski, p. 35.
164 Proclamation No. 1 (1986). 210 Id., p. 16.
165 Letter of Associate Justice Reynato S. Puno, supra. 211 Id., pp. 16-17, citing Lasson, p. 43.
166 Martin, R., Law and Jurisprudence on the Freedom Constitution of the Philippines (1986), pp. 212 Id., p. 17, citing Lasson, p. 43.
1-5. 213Id., citing Lasson, p. 44.
167 De Leon v. Esguerra, 153 SCRA 602 (1987). 214 (1765) 19 Howell’s St Tr 1029.

125
215 Id., p. 18, citing Boyd v. United States, supra; p.19, citing numerous cases where the 234 389 US 347 (1967).
Supreme Court cited Entick v. Carrington, supra. 235 Fernando, E., The Bill of Rights (1972), pp. 217-218.
216 Boyd v. United States, supra, p. 627. 236 3 Phil. 381 (1904).
217 Id., pp. 626-627. 237 United States v. Arceo, supra, pp. 384-385.
218 Id., p. 630. 238 20 Phil. 467 (1911).
219 232 US 383 (1914). 239 United States v. De Los Reyes, et al., supra, p. 473.
220 192 US 585 (1903). 240 Fernando, E., The Constitution of the Philippines (1974), p. 652.
221 Bernas, J., supra, p. 296. Although even as early as the Malolos Constitution of 1899, this 241 20 SCRA 383 (1967).
right against unreasonable searches and seizures has been protected with the sanctity of the 242 Stonehill v. Diokno, supra, p. 392.
domicile as the primordial consideration. The provision was an almost exact reproduction of the 243 101 SCRA 86 (1980).
Bill of Rights of the Spanish Constitution (Bernas, J., supra, p. 11, citing Malcolm, Constitutional 244 People v. CFI, supra, pp. 100-101.
Law of the Philippine Islands [2nd ed. 1926], p. 117), viz: 245 Valmonte v. Belmonte, 170 SCRA 256 (1989), citing Morfe v. Mutuc, 22 SCRA 424 (1968),
"ARTICLE 10 pp. 444-445.
No person shall enter the domicil of a Filipino or foreigner residing in the Philippine Islands without 246 Warden, Maryland Penitentiary v. Hayden, 387 US 294 (1967), pp. 320-324.
his consent, except in urgent cases of fire, flood, earthquake or other similar danger, or of unlawful 247 381 US 479 (1965).
aggression proceeding from within, or in order to assist a person within calling for help. 248 Griswold v. Connecticut, 381 US 479 (1965), pp. 485-486.
Outside of these cases, the entrance into the domicil of a Filipino or foreigner residing in the 249 The Fourteenth Amendment provides in relevant part, viz:
Philippine Islands and the searching of his papers or effects, can only be decreed by a competent "No State shall make or enforce any law which shall abridge the privileges or immunities of
judge and executed in the daytime. citizens of the United States; nor shall any State deprive any person of life, liberty, or property
The searching of the papers and effects shall always be done in the presence of the interested without due process of law; nor deny to any person within its jurisdiction the equal protection of the
party or of a member of his family, and, in their absence, of two witnesses residing in the same laws."
town (pueblo). 250 338 US 25 (1949).
However, if an offender found in flagrante and pursued by the authorities or their agents should 251 Ducat, C., Constitutional Interpretation: Rights of the Individual, vol. 2 (2000), pp. 641-642.
take refuge in his domicil these may enter the same, but only for the purpose of his apprehension. 252 Wolf v. Colorado, supra, pp. 31-32.
If he should take refuge in the domicil of another, request should first be made of the latter." 253 364 US 206 (1960).
xxx xxx xxx 254 367 US 643 (1961).
ARTICLE 13 255 Ducat, C., supra, pp. 641-642.
All decrees of imprisonment, for the search of domicil, or for the detention of correspondence, 256 Mapp v. Ohio, supra, pp. 654-660.
whether written, telegraphic, or by telephone, shall be for cause. 257 364 US 206 (1960).
If the decree should lack this requisite, or if the causes on which it may be founded are judicially 258 Id., p. 217.
declared unlawful or manifestly insufficient, the person who may have been imprisoned, or whose 259 LaFave, W. Search and Seizure: A Treatise in the Fourth Amendment, vol. 1 (2nd ed., 1987),
imprisonment may not have been confirmed within the term prescribed in Art. 9 or whose domicil pp. 16-17, citing Terry v. Ohio, 392 US 1 (1968).
may have been forcibly entered into, or whose correspondence may have been detained, shall 260 Id., p. 17, citing United States v. Calandra, 414 US 338 (1974), dissent.
have the right to demand the liabilities which ensue." (Bernas, J., supra, pp. 292-293.) 261 Id.
222 Bernas, J., supra, pp. 297-298. 262 42 Phil. 886 (1920).
223 Aruego, J., supra, pp. 159-160. 263 47 Phil. 626 (1925).
224 Gonzalez-Decano, A., supra, p. 9, citing E. Navarro, A Treatise on the Law of Criminal 264 251 US 385 (1919).
Procedure in the Philippines (1952), pp. 395-396. 265 57 Phil. 384 (1932).
225 Aruego, J., supra, p. 160. 266 Bernas, J., The 1987 Constitution of the Republic of the Philippines: A Commentary (1996),
226 Laurel, J., Proceedings of the Philippine Constitutional Commission (1966), vol. III, p. 172; pp. 194-195.
see also Moncado v. People’s Court, 80 Phil. 1 (1948), Dissenting Opinion of Justice Bengzon. 267 64 Phil. 33 (1937).
227 Gonzalez-Decano, A., supra, p. 11. 268 76 Phil. 637 (1946).
228 20 SCRA 383 (1967); Fernando, E., The Constitution of the Philippines (1974), pp. 658-659. 269 Bernas, J., supra note 266, pp. 197-198.
229 It may be argued that the Freedom Constitution had retroactive effect insofar as it provides 270 80 Phil. 1 (1948), pp. 1, 3-4.
that certain articles of the 1973 Constitution, including the Bill of Rights, "remain in force and 271 Wong & Lee v. Collector of Internal Revenue, et al., 104 Phil. 469 (1958), citing Moncado v.
effect." Consequently, as these articles were in force after the abrogation of the 1973 Constitution People’s Court, 8 Phil. 1 (1948); Medina v. Collector of Internal Revenue, 110 Phil. 912 (1961),
on February 25, 1986 and before the adoption of the Freedom Constitution on March 25, 1986, citing Wong & Lee, supra; Bernas, J., supra note 266, pp. 198-199.
private respondent Dimaano can invoke the constitutionally guaranteed right against unreasonable 272 20 SCRA 383 (1967).
search and seizure and the exclusionary right. Nevertheless, this separate opinion addresses the 273 Stonehill v. Diokno, supra, pp. 393-394.
question of whether or not she can invoke these rights even if the Freedom Constitution had no 274 Griswold v. Connecticut, supra, p. 493.
retroactive effect. 275 See Note 65, supra.
230 Hall, Jr., J., supra, p. 9, citing Silverman v. United States, 365 US 505 (1961); Schmerber V. 276 Pascual, C., Introduction to Legal Philosophy (1989), pp. 22-23.
California, 384 US 757 (1966); Camara v. Municipal Court of San Francisco, 387 US 523 (1967). 277 See C. Patterson, supra, p. 52.
Other citations omitted. 278 Proclamation No. 1 (1986).
231 Id., citing Warden, Maryland Penitentiary v. Hayden, 387 US 294 (1967); Berger v. New York, 279 Sandifer, D. and L. Scheman, The Foundation of Freedom (1966), pp. 44-45.
388 US 41 (1967); Stone v. Powell, 428 US 465 (1976). Other citations omitted. 280 Estrada v. Desierto, supra, p. 549, citing the Declaration of Independence. That the right
232 Katz v. United States, 389 US 347 (1967). Other citations omitted. against unreasonable searches and seizures is a natural human right may be inferred from the
233 365 US 505 (1961). 1949 case of Wolf v. Colorado, where Justice Frankfurter said:

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"The knock at the door, whether by day or night, as a prelude to a search, without authority of law
but solely on the authority of the police, did not need the commentary of recent history to be
condemned as inconsistent with the conception of human rights enshrined in the history and basic
constitutional documents of the English-speaking peoples."
281 414 US 338 (1974).
282 Id., p. 348.
283 LaFave, W., supra, p. 20.
284 Id., citing Kamisar, Does (Did) (Should) the Exclusionary Rule Rest on a "Principled Basis"
Rather than an "Empirical Proposition"? 16 Creighton L. Rev. (1983) 565, p. 598.
285 Id., citing Allen, The Judicial Quest for Penal Justice: The Warren Court and the Criminal
Cases, 1975 U. Ill. L.F. 518, 536, n. 90.
286 Mapp v. Ohio, supra, p. 657.
287 LaFave, supra, pp. 19-20.
SEPARATE OPINION
VITUG, J.:
The unprecedented 1986 People Power Revolution at EDSA remains to be such an enigma, still
confounding political scientists on its origins and repercussions, to so many. Now, before the
Court is yet another puzzle: Whether or not the Bill of Rights may be considered operative during
the interregnum from 26 February 1986 (the day Corazon C. Aquino took her oath to the
Presidency) to 24 March 1986 (immediately before the adoption of the Freedom Constitution).
Indeed, there are differing views on the other related question of whether or not the 1973
Constitution has meanwhile been rendered, ipso facto, without force and effect by the "successful
revolution."
The government under President Corazon C. Aquino was described as revolutionary for having
been so installed through a "direct exercise of the power of the Filipino people" in disregard of the
"provisions of the 1973 Constitution."1 It was said to be revolutionary in the sense that it came into
existence in defiance of existing legal processes, and President Aquino assumed the reigns of
government through the extra-legal action taken by the people.2
A revolution is defined by Western political scholars as being a "rapid fundamental and violent
domestic change in the dominant values and myths of a society in its political institutions, social
structure, leadership, and government activity and policies."3 A revolution results in a complete
overthrow of established government and of the existing legal order.4 Notable examples would be
the French, Chinese, Mexican, Russian, and Cuban revolutions. Revolution, it is pointed out, is to
be distinguished from rebellion, insurrection, revolt, coup, and war of independence.5 A rebellion
or insurrection may change policies, leadership, and the political institution, but not the social
structure and prevailing values. A coup d’etat in itself changes leadership and perhaps policies but
not necessarily more extensive and intensive than that. A war of independence is a struggle of
one community against the rule by an alien community and does not have to involve changes in
the social structure of either community.6
The 1986 People Power Revolution is a uniquely Philippine experience. Much of its effects may
not be compared in good substance with those of the "great revolutions". While a revolution may
be accomplished by peaceful means,7 it is essential, however, that there be an accompanying
basic transformation in political and social structures. The "revolution" at Edsa has not resulted in
such radical change though it concededly could have. The offices of the executive branch have
been retained, the judiciary has been allowed to function, the military, as well as the constitutional
commissions and local governments, have remained intact.8 It is observed by some analysts that
there has only been a change of personalities in the government but not a change of structures9
that can imply the consequent abrogation of the fundamental law. The efficacy of a legal order
must be distinguished from the question of its existence10 for it may be that the efficacy of a legal
order comes to a low point which may, nevertheless, continue to be operative and functioning.11
The proclamations issued, as well as the Provisional Constitution enacted by the Aquino
administration shortly after being installed, have revealed the new government’s recognition of and
its intention to preserve the provisions of the 1973 Constitution on individual rights. Proclamation
No. 1,12 dated 25 February 1986, has maintained that "sovereignty resides in the people and all
government authority emanates from them." It has expressed that the government would be
"dedicated to uphold justice, morality and decency in government, freedom and democracy." In
lifting the suspension of the privilege of the writ of habeas corpus throughout the Philippines, for,
among other reasons, the "Filipino people have established a new government bound to the ideals
of genuine liberty and freedom for all," Proclamation No. 2 of March 1986, has declared:
"Now, therefore, I, Corazon C. Aquino, President of the Philippines, by virtue of the powers vested
in me by the Constitution and the Filipino people, do hereby x x x lift the suspension of the
privilege of the writ of habeas corpus x x x."
What Constitution could the proclamation have been referring to? It could not have been the
Provisional Constitution, adopted only later on 25 March 1986 under Proclamation No. 3 which, in
fact, contains and attests to the new government’s commitment to the "restoration of democracy"
and "protection of basic rights," announcing that the "the provisions of Article I (National Territory),
Article III (Citizenship), Article IV (Bill of Rights), Article V (Duties and Obligations of Citizens), and
Article VI (Suffrage) of the 1973 Constitution, as amended, (shall) remain in force and effect,"
(emphasis supplied),13 superseding only the articles on "The Batasang Pambansa", "The Prime
Minister and the Cabinet", "Amendments", and "Transitory Provisions."14 Verily, Proclamation No.
3 is an acknowledgment by the Aquino government of the continued existence, subject to its
exclusions, of the 1973 Charter.
The new government has done wisely. The Philippines, a member of the community of nations
and among the original members of the United Nations (UN) organized in 1941, has had the clear
obligation to observe human rights and the duty to promote universal respect for and observance
of all fundamental freedoms for all individuals without distinction as to race, sex, language or
religion.15 In 1948, the United Nations General Assembly has adopted the Universal Declaration
of Human Rights proclaiming that basic rights and freedoms are inherent and inalienable to every
member of the human family. One of these rights is the right against arbitrary deprivation of one’s
property.16 Even when considered by other jurisdictions as being a mere statement of aspirations
and not of law, the Philippines Supreme Court has, as early as 1951, acknowledged the binding
force of the Universal Declaration in Mejoff vs. Director of Prisons, 17 Borovsky vs. Commissioner
of Immigration, 18 Chirskoff vs. Commissioner of Immigration, 19 and Andreu vs. Commissioner of
Immigration.20 In subsequent cases, 21 the Supreme Court has adverted to the enumeration in
the Universal Declaration in upholding various fundamental rights and freedoms. The Court, in
invoking the articles in the Universal Declaration has relied both on the Constitutional provision
stating that the Philippines adopts the generally accepted principles of international law as being
part of the law of the nation22 and, in no little degree, on the tenet that the acceptance of these
generally recognized principles of international law are deemed part of the law of the land not only
as a condition for, but as a consequence of, the country’s admission in the society of nations.23
The Universal Declaration "constitutes an authoritative interpretation of the Charter of the highest
order, and has over the years become a part of customary international law."24 It "spells out in
considerable detail the meaning of the phrase ‘human rights and fundamental freedoms,’ which
Member States have agreed to observe. The Universal Declaration has joined the Charter x x x as
part of the constitutional structure of the world community. The Declaration, as an authoritative
listing of human rights, has become a basic component of international customary law, indeed
binding all states and not only members of the United Nations."25
It might then be asked whether an individual is a proper subject of international law and whether
he can invoke a provision of international law against his own nation state. International law, also
often referred to as the law of nations, has in recent times been defined as that law which is
applicable to states in their mutual relations and to individuals in their relations with states.26 The
individual as the end of the community of nations is a member of the community, and a member
has status and is not a mere object.27 It is no longer correct to state that the State could only be
the medium between international law and its own nationals, for the law has often fractured this
link as and when it fails in its purpose. Thus, in the areas of black and white slavery, human rights
and protection of minorities, and a score of other concerns over individuals, international law has
seen such individuals, being members of the international community, as capable of invoking
rights and duties even against the nation State.28
At bottom, the Bill of Rights (under the 1973 Constitution), during the interregnum from 26
February to 24 March 1986 remained in force and in effect not only because it was so recognized
by the 1986 People Power but also because the new government was bound by International law
to respect the Universal Declaration of Human Rights.
There would appear to be nothing irregular in the issuance of the warrant in question; it was its
implementation that failed to accord with that warrant. The warrant issued by the Municipal Trial
Court of Batangas, Branch 1, only listed the search and seizure of five (5) baby armalite rifles M-
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16 and five (5) boxes of ammunition. The raiding team, however, seized the following items: one
(1) baby armalite rifle with two (2) magazines; forty (40) rounds of 5.56 ammunition; one (1) .45
caliber pistol; communications equipment; cash in the amount of P2,870,000.00 and US $
50,000.00; as well as jewelry and land titles. The Philippine Commission on Good Government
(PCGG) filed a petition for forfeiture of all the items seized under Republic Act No. 1397, otherwise
also known as an "Act for the Forfeiture of Unlawfully Acquired Property," against private
respondents Elizabeth Dimaano and Josephus Q. Ramas. The Sandiganbayan issued a
resolution on 18 November 1991 dismissing the complaint, directing the return of the illegally
seized items, and ordering the remand of the case to the Ombudsman for appropriate action. The
resolution should be affirmed.
WHEREFORE, I concur in the results.
Footnotes
1 Proclamation No. 3, 25 March 1986.
2 Bernas, The Constitution of the Republic of the Philippines, Vol. II, 1988, p. 15
3 Huntington, Political Order in Changing Societies, 1968, p. 264.
4 46 CJS 1086; Estrada vs. Desierto, Vitug, Concurring Opinion, 353 SCRA 538, citing Milne,
Philosophy and Political Action.
5 Huntington, supra.
6 Id.
7 46 CJS 1086
8 See Proclamation No. 1, 25 February 1986.
9 Maranan, The Dilemma of Legitimacy: A Two-Phase Resolution, 61 Phil. L. J., 1986, p. 153.
10 Fernandez, Law and Polity: Towards a Systems Concept of Legal Validity, 46 Phil. L.J., 1971,
p. 422.
11 Id.
12 Entitled "Proclaiming that President Corazon C. Aquino and Vice-President Salvador H. Laurel
are Taking Powers of the Government in the name and by Will of the Filipino People"
13 Section 1, Proclamation No. 3, 25 March 1986; Eight other articles – Article II (Declaration of
Principles and State Policies), Article VII (The President), Article X (The Judiciary), Article XI
(Local Government), Article XII (The Constitutional Commissions), Article XIII (Accountability of
Public Officers), Article XIV (The National Economy and Patrimony of the Nation), Article XV
(General Provisions) – were conditionally retained "insofar as they (were) not inconsistent with the
provisions of the Proclamation." (Section 2, Proclamation No. 3, 25 March 1986.)
14 Section 3, Proclamation No. 3, 25 March 1986.
15 Article 1 (3), Charter of the United Nations.
16 Article 17, Universal Declaration of Human Rights.
17 90 Phil 70
18 90 Phil 107
19 90 Phil 256
20 90 Phil 342
21 Aberca, et al. vs. Ver, 160 SCRA 590; Villar vs. TIP, 135 SCRA 706; Reyes vs. Bagatsing, 210
Phil 457; National Federation of Sugar Workers vs. Ethelworld, 114 SCRA 354; Salonga vs.
Hermoso, 97 SCRA 121; PAFLU vs. Secretary of Labor, 27 SCRA 41; Boy Scouts of the
Philippines vs. Arado, 102 Phil 1080; Municipal Governor of Caloocan vs. Chon Huat & Co., 96
Phil 80.
22 Section 3, Article II, 1935 Constitution; Section 2, Article II, 1973 Constitution; Section 2 Article
II, 1987 Constitution.
23 U.S. vs. Guinto, 182 SCRA 644.
24 Montreal Statement of the Assembly for Human Rights 2 (New York, 1968), as cited in Henkin,
et al., International Law Cases and Materials, 2nd ed., 1987, p. 987.
25 Sohn, the New International Law: Protection of the Rights of Individuals Rather than States, 32
Am U.L. Rev. 1, 1982, pp. 16-17.
26 Jessup, A Modern Law of Nations, 1948, p. 17.
27 O’Connel, International law, vol. 1, 2nd ed., 1970, p. 108.
28 Id.
SEPARATE OPINION
TINGA, J.:
In a little less than a fortnight, I find myself privileged with my involvement in the final deliberation
of quite a few significant public interest cases. Among them is the present case.
With the well-studied and exhaustive main opinion of Justice Antonio Carpio, the scholarly treatise
that the separate opinion of Justice Reynato Puno is, and the equally incisive separate opinion of
Justice Jose Vitug, any other opinion may appear unnecessary. But the questions posed are so
challenging and the implications so far-reaching that I feel it is my duty to offer my modest views.
To begin with, there is unanimity as regards the nullity of the questioned seizure of items which
are not listed in the search warrant. The disagreement relates to the juridical basis for voiding the
confiscation. At the core of the controversy is the question of whether the Bill of Rights was in
force and effect during the time gap between the establishment of the revolutionary government
as a result of the People Power Revolution in February 1986, and the promulgation of the
Provisional or Freedom Constitution by then President Corazon C. Aquino a month thereafter.
According to the majority, during the interregnum the Filipino people continued to enjoy, under the
auspices of the Universal Declaration of Human Rights ("Universal Declaration") and the
International Covenant on Civil and Political Rights ("International Covenant"), practically the same
rights under the Bill of Rights of the 1973 Constitution although the said Constitution itself was no
longer operative then. Justice Puno posits that during that period, the right against unreasonable
search and seizure still held sway, this time under the aegis of natural law. Justice Vitug is of the
view that the Bill of Rights under the 1973 Constitution remained in force and effect mainly
because the revolutionary government was bound to respect the Universal Declaration.
Interestingly, the case has necessitated a debate on jurisprudential thought.
Apparently, the majority adheres to the legal positivist theory championed by nineteenth century
philosopher John Austin, who defined the essence of law as a distinct branch of morality or
justice.1 He and the English positivists believed that the essence of law is the simple idea of an
order backed by threats.2
On the other side is Justice Puno’s espousal of the natural law doctrine, which, despite its
numerous forms and varied disguises, is still relevant in modern times as an important tool in
political and legal thinking. Essentially, it has afforded a potent justification of the existing legal
order and the social and economic system it embodies, for by regarding positive law as based on
a higher law ordained by divine or natural reason, the actual legal system thus acquires stability or
even sanctity it would not otherwise possess.3
While the two philosophies are poles apart in content, yet they are somehow cognate.4 To
illustrate, the Bill of Rights in the Constitution has its origins from natural law. Likewise a natural
law document is the Universal Declaration.5
A professor of Jurisprudence notes the inexorable trend to codify fundamental rights:
The emphasis on individual liberty and freedom has been a distinctive feature of western political
and legal philosophy since the seventeenth century, associated particularly with the doctrine of
natural rights. In the twentieth century this doctrine has resulted in the widespread acceptance of
the existence of fundamental rights built into the constitutional framework as a bill of rights, as well
as receiving recognition internationally by means of Covenants of Human Rights agreed upon
between states.
As such bill of rights—whether proffered as a statement of the inalienable and immutable rights of
man vested in him by natural law, or as no more than a set of social and economic rights which
the prevailing consensus and the climate of the times acknowledge to be necessary and
fundamental in a just society—will inevitably take the form of a catalogue of those rights, which
experience has taught modern western society to be crucial for the adequate protection of the
individual and the integrity of his personality. We may therefore expect, in one form or another, the
inclusion of a variety of freedoms, such as freedom of association, of religion, of free speech and
of a free press.6
In the case at bar, in the ultimate analysis both jurisprudential doctrines have found application in
the denouement of the case. The Bill of Rights in the Constitution, the Universal Declaration and
the International Covenant, great documents of liberty and human rights all, are founded on
natural law.
Going back to the specific question as to the juridical basis for the nullification of the questioned
confiscation, I respectfully maintain that it is no less than the Freedom Constitution since it made
the Bill of Rights in the 1973 Constitution operable from the incipiency of the Aquino government.
128
In the well-publicised so-called "OIC cases,"7 this Court issued an en banc resolution8 dismissing
the petitions and upholding the validity of the removal of the petitioners who were all elected and
whose terms of office under the 1973 Constitution were to expire on June 30, 1986, on the basis
of Article III, Section 2 of the Freedom Constitution, which reads:
SEC. 2. All elective and appointive officials and employees under the 1973 Constitution shall
continue in office until otherwise provided by proclamation or executive order or upon the
designation or appointment and qualification of their successors, if such appointment is made
within a period of one year from February 25, 1986.
This Court perforce extended retroactive effect to the above-quoted provision as the petitions
except one9 were filed before the adoption of the Freedom Constitution on March 25, 1986. That
being the case, with greater reason should the Bill of Rights in the 1973 Constitution be accorded
retroactive application pursuant to the Freedom Constitution.
But the more precise statement is that it was the unmistakable thrust of the Freedom Constitution
to bestow uninterrupted operability to the Bill of Rights in the 1973 Constitution. For one thing, the
title10 itself of Proclamation No. 3 which ordained the Freedom Constitution, as well as one of the
vital premises or whereas clauses11 thereof, adverts to the "protection of the basic rights" of the
people. For another, the Freedom Constitution in Article 1, Section 1 mandates that the Bill of
Rights and other provisions of the Freedom Constitution specified therein "remain in force and
effect and are hereby adopted in toto as part of this Provisional Constitution."
Of course, even if it is supposed that the Freedom Constitution had no retroactive effect or it did
not extend the effectivity of the Bill of Rights in the 1973 Constitution, still there would be no void
in the municipal or domestic law at the time as far as the observance of fundamental rights is
concerned. The Bill of Rights in the 1973 Constitution would still be in force, independently of the
Freedom Constitution, or at least the provisions thereof proscribing unreasonable search and
seizure12 and excluding evidence in violation of the proscription.13
Markedly departing from the typical, the revolutionary government installed by President Aquino
was a benign government. It had chosen to observe prevailing constitutional restraints. An
eloquent proof was the fact that through the defunct Philippine Constabulary, it applied for a
search warrant and conducted the questioned search and seizure only after obtaining the warrant.
Furthermore, President Aquino definitely pledged in her oath of office to uphold and defend the
Constitution, which undoubtedly was the 1973 Constitution, including the Bill of Rights thereof.
True, the Aquino government reorganized the government, including the judiciary and the local
officialdom. It did so to protect and stabilize the revolutionary government and not for the purpose
of trampling upon the fundamental rights of the people.
While arguably the due process clause was not observed in the case of the sequestration orders
issued by the Presidential Commission on Good Government, the fact remains that by and large,
the Aquino Government elected and managed to uphold and honor the Bill of Rights.
In light of the foregoing, I concur in the result.
5 Against the natural rights approach, Prof. Milne argues that human rights are simply what every
human being owes to every other human being and as such represent universal moral obligations.
These rights can be summarized as the right to life, to freedom from unprovoked violence and
arbitrary coercion, to be dealt with honestly, to receive aid in distress and to be respected as a
human person. He admits, however, that these are of only limited significance, as what they in fact
amount to depends upon particular social and cultural contexts. What therefore a bill of rights
should cover are not human rights simpliciter but rights regarded as of paramount importance in a
particular society (A. J. M. Milne, "Should We Have a Bill of Rights?" (1977) 40 M.L.R. 389, cited
in Lord of Hampstead, supra. at 99).
6 Lord Lloyd of Hamsptead, supra at 99.
7 GR No. 73770, Topacio, Jr. v. Pimentel; GR No. 738111, Velasco v. Pimentel; GR No. 73823,
Governors of the Philippines v. Pimentel; GR No. 73940, the Municipal Mayor’s League of the
Philippines, et al. v. Pimentel; and GR No. 73970, Solis v. Pimentel, et al.
8 Resolution, Court En Banc dated April 10, 1986.
9 G.R. No. 73970, Solis v. Pimentel.
10 Declaring a National Policy to Implement The Reforms Mandated by the People, Protecting
Their Basic Rights, Adopting a Provisional Constitution, and Providing For an Orderly Transition to
a Government Under a New Constitution. (Emphasis supplied)
11 WHEREAS, the direct mandate of the people as manifested by their extraordinary action
demands the complete reorganization of the government, restoration of democracy, protection of
basic rights, rebuilding of confidence in the entire governmental system, eradication of graft and
corruption, restoration of peace and order, maintenance of the supremacy of civilian authority over
the military, and the transition to a government under a New Constitution in the shortest time
possible;
WHEREAS, during the period of transition to a New Constitution it must be guaranteed that the
government will respect basic human rights and fundamental freedoms. (Emphasis supplied)
12 Const., (1973), art. IV, sec. 2.
13 Const., (1973), art. IV, sec. 4, par. 2.

Footnotes
1 John Austin, The Province of Jurisprudence Determined (New York: Humanities Press 1965);
Lectine VI (New York: Humanities Press 1965 (1954 ed.)).
2 H. L. Hart, The Concept of Law 16 (Oxford: Clarendon Press 1961).
3 Cf. Hans Kelsen, What is Justice?, p. 137 et seq. (Univ. of California Press); also V. Gordon
Childe, What Happened in History?, pp. 211-127; and Ross, On Law and Justice (1958), pp. 258-
262.
4 Although the positivist approach relegates natural law exclusively to the sphere of morals and
religion and segregates man-made law as a distinct phenomenon whose validity did not rest on
divine or supernatural sanctions, it resembles the natural law philosophy in being primarily
conceptual. Austin also interpreted both natural and positive law in terms of command: God’s and
the sovereigns, respectively. Likewise, some detect signs of the natural law doctrine in Jeremy
Bentham’s principle of utility. Lundstedt asserts that all schools of jurisprudence (except his own)
adopt the natural law approach.
Professor Hart, the leader of contemporary positivism, has attempted to restate natural law from a
semi-sociological point of view. He posits that there are certain substantive rules which are
essential if human beings are to live continuously together in close proximity. (Lord Lloyd of
Hampstead, Introduction to Jurisprudence, (4th ed), pp. 86, 90). 10. EN BANC
G.R. No. 160261 November 10, 2003

129
 RUFINO BIAZON, LEOVIGILDO BANAAG, ERIC SINGSON, JACINTO PARAS, JOSE SOLIS,
ERNESTO B. FRANCISCO, JR., petitioner, RENATO MATUBO, HERMINO TEVES, AMADO ESPINO, JR., EMILIO MACIAS, ARTHUR
NAGMAMALASAKIT NA MGA MANANANGGOL NG MGA MANGGAGAWANG PILIPINO, INC., PINGOY, JR., FRANCIS NEPOMUCENO, CONRADO ESTRELLA III, ELIAS BULUT, JR.,
ITS OFFICERS AND MEMBERS, petitioner-in-intervention, JURDIN ROMUALDO, JUAN PABLO BONDOC, GENEROSO TULAGAN, PERPETUO YLAGAN,
WORLD WAR II VETERANS LEGIONARIES OF THE PHILIPPINES, INC., petitioner-in- MICHAEL DUAVIT, JOSEPH DURANO, JESLI LAPUS, CARLOS COJUANGCO, GIORGIDI
intervention, AGGABAO, FRANCIS ESCUDERRO, RENE VELARDE, CELSO LOBREGAT, ALIPIO
BADELLES, DIDAGEN DILANGALEN, ABRAHAM MITRA, JOSEPH SANTIAGO, DARLENE
vs. ANTONIO-CUSTODIO, ALETA SUAREZ, RODOLF PLAZA, JV BAUTISTA, GREGORIO IPONG,
GILBERT REMULLA, ROLEX SUPLICO, CELIA LAYUS, JUAN MIGUEL ZUBIRI, BENASING
MACARAMBON, JR., JOSEFINA JOSON, MARK COJUANGCO, MAURICIO DOMOGAN,
THE HOUSE OF REPRESENTATIVES, REPRESENTED BY SPEAKER JOSE G. DE
RONALDO ZAMORA, ANGELO MONTILLA, ROSELLER BARINAGA, JESNAR FALCON,
VENECIA, THE SENATE, REPRESENTED BY SENATE PRESIDENT FRANKLIN M. DRILON,
REYLINA NICOLAS, RODOLFO ALBANO, JOAQUIN CHIPECO, JR., AND RUY ELIAS LOPEZ,
REPRESENTATIVE GILBERTO C. TEODORO, JR. AND REPRESENTATIVE FELIX WILLIAM B.
respondents,
FUENTEBELLA, respondents.
JAIME N. SORIANO, respondent-in-intervention,
JAIME N. SORIANO, respondent-in-Intervention,
SENATOR AQUILINO Q. PIMENTEL, respondent-in-intervention.
SENATOR AQUILINO Q. PIMENTEL, respondent-in-intervention.
x---------------------------------------------------------x
x---------------------------------------------------------x
G.R. No. 160292 November 10, 2003
G.R. No. 160262 November 10, 2003
HERMINIO HARRY L. ROQUE, JR., JOEL RUIZ BUTUYAN, MA. CECILIA PAPA, NAPOLEON C.
SEDFREY M. CANDELARIA, CARLOS P. MEDINA, JR. AND HENEDINA RAZON-ABAD,
REYES, ANTONIO H. ABAD, JR., ALFREDO C. LIGON, JOAN P. SERRANO AND GARY S.
petitioners,
MALLARI, petitioners,
ATTYS. ROMULO B. MACALINTAL AND PETE QUIRINO QUADRA, petitioners-in-intervention,
WORLD WAR II VETERANS LEGIONARIES OF THE PHILIPPINES, INC., petitioner-in-
WORLD WAR II VETERANS LEGIONARIES OF THE PHILIPPINES, INC., petitioner-in-
intervention,
intervention,
vs.
vs.
HON. SPEAKER JOSE G. DE VENECIA, JR. AND ROBERTO P. NAZARENO, IN HIS
THE HOUSE OF REPRESENTATIVES, THROUGH THE SPEAKER OR ACTING SPEAKER OR
CAPACITY AS SECRETARY GENERAL OF THE HOUSE OF REPRESENTATIVES, AND THE
PRESIDING OFFICER, SPEAKER JOSE G. DE VENECIA, REPRESENTATIVE GILBERTO G.
HOUSE OF REPRESENTATIVES, respondents,
TEODORO, JR., REPRESENTA-TIVE FELIX WILLIAM B. FUENTEBELLA, THE SENATE OF
JAIME N. SORIANO, respondent-in-intervention,
THE PHILIPPINES, THROUGH ITS PRESIDENT, SENATE PRESIDENT FRANKLIN M. DRILON,
SENATOR AQUILINO Q. PIMENTEL, respondent-in-intervention.
respondents,
x---------------------------------------------------------x
JAIME N. SORIANO, respondent-in-intervention,
G.R. No. 160295 November 10, 2003
SENATOR AQUILINO Q. PIMENTEL, respondent-in-intervention.
SALACNIB F. BATERINA AND DEPUTY SPEAKER RAUL M. GONZALES, petitioners,
x---------------------------------------------------------x
WORLD WAR II VETERANS LEGIONARIES OF THE PHILIPPINES, INC., petitioner-in-
G.R. No. 160263 November 10, 2003
intervention,
ARTURO M. DE CASTRO AND SOLEDAD M. CAGAMPANG, petitioners,
WORLD WAR II VETERANS LEGIONARIES OF THE PHILIPPINES, INC., petitioners-in-
vs.
intervention,
THE HOUSE OF REPRESEN-TATIVES, THROUGH THE SPEAKER OR ACTING SPEAKER OR
vs.
PRESIDING OFFICER, SPEAKER JOSE G. DE VENECIA, REPRESENTATIVE GILBERTO G.
FRANKLIN M. DRILON, IN HIS CAPACITY AS SENATE PRESIDENT, AND JOSE G. DE
TEODORO, JR., REPRESENTATIVE FELIX WILLIAM B. FUENTEBELLA, THE SENATE OF THE
VENECIA, JR., IN HIS CAPACITY AS SPEAKER OF THE HOUSE OF REPRESENTATIVES,
PHILIPPINES, THROUGH ITS PRESIDENT, SENATE PRESIDENT FRANKLIN M. DRILON,
respondents,
respondents,
JAIME N. SORIANO, respondent-in-intervention,
JAIME N. SORIANO, respondent-in-intervention,
SENATOR AQUILINO Q. PIMENTEL, respondent-in-intervention.
SENATOR AQUILINO Q. PIMENTEL, respondent-in-intervention.
x---------------------------------------------------------x
x---------------------------------------------------------x
G.R. No. 160277 November 10, 2003
G.R. No. 160310 November 10, 2003
FRANCISCO I. CHAVEZ, petitioner,
LEONILO R. ALFONSO, PETER ALVAREZ, SAMUEL DOCTOR, MELVIN MATIBAG, RAMON
WORLD WAR II VETERANS LEGIONARIES OF THE PHILIPPINES, INC., petitioner-in-
MIQUIBAS, RODOLFO MAGSINO, EDUARDO MALASAGA, EDUARDO SARMIENTO,
intervention,
EDGARDO NAOE, LEONARDO GARCIA, EDGARD SMITH, EMETERIO MENDIOLA, MARIO
vs.
TOREJA, GUILLERMO CASTASUS, NELSON A. LOYOLA, WILFREDO BELLO, JR., RONNIE
JOSE G. DE VENECIA, IN HIS CAPACITY AS SPEAKER OF THE HOUSE OF
TOQUILLO, KATE ANN VITAL, ANGELITA Q. GUZMAN, MONICO PABLES, JR., JAIME
REPRESENTATIVES, FRANKLIN M. DRILON, IN HIS CAPACITY AS PRESIDENT OF THE
BOAQUINA, LITA A. AQUINO, MILA P. GABITO, JANETTE ARROYO, RIZALDY EMPIG, ERNA
SENATE OF THE REPUBLIC OF THE PHILIPPINES, GILBERT TEODORO, JR., FELIX
LAHUZ, HOMER CALIBAG, DR. BING ARCE, SIMEON ARCE, JR., EL DELLE ARCE, WILLIE
WILLIAM FUENTEBELLA, JULIO LEDESMA IV, HENRY LANOT, KIM BERNARDO-LOKIN,
RIVERO, DANTE DIAZ, ALBERTO BUENAVISTA, FAUSTO BUENAVISTA, EMILY SENERIS,
MARCELINO LIBANAN, EMMYLOU TALIÑO-SANTOS, DOUGLAS CAGAS, SHERWIN
ANNA CLARISSA LOYOLA, SALVACION LOYOLA, RAINIER QUIROLGICO, JOSEPH
GATCHALIAN, LUIS BERSAMIN, JR., NERISSA SOON-RUIZ, ERNESTO NIEVA, EDGAR
LEANDRO LOYOLA, ANTONIO LIBREA, FILEMON SIBULO, MANUEL D. COMIA, JULITO U.
ERICE, ISMAEL MATHAY, SAMUEL DANGWA, ALFREDO MARAÑON, JR., CECILIA
SOON, VIRGILIO LUSTRE, AND NOEL ISORENA, MAU RESTRIVERA, MAX VILLAESTER,
CARREON-JALOSJOS, AGAPITO AQUINO, FAUSTO SEACHON, JR., GEORGILU YUMUL-
AND EDILBERTO GALLOR, petitioners,
HERMIDA, JOSE CARLOS LACSON, MANUEL ORTEGA, ULIRAN JUAQUIN, SORAYA
WORLD WAR II VETERANS LEGIONARIES OF THE PHILIPPINES, INC., petitioner-in-
JAAFAR, WILHELMINO SY-ALVARADO, CLAUDE BAUTISTA, DEL DE GUZMAN, ZENAIDA
intervention,
CRUZ-DUCUT, AUGUSTO BACULIO, FAUSTINO DY III, AUGUSTO SYJUCO, ROZZANO
130
vs.
THE HOUSE OF REPRESENTATIVES, REPRESENTED BY HON. SPEAKER JOSE C. DE
VENECIA, JR., THE SENATE, REPRESENTED BY HON. SENATE PRESIDENT FRANKLIN
DRILON, HON. FELIX FUENTEBELLA, ET AL., respondents.
x---------------------------------------------------------x
G.R. No. 160318 November 10, 2003
PUBLIC INTEREST CENTER, INC., CRISPIN T. REYES, petitioners,
vs.
HON. SPEAKER JOSE G. DE VENECIA, ALL MEMBERS, HOUSE OF REPRESENTATIVES,
HON. SENATE PRESIDENT FRANKLIN M. DRILON, AND ALL MEMBERS, PHILIPPINE
SENATE, respondents.
x---------------------------------------------------------x
G.R. No. 160342 November 10, 2003
ATTY. FERNANDO P.R. PERITO, IN HIS CAPACITY AS A MEMBER OF THE INTEGRATED
BAR OF THE PHILIPPINES, MANILA III, AND ENGR. MAXIMO N. MENEZ JR., IN HIS
CAPACITY AS A TAXPAYER AND MEMBER OF THE ENGINEERING PROFESSION,
petitioners,
vs.
THE HOUSE OF REPRESENTA-TIVES REPRESENTED BY THE 83 HONORABLE MEMBERS
OF THE HOUSE LED BY HON. REPRESENTATIVE WILLIAM FUENTEBELLA, respondents.
x---------------------------------------------------------x
G.R. No. 160343 November 10, 2003
INTEGRATED BAR OF THE PHILIPPINES, petitioner,
vs.
THE HOUSE OF REPRESENTA-TIVES, THROUGH THE SPEAKER OR ACTING SPEAKER OR
PRESIDING OFFICER, SPEAKER JOSE G. DE VENECIA, REPRESENTATIVE GILBERTO G.
TEODORO, JR., REPRESENTATIVE FELIX WILLIAM B. FUENTEBELLA, THE SENATE OF THE
PHILIPPINES THROUGH ITS PRESIDENT, SENATE PRESIDENT FRANKLIN M. DRILON,
respondents.
x---------------------------------------------------------x
G.R. No. 160360 November 10, 2003
CLARO B. FLORES, petitioner,
vs.
THE HOUSE OF REPRESENTATIVES THROUGH THE SPEAKER, AND THE SENATE OF THE
PHILIPPINES, THROUGH THE SENATE PRESIDENT, respondents.
x---------------------------------------------------------x
G.R. No. 160365 November 10, 2003
U.P. LAW ALUMNI CEBU FOUNDATION, INC., GOERING G.C. PADERANGA, DANILO V.
ORTIZ, GLORIA C. ESTENZO-RAMOS, LIZA D. CORRO, LUIS V. DIORES, SR., BENJAMIN S.
RALLON, ROLANDO P. NONATO, DANTE T. RAMOS, ELSA R. DIVINAGRACIA, KAREN B.
CAPARROS-ARQUILLANO, SYLVA G. AGUIRRE-PADERANGA, FOR THEMSELVES AND IN
BEHALF OF OTHER CITIZENS OF THE REPUBLIC OF THE PHILIPPINES, petitioners,
vs.
THE HOUSE OF REPRESENTA-TIVES, SPEAKER JOSE G. DE VENECIA, THE SENATE OF
THE PHILIPPINES, SENATE PRESIDENT FRANKLIN DRILON, HOUSE REPRESENTATIVES
FELIX FUENTEBELLA AND GILBERTO TEODORO, BY THEMSELVES AND AS
REPRESENTATIVES OF THE GROUP OF MORE THAN 80 HOUSE REPRESENTATIVES WHO
SIGNED AND FILED THE IMPEACHMENT COMPLAINT AGAINST SUPREME COURT CHIEF
JUSTICE HILARIO G. DAVIDE, JR. respondents.
x---------------------------------------------------------x
G.R. No. 160370 November 10, 2003
FR. RANHILIO CALLANGAN AQUINO, petitioner,
vs.
THE HONORABLE PRESIDENT OF THE SENATE, THE HONORABLE SPEAKER OF THE
HOUSE OF REPRESENTATIVES, respondents.
x---------------------------------------------------------x
G.R. No. 160376 November 10, 2003
NILO A. MALANYAON, petitioner,
vs.
HON. FELIX WILLIAM FUENTEBELLA AND GILBERT TEODORO, IN REPRESENTATION OF
THE 86 SIGNATORIES OF THE ARTICLES OF IMPEACHMENT AGAINST CHIEF JUSTICE
HILARIO G. DAVIDE, JR. AND THE HOUSE OF REPRESENTATIVES, CONGRESS OF THE
PHILIPPINES, REPRESENTED BY ITS SPEAKER, HON. JOSE G. DE VENECIA, respondents.
x---------------------------------------------------------x
G.R. No. 160392 November 10, 2003
VENICIO S. FLORES AND HECTOR L. HOFILEÑA, petitioners,
vs.
THE HOUSE OF REPRESENTATIVES, THROUGH SPEAKER JOSE G. DE VENECIA, AND
THE SENATE OF THE PHILIPPINES, THROUGH SENATE PRESIDENT FRANKLIN DRILON,
respondents.
x---------------------------------------------------------x
G.R. No. 160397 November 10, 2003
IN THE MATTER OF THE IMPEACHMENT COMPLAINT AGAINST CHIEF JUSTICE HILARIO G.
DAVIDE, JR., ATTY. DIOSCORO U. VALLEJOS, JR., petitioner.
x---------------------------------------------------------x
G.R. No. 160403 November 10, 2003
PHILIPPINE BAR ASSOCIATION, petitioner,
vs.
THE HOUSE OF REPRESENTATIVES, THROUGH THE SPEAKER OR PRESIDING OFFICER,
HON. JOSE G. DE VENECIA, REPRESENTATIVE GILBERTO G. TEODORO, JR.,
REPRESENTATIVE FELIX WILLIAM B. FUENTEBELA, THE SENATE OF THE PHILIPPINES,
THROUGH SENATE PRESIDENT, HON. FRANKLIN DRILON, respondents.
x---------------------------------------------------------x
G.R. No. 160405 November 10, 2003
DEMOCRITO C. BARCENAS, PRESIDENT OF IBP, CEBU CITY CHAPTER, MANUEL M.
MONZON, PRESIDING OF IBP, CEBU PROVINCE, VICTOR A. MAAMBONG, PROVINCIAL
BOARD MEMBER, ADELINO B. SITOY, DEAN OF THE COLLEG EOF LAW, UNIVERSITY OF
CEBU, YOUNG LAWYERS ASSOCAITION OF CEBU, INC. [YLAC], REPRSEENTED BY ATTY.
MANUEL LEGASPI, CONFEDERATION OF ACCREDITED MEDIATORS OF THE PHILIPPINES,
INC. [CAMP, INC], REPRESENTED BY RODERIC R. POCA, MANDAUE LAWYERS
ASSOCIATION, [MANLAW], REPRESENTED BY FELIPE VELASQUEZ, FEDERACION
INTERNACIONAL DE ABOGADAS [FIDA], REPRESENTED BY THELMA L. JORDAN, CARLOS
G. CO, PRESIENT OF CEBU CHAMBER OF COMMERCE AND INDUSTRY AND CEBU LADY
LAWYERS ASSOCIATION, INC. [CELLA, INC.], MARIBELLE NAVARRO AND BERNARDITO
FLORIDO, PAST PRESIDENT CEBU CHAMBER OF COMMERCE AND INTEGRATED BAR OF
THE PHILIPPINES, CEBU CHAPTER, petitioners,
vs.
THE HOUSE OF REPRESENTA-TIVES, REPRESENTED BY REP. JOSE G. DE VENECIA, AS
HOUSE SPEAKER AND THE SENATE, REPRESENTED BY SENATOR FRANKLIN DRILON, AS
SENATE PRESIDENT, respondents.
CARPIO MORALES, J.:
There can be no constitutional crisis arising from a conflict, no matter how passionate and
seemingly irreconcilable it may appear to be, over the determination by the independent branches
of government of the nature, scope and extent of their respective constitutional powers where the
Constitution itself provides for the means and bases for its resolution.
Our nation's history is replete with vivid illustrations of the often frictional, at times turbulent,
dynamics of the relationship among these co-equal branches. This Court is confronted with one
such today involving the legislature and the judiciary which has drawn legal luminaries to chart
antipodal courses and not a few of our countrymen to vent cacophonous sentiments thereon.
There may indeed be some legitimacy to the characterization that the present controversy subject
of the instant petitions – whether the filing of the second impeachment complaint against Chief
Justice Hilario G. Davide, Jr. with the House of Representatives falls within the one year bar
provided in the Constitution, and whether the resolution thereof is a political question – has
resulted in a political crisis. Perhaps even more truth to the view that it was brought upon by a
political crisis of conscience.
131
In any event, it is with the absolute certainty that our Constitution is sufficient to address all the
issues which this controversy spawns that this Court unequivocally pronounces, at the first
instance, that the feared resort to extra-constitutional methods of resolving it is neither necessary
nor legally permissible. Both its resolution and protection of the public interest lie in adherence to,
not departure from, the Constitution.
In passing over the complex issues arising from the controversy, this Court is ever mindful of the
essential truth that the inviolate doctrine of separation of powers among the legislative, executive
or judicial branches of government by no means prescribes for absolute autonomy in the
discharge by each of that part of the governmental power assigned to it by the sovereign people.
At the same time, the corollary doctrine of checks and balances which has been carefully
calibrated by the Constitution to temper the official acts of each of these three branches must be
given effect without destroying their indispensable co-equality.
Taken together, these two fundamental doctrines of republican government, intended as they are
to insure that governmental power is wielded only for the good of the people, mandate a
relationship of interdependence and coordination among these branches where the delicate
functions of enacting, interpreting and enforcing laws are harmonized to achieve a unity of
governance, guided only by what is in the greater interest and well-being of the people. Verily,
salus populi est suprema lex.
Article XI of our present 1987 Constitution provides:
ARTICLE XI
Accountability of Public Officers
SECTION 1. Public office is a public trust. Public officers and employees must at all times be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency,
act with patriotism and justice, and lead modest lives.
SECTION 2. The President, the Vice-President, the Members of the Supreme Court, the Members
of the Constitutional Commissions, and the Ombudsman may be removed from office, on
impeachment for, and conviction of, culpable violation of the Constitution, treason, bribery, graft
and corruption, other high crimes, or betrayal of public trust. All other public officers and
employees may be removed from office as provided by law, but not by impeachment.
SECTION 3. (1) The House of Representatives shall have the exclusive power to initiate all cases
of impeachment.
(2) A verified complaint for impeachment may be filed by any Member of the House of
Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
which shall be included in the Order of Business within ten session days, and referred to the
proper Committee within three session days thereafter. The Committee, after hearing, and by a
majority vote of all its Members, shall submit its report to the House within sixty session days from
such referral, together with the corresponding resolution. The resolution shall be calendared for
consideration by the House within ten session days from receipt thereof.
(3) A vote of at least one-third of all the Members of the House shall be necessary either to affirm
a favorable resolution with the Articles of Impeachment of the Committee, or override its contrary
resolution. The vote of each Member shall be recorded.
(4) In case the verified complaint or resolution of impeachment is filed by at least one-third of all
the Members of the House, the same shall constitute the Articles of Impeachment, and trial by the
Senate shall forthwith proceed.
(5) No impeachment proceedings shall be initiated against the same official more than once within
a period of one year.
(6) The Senate shall have the sole power to try and decide all cases of impeachment. When sitting
for that purpose, the Senators shall be on oath or affirmation. When the President of the
Philippines is on trial, the Chief Justice of the Supreme Court shall preside, but shall not vote. No
person shall be convicted without the concurrence of two-thirds of all the Members of the Senate.
(7) Judgment in cases of impeachment shall not extend further than removal from office and
disqualification to hold any office under the Republic of the Philippines, but the party convicted
shall nevertheless be liable and subject to prosecution, trial, and punishment according to law.
(8) The Congress shall promulgate its rules on impeachment to effectively carry out the purpose of
this section. (Emphasis and underscoring supplied)
Following the above-quoted Section 8 of Article XI of the Constitution, the 12th Congress of the
House of Representatives adopted and approved the Rules of Procedure in Impeachment
Proceedings (House Impeachment Rules) on November 28, 2001, superseding the previous
House Impeachment Rules1 approved by the 11th Congress. The relevant distinctions between
these two Congresses' House Impeachment Rules are shown in the following tabulation:
11TH CONGRESS RULES
12TH CONGRESS NEW RULES
RULE II
INITIATING IMPEACHMENT
Section 2. Mode of Initiating Impeachment. – Impeachment shall be initiated only by a verified
complaint for impeachment filed by any Member of the House of Representatives or by any citizen
upon a resolution of endorsement by any Member thereof or by a verified complaint or resolution
of impeachment filed by at least one-third (1/3) of all the Members of the House.
RULE V
BAR AGAINST INITIATION OF IMPEACHMENT PROCEEDINGS AGAINST THE SAME
OFFICIAL
Section 16. – Impeachment Proceedings Deemed Initiated. – In cases where a Member of the
House files a verified complaint of impeachment or a citizen files a verified complaint that is
endorsed by a Member of the House through a resolution of endorsement against an impeachable
officer, impeachment proceedings against such official are deemed initiated on the day the
Committee on Justice finds that the verified complaint and/or resolution against such official, as
the case may be, is sufficient in substance, or on the date the House votes to overturn or affirm
the finding of the said Committee that the verified complaint and/or resolution, as the case may be,
is not sufficient in substance.
In cases where a verified complaint or a resolution of impeachment is filed or endorsed, as the
case may be, by at least one-third (1/3) of the Members of the House, impeachment proceedings
are deemed initiated at the time of the filing of such verified complaint or resolution of
impeachment with the Secretary General.
RULE V
BAR AGAINST IMPEACHMENT
Section 14. Scope of Bar. – No impeachment proceedings shall be initiated against the same
official more than once within the period of one (1) year.
Section 17. Bar Against Initiation Of Impeachment Proceedings. – Within a period of one (1) year
from the date impeachment proceedings are deemed initiated as provided in Section 16 hereof, no
impeachment proceedings, as such, can be initiated against the same official. (Italics in the
original; emphasis and underscoring supplied)
On July 22, 2002, the House of Representatives adopted a Resolution,2 sponsored by
Representative Felix William D. Fuentebella, which directed the Committee on Justice "to conduct
an investigation, in aid of legislation, on the manner of disbursements and expenditures by the
Chief Justice of the Supreme Court of the Judiciary Development Fund (JDF)."3
On June 2, 2003, former President Joseph E. Estrada filed an impeachment complaint4 (first
impeachment complaint) against Chief Justice Hilario G. Davide Jr. and seven Associate
Justices5 of this Court for "culpable violation of the Constitution, betrayal of the public trust and
other high crimes."6 The complaint was endorsed by Representatives Rolex T. Suplico, Ronaldo
B. Zamora and Didagen Piang Dilangalen,7 and was referred to the House Committee on Justice
on August 5, 20038 in accordance with Section 3(2) of Article XI of the Constitution which reads:
Section 3(2) A verified complaint for impeachment may be filed by any Member of the House of
Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
which shall be included in the Order of Business within ten session days, and referred to the
proper Committee within three session days thereafter. The Committee, after hearing, and by a
majority vote of all its Members, shall submit its report to the House within sixty session days from
such referral, together with the corresponding resolution. The resolution shall be calendared for
consideration by the House within ten session days from receipt thereof.
The House Committee on Justice ruled on October 13, 2003 that the first impeachment complaint
was "sufficient in form,"9 but voted to dismiss the same on October 22, 2003 for being insufficient
in substance.10 To date, the Committee Report to this effect has not yet been sent to the House in
plenary in accordance with the said Section 3(2) of Article XI of the Constitution.
Four months and three weeks since the filing on June 2, 2003 of the first complaint or on October
23, 2003, a day after the House Committee on Justice voted to dismiss it, the second
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impeachment complaint11 was filed with the Secretary General of the House12 by
Representatives Gilberto C. Teodoro, Jr. (First District, Tarlac) and Felix William B. Fuentebella
(Third District, Camarines Sur) against Chief Justice Hilario G. Davide, Jr., founded on the alleged
results of the legislative inquiry initiated by above-mentioned House Resolution. This second
impeachment complaint was accompanied by a "Resolution of Endorsement/Impeachment"
signed by at least one-third (1/3) of all the Members of the House of Representatives.13
Thus arose the instant petitions against the House of Representatives, et. al., most of which
petitions contend that the filing of the second impeachment complaint is unconstitutional as it
violates the provision of Section 5 of Article XI of the Constitution that "[n]o impeachment
proceedings shall be initiated against the same official more than once within a period of one
year."
In G.R. No. 160261, petitioner Atty. Ernesto B. Francisco, Jr., alleging that he has a duty as a
member of the Integrated Bar of the Philippines to use all available legal remedies to stop an
unconstitutional impeachment, that the issues raised in his petition for Certiorari, Prohibition and
Mandamus are of transcendental importance, and that he "himself was a victim of the capricious
and arbitrary changes in the Rules of Procedure in Impeachment Proceedings introduced by the
12th Congress,"14 posits that his right to bring an impeachment complaint against then
Ombudsman Aniano Desierto had been violated due to the capricious and arbitrary changes in the
House Impeachment Rules adopted and approved on November 28, 2001 by the House of
Representatives and prays that (1) Rule V, Sections 16 and 17 and Rule III, Sections 5, 6, 7, 8,
and 9 thereof be declared unconstitutional; (2) this Court issue a writ of mandamus directing
respondents House of Representatives et. al. to comply with Article IX, Section 3 (2), (3) and (5) of
the Constitution, to return the second impeachment complaint and/or strike it off the records of the
House of Representatives, and to promulgate rules which are consistent with the Constitution; and
(3) this Court permanently enjoin respondent House of Representatives from proceeding with the
second impeachment complaint.
In G.R. No. 160262, petitioners Sedfrey M. Candelaria, et. al., as citizens and taxpayers, alleging
that the issues of the case are of transcendental importance, pray, in their petition for
Certiorari/Prohibition, the issuance of a writ "perpetually" prohibiting respondent House of
Representatives from filing any Articles of Impeachment against the Chief Justice with the Senate;
and for the issuance of a writ "perpetually" prohibiting respondents Senate and Senate President
Franklin Drilon from accepting any Articles of Impeachment against the Chief Justice or, in the
event that the Senate has accepted the same, from proceeding with the impeachment trial.
In G.R. No. 160263, petitioners Arturo M. de Castro and Soledad Cagampang, as citizens,
taxpayers, lawyers and members of the Integrated Bar of the Philippines, alleging that their
petition for Prohibition involves public interest as it involves the use of public funds necessary to
conduct the impeachment trial on the second impeachment complaint, pray for the issuance of a
writ of prohibition enjoining Congress from conducting further proceedings on said second
impeachment complaint.
In G.R. No. 160277, petitioner Francisco I. Chavez, alleging that this Court has recognized that he
has locus standi to bring petitions of this nature in the cases of Chavez v. PCGG15 and Chavez v.
PEA-Amari Coastal Bay Development Corporation,16 prays in his petition for Injunction that the
second impeachment complaint be declared unconstitutional.
In G.R. No. 160292, petitioners Atty. Harry L. Roque, et. al., as taxpayers and members of the
legal profession, pray in their petition for Prohibition for an order prohibiting respondent House of
Representatives from drafting, adopting, approving and transmitting to the Senate the second
impeachment complaint, and respondents De Venecia and Nazareno from transmitting the Articles
of Impeachment to the Senate.
In G.R. No. 160295, petitioners Representatives Salacnib F. Baterina and Deputy Speaker Raul
M. Gonzalez, alleging that, as members of the House of Representatives, they have a legal
interest in ensuring that only constitutional impeachment proceedings are initiated, pray in their
petition for Certiorari/Prohibition that the second impeachment complaint and any act proceeding
therefrom be declared null and void.
In G.R. No. 160310, petitioners Leonilo R. Alfonso et al., claiming that they have a right to be
protected against all forms of senseless spending of taxpayers' money and that they have an
obligation to protect the Supreme Court, the Chief Justice, and the integrity of the Judiciary, allege
in their petition for Certiorari and Prohibition that it is instituted as "a class suit" and pray that (1)
the House Resolution endorsing the second impeachment complaint as well as all issuances
emanating therefrom be declared null and void; and (2) this Court enjoin the Senate and the
Senate President from taking cognizance of, hearing, trying and deciding the second
impeachment complaint, and issue a writ of prohibition commanding the Senate, its prosecutors
and agents to desist from conducting any proceedings or to act on the impeachment complaint.
In G.R. No. 160318, petitioner Public Interest Center, Inc., whose members are citizens and
taxpayers, and its co-petitioner Crispin T. Reyes, a citizen, taxpayer and a member of the
Philippine Bar, both allege in their petition, which does not state what its nature is, that the filing of
the second impeachment complaint involves paramount public interest and pray that Sections 16
and 17 of the House Impeachment Rules and the second impeachment complaint/Articles of
Impeachment be declared null and void.
In G.R. No. 160342, petitioner Atty. Fernando P. R. Perito, as a citizen and a member of the
Philippine Bar Association and of the Integrated Bar of the Philippines, and petitioner Engr.
Maximo N. Menez, Jr., as a taxpayer, pray in their petition for the issuance of a Temporary
Restraining Order and Permanent Injunction to enjoin the House of Representatives from
proceeding with the second impeachment complaint.
In G.R. No. 160343, petitioner Integrated Bar of the Philippines, alleging that it is mandated by the
Code of Professional Responsibility to uphold the Constitution, prays in its petition for Certiorari
and Prohibition that Sections 16 and 17 of Rule V and Sections 5, 6, 7, 8, 9 of Rule III of the
House Impeachment Rules be declared unconstitutional and that the House of Representatives be
permanently enjoined from proceeding with the second impeachment complaint.
In G.R. No. 160360, petitioner-taxpayer Atty. Claro Flores prays in his petition for Certiorari and
Prohibition that the House Impeachment Rules be declared unconstitutional.
In G.R. No. 160365, petitioners U.P. Law Alumni Cebu Foundation Inc., et. al., in their petition for
Prohibition and Injunction which they claim is a class suit filed in behalf of all citizens, citing Oposa
v. Factoran17 which was filed in behalf of succeeding generations of Filipinos, pray for the
issuance of a writ prohibiting respondents House of Representatives and the Senate from
conducting further proceedings on the second impeachment complaint and that this Court declare
as unconstitutional the second impeachment complaint and the acts of respondent House of
Representatives in interfering with the fiscal matters of the Judiciary.
In G.R. No. 160370, petitioner-taxpayer Father Ranhilio Callangan Aquino, alleging that the issues
in his petition for Prohibition are of national and transcendental significance and that as an official
of the Philippine Judicial Academy, he has a direct and substantial interest in the unhampered
operation of the Supreme Court and its officials in discharging their duties in accordance with the
Constitution, prays for the issuance of a writ prohibiting the House of Representatives from
transmitting the Articles of Impeachment to the Senate and the Senate from receiving the same or
giving the impeachment complaint due course.
In G.R. No. 160376, petitioner Nilo A. Malanyaon, as a taxpayer, alleges in his petition for
Prohibition that respondents Fuentebella and Teodoro at the time they filed the second
impeachment complaint, were "absolutely without any legal power to do so, as they acted without
jurisdiction as far as the Articles of Impeachment assail the alleged abuse of powers of the Chief
Justice to disburse the (JDF)."
In G.R. No. 160392, petitioners Attorneys Venicio S. Flores and Hector L. Hofileña, alleging that
as professors of law they have an abiding interest in the subject matter of their petition for
Certiorari and Prohibition as it pertains to a constitutional issue "which they are trying to inculcate
in the minds of their students," pray that the House of Representatives be enjoined from endorsing
and the Senate from trying the Articles of Impeachment and that the second impeachment
complaint be declared null and void.
In G.R. No. 160397, petitioner Atty. Dioscoro Vallejos, Jr., without alleging his locus standi, but
alleging that the second impeachment complaint is founded on the issue of whether or not the
Judicial Development Fund (JDF) was spent in accordance with law and that the House of
Representatives does not have exclusive jurisdiction in the examination and audit thereof, prays in
his petition "To Declare Complaint Null and Void for Lack of Cause of Action and Jurisdiction" that
the second impeachment complaint be declared null and void.
In G.R. No. 160403, petitioner Philippine Bar Association, alleging that the issues raised in the
filing of the second impeachment complaint involve matters of transcendental importance, prays in
its petition for Certiorari/Prohibition that (1) the second impeachment complaint and all
proceedings arising therefrom be declared null and void; (2) respondent House of Representatives
be prohibited from transmitting the Articles of Impeachment to the Senate; and (3) respondent
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Senate be prohibited from accepting the Articles of Impeachment and from conducting any
proceedings thereon.
In G.R. No. 160405, petitioners Democrit C. Barcenas et. al., as citizens and taxpayers, pray in
their petition for Certiorari/Prohibition that (1) the second impeachment complaint as well as the
resolution of endorsement and impeachment by the respondent House of Representatives be
declared null and void and (2) respondents Senate and Senate President Franklin Drilon be
prohibited from accepting any Articles of Impeachment against the Chief Justice or, in the event
that they have accepted the same, that they be prohibited from proceeding with the impeachment
trial.
Petitions bearing docket numbers G.R. Nos. 160261, 160262 and 160263, the first three of the
eighteen which were filed before this Court,18 prayed for the issuance of a Temporary Restraining
Order and/or preliminary injunction to prevent the House of Representatives from transmitting the
Articles of Impeachment arising from the second impeachment complaint to the Senate. Petition
bearing docket number G.R. No. 160261 likewise prayed for the declaration of the November 28,
2001 House Impeachment Rules as null and void for being unconstitutional.
Petitions bearing docket numbers G.R. Nos. 160277, 160292 and 160295, which were filed on
October 28, 2003, sought similar relief. In addition, petition bearing docket number G.R. No.
160292 alleged that House Resolution No. 260 (calling for a legislative inquiry into the
administration by the Chief Justice of the JDF) infringes on the constitutional doctrine of
separation of powers and is a direct violation of the constitutional principle of fiscal autonomy of
the judiciary.
On October 28, 2003, during the plenary session of the House of Representatives, a motion was
put forth that the second impeachment complaint be formally transmitted to the Senate, but it was
not carried because the House of Representatives adjourned for lack of quorum,19 and as
reflected above, to date, the Articles of Impeachment have yet to be forwarded to the Senate.
Before acting on the petitions with prayers for temporary restraining order and/or writ of
preliminary injunction which were filed on or before October 28, 2003, Justices Puno and Vitug
offered to recuse themselves, but the Court rejected their offer. Justice Panganiban inhibited
himself, but the Court directed him to participate.
Without necessarily giving the petitions due course, this Court in its Resolution of October 28,
2003, resolved to (a) consolidate the petitions; (b) require respondent House of Representatives
and the Senate, as well as the Solicitor General, to comment on the petitions not later than 4:30
p.m. of November 3, 2003; (c) set the petitions for oral arguments on November 5, 2003, at 10:00
a.m.; and (d) appointed distinguished legal experts as amici curiae.20 In addition, this Court called
on petitioners and respondents to maintain the status quo, enjoining all the parties and others
acting for and in their behalf to refrain from committing acts that would render the petitions moot.
Also on October 28, 2003, when respondent House of Representatives through Speaker Jose C.
De Venecia, Jr. and/or its co-respondents, by way of special appearance, submitted a
Manifestation asserting that this Court has no jurisdiction to hear, much less prohibit or enjoin the
House of Representatives, which is an independent and co-equal branch of government under the
Constitution, from the performance of its constitutionally mandated duty to initiate impeachment
cases. On even date, Senator Aquilino Q. Pimentel, Jr., in his own behalf, filed a Motion to
Intervene (Ex Abudante Cautela)21 and Comment, praying that "the consolidated petitions be
dismissed for lack of jurisdiction of the Court over the issues affecting the impeachment
proceedings and that the sole power, authority and jurisdiction of the Senate as the impeachment
court to try and decide impeachment cases, including the one where the Chief Justice is the
respondent, be recognized and upheld pursuant to the provisions of Article XI of the
Constitution."22
Acting on the other petitions which were subsequently filed, this Court resolved to (a) consolidate
them with the earlier consolidated petitions; (b) require respondents to file their comment not later
than 4:30 p.m. of November 3, 2003; and (c) include them for oral arguments on November 5,
2003.
On October 29, 2003, the Senate of the Philippines, through Senate President Franklin M. Drilon,
filed a Manifestation stating that insofar as it is concerned, the petitions are plainly premature and
have no basis in law or in fact, adding that as of the time of the filing of the petitions, no justiciable
issue was presented before it since (1) its constitutional duty to constitute itself as an
impeachment court commences only upon its receipt of the Articles of Impeachment, which it had
not, and (2) the principal issues raised by the petitions pertain exclusively to the proceedings in
the House of Representatives.
On October 30, 2003, Atty. Jaime Soriano filed a "Petition for Leave to Intervene" in G.R. Nos.
160261, 160262, 160263, 160277, 160292, and 160295, questioning the status quo Resolution
issued by this Court on October 28, 2003 on the ground that it would unnecessarily put Congress
and this Court in a "constitutional deadlock" and praying for the dismissal of all the petitions as the
matter in question is not yet ripe for judicial determination.
On November 3, 2003, Attorneys Romulo B. Macalintal and Pete Quirino Quadra filed in G.R. No.
160262 a "Motion for Leave of Court to Intervene and to Admit the Herein Incorporated Petition in
Intervention."
On November 4, 2003, Nagmamalasakit na mga Manananggol ng mga Manggagawang Pilipino,
Inc. filed a Motion for Intervention in G.R. No. 160261. On November 5, 2003, World War II
Veterans Legionnaires of the Philippines, Inc. also filed a "Petition-in-Intervention with Leave to
Intervene" in G.R. Nos. 160261, 160262, 160263, 160277, 160292, 160295, and 160310.
The motions for intervention were granted and both Senator Pimentel's Comment and Attorneys
Macalintal and Quadra's Petition in Intervention were admitted.
On November 5-6, 2003, this Court heard the views of the amici curiae and the arguments of
petitioners, intervenors Senator Pimentel and Attorney Makalintal, and Solicitor General Alfredo
Benipayo on the principal issues outlined in an Advisory issued by this Court on November 3,
2003, to wit:
Whether the certiorari jurisdiction of the Supreme Court may be invoked; who can invoke it; on
what issues and at what time; and whether it should be exercised by this Court at this time.
In discussing these issues, the following may be taken up:
a) locus standi of petitioners;
b) ripeness(prematurity; mootness);
c) political question/justiciability;
d) House's "exclusive" power to initiate all cases of impeachment;
e) Senate's "sole" power to try and decide all cases of impeachment;
f) constitutionality of the House Rules on Impeachment vis-a-vis Section 3(5) of Article XI of the
Constitution; and
g) judicial restraint (Italics in the original)
In resolving the intricate conflux of preliminary and substantive issues arising from the instant
petitions as well as the myriad arguments and opinions presented for and against the grant of the
reliefs prayed for, this Court has sifted and determined them to be as follows: (1) the threshold and
novel issue of whether or not the power of judicial review extends to those arising from
impeachment proceedings; (2) whether or not the essential pre-requisites for the exercise of the
power of judicial review have been fulfilled; and (3) the substantive issues yet remaining. These
matters shall now be discussed in seriatim.
Judicial Review
As reflected above, petitioners plead for this Court to exercise the power of judicial review to
determine the validity of the second impeachment complaint.
This Court's power of judicial review is conferred on the judicial branch of the government in
Section 1, Article VIII of our present 1987 Constitution:
SECTION 1. The judicial power shall be vested in one Supreme Court and in such lower courts as
may be established by law.
Judicial power 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 abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the government. (Emphasis supplied)
Such power of judicial review was early on exhaustively expounded upon by Justice Jose P.
Laurel in the definitive 1936 case of Angara v. Electoral Commission23 after the effectivity of the
1935 Constitution whose provisions, unlike the present Constitution, did not contain the present
provision in Article VIII, Section 1, par. 2 on what judicial power includes. Thus, Justice Laurel
discoursed:
x x x In times of social disquietude or political excitement, the great landmarks of the Constitution
are apt to be forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial
department is the only constitutional organ which can be called upon to determine the proper
134
allocation of powers between the several departments and among the integral or constituent units
thereof.
As any human production, our Constitution is of course lacking perfection and perfectibility, but as
much as it was within the power of our people, acting through their delegates to so provide, that
instrument which is the expression of their sovereignty however limited, has established a
republican government intended to operate and function as a harmonious whole, under a system
of checks and balances, and subject to specific limitations and restrictions provided in the said
instrument. The Constitution sets forth in no uncertain language the restrictions and limitations
upon governmental powers and agencies. If these restrictions and limitations are transcended it
would be inconceivable if the Constitution had not provided for a mechanism by which to direct the
course of government along constitutional channels, for then the distribution of powers would be
mere verbiage, the bill of rights mere expressions of sentiment, and the principles of good
government mere political apothegms. Certainly, the limitations and restrictions embodied in our
Constitution are real as they should be in any living constitution. In the United States where no
express constitutional grant is found in their constitution, the possession of this moderating power
of the courts, not to speak of its historical origin and development there, has been set at rest by
popular acquiescence for a period of more than one and a half centuries. In our case, this
moderating power is granted, if not expressly, by clear implication from section 2 of article VIII of
our Constitution.
The Constitution is a definition of the powers of government. Who is to determine the nature,
scope and extent of such powers? The Constitution itself has provided for the instrumentality of
the judiciary as the rational way. 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. This is in truth all that is involved in what is termed "judicial supremacy"
which properly is the power of judicial review under the Constitution. Even then, this power of
judicial review is limited to actual cases and controversies to be exercised after full opportunity of
argument by the parties, and limited further to the constitutional question raised or the very lis
mota presented. Any attempt at abstraction could only lead to dialectics and barren legal
questions and to sterile conclusions unrelated to actualities. Narrowed as its function is in this
manner, the judiciary does not pass upon questions of wisdom, justice or expediency of
legislation. More than that, courts accord the presumption of constitutionality to legislative
enactments, not only because the legislature is presumed to abide by the Constitution but also
because the judiciary in the determination of actual cases and controversies must reflect the
wisdom and justice of the people as expressed through their representatives in the executive and
legislative departments of the government.24 (Italics in the original; emphasis and underscoring
supplied)
As pointed out by Justice Laurel, this "moderating power" to "determine the proper allocation of
powers" of the different branches of government and "to direct the course of government along
constitutional channels" is inherent in all courts25 as a necessary consequence of the judicial
power itself, which is "the power of the court to settle actual controversies involving rights which
are legally demandable and enforceable."26
Thus, even in the United States where the power of judicial review is not explicitly conferred upon
the courts by its Constitution, such power has "been set at rest by popular acquiescence for a
period of more than one and a half centuries." To be sure, it was in the 1803 leading case of
Marbury v. Madison27 that the power of judicial review was first articulated by Chief Justice
Marshall, to wit:
It is also not entirely unworthy of observation, that in declaring what shall be the supreme law of
the land, the constitution itself is first mentioned; and not the laws of the United States generally,
but those only which shall be made in pursuance of the constitution, have that rank.
Thus, the particular phraseology of the constitution of the United States confirms and strengthens
the principle, supposed to be essential to all written constitutions, that a law repugnant to the
constitution is void; and that courts, as well as other departments, are bound by that instrument.28
(Italics in the original; emphasis supplied)
In our own jurisdiction, as early as 1902, decades before its express grant in the 1935
Constitution, the power of judicial review was exercised by our courts to invalidate constitutionally
infirm acts.29 And as pointed out by noted political law professor and former Supreme Court
Justice Vicente V. Mendoza,30 the executive and legislative branches of our government in fact
effectively acknowledged this power of judicial review in Article 7 of the Civil Code, to wit:
Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall
not be excused by disuse, or custom or practice to the contrary.
When the courts declare a law to be inconsistent with the Constitution, the former shall be void
and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws or the Constitution. (Emphasis supplied)
As indicated in Angara v. Electoral Commission,31 judicial review is indeed an integral component
of the delicate system of checks and balances which, together with the corollary principle of
separation of powers, forms the bedrock of our republican form of government and insures that its
vast powers are utilized only for the benefit of the people for which it serves.
The separation of powers is a fundamental principle in our system of government. It obtains not
through express provision but by actual division in our Constitution. Each department of the
government has exclusive cognizance of matters within its jurisdiction, and is supreme within its
own sphere. But it does not follow from the fact that the three powers are to be kept separate and
distinct that the Constitution intended them to be absolutely unrestrained and independent of each
other. The Constitution has provided for an elaborate system of checks and balances to secure
coordination in the workings of the various departments of the government. x x x And the judiciary
in turn, with the Supreme Court as the final arbiter, effectively checks the other departments in the
exercise of its power to determine the law, and hence to declare executive and legislative acts
void if violative of the Constitution.32 (Emphasis and underscoring supplied)
In the scholarly estimation of former Supreme Court Justice Florentino Feliciano, "x x x judicial
review is essential for the maintenance and enforcement of the separation of powers and the
balancing of powers among the three great departments of government through the definition and
maintenance of the boundaries of authority and control between them."33 To him, "[j]udicial review
is the chief, indeed the only, medium of participation – or instrument of intervention – of the
judiciary in that balancing operation."34
To ensure the potency of the power of judicial review to curb grave abuse of discretion by "any
branch or instrumentalities of government," the afore-quoted Section 1, Article VIII of the
Constitution engraves, for the first time into its history, into block letter law the so-called "expanded
certiorari jurisdiction" of this Court, the nature of and rationale for which are mirrored in the
following excerpt from the sponsorship speech of its proponent, former Chief Justice Constitutional
Commissioner Roberto Concepcion:
xxx
The first section starts with a sentence copied from former Constitutions. It says:
The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
I suppose nobody can question it.
The next provision is new in our constitutional law. I will read it first and explain.
Judicial power includes the duty of 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 abuse of discretion amounting to lack or excess of jurisdiction on the part or instrumentality
of the government.
Fellow Members of this Commission, this is actually a product of our experience during martial
law. As a matter of fact, it has some antecedents in the past, but the role of the judiciary during the
deposed regime was marred considerably by the circumstance that in a number of cases against
the government, which then had no legal defense at all, the solicitor general set up the defense of
political questions and got away with it. As a consequence, certain principles concerning
particularly the writ of habeas corpus, that is, the authority of courts to order the release of political
detainees, and other matters related to the operation and effect of martial law failed because the
government set up the defense of political question. And the Supreme Court said: "Well, since it is
political, we have no authority to pass upon it." The Committee on the Judiciary feels that this was
not a proper solution of the questions involved. It did not merely request an encroachment upon
the rights of the people, but it, in effect, encouraged further violations thereof during the martial
law regime. x x x
xxx
135
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on the
question whether or not a branch of government or any of its officials has acted without jurisdiction
or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to
excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass
judgment on matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter
evade the duty to settle matters of this nature, by claiming that such matters constitute a political
question.35 (Italics in the original; emphasis and underscoring supplied)
To determine the merits of the issues raised in the instant petitions, this Court must necessarily
turn to the Constitution itself which employs the well-settled principles of constitutional
construction.
First, verba legis, that is, wherever possible, the words used in the Constitution must be given their
ordinary meaning except where technical terms are employed. Thus, in J.M. Tuason & Co., Inc. v.
Land Tenure Administration,36 this Court, speaking through Chief Justice Enrique Fernando,
declared:
We look to the language of the document itself in our search for its meaning. We do not of course
stop there, but that is where we begin. It is to be assumed that the words in which constitutional
provisions are couched express the objective sought to be attained. They are to be given their
ordinary meaning except where technical terms are employed in which case the significance thus
attached to them prevails. As the Constitution is not primarily a lawyer's document, it being
essential for the rule of law to obtain that it should ever be present in the people's consciousness,
its language as much as possible should be understood in the sense they have in common use.
What it says according to the text of the provision to be construed compels acceptance and
negates the power of the courts to alter it, based on the postulate that the framers and the people
mean what they say. Thus these are the cases where the need for construction is reduced to a
minimum.37 (Emphasis and underscoring supplied)
Second, where there is ambiguity, ratio legis est anima. The words of the Constitution should be
interpreted in accordance with the intent of its framers. And so did this Court apply this principle in
Civil Liberties Union v. Executive Secretary38 in this wise:
A foolproof yardstick in constitutional construction is the intention underlying the provision under
consideration. Thus, it has been held that the Court in construing a Constitution should bear in
mind the object sought to be accomplished by its adoption, and the evils, if any, sought to be
prevented or remedied. A doubtful provision will be examined in the light of the history of the
times, and the condition and circumstances under which the Constitution was framed. The object
is to ascertain the reason which induced the framers of the Constitution to enact the particular
provision and the purpose sought to be accomplished thereby, in order to construe the whole as to
make the words consonant to that reason and calculated to effect that purpose.39 (Emphasis and
underscoring supplied)
As it did in Nitafan v. Commissioner on Internal Revenue40 where, speaking through Madame
Justice Amuerfina A. Melencio-Herrera, it declared:
x x x The ascertainment of that intent is but in keeping with the fundamental principle of
constitutional construction that the intent of the framers of the organic law and of the people
adopting it should be given effect. The primary task in constitutional construction is to ascertain
and thereafter assure the realization of the purpose of the framers and of the people in the
adoption of the Constitution. It may also be safely assumed that the people in ratifying the
Constitution were guided mainly by the explanation offered by the framers.41 (Emphasis and
underscoring supplied)
Finally, ut magis valeat quam pereat. The Constitution is to be interpreted as a whole. Thus, in
Chiongbian v. De Leon,42 this Court, through Chief Justice Manuel Moran declared:
x x x [T]he members of the Constitutional Convention could not have dedicated a provision of our
Constitution merely for the benefit of one person without considering that it could also affect
others. When they adopted subsection 2, they permitted, if not willed, that said provision should
function to the full extent of its substance and its terms, not by itself alone, but in conjunction with
all other provisions of that great document.43 (Emphasis and underscoring supplied)
Likewise, still in Civil Liberties Union v. Executive Secretary,44 this Court affirmed that:
It is a well-established rule in constitutional construction that no one provision of the Constitution is
to be separated from all the others, to be considered alone, but that all the provisions bearing
upon a particular subject are to be brought into view and to be so interpreted as to effectuate the
great purposes of the instrument. Sections bearing on a particular subject should be considered
and interpreted together as to effectuate the whole purpose of the Constitution and one section is
not to be allowed to defeat another, if by any reasonable construction, the two can be made to
stand together.
In other words, the court must harmonize them, if practicable, and must lean in favor of a
construction which will render every word operative, rather than one which may make the words
idle and nugatory.45 (Emphasis supplied)
If, however, the plain meaning of the word is not found to be clear, resort to other aids is available.
In still the same case of Civil Liberties Union v. Executive Secretary, this Court expounded:
While it is permissible in this jurisdiction to consult the debates and proceedings of the
constitutional convention in order to arrive at the reason and purpose of the resulting Constitution,
resort thereto may be had only when other guides fail as said proceedings are powerless to vary
the terms of the Constitution when the meaning is clear. Debates in the constitutional convention
"are of value as showing the views of the individual members, and as indicating the reasons for
their votes, but they give us no light as to the views of the large majority who did not talk, much
less of the mass of our fellow citizens whose votes at the polls gave that instrument the force of
fundamental law. We think it safer to construe the constitution from what appears upon its face."
The proper interpretation therefore depends more on how it was understood by the people
adopting it than in the framers's understanding thereof.46 (Emphasis and underscoring supplied)
It is in the context of the foregoing backdrop of constitutional refinement and jurisprudential
application of the power of judicial review that respondents Speaker De Venecia, et. al. and
intervenor Senator Pimentel raise the novel argument that the Constitution has excluded
impeachment proceedings from the coverage of judicial review.
Briefly stated, it is the position of respondents Speaker De Venecia et. al. that impeachment is a
political action which cannot assume a judicial character. Hence, any question, issue or incident
arising at any stage of the impeachment proceeding is beyond the reach of judicial review.47
For his part, intervenor Senator Pimentel contends that the Senate's "sole power to try"
impeachment cases48 (1) entirely excludes the application of judicial review over it; and (2)
necessarily includes the Senate's power to determine constitutional questions relative to
impeachment proceedings.49
In furthering their arguments on the proposition that impeachment proceedings are outside the
scope of judicial review, respondents Speaker De Venecia, et. al. and intervenor Senator Pimentel
rely heavily on American authorities, principally the majority opinion in the case of Nixon v. United
States.50 Thus, they contend that the exercise of judicial review over impeachment proceedings is
inappropriate since it runs counter to the framers' decision to allocate to different fora the powers
to try impeachments and to try crimes; it disturbs the system of checks and balances, under which
impeachment is the only legislative check on the judiciary; and it would create a lack of finality and
difficulty in fashioning relief.51 Respondents likewise point to deliberations on the US Constitution
to show the intent to isolate judicial power of review in cases of impeachment.
Respondents' and intervenors' reliance upon American jurisprudence, the American Constitution
and American authorities cannot be credited to support the proposition that the Senate's "sole
power to try and decide impeachment cases," as provided for under Art. XI, Sec. 3(6) of the
Constitution, is a textually demonstrable constitutional commitment of all issues pertaining to
impeachment to the legislature, to the total exclusion of the power of judicial review to check and
restrain any grave abuse of the impeachment process. Nor can it reasonably support the
interpretation that it necessarily confers upon the Senate the inherently judicial power to determine
constitutional questions incident to impeachment proceedings.
Said American jurisprudence and authorities, much less the American Constitution, are of dubious
application for these are no longer controlling within our jurisdiction and have only limited
persuasive merit insofar as Philippine constitutional law is concerned. As held in the case of
Garcia vs. COMELEC,52 "[i]n resolving constitutional disputes, [this Court] should not be beguiled
by foreign jurisprudence some of which are hardly applicable because they have been dictated by
different constitutional settings and needs."53 Indeed, although the Philippine Constitution can
trace its origins to that of the United States, their paths of development have long since diverged.
In the colorful words of Father Bernas, "[w]e have cut the umbilical cord."
The major difference between the judicial power of the Philippine Supreme Court and that of the
U.S. Supreme Court is that while the power of judicial review is only impliedly granted to the U.S.
136
Supreme Court and is discretionary in nature, that granted to the Philippine Supreme Court and
lower courts, as expressly provided for in the Constitution, is not just a power but also a duty, and
it was given an expanded definition to include the power to correct any grave abuse of discretion
on the part of any government branch or instrumentality.
There are also glaring distinctions between the U.S. Constitution and the Philippine Constitution
with respect to the power of the House of Representatives over impeachment proceedings. While
the U.S. Constitution bestows sole power of impeachment to the House of Representatives
without limitation,54 our Constitution, though vesting in the House of Representatives the
exclusive power to initiate impeachment cases,55 provides for several limitations to the exercise
of such power as embodied in Section 3(2), (3), (4) and (5), Article XI thereof. These limitations
include the manner of filing, required vote to impeach, and the one year bar on the impeachment
of one and the same official.
Respondents are also of the view that judicial review of impeachments undermines their finality
and may also lead to conflicts between Congress and the judiciary. Thus, they call upon this Court
to exercise judicial statesmanship on the principle that "whenever possible, the Court should defer
to the judgment of the people expressed legislatively, recognizing full well the perils of judicial
willfulness and pride."56
But did not the people also express their will when they instituted the above-mentioned safeguards
in the Constitution? This shows that the Constitution did not intend to leave the matter of
impeachment to the sole discretion of Congress. Instead, it provided for certain well-defined limits,
or in the language of Baker v. Carr,57 "judicially discoverable standards" for determining the
validity of the exercise of such discretion, through the power of judicial review.
The cases of Romulo v. Yniguez58 and Alejandrino v. Quezon,59 cited by respondents in support
of the argument that the impeachment power is beyond the scope of judicial review, are not in
point. These cases concern the denial of petitions for writs of mandamus to compel the legislature
to perform non-ministerial acts, and do not concern the exercise of the power of judicial review.
There is indeed a plethora of cases in which this Court exercised the power of judicial review over
congressional action. Thus, in Santiago v. Guingona, Jr.,60 this Court ruled that it is well within the
power and jurisdiction of the Court to inquire whether the Senate or its officials committed a
violation of the Constitution or grave abuse of discretion in the exercise of their functions and
prerogatives. In Tanada v. Angara,61 in seeking to nullify an act of the Philippine Senate on the
ground that it contravened the Constitution, it held that the petition raises a justiciable controversy
and that when an action of the legislative branch is seriously alleged to have infringed the
Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute.
In Bondoc v. Pineda,62 this Court declared null and void a resolution of the House of
Representatives withdrawing the nomination, and rescinding the election, of a congressman as a
member of the House Electoral Tribunal for being violative of Section 17, Article VI of the
Constitution. In Coseteng v. Mitra,63 it held that the resolution of whether the House
representation in the Commission on Appointments was based on proportional representation of
the political parties as provided in Section 18, Article VI of the Constitution is subject to judicial
review. In Daza v. Singson,64 it held that the act of the House of Representatives in removing the
petitioner from the Commission on Appointments is subject to judicial review. In Tanada v.
Cuenco,65 it held that although under the Constitution, the legislative power is vested exclusively
in Congress, this does not detract from the power of the courts to pass upon the constitutionality of
acts of Congress. In Angara v. Electoral Commission,66 it ruled that confirmation by the National
Assembly of the election of any member, irrespective of whether his election is contested, is not
essential before such member-elect may discharge the duties and enjoy the privileges of a
member of the National Assembly.
Finally, there exists no constitutional basis for the contention that the exercise of judicial review
over impeachment proceedings would upset the system of checks and balances. Verily, the
Constitution is to be interpreted as a whole and "one section is not to be allowed to defeat
another."67 Both are integral components of the calibrated system of independence and
interdependence that insures that no branch of government act beyond the powers assigned to it
by the Constitution.
Essential Requisites for Judicial Review
As clearly stated in Angara v. Electoral Commission, the courts' power of judicial review, like
almost all powers conferred by the Constitution, is subject to several limitations, namely: (1) an
actual case or controversy calling for the exercise of judicial power; (2) the person challenging the
act must have "standing" to challenge; 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 possible opportunity; and (4) the issue of
constitutionality must be the very lis mota of the case.
x x x Even then, this power of judicial review is limited to actual cases and controversies to be
exercised after full opportunity of argument by the parties, and limited further to the constitutional
question raised or the very lis mota presented. Any attempt at abstraction could only lead to
dialectics and barren legal questions and to sterile conclusions unrelated to actualities. Narrowed
as its function is in this manner, the judiciary does not pass upon questions of wisdom, justice or
expediency of legislation. More than that, courts accord the presumption of constitutionality to
legislative enactments, not only because the legislature is presumed to abide by the Constitution
but also because the judiciary in the determination of actual cases and controversies must reflect
the wisdom and justice of the people as expressed through their representatives in the executive
and legislative departments of the government.68 (Italics in the original)
Standing
Locus standi or legal standing or has been defined as a personal and substantial interest in the
case such that the party has sustained or will sustain direct injury as a result of the governmental
act that is being challenged. The gist of the question of standing is whether a party alleges such
personal stake in the outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court depends for illumination of difficult
constitutional questions.69
Intervenor Soriano, in praying for the dismissal of the petitions, contends that petitioners do not
have standing since only the Chief Justice has sustained and will sustain direct personal injury.
Amicus curiae former Justice Minister and Solicitor General Estelito Mendoza similarly contends.
Upon the other hand, the Solicitor General asserts that petitioners have standing since this Court
had, in the past, accorded standing to taxpayers, voters, concerned citizens, legislators in cases
involving paramount public interest70 and transcendental importance,71 and that procedural
matters are subordinate to the need to determine whether or not the other branches of the
government have kept themselves within the limits of the Constitution and the laws and that they
have not abused the discretion given to them.72 Amicus curiae Dean Raul Pangalangan of the
U.P. College of Law is of the same opinion, citing transcendental importance and the well-
entrenched rule exception that, when the real party in interest is unable to vindicate his rights by
seeking the same remedies, as in the case of the Chief Justice who, for ethical reasons, cannot
himself invoke the jurisdiction of this Court, the courts will grant petitioners standing.
There is, however, a difference between the rule on real-party-in-interest and the rule on standing,
for the former is a concept of civil procedure73 while the latter has constitutional underpinnings.74
In view of the arguments set forth regarding standing, it behooves the Court to reiterate the ruling
in Kilosbayan, Inc. v. Morato75 to clarify what is meant by locus standi and to distinguish it from
real party-in-interest.
The difference between the rule on standing and real party in interest has been noted by
authorities thus: "It is important to note . . . that standing because of its constitutional and public
policy underpinnings, is very different from questions relating to whether a particular plaintiff is the
real party in interest or has capacity to sue. Although all three requirements are directed towards
ensuring that only certain parties can maintain an action, standing restrictions require a partial
consideration of the merits, as well as broader policy concerns relating to the proper role of the
judiciary in certain areas.
Standing is a special concern in constitutional law because in some cases suits are brought not by
parties who have been personally injured by the operation of a law or by official action taken, but
by concerned citizens, taxpayers or voters who actually sue in the public interest. Hence the
question in standing is whether such parties have "alleged such a personal stake in the outcome
of the controversy as to assure that concrete adverseness which sharpens the presentation of
issues upon which the court so largely depends for illumination of difficult constitutional questions."
xxx
On the other hand, the question as to "real party in interest" is whether he is "the party who would
be benefited or injured by the judgment, or the 'party entitled to the avails of the suit.'"76 (Citations
omitted)
While rights personal to the Chief Justice may have been injured by the alleged unconstitutional
acts of the House of Representatives, none of the petitioners before us asserts a violation of the
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personal rights of the Chief Justice. On the contrary, they invariably invoke the vindication of their
own rights – as taxpayers; members of Congress; citizens, individually or in a class suit; and
members of the bar and of the legal profession – which were supposedly violated by the alleged
unconstitutional acts of the House of Representatives.
In a long line of cases, however, concerned citizens, taxpayers and legislators when specific
requirements have been met have been given standing by this Court.
When suing as a citizen, the interest of the petitioner assailing the constitutionality of a statute
must be direct and personal. He must be able to show, not only that the law or any government
act is invalid, but also that he sustained or is in imminent danger of sustaining some direct injury
as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. It
must appear that the person complaining has been or is about to be denied some right or privilege
to which he is lawfully entitled or that he is about to be subjected to some burdens or penalties by
reason of the statute or act complained of.77 In fine, when the proceeding involves the assertion
of a public right,78 the mere fact that he is a citizen satisfies the requirement of personal interest.
In the case of a taxpayer, he is allowed to sue where there is a claim that public funds are illegally
disbursed, or that public money is being deflected to any improper purpose, or that there is a
wastage of public funds through the enforcement of an invalid or unconstitutional law.79 Before he
can invoke the power of judicial review, however, he must specifically prove that he has sufficient
interest in preventing the illegal expenditure of money raised by taxation and that he would sustain
a direct injury as a result of the enforcement of the questioned statute or contract. It is not
sufficient that he has merely a general interest common to all members of the public.80
At all events, courts are vested with discretion as to whether or not a taxpayer's suit should be
entertained.81 This Court opts to grant standing to most of the petitioners, given their allegation
that any impending transmittal to the Senate of the Articles of Impeachment and the ensuing trial
of the Chief Justice will necessarily involve the expenditure of public funds.
As for a legislator, he is allowed to sue to question the validity of any official action which he
claims infringes his prerogatives as a legislator.82 Indeed, a member of the House of
Representatives has standing to maintain inviolate the prerogatives, powers and privileges vested
by the Constitution in his office.83
While an association has legal personality to represent its members,84 especially when it is
composed of substantial taxpayers and the outcome will affect their vital interests,85 the mere
invocation by the Integrated Bar of the Philippines or any member of the legal profession of the
duty to preserve the rule of law and nothing more, although undoubtedly true, does not suffice to
clothe it with standing. Its interest is too general. It is shared by other groups and the whole
citizenry. However, a reading of the petitions shows that it has advanced constitutional issues
which deserve the attention of this Court in view of their seriousness, novelty and weight as
precedents.86 It, therefore, behooves this Court to relax the rules on standing and to resolve the
issues presented by it.
In the same vein, when dealing with class suits filed in behalf of all citizens, persons intervening
must be sufficiently numerous to fully protect the interests of all concerned87 to enable the court
to deal properly with all interests involved in the suit,88 for a judgment in a class suit, whether
favorable or unfavorable to the class, is, under the res judicata principle, binding on all members
of the class whether or not they were before the court.89 Where it clearly appears that not all
interests can be sufficiently represented as shown by the divergent issues raised in the numerous
petitions before this Court, G.R. No. 160365 as a class suit ought to fail. Since petitioners
additionally allege standing as citizens and taxpayers, however, their petition will stand.
The Philippine Bar Association, in G.R. No. 160403, invokes the sole ground of transcendental
importance, while Atty. Dioscoro U. Vallejos, in G.R. No. 160397, is mum on his standing.
There being no doctrinal definition of transcendental importance, the following instructive
determinants formulated by former Supreme Court Justice Florentino P. Feliciano are instructive:
(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 raising the questions being raised.90 Applying these determinants, this Court is
satisfied that the issues raised herein are indeed of transcendental importance.
In not a few cases, this Court has in fact adopted a liberal attitude on the locus standi of a
petitioner where the petitioner is able to craft an issue of transcendental significance to the people,
as when the issues raised are of paramount importance to the public.91 Such liberality does not,
however, mean that the requirement that a party should have an interest in the matter is totally
eliminated. A party must, at the very least, still plead the existence of such interest, it not being
one of which courts can take judicial notice. In petitioner Vallejos' case, he failed to allege any
interest in the case. He does not thus have standing.
With respect to the motions for intervention, Rule 19, Section 2 of the Rules of Court requires an
intervenor to possess a legal interest in the matter in litigation, or in the success of either of the
parties, or an interest against both, or is so situated as to be adversely affected by a distribution or
other disposition of property in the custody of the court or of an officer thereof. While intervention
is not a matter of right, it may be permitted by the courts when the applicant shows facts which
satisfy the requirements of the law authorizing intervention.92
In Intervenors Attorneys Romulo Macalintal and Pete Quirino Quadra's case, they seek to join
petitioners Candelaria, et. al. in G.R. No. 160262. Since, save for one additional issue, they raise
the same issues and the same standing, and no objection on the part of petitioners Candelaria, et.
al. has been interposed, this Court as earlier stated, granted the Motion for Leave of Court to
Intervene and Petition-in-Intervention.
Nagmamalasakit na mga Manananggol ng mga Manggagawang Pilipino, Inc., et. al. sought to join
petitioner Francisco in G.R. No. 160261. Invoking their right as citizens to intervene, alleging that
"they will suffer if this insidious scheme of the minority members of the House of Representatives
is successful," this Court found the requisites for intervention had been complied with.
Alleging that the issues raised in the petitions in G.R. Nos. 160261, 160262, 160263, 160277,
160292, 160295, and 160310 were of transcendental importance, World War II Veterans
Legionnaires of the Philippines, Inc. filed a "Petition-in-Intervention with Leave to Intervene" to
raise the additional issue of whether or not the second impeachment complaint against the Chief
Justice is valid and based on any of the grounds prescribed by the Constitution.
Finding that Nagmamalasakit na mga Manananggol ng mga Manggagawang Pilipino, Inc., et al.
and World War II Veterans Legionnaires of the Philippines, Inc. possess a legal interest in the
matter in litigation the respective motions to intervene were hereby granted.
Senator Aquilino Pimentel, on the other hand, sought to intervene for the limited purpose of
making of record and arguing a point of view that differs with Senate President Drilon's. He alleges
that submitting to this Court's jurisdiction as the Senate President does will undermine the
independence of the Senate which will sit as an impeachment court once the Articles of
Impeachment are transmitted to it from the House of Representatives. Clearly, Senator Pimentel
possesses a legal interest in the matter in litigation, he being a member of Congress against which
the herein petitions are directed. For this reason, and to fully ventilate all substantial issues
relating to the matter at hand, his Motion to Intervene was granted and he was, as earlier stated,
allowed to argue.
Lastly, as to Jaime N. Soriano's motion to intervene, the same must be denied for, while he
asserts an interest as a taxpayer, he failed to meet the standing requirement for bringing
taxpayer's suits as set forth in Dumlao v. Comelec,93 to wit:
x x x While, concededly, the elections to be held involve the expenditure of public moneys,
nowhere in their Petition do said petitioners allege that their tax money is "being extracted and
spent in violation of specific constitutional protection against abuses of legislative power," or that
there is a misapplication of such funds by respondent COMELEC, or that public money is being
deflected to any improper purpose. Neither do petitioners seek to restrain respondent from
wasting public funds through the enforcement of an invalid or unconstitutional law.94 (Citations
omitted)
In praying for the dismissal of the petitions, Soriano failed even to allege that the act of petitioners
will result in illegal disbursement of public funds or in public money being deflected to any
improper purpose. Additionally, his mere interest as a member of the Bar does not suffice to clothe
him with standing.
Ripeness and Prematurity
In Tan v. Macapagal,95 this Court, through Chief Justice Fernando, held that for a case to be
considered ripe for adjudication, "it is a prerequisite that something had by then been
accomplished or performed by either branch before a court may come into the picture."96 Only
then may the courts pass on the validity of what was done, if and when the latter is challenged in
an appropriate legal proceeding.
The instant petitions raise in the main the issue of the validity of the filing of the second
impeachment complaint against the Chief Justice in accordance with the House Impeachment
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Rules adopted by the 12th Congress, the constitutionality of which is questioned. The questioned
acts having been carried out, i.e., the second impeachment complaint had been filed with the
House of Representatives and the 2001 Rules have already been already promulgated and
enforced, the prerequisite that the alleged unconstitutional act should be accomplished and
performed before suit, as Tan v. Macapagal holds, has been complied with.
Related to the issue of ripeness is the question of whether the instant petitions are premature.
Amicus curiae former Senate President Jovito R. Salonga opines that there may be no urgent
need for this Court to render a decision at this time, it being the final arbiter on questions of
constitutionality anyway. He thus recommends that all remedies in the House and Senate should
first be exhausted.
Taking a similar stand is Dean Raul Pangalangan of the U.P. College of Law who suggests to this
Court to take judicial notice of on-going attempts to encourage signatories to the second
impeachment complaint to withdraw their signatures and opines that the House Impeachment
Rules provide for an opportunity for members to raise constitutional questions themselves when
the Articles of Impeachment are presented on a motion to transmit to the same to the Senate. The
dean maintains that even assuming that the Articles are transmitted to the Senate, the Chief
Justice can raise the issue of their constitutional infirmity by way of a motion to dismiss.
The dean's position does not persuade. First, the withdrawal by the Representatives of their
signatures would not, by itself, cure the House Impeachment Rules of their constitutional infirmity.
Neither would such a withdrawal, by itself, obliterate the questioned second impeachment
complaint since it would only place it under the ambit of Sections 3(2) and (3) of Article XI of the
Constitution97 and, therefore, petitioners would continue to suffer their injuries.
Second and most importantly, the futility of seeking remedies from either or both Houses of
Congress before coming to this Court is shown by the fact that, as previously discussed, neither
the House of Representatives nor the Senate is clothed with the power to rule with definitiveness
on the issue of constitutionality, whether concerning impeachment proceedings or otherwise, as
said power is exclusively vested in the judiciary by the earlier quoted Section I, Article VIII of the
Constitution. Remedy cannot be sought from a body which is bereft of power to grant it.
Justiciability
In the leading case of Tanada v. Cuenco,98 Chief Justice Roberto Concepcion defined the term
"political question," viz:
[T]he term "political question" connotes, in legal parlance, what it means in ordinary parlance,
namely, a question of policy. In other words, in the language of Corpus Juris Secundum, it refers
to "those questions which, under the Constitution, are to be decided by the people in their
sovereign capacity, or in regard to which full discretionary authority has been delegated to the
Legislature or executive branch of the Government." It is concerned with issues dependent upon
the wisdom, not legality, of a particular measure.99 (Italics in the original)
Prior to the 1973 Constitution, without consistency and seemingly without any rhyme or reason,
this Court vacillated on its stance of taking cognizance of cases which involved political questions.
In some cases, this Court hid behind the cover of the political question doctrine and refused to
exercise its power of judicial review.100 In other cases, however, despite the seeming political
nature of the therein issues involved, this Court assumed jurisdiction whenever it found
constitutionally imposed limits on powers or functions conferred upon political bodies.101 Even in
the landmark 1988 case of Javellana v. Executive Secretary102 which raised the issue of whether
the 1973 Constitution was ratified, hence, in force, this Court shunted the political question
doctrine and took cognizance thereof. Ratification by the people of a Constitution is a political
question, it being a question decided by the people in their sovereign capacity.
The frequency with which this Court invoked the political question doctrine to refuse to take
jurisdiction over certain cases during the Marcos regime motivated Chief Justice Concepcion,
when he became a Constitutional Commissioner, to clarify this Court's power of judicial review and
its application on issues involving political questions, viz:
MR. CONCEPCION. Thank you, Mr. Presiding Officer.
I will speak on the judiciary. Practically, everybody has made, I suppose, the usual comment that
the judiciary is the weakest among the three major branches of the service. Since the legislature
holds the purse and the executive the sword, the judiciary has nothing with which to enforce its
decisions or commands except the power of reason and appeal to conscience which, after all,
reflects the will of God, and is the most powerful of all other powers without exception. x x x And
so, with the body's indulgence, I will proceed to read the provisions drafted by the Committee on
the Judiciary.
The first section starts with a sentence copied from former Constitutions. It says:
The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
I suppose nobody can question it.
The next provision is new in our constitutional law. I will read it first and explain.
Judicial power includes the duty of 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 abuse of discretion amounting to lack or excess of jurisdiction on the part or instrumentality
of the government.
Fellow Members of this Commission, this is actually a product of our experience during martial
law. As a matter of fact, it has some antecedents in the past, but the role of the judiciary during the
deposed regime was marred considerably by the circumstance that in a number of cases against
the government, which then had no legal defense at all, the solicitor general set up the defense of
political questions and got away with it. As a consequence, certain principles concerning
particularly the writ of habeas corpus, that is, the authority of courts to order the release of political
detainees, and other matters related to the operation and effect of martial law failed because the
government set up the defense of political question. And the Supreme Court said: "Well, since it is
political, we have no authority to pass upon it." The Committee on the Judiciary feels that this was
not a proper solution of the questions involved. It did not merely request an encroachment upon
the rights of the people, but it, in effect, encouraged further violations thereof during the martial
law regime. I am sure the members of the Bar are familiar with this situation. But for the benefit of
the Members of the Commission who are not lawyers, allow me to explain. I will start with a
decision of the Supreme Court in 1973 on the case of Javellana vs. the Secretary of Justice, if I
am not mistaken. Martial law was announced on September 22, although the proclamation was
dated September 21. The obvious reason for the delay in its publication was that the
administration had apprehended and detained prominent newsmen on September 21. So that
when martial law was announced on September 22, the media hardly published anything about it.
In fact, the media could not publish any story not only because our main writers were already
incarcerated, but also because those who succeeded them in their jobs were under mortal threat
of being the object of wrath of the ruling party. The 1971 Constitutional Convention had begun on
June 1, 1971 and by September 21 or 22 had not finished the Constitution; it had barely agreed in
the fundamentals of the Constitution. I forgot to say that upon the proclamation of martial law,
some delegates to that 1971 Constitutional Convention, dozens of them, were picked up. One of
them was our very own colleague, Commissioner Calderon. So, the unfinished draft of the
Constitution was taken over by representatives of Malacañang. In 17 days, they finished what the
delegates to the 1971 Constitutional Convention had been unable to accomplish for about 14
months. The draft of the 1973 Constitution was presented to the President around December 1,
1972, whereupon the President issued a decree calling a plebiscite which suspended the
operation of some provisions in the martial law decree which prohibited discussions, much less
public discussions of certain matters of public concern. The purpose was presumably to allow a
free discussion on the draft of the Constitution on which a plebiscite was to be held sometime in
January 1973. If I may use a word famous by our colleague, Commissioner Ople, during the
interregnum, however, the draft of the Constitution was analyzed and criticized with such a telling
effect that Malacañang felt the danger of its approval. So, the President suspended indefinitely the
holding of the plebiscite and announced that he would consult the people in a referendum to be
held from January 10 to January 15. But the questions to be submitted in the referendum were not
announced until the eve of its scheduled beginning, under the supposed supervision not of the
Commission on Elections, but of what was then designated as "citizens assemblies or barangays."
Thus the barangays came into existence. The questions to be propounded were released with
proposed answers thereto, suggesting that it was unnecessary to hold a plebiscite because the
answers given in the referendum should be regarded as the votes cast in the plebiscite.
Thereupon, a motion was filed with the Supreme Court praying that the holding of the referendum
be suspended. When the motion was being heard before the Supreme Court, the Minister of
Justice delivered to the Court a proclamation of the President declaring that the new Constitution
was already in force because the overwhelming majority of the votes cast in the referendum
favored the Constitution. Immediately after the departure of the Minister of Justice, I proceeded to
139
the session room where the case was being heard. I then informed the Court and the parties the
presidential proclamation declaring that the 1973 Constitution had been ratified by the people and
is now in force.
A number of other cases were filed to declare the presidential proclamation null and void. The
main defense put up by the government was that the issue was a political question and that the
court had no jurisdiction to entertain the case.
xxx
The government said that in a referendum held from January 10 to January 15, the vast majority
ratified the draft of the Constitution. Note that all members of the Supreme Court were residents of
Manila, but none of them had been notified of any referendum in their respective places of
residence, much less did they participate in the alleged referendum. None of them saw any
referendum proceeding.
In the Philippines, even local gossips spread like wild fire. So, a majority of the members of the
Court felt that there had been no referendum.
Second, a referendum cannot substitute for a plebiscite. There is a big difference between a
referendum and a plebiscite. But another group of justices upheld the defense that the issue was a
political question. Whereupon, they dismissed the case. This is not the only major case in which
the plea of "political question" was set up. There have been a number of other cases in the past.
x x x The defense of the political question was rejected because the issue was clearly justiciable.
xxx
x x x When your Committee on the Judiciary began to perform its functions, it faced the following
questions: What is judicial power? What is a political question?
The Supreme Court, like all other courts, has one main function: to settle actual controversies
involving conflicts of rights which are demandable and enforceable. There are rights which are
guaranteed by law but cannot be enforced by a judiciary party. In a decided case, a husband
complained that his wife was unwilling to perform her duties as a wife. The Court said: "We can tell
your wife what her duties as such are and that she is bound to comply with them, but we cannot
force her physically to discharge her main marital duty to her husband. There are some rights
guaranteed by law, but they are so personal that to enforce them by actual compulsion would be
highly derogatory to human dignity."
This is why the first part of the second paragraph of Section I provides that:
Judicial power includes the duty of courts to settle actual controversies involving rights which are
legally demandable or enforceable . . .
The courts, therefore, cannot entertain, much less decide, hypothetical questions. In a presidential
system of government, the Supreme Court has, also another important function. The powers of
government are generally considered divided into three branches: the Legislative, the Executive
and the Judiciary. Each one is supreme within its own sphere and independent of the others.
Because of that supremacy power to determine whether a given law is valid or not is vested in
courts of justice.
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on the
question whether or not a branch of government or any of its officials has acted without jurisdiction
or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to
excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass
judgment on matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter
evade the duty to settle matters of this nature, by claiming that such matters constitute a political
question.
I have made these extended remarks to the end that the Commissioners may have an initial food
for thought on the subject of the judiciary.103 (Italics in the original; emphasis supplied)
During the deliberations of the Constitutional Commission, Chief Justice Concepcion further
clarified the concept of judicial power, thus:
MR. NOLLEDO. The Gentleman used the term "judicial power" but judicial power is not vested in
the Supreme Court alone but also in other lower courts as may be created by law.
MR. CONCEPCION. Yes.
MR. NOLLEDO. And so, is this only an example?
MR. CONCEPCION. No, I know this is not. The Gentleman seems to identify political questions
with jurisdictional questions. But there is a difference.
MR. NOLLEDO. Because of the expression "judicial power"?
MR. CONCEPCION. No. Judicial power, as I said, refers to ordinary cases but where there is a
question as to whether the government had authority or had abused its authority to the extent of
lacking jurisdiction or excess of jurisdiction, that is not a political question. Therefore, the court has
the duty to decide.
xxx
FR. BERNAS. Ultimately, therefore, it will always have to be decided by the Supreme Court
according to the new numerical need for votes.
On another point, is it the intention of Section 1 to do away with the political question doctrine?
MR. CONCEPCION. No.
FR. BERNAS. It is not.
MR. CONCEPCION. No, because whenever there is an abuse of discretion, amounting to a lack
of jurisdiction. . .
FR. BERNAS. So, I am satisfied with the answer that it is not intended to do away with the political
question doctrine.
MR. CONCEPCION. No, certainly not.
When this provision was originally drafted, it sought to define what is judicial power. But the
Gentleman will notice it says, "judicial power includes" and the reason being that the definition that
we might make may not cover all possible areas.
FR. BERNAS. So, this is not an attempt to solve the problems arising from the political question
doctrine.
MR. CONCEPCION. It definitely does not eliminate the fact that truly political questions are
beyond the pale of judicial power.104 (Emphasis supplied)
From the foregoing record of the proceedings of the 1986 Constitutional Commission, it is clear
that judicial power is not only a power; it is also a duty, a duty which cannot be abdicated by the
mere specter of this creature called the political question doctrine. Chief Justice Concepcion
hastened to clarify, however, that Section 1, Article VIII was not intended to do away with "truly
political questions." From this clarification it is gathered that there are two species of political
questions: (1) "truly political questions" and (2) those which "are not truly political questions."
Truly political questions are thus beyond judicial review, the reason for respect of the doctrine of
separation of powers to be maintained. On the other hand, by virtue of Section 1, Article VIII of the
Constitution, courts can review questions which are not truly political in nature.
As pointed out by amicus curiae former dean Pacifico Agabin of the UP College of Law, this Court
has in fact in a number of cases taken jurisdiction over questions which are not truly political
following the effectivity of the present Constitution.
In Marcos v. Manglapus,105 this Court, speaking through Madame Justice Irene Cortes, held:
The present Constitution limits resort to the political question doctrine and broadens the scope of
judicial inquiry into areas which the Court, under previous constitutions, would have normally left
to the political departments to decide.106 x x x
In Bengzon v. Senate Blue Ribbon Committee,107 through Justice Teodoro Padilla, this Court
declared:
The "allocation of constitutional boundaries" is a task that this Court must perform under the
Constitution. Moreover, as held in a recent case, "(t)he political question doctrine neither
interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit
constitutional boundaries has been given to this Court. It cannot abdicate that obligation mandated
by the 1987 Constitution, although said provision by no means does away with the applicability of
the principle in appropriate cases."108 (Emphasis and underscoring supplied)
And in Daza v. Singson,109 speaking through Justice Isagani Cruz, this Court ruled:
In the case now before us, the jurisdictional objection becomes even less tenable and decisive.
The reason is that, even if we were to assume that the issue presented before us was political in
nature, we would still not be precluded from resolving it under the expanded jurisdiction conferred
upon us that now covers, in proper cases, even the political question.110 x x x (Emphasis and
underscoring supplied.)
Section 1, Article VIII, of the Court does not define what are justiciable political questions and non-
justiciable political questions, however. Identification of these two species of political questions
may be problematic. There has been no clear standard. The American case of Baker v. Carr111
attempts to provide some:
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x x x Prominent on the surface of any case held to involve a political question is found a textually
demonstrable constitutional commitment of the issue to a coordinate political department; or a lack
of judicially discoverable and manageable standards for resolving it; or the impossibility of
deciding without an initial policy determination of a kind clearly for non-judicial discretion; or the
impossibility of a court's undertaking independent resolution without expressing lack of the respect
due coordinate branches of government; or an unusual need for questioning adherence to a
political decision already made; or the potentiality of embarrassment from multifarious
pronouncements by various departments on one question.112 (Underscoring supplied)
Of these standards, the more reliable have been the first three: (1) a textually demonstrable
constitutional commitment of the issue to a coordinate political department; (2) the lack of judicially
discoverable and manageable standards for resolving it; and (3) the impossibility of deciding
without an initial policy determination of a kind clearly for non-judicial discretion. These standards
are not separate and distinct concepts but are interrelated to each in that the presence of one
strengthens the conclusion that the others are also present.
The problem in applying the foregoing standards is that the American concept of judicial review is
radically different from our current concept, for Section 1, Article VIII of the Constitution provides
our courts with far less discretion in determining whether they should pass upon a constitutional
issue.
In our jurisdiction, the determination of a truly political question from a non-justiciable political
question lies in the answer to the question of whether there are constitutionally imposed limits on
powers or functions conferred upon political bodies. If there are, then our courts are duty-bound to
examine whether the branch or instrumentality of the government properly acted within such limits.
This Court shall thus now apply this standard to the present controversy.
These petitions raise five substantial issues:
I. Whether the offenses alleged in the Second impeachment complaint constitute valid
impeachable offenses under the Constitution.
II. Whether the second impeachment complaint was filed in accordance with Section 3(4), Article
XI of the Constitution.
III. Whether the legislative inquiry by the House Committee on Justice into the Judicial
Development Fund is an unconstitutional infringement of the constitutionally mandated fiscal
autonomy of the judiciary.
IV. Whether Sections 15 and 16 of Rule V of the Rules on Impeachment adopted by the 12th
Congress are unconstitutional for violating the provisions of Section 3, Article XI of the
Constitution.
V. Whether the second impeachment complaint is barred under Section 3(5) of Article XI of the
Constitution.
The first issue goes into the merits of the second impeachment complaint over which this Court
has no jurisdiction. More importantly, any discussion of this issue would require this Court to make
a determination of what constitutes an impeachable offense. Such a determination is a purely
political question which the Constitution has left to the sound discretion of the legislation. Such an
intent is clear from the deliberations of the Constitutional Commission.113
Although Section 2 of Article XI of the Constitution enumerates six grounds for impeachment, two
of these, namely, other high crimes and betrayal of public trust, elude a precise definition. In fact,
an examination of the records of the 1986 Constitutional Commission shows that the framers
could find no better way to approximate the boundaries of betrayal of public trust and other high
crimes than by alluding to both positive and negative examples of both, without arriving at their
clear cut definition or even a standard therefor.114 Clearly, the issue calls upon this court to
decide a non-justiciable political question which is beyond the scope of its judicial power under
Section 1, Article VIII.
Lis Mota
It is a well-settled maxim of adjudication that an issue assailing the constitutionality of a
governmental act should be avoided whenever possible. Thus, in the case of Sotto v. Commission
on Elections,115 this Court held:
x x x It is a well-established rule that a court should not pass upon a constitutional question and
decide a law to be unconstitutional or invalid, unless such question is raised by the parties and
that when it is raised, if the record also presents some other ground upon which the court may rest
its judgment, that course will be adopted and the constitutional question will be left for
consideration until a case arises in which a decision upon such question will be unavoidable.116
[Emphasis and underscoring supplied]
The same principle was applied in Luz Farms v. Secretary of Agrarian Reform,117 where this
Court invalidated Sections 13 and 32 of Republic Act No. 6657 for being confiscatory and violative
of due process, to wit:
It has been established that this Court will assume jurisdiction over a constitutional question only if
it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied.
Thus, there must be an actual case or controversy involving a conflict of legal rights susceptible of
judicial determination, the constitutional question must have been opportunely raised by the
proper party, and the resolution of the question is unavoidably necessary to the decision of the
case itself.118 [Emphasis supplied]
Succinctly put, courts will not touch the issue of constitutionality unless it is truly unavoidable and
is the very lis mota or crux of the controversy.
As noted earlier, the instant consolidated petitions, while all seeking the invalidity of the second
impeachment complaint, collectively raise several constitutional issues upon which the outcome of
this controversy could possibly be made to rest. In determining whether one, some or all of the
remaining substantial issues should be passed upon, this Court is guided by the related cannon of
adjudication that "the court should not form a rule of constitutional law broader than is required by
the precise facts to which it is applied."119
In G.R. No. 160310, petitioners Leonilo R. Alfonso, et al. argue that, among other reasons, the
second impeachment complaint is invalid since it directly resulted from a Resolution120 calling for
a legislative inquiry into the JDF, which Resolution and legislative inquiry petitioners claim to
likewise be unconstitutional for being: (a) a violation of the rules and jurisprudence on
investigations in aid of legislation; (b) an open breach of the doctrine of separation of powers; (c) a
violation of the constitutionally mandated fiscal autonomy of the judiciary; and (d) an assault on
the independence of the judiciary.121
Without going into the merits of petitioners Alfonso, et. al.'s claims, it is the studied opinion of this
Court that the issue of the constitutionality of the said Resolution and resulting legislative inquiry is
too far removed from the issue of the validity of the second impeachment complaint. Moreover, the
resolution of said issue would, in the Court's opinion, require it to form a rule of constitutional law
touching on the separate and distinct matter of legislative inquiries in general, which would thus be
broader than is required by the facts of these consolidated cases. This opinion is further
strengthened by the fact that said petitioners have raised other grounds in support of their petition
which would not be adversely affected by the Court's ruling.
En passant, this Court notes that a standard for the conduct of legislative inquiries has already
been enunciated by this Court in Bengzon, Jr. v. Senate Blue Ribbon Commttee,122 viz:
The 1987 Constitution expressly recognizes the power of both houses of Congress to conduct
inquiries in aid of legislation. Thus, Section 21, Article VI thereof provides:
The Senate or the House of Representatives or any of its respective committees may conduct
inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of
persons appearing in or affected by such inquiries shall be respected.
The power of both houses of Congress to conduct inquiries in aid of legislation is not, therefore
absolute or unlimited. Its exercise is circumscribed by the afore-quoted provision of the
Constitution. Thus, as provided therein, the investigation must be "in aid of legislation in
accordance with its duly published rules of procedure" and that "the rights of persons appearing in
or affected by such inquiries shall be respected." It follows then that the right rights of persons
under the Bill of Rights must be respected, including the right to due process and the right not be
compelled to testify against one's self.123
In G.R. No. 160262, intervenors Romulo B. Macalintal and Pete Quirino Quadra, while joining the
original petition of petitioners Candelaria, et. al., introduce the new argument that since the second
impeachment complaint was verified and filed only by Representatives Gilberto Teodoro, Jr. and
Felix William Fuentebella, the same does not fall under the provisions of Section 3 (4), Article XI of
the Constitution which reads:
Section 3(4) In case the verified complaint or resolution of impeachment is filed by at least one-
third of all the Members of the House, the same shall constitute the Articles of Impeachment, and
trial by the Senate shall forthwith proceed.
They assert that while at least 81 members of the House of Representatives signed a Resolution
of Endorsement/Impeachment, the same did not satisfy the requisites for the application of the
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afore-mentioned section in that the "verified complaint or resolution of impeachment" was not filed
"by at least one-third of all the Members of the House." With the exception of Representatives
Teodoro and Fuentebella, the signatories to said Resolution are alleged to have verified the same
merely as a "Resolution of Endorsement." Intervenors point to the "Verification" of the Resolution
of Endorsement which states that:
"We are the proponents/sponsors of the Resolution of Endorsement of the abovementioned
Complaint of Representatives Gilberto Teodoro and Felix William B. Fuentebella x x x"124
Intervenors Macalintal and Quadra further claim that what the Constitution requires in order for
said second impeachment complaint to automatically become the Articles of Impeachment and for
trial in the Senate to begin "forthwith," is that the verified complaint be "filed," not merely endorsed,
by at least one-third of the Members of the House of Representatives. Not having complied with
this requirement, they concede that the second impeachment complaint should have been
calendared and referred to the House Committee on Justice under Section 3(2), Article XI of the
Constitution, viz:
Section 3(2) A verified complaint for impeachment may be filed by any Member of the House of
Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
which shall be included in the Order of Business within ten session days, and referred to the
proper Committee within three session days thereafter. The Committee, after hearing, and by a
majority vote of all its Members, shall submit its report to the House within sixty session days from
such referral, together with the corresponding resolution. The resolution shall be calendared for
consideration by the House within ten session days from receipt thereof.
Intervenors' foregoing position is echoed by Justice Maambong who opined that for Section 3 (4),
Article XI of the Constitution to apply, there should be 76 or more representatives who signed and
verified the second impeachment complaint as complainants, signed and verified the signatories
to a resolution of impeachment. Justice Maambong likewise asserted that the Resolution of
Endorsement/Impeachment signed by at least one-third of the members of the House of
Representatives as endorsers is not the resolution of impeachment contemplated by the
Constitution, such resolution of endorsement being necessary only from at least one Member
whenever a citizen files a verified impeachment complaint.
While the foregoing issue, as argued by intervenors Macalintal and Quadra, does indeed limit the
scope of the constitutional issues to the provisions on impeachment, more compelling
considerations militate against its adoption as the lis mota or crux of the present controversy.
Chief among this is the fact that only Attorneys Macalintal and Quadra, intervenors in G.R. No.
160262, have raised this issue as a ground for invalidating the second impeachment complaint.
Thus, to adopt this additional ground as the basis for deciding the instant consolidated petitions
would not only render for naught the efforts of the original petitioners in G.R. No. 160262, but the
efforts presented by the other petitioners as well.
Again, the decision to discard the resolution of this issue as unnecessary for the determination of
the instant cases is made easier by the fact that said intervenors Macalintal and Quadra have
joined in the petition of Candelaria, et. al., adopting the latter's arguments and issues as their own.
Consequently, they are not unduly prejudiced by this Court's decision.
In sum, this Court holds that the two remaining issues, inextricably linked as they are, constitute
the very lis mota of the instant controversy: (1) whether Sections 15 and 16 of Rule V of the House
Impeachment Rules adopted by the 12th Congress are unconstitutional for violating the provisions
of Section 3, Article XI of the Constitution; and (2) whether, as a result thereof, the second
impeachment complaint is barred under Section 3(5) of Article XI of the Constitution.
Judicial Restraint
Senator Pimentel urges this Court to exercise judicial restraint on the ground that the Senate,
sitting as an impeachment court, has the sole power to try and decide all cases of impeachment.
Again, this Court reiterates that the power of judicial review includes the power of review over
justiciable issues in impeachment proceedings.
On the other hand, respondents Speaker De Venecia et. al. argue that "[t]here is a moral
compulsion for the Court to not assume jurisdiction over the impeachment because all the
Members thereof are subject to impeachment."125 But this argument is very much like saying the
Legislature has a moral compulsion not to pass laws with penalty clauses because Members of
the House of Representatives are subject to them.
The exercise of judicial restraint over justiciable issues is not an option before this Court.
Adjudication may not be declined, because this Court is not legally disqualified. Nor can
jurisdiction be renounced as there is no other tribunal to which the controversy may be
referred."126 Otherwise, this Court would be shirking from its duty vested under Art. VIII, Sec. 1(2)
of the Constitution. More than being clothed with authority thus, this Court is duty-bound to take
cognizance of the instant petitions.127 In the august words of amicus curiae Father Bernas,
"jurisdiction is not just a power; it is a solemn duty which may not be renounced. To renounce it,
even if it is vexatious, would be a dereliction of duty."
Even in cases where it is an interested party, the Court under our system of government cannot
inhibit itself and must rule upon the challenge because no other office has the authority to do
so.128 On the occasion that this Court had been an interested party to the controversy before it, it
has acted upon the matter "not with officiousness but in the discharge of an unavoidable duty and,
as always, with detachment and fairness."129 After all, "by [his] appointment to the office, the
public has laid on [a member of the judiciary] their confidence that [he] is mentally and morally fit
to pass upon the merits of their varied contentions. For this reason, they expect [him] to be
fearless in [his] pursuit to render justice, to be unafraid to displease any person, interest or power
and to be equipped with a moral fiber strong enough to resist the temptations lurking in [his]
office."130
The duty to exercise the power of adjudication regardless of interest had already been settled in
the case of Abbas v. Senate Electoral Tribunal.131 In that case, the petitioners filed with the
respondent Senate Electoral Tribunal a Motion for Disqualification or Inhibition of the Senators-
Members thereof from the hearing and resolution of SET Case No. 002-87 on the ground that all
of them were interested parties to said case as respondents therein. This would have reduced the
Tribunal's membership to only its three Justices-Members whose disqualification was not sought,
leaving them to decide the matter. This Court held:
Where, as here, a situation is created which precludes the substitution of any Senator sitting in the
Tribunal by any of his other colleagues in the Senate without inviting the same objections to the
substitute's competence, the proposed mass disqualification, if sanctioned and ordered, would
leave the Tribunal no alternative but to abandon a duty that no other court or body can perform,
but which it cannot lawfully discharge if shorn of the participation of its entire membership of
Senators.
To our mind, this is the overriding consideration — that the Tribunal be not prevented from
discharging a duty which it alone has the power to perform, the performance of which is in the
highest public interest as evidenced by its being expressly imposed by no less than the
fundamental law.
It is aptly noted in the first of the questioned Resolutions that the framers of the Constitution could
not have been unaware of the possibility of an election contest that would involve all Senators—
elect, six of whom would inevitably have to sit in judgment thereon. Indeed, such possibility might
surface again in the wake of the 1992 elections when once more, but for the last time, all 24 seats
in the Senate will be at stake. Yet the Constitution provides no scheme or mode for settling such
unusual situations or for the substitution of Senators designated to the Tribunal whose
disqualification may be sought. Litigants in such situations must simply place their trust and hopes
of vindication in the fairness and sense of justice of the Members of the Tribunal. Justices and
Senators, singly and collectively.
Let us not be misunderstood as saying that no Senator-Member of the Senate Electoral Tribunal
may inhibit or disqualify himself from sitting in judgment on any case before said Tribunal. Every
Member of the Tribunal may, as his conscience dictates, refrain from participating in the resolution
of a case where he sincerely feels that his personal interests or biases would stand in the way of
an objective and impartial judgment. What we are merely saying is that in the light of the
Constitution, the Senate Electoral Tribunal cannot legally function as such, absent its entire
membership of Senators and that no amendment of its Rules can confer on the three Justices-
Members alone the power of valid adjudication of a senatorial election contest.
More recently in the case of Estrada v. Desierto,132 it was held that:
Moreover, to disqualify any of the members of the Court, particularly a majority of them, is nothing
short of pro tanto depriving the Court itself of its jurisdiction as established by the fundamental law.
Disqualification of a judge is a deprivation of his judicial power. And if that judge is the one
designated by the Constitution to exercise the jurisdiction of his court, as is the case with the
Justices of this Court, the deprivation of his or their judicial power is equivalent to the deprivation
of the judicial power of the court itself. It affects the very heart of judicial independence. The
proposed mass disqualification, if sanctioned and ordered, would leave the Court no alternative
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but to abandon a duty which it cannot lawfully discharge if shorn of the participation of its entire
membership of Justices.133 (Italics in the original)
Besides, there are specific safeguards already laid down by the Court when it exercises its power
of judicial review.
In Demetria v. Alba,134 this Court, through Justice Marcelo Fernan cited the "seven pillars" of
limitations of the power of judicial review, enunciated by US Supreme Court Justice Brandeis in
Ashwander v. TVA135 as follows:
1. The Court will not pass upon the constitutionality of legislation in a friendly, non-adversary
proceeding, declining because to decide such questions 'is legitimate only in the last resort, and
as a necessity in the determination of real, earnest and vital controversy between individuals. It
never was the thought that, by means of a friendly suit, a party beaten in the legislature could
transfer to the courts an inquiry as to the constitutionality of the legislative act.'
2. The Court will not 'anticipate a question of constitutional law in advance of the necessity of
deciding it.' . . . 'It is not the habit of the Court to decide questions of a constitutional nature unless
absolutely necessary to a decision of the case.'
3. The Court will not 'formulate a rule of constitutional law broader than is required by the precise
facts to which it is to be applied.'
4. The Court will not pass upon a constitutional question although properly presented by the
record, if there is also present some other ground upon which the case may be disposed of. This
rule has found most varied application. Thus, if a case can be decided on either of two grounds,
one involving a constitutional question, the other a question of statutory construction or general
law, the Court will decide only the latter. Appeals from the highest court of a state challenging its
decision of a question under the Federal Constitution are frequently dismissed because the
judgment can be sustained on an independent state ground.
5. The Court will not pass upon the validity of a statute upon complaint of one who fails to show
that he is injured by its operation. Among the many applications of this rule, none is more striking
than the denial of the right of challenge to one who lacks a personal or property right. Thus, the
challenge by a public official interested only in the performance of his official duty will not be
entertained . . . In Fairchild v. Hughes, the Court affirmed the dismissal of a suit brought by a
citizen who sought to have the Nineteenth Amendment declared unconstitutional. In
Massachusetts v. Mellon, the challenge of the federal Maternity Act was not entertained although
made by the Commonwealth on behalf of all its citizens.
6. The Court will not pass upon the constitutionality of a statute at the instance of one who has
availed himself of its benefits.
7. When the validity of an act of the Congress is drawn in question, and even if a serious doubt of
constitutionality is raised, it is a cardinal principle that this Court will first ascertain whether a
construction of the statute is fairly possible by which the question may be avoided (citations
omitted).
The foregoing "pillars" of limitation of judicial review, summarized in Ashwander v. TVA from
different decisions of the United States Supreme Court, can be encapsulated into the following
categories:
1. that there be absolute necessity of deciding a case
2. that rules of constitutional law shall be formulated only as required by the facts of the case
3. that judgment may not be sustained on some other ground
4. that there be actual injury sustained by the party by reason of the operation of the statute
5. that the parties are not in estoppel
6. that the Court upholds the presumption of constitutionality.
As stated previously, parallel guidelines have been adopted by this Court in the exercise of judicial
review:
1. actual case or controversy calling for the exercise of judicial power
2. the person challenging the act must have "standing" to challenge; 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 possible opportunity
4. the issue of constitutionality must be the very lis mota of the case.136
Respondents Speaker de Venecia, et. al. raise another argument for judicial restraint the
possibility that "judicial review of impeachments might also lead to embarrassing conflicts between
the Congress and the [J]udiciary." They stress the need to avoid the appearance of impropriety or
conflicts of interest in judicial hearings, and the scenario that it would be confusing and humiliating
and risk serious political instability at home and abroad if the judiciary countermanded the vote of
Congress to remove an impeachable official.137 Intervenor Soriano echoes this argument by
alleging that failure of this Court to enforce its Resolution against Congress would result in the
diminution of its judicial authority and erode public confidence and faith in the judiciary.
Such an argument, however, is specious, to say the least. As correctly stated by the Solicitor
General, the possibility of the occurrence of a constitutional crisis is not a reason for this Court to
refrain from upholding the Constitution in all impeachment cases. Justices cannot abandon their
constitutional duties just because their action may start, if not precipitate, a crisis.
Justice Feliciano warned against the dangers when this Court refuses to act.
x x x Frequently, the fight over a controversial legislative or executive act is not regarded as
settled until the Supreme Court has passed upon the constitutionality of the act involved, the
judgment has not only juridical effects but also political consequences. Those political
consequences may follow even where the Court fails to grant the petitioner's prayer to nullify an
act for lack of the necessary number of votes. Frequently, failure to act explicitly, one way or the
other, itself constitutes a decision for the respondent and validation, or at least quasi-validation,
follows." 138
Thus, in Javellana v. Executive Secretary139 where this Court was split and "in the end there
were not enough votes either to grant the petitions, or to sustain respondent's claims,"140 the pre-
existing constitutional order was disrupted which paved the way for the establishment of the
martial law regime.
Such an argument by respondents and intervenor also presumes that the coordinate branches of
the government would behave in a lawless manner and not do their duty under the law to uphold
the Constitution and obey the laws of the land. Yet there is no reason to believe that any of the
branches of government will behave in a precipitate manner and risk social upheaval, violence,
chaos and anarchy by encouraging disrespect for the fundamental law of the land.
Substituting the word public officers for judges, this Court is well guided by the doctrine in People
v. Veneracion, to wit:141
Obedience to the rule of law forms the bedrock of our system of justice. If [public officers], under
the guise of religious or political beliefs were allowed to roam unrestricted beyond boundaries
within which they are required by law to exercise the duties of their office, then law becomes
meaningless. A government of laws, not of men excludes the exercise of broad discretionary
powers by those acting under its authority. Under this system, [public officers] are guided by the
Rule of Law, and ought "to protect and enforce it without fear or favor," resist encroachments by
governments, political parties, or even the interference of their own personal beliefs.142
Constitutionality of the Rules of Procedure
for Impeachment Proceedings
adopted by the 12th Congress
Respondent House of Representatives, through Speaker De Venecia, argues that Sections 16
and 17 of Rule V of the House Impeachment Rules do not violate Section 3 (5) of Article XI of our
present Constitution, contending that the term "initiate" does not mean "to file;" that Section 3 (1) is
clear in that it is the House of Representatives, as a collective body, which has the exclusive
power to initiate all cases of impeachment; that initiate could not possibly mean "to file" because
filing can, as Section 3 (2), Article XI of the Constitution provides, only be accomplished in 3 ways,
to wit: (1) by a verified complaint for impeachment by any member of the House of
Representatives; or (2) by any citizen upon a resolution of endorsement by any member; or (3) by
at least 1/3 of all the members of the House. Respondent House of Representatives concludes
that the one year bar prohibiting the initiation of impeachment proceedings against the same
officials could not have been violated as the impeachment complaint against Chief Justice Davide
and seven Associate Justices had not been initiated as the House of Representatives, acting as
the collective body, has yet to act on it.
The resolution of this issue thus hinges on the interpretation of the term "initiate." Resort to
statutory construction is, therefore, in order.
That the sponsor of the provision of Section 3(5) of the Constitution, Commissioner Florenz
Regalado, who eventually became an Associate Justice of this Court, agreed on the meaning of
"initiate" as "to file," as proffered and explained by Constitutional Commissioner Maambong during
the Constitutional Commission proceedings, which he (Commissioner Regalado) as amicus curiae
affirmed during the oral arguments on the instant petitions held on November 5, 2003 at which he
143
added that the act of "initiating" included the act of taking initial action on the complaint, dissipates
any doubt that indeed the word "initiate" as it twice appears in Article XI (3) and (5) of the
Constitution means to file the complaint and take initial action on it.
"Initiate" of course is understood by ordinary men to mean, as dictionaries do, to begin, to
commence, or set going. As Webster's Third New International Dictionary of the English Language
concisely puts it, it means "to perform or facilitate the first action," which jibes with Justice
Regalado's position, and that of Father Bernas, who elucidated during the oral arguments of the
instant petitions on November 5, 2003 in this wise:
Briefly then, an impeachment proceeding is not a single act. It is a comlexus of acts consisting of a
beginning, a middle and an end. The end is the transmittal of the articles of impeachment to the
Senate. The middle consists of those deliberative moments leading to the formulation of the
articles of impeachment. The beginning or the initiation is the filing of the complaint and its referral
to the Committee on Justice.
Finally, it should be noted that the House Rule relied upon by Representatives Cojuangco and
Fuentebella says that impeachment is "deemed initiated" when the Justice Committee votes in
favor of impeachment or when the House reverses a contrary vote of the Committee. Note that the
Rule does not say "impeachment proceedings" are initiated but rather are "deemed initiated." The
language is recognition that initiation happened earlier, but by legal fiction there is an attempt to
postpone it to a time after actual initiation. (Emphasis and underscoring supplied)
As stated earlier, one of the means of interpreting the Constitution is looking into the intent of the
law. Fortunately, the intent of the framers of the 1987 Constitution can be pried from its records:
MR. MAAMBONG. With reference to Section 3, regarding the procedure and the substantive
provisions on impeachment, I understand there have been many proposals and, I think, these
would need some time for Committee action.
However, I would just like to indicate that I submitted to the Committee a resolution on
impeachment proceedings, copies of which have been furnished the Members of this body. This is
borne out of my experience as a member of the Committee on Justice, Human Rights and Good
Government which took charge of the last impeachment resolution filed before the First Batasang
Pambansa. For the information of the Committee, the resolution covers several steps in the
impeachment proceedings starting with initiation, action of the Speaker committee action,
calendaring of report, voting on the report, transmittal referral to the Senate, trial and judgment by
the Senate.
xxx
MR. MAAMBONG. Mr. Presiding Officer, I am not moving for a reconsideration of the approval of
the amendment submitted by Commissioner Regalado, but I will just make of record my thinking
that we do not really initiate the filing of the Articles of Impeachment on the floor. The procedure,
as I have pointed out earlier, was that the initiation starts with the filing of the complaint. And what
is actually done on the floor is that the committee resolution containing the Articles of
Impeachment is the one approved by the body.
As the phraseology now runs, which may be corrected by the Committee on Style, it appears that
the initiation starts on the floor. If we only have time, I could cite examples in the case of the
impeachment proceedings of President Richard Nixon wherein the Committee on the Judiciary
submitted the recommendation, the resolution, and the Articles of Impeachment to the body, and it
was the body who approved the resolution. It is not the body which initiates it. It only approves or
disapproves the resolution. So, on that score, probably the Committee on Style could help in
rearranging these words because we have to be very technical about this. I have been bringing
with me The Rules of the House of Representatives of the U.S. Congress. The Senate Rules are
with me. The proceedings on the case of Richard Nixon are with me. I have submitted my
proposal, but the Committee has already decided. Nevertheless, I just want to indicate this on
record.
xxx
MR. MAAMBONG. I would just like to move for a reconsideration of the approval of Section 3 (3).
My reconsideration will not at all affect the substance, but it is only in keeping with the exact
formulation of the Rules of the House of Representatives of the United States regarding
impeachment.
I am proposing, Madam President, without doing damage to any of this provision, that on page 2,
Section 3 (3), from lines 17 to 18, we delete the words which read: "to initiate impeachment
proceedings" and the comma (,) and insert on line 19 after the word "resolution" the phrase WITH
THE ARTICLES, and then capitalize the letter "i" in "impeachment" and replace the word "by" with
OF, so that the whole section will now read: "A vote of at least one-third of all the Members of the
House shall be necessary either to affirm a resolution WITH THE ARTICLES of Impeachment OF
the Committee or to override its contrary resolution. The vote of each Member shall be recorded."
I already mentioned earlier yesterday that the initiation, as far as the House of Representatives of
the United States is concerned, really starts from the filing of the verified complaint and every
resolution to impeach always carries with it the Articles of Impeachment. As a matter of fact, the
words "Articles of Impeachment" are mentioned on line 25 in the case of the direct filing of a
verified compliant of one-third of all the Members of the House. I will mention again, Madam
President, that my amendment will not vary the substance in any way. It is only in keeping with the
uniform procedure of the House of Representatives of the United States Congress. Thank you,
Madam President.143 (Italics in the original; emphasis and udnerscoring supplied)
This amendment proposed by Commissioner Maambong was clarified and accepted by the
Committee on the Accountability of Public Officers.144
It is thus clear that the framers intended "initiation" to start with the filing of the complaint. In his
amicus curiae brief, Commissioner Maambong explained that "the obvious reason in deleting the
phrase "to initiate impeachment proceedings" as contained in the text of the provision of Section 3
(3) was to settle and make it understood once and for all that the initiation of impeachment
proceedings starts with the filing of the complaint, and the vote of one-third of the House in a
resolution of impeachment does not initiate the impeachment proceedings which was already
initiated by the filing of a verified complaint under Section 3, paragraph (2), Article XI of the
Constitution."145
Amicus curiae Constitutional Commissioner Regalado is of the same view as is Father Bernas,
who was also a member of the 1986 Constitutional Commission, that the word "initiate" as used in
Article XI, Section 3(5) means to file, both adding, however, that the filing must be accompanied
by an action to set the complaint moving.
During the oral arguments before this Court, Father Bernas clarified that the word "initiate,"
appearing in the constitutional provision on impeachment, viz:
Section 3 (1) The House of Representatives shall have the exclusive power to initiate all cases of
impeachment.
xxx
(5) No impeachment proceedings shall be initiated against the same official more than once within
a period of one year, (Emphasis supplied)
refers to two objects, "impeachment case" and "impeachment proceeding."
Father Bernas explains that in these two provisions, the common verb is "to initiate." The object in
the first sentence is "impeachment case." The object in the second sentence is "impeachment
proceeding." Following the principle of reddendo singuala sinuilis, the term "cases" must be
distinguished from the term "proceedings." An impeachment case is the legal controversy that
must be decided by the Senate. Above-quoted first provision provides that the House, by a vote of
one-third of all its members, can bring a case to the Senate. It is in that sense that the House has
"exclusive power" to initiate all cases of impeachment. No other body can do it. However, before a
decision is made to initiate a case in the Senate, a "proceeding" must be followed to arrive at a
conclusion. A proceeding must be "initiated." To initiate, which comes from the Latin word initium,
means to begin. On the other hand, proceeding is a progressive noun. It has a beginning, a
middle, and an end. It takes place not in the Senate but in the House and consists of several
steps: (1) there is the filing of a verified complaint either by a Member of the House of
Representatives or by a private citizen endorsed by a Member of the House of the
Representatives; (2) there is the processing of this complaint by the proper Committee which may
either reject the complaint or uphold it; (3) whether the resolution of the Committee rejects or
upholds the complaint, the resolution must be forwarded to the House for further processing; and
(4) there is the processing of the same complaint by the House of Representatives which either
affirms a favorable resolution of the Committee or overrides a contrary resolution by a vote of one-
third of all the members. If at least one third of all the Members upholds the complaint, Articles of
Impeachment are prepared and transmitted to the Senate. It is at this point that the House
"initiates an impeachment case." It is at this point that an impeachable public official is
successfully impeached. That is, he or she is successfully charged with an impeachment "case"
before the Senate as impeachment court.
144
Father Bernas further explains: The "impeachment proceeding" is not initiated when the complaint
is transmitted to the Senate for trial because that is the end of the House proceeding and the
beginning of another proceeding, namely the trial. Neither is the "impeachment proceeding"
initiated when the House deliberates on the resolution passed on to it by the Committee, because
something prior to that has already been done. The action of the House is already a further step in
the proceeding, not its initiation or beginning. Rather, the proceeding is initiated or begins, when a
verified complaint is filed and referred to the Committee on Justice for action. This is the initiating
step which triggers the series of steps that follow.
The framers of the Constitution also understood initiation in its ordinary meaning. Thus when a
proposal reached the floor proposing that "A vote of at least one-third of all the Members of the
House shall be necessary… to initiate impeachment proceedings," this was met by a proposal to
delete the line on the ground that the vote of the House does not initiate impeachment proceeding
but rather the filing of a complaint does.146 Thus the line was deleted and is not found in the
present Constitution.
Father Bernas concludes that when Section 3 (5) says, "No impeachment proceeding shall be
initiated against the same official more than once within a period of one year," it means that no
second verified complaint may be accepted and referred to the Committee on Justice for action.
By his explanation, this interpretation is founded on the common understanding of the meaning of
"to initiate" which means to begin. He reminds that the Constitution is ratified by the people, both
ordinary and sophisticated, as they understand it; and that ordinary people read ordinary meaning
into ordinary words and not abstruse meaning, they ratify words as they understand it and not as
sophisticated lawyers confuse it.
To the argument that only the House of Representatives as a body can initiate impeachment
proceedings because Section 3 (1) says "The House of Representatives shall have the exclusive
power to initiate all cases of impeachment," This is a misreading of said provision and is contrary
to the principle of reddendo singula singulis by equating "impeachment cases" with "impeachment
proceeding."
From the records of the Constitutional Commission, to the amicus curiae briefs of two former
Constitutional Commissioners, it is without a doubt that the term "to initiate" refers to the filing of
the impeachment complaint coupled with Congress' taking initial action of said complaint.
Having concluded that the initiation takes place by the act of filing and referral or endorsement of
the impeachment complaint to the House Committee on Justice or, by the filing by at least one-
third of the members of the House of Representatives with the Secretary General of the House,
the meaning of Section 3 (5) of Article XI becomes clear. Once an impeachment complaint has
been initiated, another impeachment complaint may not be filed against the same official within a
one year period.
Under Sections 16 and 17 of Rule V of the House Impeachment Rules, impeachment proceedings
are deemed initiated (1) if there is a finding by the House Committee on Justice that the verified
complaint and/or resolution is sufficient in substance, or (2) once the House itself affirms or
overturns the finding of the Committee on Justice that the verified complaint and/or resolution is
not sufficient in substance or (3) by the filing or endorsement before the Secretary-General of the
House of Representatives of a verified complaint or a resolution of impeachment by at least 1/3 of
the members of the House. These rules clearly contravene Section 3 (5) of Article XI since the
rules give the term "initiate" a meaning different meaning from filing and referral.
In his amicus curiae brief, Justice Hugo Gutierrez posits that this Court could not use
contemporaneous construction as an aid in the interpretation of Sec.3 (5) of Article XI, citing Vera
v. Avelino147 wherein this Court stated that "their personal opinions (referring to Justices who
were delegates to the Constitution Convention) on the matter at issue expressed during this
Court's our deliberations stand on a different footing from the properly recorded utterances of
debates and proceedings." Further citing said case, he states that this Court likened the former
members of the Constitutional Convention to actors who are so absorbed in their emotional roles
that intelligent spectators may know more about the real meaning because of the latter's balanced
perspectives and disinterestedness.148
Justice Gutierrez's statements have no application in the present petitions. There are at present
only two members of this Court who participated in the 1986 Constitutional Commission – Chief
Justice Davide and Justice Adolf Azcuna. Chief Justice Davide has not taken part in these
proceedings for obvious reasons. Moreover, this Court has not simply relied on the personal
opinions now given by members of the Constitutional Commission, but has examined the records
of the deliberations and proceedings thereof.
Respondent House of Representatives counters that under Section 3 (8) of Article XI, it is clear
and unequivocal that it and only it has the power to make and interpret its rules governing
impeachment. Its argument is premised on the assumption that Congress has absolute power to
promulgate its rules. This assumption, however, is misplaced.
Section 3 (8) of Article XI provides that "The Congress shall promulgate its rules on impeachment
to effectively carry out the purpose of this section." Clearly, its power to promulgate its rules on
impeachment is limited by the phrase "to effectively carry out the purpose of this section." Hence,
these rules cannot contravene the very purpose of the Constitution which said rules were intended
to effectively carry out. Moreover, Section 3 of Article XI clearly provides for other specific
limitations on its power to make rules, viz:
Section 3. (1) x x x
(2) A verified complaint for impeachment may be filed by any Member of the House of
Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
which shall be included in the Order of Business within ten session days, and referred to the
proper Committee within three session days thereafter. The Committee, after hearing, and by a
majority vote of all its Members, shall submit its report to the House within sixty session days from
such referral, together with the corresponding resolution. The resolution shall be calendared for
consideration by the House within ten session days from receipt thereof.
(3) A vote of at least one-third of all the Members of the House shall be necessary to either affirm
a favorable resolution with the Articles of Impeachment of the Committee, or override its contrary
resolution. The vote of each Member shall be recorded.
(4) In case the verified complaint or resolution of impeachment is filed by at least one-third of all
the Members of the House, the same shall constitute the Articles of Impeachment, and trial by the
Senate shall forthwith proceed.
(5) No impeachment proceedings shall be initiated against the same official more than once within
a period of one year.
It is basic that all rules must not contravene the Constitution which is the fundamental law. If as
alleged Congress had absolute rule making power, then it would by necessary implication have
the power to alter or amend the meaning of the Constitution without need of referendum.
In Osmeña v. Pendatun,149 this Court held that it is within the province of either House of
Congress to interpret its rules and that it was the best judge of what constituted "disorderly
behavior" of its members. However, in Paceta v. Secretary of the Commission on
Appointments,150 Justice (later Chief Justice) Enrique Fernando, speaking for this Court and
quoting Justice Brandeis in United States v. Smith,151 declared that where the construction to be
given to a rule affects persons other than members of the Legislature, the question becomes
judicial in nature. In Arroyo v. De Venecia,152 quoting United States v. Ballin, Joseph & Co.,153
Justice Vicente Mendoza, speaking for this Court, held that while the Constitution empowers each
house to determine its rules of proceedings, it may not by its rules ignore constitutional restraints
or violate fundamental rights, and further that there should be a reasonable relation between the
mode or method of proceeding established by the rule and the result which is sought to be
attained. It is only within these limitations that all matters of method are open to the determination
of the Legislature. In the same case of Arroyo v. De Venecia, Justice Reynato S. Puno, in his
Concurring and Dissenting Opinion, was even more emphatic as he stressed that in the Philippine
setting there is even more reason for courts to inquire into the validity of the Rules of Congress,
viz:
With due respect, I do not agree that the issues posed by the petitioner are non-justiciable. Nor do
I agree that we will trivialize the principle of separation of power if we assume jurisdiction over he
case at bar. Even in the United States, the principle of separation of power is no longer an
impregnable impediment against the interposition of judicial power on cases involving breach of
rules of procedure by legislators.
Rightly, the ponencia uses the 1891 case of US v Ballin (144 US 1) as a window to view the
issues before the Court. It is in Ballin where the US Supreme Court first defined the boundaries of
the power of the judiciary to review congressional rules. It held:
"x x x
145
"The Constitution, in the same section, provides, that each house may determine the rules of its
proceedings." It appears that in pursuance of this authority the House had, prior to that day,
passed this as one of its rules:
Rule XV
3. On the demand of any member, or at the suggestion of the Speaker, the names of members
sufficient to make a quorum in the hall of the House who do not vote shall be noted by the clerk
and recorded in the journal, and reported to the Speaker with the names of the members voting,
and be counted and announced in determining the presence of a quorum to do business. (House
Journal, 230, Feb. 14, 1890)
The action taken was in direct compliance with this rule. The question, therefore, is as to the
validity of this rule, and not what methods the Speaker may of his own motion resort to for
determining the presence of a quorum, nor what matters the Speaker or clerk may of their own
volition place upon the journal. Neither do the advantages or disadvantages, the wisdom or folly,
of such a rule present any matters for judicial consideration. With the courts the question is only
one of power. The Constitution empowers each house to determine its rules of proceedings. It
may not by its rules ignore constitutional restraints or violate fundamental rights, and there should
be a reasonable relation between the mode or method of proceedings established by the rule and
the result which is sought to be attained. But within these limitations all matters of method are
open to the determination of the House, and it is no impeachment of the rule to say that some
other way would be better, more accurate, or even more just. It is no objection to the validity of a
rule that a different one has been prescribed and in force for a length of time. The power to make
rules is not one which once exercised is exhausted. It is a continuous power, always subject to be
exercised by the House, and within the limitations suggested, absolute and beyond the challenge
of any other body or tribunal."
Ballin, clearly confirmed the jurisdiction of courts to pass upon the validity of congressional rules,
i.e, whether they are constitutional. Rule XV was examined by the Court and it was found to
satisfy the test: (1) that it did not ignore any constitutional restraint; (2) it did not violate any
fundamental right; and (3) its method had a reasonable relationship with the result sought to be
attained. By examining Rule XV, the Court did not allow its jurisdiction to be defeated by the mere
invocation of the principle of separation of powers.154
xxx
In the Philippine setting, there is a more compelling reason for courts to categorically reject the
political question defense when its interposition will cover up abuse of power. For section 1, Article
VIII of our Constitution was intentionally cobbled to empower courts "x x x to determine whether or
not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the government." This power is new and was not granted
to our courts in the 1935 and 1972 Constitutions. It was not also xeroxed from the US Constitution
or any foreign state constitution. The CONCOM granted this enormous power to our courts in view
of our experience under martial law where abusive exercises of state power were shielded from
judicial scrutiny by the misuse of the political question doctrine. Led by the eminent former Chief
Justice Roberto Concepcion, the CONCOM expanded and sharpened the checking powers of the
judiciary vis-à-vis the Executive and the Legislative departments of government.155
xxx
The Constitution cannot be any clearer. What it granted to this Court is not a mere power which it
can decline to exercise. Precisely to deter this disinclination, the Constitution imposed it as a duty
of this Court to strike down any act of a branch or instrumentality of government or any of its
officials done with grave abuse of discretion amounting to lack or excess of jurisdiction. Rightly or
wrongly, the Constitution has elongated the checking powers of this Court against the other
branches of government despite their more democratic character, the President and the legislators
being elected by the people.156
xxx
The provision defining judicial power as including the 'duty of the courts of justice. . . to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government' constitutes the
capstone of the efforts of the Constitutional Commission to upgrade the powers of this court vis-à-
vis the other branches of government. This provision was dictated by our experience under martial
law which taught us that a stronger and more independent judiciary is needed to abort abuses in
government. x x x
xxx
In sum, I submit that in imposing to this Court the duty to annul acts of government committed with
grave abuse of discretion, the new Constitution transformed this Court from passivity to activism.
This transformation, dictated by our distinct experience as nation, is not merely evolutionary but
revolutionary. Under the 1935 and the 1973 Constitutions, this Court approached constitutional
violations by initially determining what it cannot do; under the 1987 Constitution, there is a shift in
stress – this Court is mandated to approach constitutional violations not by finding out what it
should not do but what it must do. The Court must discharge this solemn duty by not resuscitating
a past that petrifies the present.
I urge my brethren in the Court to give due and serious consideration to this new constitutional
provision as the case at bar once more calls us to define the parameters of our power to review
violations of the rules of the House. We will not be true to our trust as the last bulwark against
government abuses if we refuse to exercise this new power or if we wield it with timidity. To be
sure, it is this exceeding timidity to unsheathe the judicial sword that has increasingly emboldened
other branches of government to denigrate, if not defy, orders of our courts. In Tolentino, I
endorsed the view of former Senator Salonga that this novel provision stretching the latitude of
judicial power is distinctly Filipino and its interpretation should not be depreciated by undue
reliance on inapplicable foreign jurisprudence. In resolving the case at bar, the lessons of our own
history should provide us the light and not the experience of foreigners.157 (Italics in the original
emphasis and underscoring supplied)
Thus, the ruling in Osmena v. Pendatun is not applicable to the instant petitions. Here, the third
parties alleging the violation of private rights and the Constitution are involved.
Neither may respondent House of Representatives' rely on Nixon v. US158 as basis for arguing
that this Court may not decide on the constitutionality of Sections 16 and 17 of the House
Impeachment Rules. As already observed, the U.S. Federal Constitution simply provides that "the
House of Representatives shall have the sole power of impeachment." It adds nothing more. It
gives no clue whatsoever as to how this "sole power" is to be exercised. No limitation whatsoever
is given. Thus, the US Supreme Court concluded that there was a textually demonstrable
constitutional commitment of a constitutional power to the House of Representatives. This
reasoning does not hold with regard to impeachment power of the Philippine House of
Representatives since our Constitution, as earlier enumerated, furnishes several provisions
articulating how that "exclusive power" is to be exercised.
The provisions of Sections 16 and 17 of Rule V of the House Impeachment Rules which state that
impeachment proceedings are deemed initiated (1) if there is a finding by the House Committee
on Justice that the verified complaint and/or resolution is sufficient in substance, or (2) once the
House itself affirms or overturns the finding of the Committee on Justice that the verified complaint
and/or resolution is not sufficient in substance or (3) by the filing or endorsement before the
Secretary-General of the House of Representatives of a verified complaint or a resolution of
impeachment by at least 1/3 of the members of the House thus clearly contravene Section 3 (5) of
Article XI as they give the term "initiate" a meaning different from "filing."
Validity of the Second Impeachment Complaint
Having concluded that the initiation takes place by the act of filing of the impeachment complaint
and referral to the House Committee on Justice, the initial action taken thereon, the meaning of
Section 3 (5) of Article XI becomes clear. Once an impeachment complaint has been initiated in
the foregoing manner, another may not be filed against the same official within a one year period
following Article XI, Section 3(5) of the Constitution.
In fine, considering that the first impeachment complaint, was filed by former President Estrada
against Chief Justice Hilario G. Davide, Jr., along with seven associate justices of this Court, on
June 2, 2003 and referred to the House Committee on Justice on August 5, 2003, the second
impeachment complaint filed by Representatives Gilberto C. Teodoro, Jr. and Felix William
Fuentebella against the Chief Justice on October 23, 2003 violates the constitutional prohibition
against the initiation of impeachment proceedings against the same impeachable officer within a
one-year period.
Conclusion
If there is anything constant about this country, it is that there is always a phenomenon that takes
the center stage of our individual and collective consciousness as a people with our characteristic
flair for human drama, conflict or tragedy. Of course this is not to demean the seriousness of the
controversy over the Davide impeachment. For many of us, the past two weeks have proven to be
146
an exasperating, mentally and emotionally exhausting experience. Both sides have fought bitterly
a dialectical struggle to articulate what they respectively believe to be the correct position or view
on the issues involved. Passions had ran high as demonstrators, whether for or against the
impeachment of the Chief Justice, took to the streets armed with their familiar slogans and chants
to air their voice on the matter. Various sectors of society - from the business, retired military, to
the academe and denominations of faith – offered suggestions for a return to a state of normalcy
in the official relations of the governmental branches affected to obviate any perceived resulting
instability upon areas of national life.
Through all these and as early as the time when the Articles of Impeachment had been
constituted, this Court was specifically asked, told, urged and argued to take no action of any kind
and form with respect to the prosecution by the House of Representatives of the impeachment
complaint against the subject respondent public official. When the present petitions were knocking
so to speak at the doorsteps of this Court, the same clamor for non-interference was made
through what are now the arguments of "lack of jurisdiction," "non-justiciability," and "judicial self-
restraint" aimed at halting the Court from any move that may have a bearing on the impeachment
proceedings.
This Court did not heed the call to adopt a hands-off stance as far as the question of the
constitutionality of initiating the impeachment complaint against Chief Justice Davide is concerned.
To reiterate what has been already explained, the Court found the existence in full of all the
requisite conditions for its exercise of its constitutionally vested power and duty of judicial review
over an issue whose resolution precisely called for the construction or interpretation of a provision
of the fundamental law of the land. What lies in here is an issue of a genuine constitutional
material which only this Court can properly and competently address and adjudicate in
accordance with the clear-cut allocation of powers under our system of government. Face-to-face
thus with a matter or problem that squarely falls under the Court's jurisdiction, no other course of
action can be had but for it to pass upon that problem head on.
The claim, therefore, that this Court by judicially entangling itself with the process of impeachment
has effectively set up a regime of judicial supremacy, is patently without basis in fact and in law.
This Court in the present petitions subjected to judicial scrutiny and resolved on the merits only the
main issue of whether the impeachment proceedings initiated against the Chief Justice
transgressed the constitutionally imposed one-year time bar rule. Beyond this, it did not go about
assuming jurisdiction where it had none, nor indiscriminately turn justiciable issues out of
decidedly political questions. Because it is not at all the business of this Court to assert judicial
dominance over the other two great branches of the government. Rather, the raison d'etre of the
judiciary is to complement the discharge by the executive and legislative of their own powers to
bring about ultimately the beneficent effects of having founded and ordered our society upon the
rule of law.
It is suggested that by our taking cognizance of the issue of constitutionality of the impeachment
proceedings against the Chief Justice, the members of this Court have actually closed ranks to
protect a brethren. That the members' interests in ruling on said issue is as much at stake as is
that of the Chief Justice. Nothing could be farther from the truth.
The institution that is the Supreme Court together with all other courts has long held and been
entrusted with the judicial power to resolve conflicting legal rights regardless of the personalities
involved in the suits or actions. This Court has dispensed justice over the course of time,
unaffected by whomsoever stood to benefit or suffer therefrom, unfraid by whatever imputations or
speculations could be made to it, so long as it rendered judgment according to the law and the
facts. Why can it not now be trusted to wield judicial power in these petitions just because it is the
highest ranking magistrate who is involved when it is an incontrovertible fact that the fundamental
issue is not him but the validity of a government branch's official act as tested by the limits set by
the Constitution? Of course, there are rules on the inhibition of any member of the judiciary from
taking part in a case in specified instances. But to disqualify this entire institution now from the suit
at bar is to regard the Supreme Court as likely incapable of impartiality when one of its members
is a party to a case, which is simply a non sequitur.
No one is above the law or the Constitution. This is a basic precept in any legal system which
recognizes equality of all men before the law as essential to the law's moral authority and that of
its agents to secure respect for and obedience to its commands. Perhaps, there is no other
government branch or instrumentality that is most zealous in protecting that principle of legal
equality other than the Supreme Court which has discerned its real meaning and ramifications
through its application to numerous cases especially of the high-profile kind in the annals of
jurisprudence. The Chief Justice is not above the law and neither is any other member of this
Court. But just because he is the Chief Justice does not imply that he gets to have less in law than
anybody else. The law is solicitous of every individual's rights irrespective of his station in life.
The Filipino nation and its democratic institutions have no doubt been put to test once again by
this impeachment case against Chief Justice Hilario Davide. Accordingly, this Court has resorted
to no other than the Constitution in search for a solution to what many feared would ripen to a
crisis in government. But though it is indeed immensely a blessing for this Court to have found
answers in our bedrock of legal principles, it is equally important that it went through this crucible
of a democratic process, if only to discover that it can resolve differences without the use of force
and aggression upon each other.
WHEREFORE, Sections 16 and 17 of Rule V of the Rules of Procedure in Impeachment
Proceedings which were approved by the House of Representatives on November 28, 2001 are
unconstitutional. Consequently, the second impeachment complaint against Chief Justice Hilario
G. Davide, Jr. which was filed by Representatives Gilberto C. Teodoro, Jr. and Felix William B.
Fuentebella with the Office of the Secretary General of the House of Representatives on October
23, 2003 is barred under paragraph 5, section 3 of Article XI of the Constitution.
SO ORDERED.
Bellosillo and Tinga, JJ., see separate opinion.
Puno, and Ynares-Santiago, J., see concurring and dissenting opinion.
Vitug, Panganiban, Sandoval-Gutierrez and Callejo, Sr., JJ., see separate concurring opinion.
Quisumbing, J., concurring separate opinion received.
Carpio, J., concur.
Austria-Martinez, J., concur in the majority opinion and in the separate opinion of J. Vitug.
Corona, J., will write a separate concurring opinion.
Azcuna, J., concur in the separate opinion.
Footnotes
1 Rollo, G.R. No. 160261 at 180-182; Annex "H."
2 Per Special Appearance with Manifestation of House Speaker Jose C. De Venecia, Jr. (Rollo,
G.R. No. 160261 at 325-363) the pertinent House Resolution is HR No. 260, but no copy of the
same was submitted before this Court.
3 Id. at 329. Created through PD No. 1949 (July 18, 1984), the JDF was established "to help
ensure and guarantee the independence of the Judiciary as mandated by the Constitution and
public policy and required by the impartial administration of justice" by creating a special fund to
augment the allowances of the members and personnel of the Judiciary and to finance the
acquisition, maintenance and repair of office equipment and facilities."
4 Rollo, G.R. No. 160261 at 120-139; Annex "E."
5 The initial complaint impleaded only Justices Artemio V. Panganiban, Josue N. Bellosillo,
Reynato S. Puno, Antonio T. Carpio and Renato C. Corona, and was later amended to include
Justices Jose C. Vitug, and Leonardo A. Quisumbing.
6 Supra note 4 at 123-124.
7 Rollo, G.R. No. 160403 at 48-53; Annex "A."
8 http://www.congress.gov.ph/search/bills/hist_show.php?bill_no=RPT9999
9 Rollo, G.R. No. 160262 at 8.
10 Rollo, G.R. No. 160295 at 11.
11 Rollo, G.R. No. 160262 at 43-84; Annex "B."
12 Supra note 2.
13 A perusal of the attachments submitted by the various petitioners reveals the following
signatories to the second impeachment complaint and the accompanying
Resolution/Endorsement. 1. Gilbert Teodoro, Jr., NPC, Tarlac (principal complainant) 2. Felix
Fuentebella, NPC, Camarines Sur (second principal complainant) 3. Julio Ledesma, IV, NPC,
Negros Occidental 4. Henry Lanot, NPC, Lone District of Pasig City 5. Kim Bernardo-Lokin, Party
List-CIBAC 6. Marcelino Libanan, NPC, Lone District of Eastern Samar, (Chairman, House
Committee on Justice) 7. Emmylou Talino-Santos, Independent, 1st District, North Cotobato 8.
Douglas RA. Cagas, NPC, 1st District, Davao del Sur 9. Sherwin Gatchalian, NPC, 1st District,
Valenzuela City 10. Luis Bersamin, Jr., PDSP-PPC, Lone District of Abra 11. Nerissa Soon-Ruiz
Alayon, 6th District, Cebu 12. Ernesto Nieva, Lakas, 1st District, Manila 13. Edgar R. Erice, Lakas,
147
2nd District, Kalookan City 14. Ismael Mathay III, Independent, 2nd District, Quezon City 15.
Samuel Dangwa, Reporma, Lone District of Benguet 16. Alfredo Marañon, Jr., NPC, 2nd District,
Negros Occidental 17. Cecilia Jalosjos-Carreon, Reporma, 1st District, Zamboanga del Norte 18.
Agapito A. Aquino, LDP, 2nd District, Makati City 19. Fausto L. Seachon, Jr., NPC, 3rd District,
Masbate 20. Georgilu Yumul-Hermida, Pwersa ng Masa, 4th District, Quezon 21. Jose Carlos
Lacson, Lakas, 3rd District, Negros Occidental 22. Manuel C. Ortega, NPC, 1st District, La Union
23. Uliran Joaquin, NPC, 1st District, Laguna 24. Soraya C. Jaafar, Lakas, Lone District of Tawi-
Tawi 25. Wilhelmino Sy-Alvarado, Lakas, 1st District, Bulacan 26. Claude P. Bautista, NPC, 2nd
District, Davao Del Sur 27. Del De Guzman, Lakas, Lone District of Marikina City 28. Zeneida
Cruz-Ducut, NPC, 2nd District, Pampanga 29. Augusto Baculio, Independent-LDP, 2nd District,
Misamis Oriental 30. Faustino Dy III, NPC-Lakas, 3rd District, Isabela 31. Agusto Boboy Syjuco,
Lakas, 2nd District, Iloilo 32. Rozzano Rufino B. Biazon, LDP, Lone District of Muntinlupa City 33.
Leovigildo B. Banaag, NPC-Lakas, 1st District, Agusan del Norte 34. Eric Singson, LP, 2nd
District, Ilocos Sur 35. Jacinto Paras, Lakas, 1st District, Negros Oriental 36. Jose Solis,
Independent, 2nd District, Sorsogon 37. Renato B. Magtubo, Party List-Partido ng Manggagawa
38. Herminio G. Teves, Lakas, 3rd District, Negros Oriental 39. Amado T. Espino, Jr., Lakas, 2nd
District, Pangasinan 40. Emilio Macias, NPC, 2nd District, Negros Oriental 41. Arthur Y. Pingoy,
Jr., NPC, 2nd District, South Cotobato 42. Francis Nepomuceno, NPC, 1st District, Pampanga 43.
Conrado M. Estrella III, NPC, 6th District, Pangasinan 44. Elias Bulut, Jr., NPC, Lone District of
Apayao 45. Jurdin Jesus M. Romualdo, NPC, Lone District of Camiguin 46. Juan Pablo Bondoc,
NPC, 4th District, Pampanga 47. Generoso DC. Tulagan, NPC, 3rd District, Pangasinan 48.
Perpetuo Ylagan, Lakas, Lone District of Romblon 49. Michael Duavit, NPC, 1st District, Rizal 50.
Joseph Ace H. Durano, NPC, 5th District, Cebu 51. Jesli Lapus, NPC, 3rd District, Tarlac 52.
Carlos Q. Cojuangco, NPC, 4th District, Negros Occidental 53. Georgidi B. Aggabao, NPC, 4th
District, Santiago, Isabela 54. Francis Escudero, NPC, 1st District, Sorsogon 55. Rene M. Velarde,
Party List-Buhay 56. Celso L. Lobregat, LDP, Lone District of Zamboanga City 57. Alipio Cirilo V.
Badelles, NPC, 1st District, Lanao del Norte 58. Didagen P. Dilangalen, Pwersa ng Masa, Lone
District of Maguindanao 59. Abraham B. Mitra, LDP, 2nd District, Palawan 60. Joseph Santiago,
NPC, Lone District of Catanduanes 61. Darlene Antonino-Custodio, NPC, 1st District of South
Cotobato & General Santos City 62. Aleta C. Suarez, LP, 3rd District, Quezon 63. Rodolfo G.
Plaza, NPC, Lone District of Agusan del Sur 64. JV Bautista, Party List-Sanlakas 65. Gregorio
Ipong, NPC, 2nd District, North Cotabato 66. Gilbert C. Remulla, LDP, 2nd District, Cavite 67.
Rolex T. Suplico, LDP, 5th District, Iloilo 68. Celia Layus, NPC, Cagayan 69. Juan Miguel Zubiri,
Lakas, 3rd District, Bukidnon 70. Benasing Macarambon Jr,. NPC, 2nd District, Lanao del Sur 71.
Josefina Joson, NPC, Lone District of Nueva Ecija 72. Mark Cojuangco, NPC, 5th District,
Pangasinan 73. Mauricio Domogan, Lakas, Lone District of Baguio City 74. Ronaldo B. Zamora,
Pwersa ng Masa, Lone District of San Juan 75. Angelo O. Montilla, NPC, Lone District of Sultan
Kudarat 76. Roseller L. Barinaga, NPC, 2nd District, Zamboanga del Norte 77. Jesnar R. Falcon,
NPC, 2nd District, Surigao del Sur 78. Ruy Elias Lopez, NPC, 3rd District, Davao City.
14 Rollo, G.R. No. 160261 at 5. Petitioner had previously filed two separate impeachment
complaints before the House of Representatives against Ombudsman Aniano Desierto.
15 299 SCRA 744 (1998). In Chavez v. PCGG, petitioner Chavez argued that as a taxpayer and a
citizen, he had the legal personality to file a petition demanding that the PCGG make public any
and all negotiations and agreements pertaining to the PCGG's task of recovering the Marcoses' ill-
gotten wealth. Petitioner Chavez further argued that the matter of recovering the ill-gotten wealth
of the Marcoses is an issue of transcendental importance to the public. The Supreme Court, citing
Tañada v. Tuvera, 136 SCRA 27 (1985), Legaspi v. Civil Service Commission, 150 SCRA 530
(1987) and Albano v. Reyes, 175 SCRA 264 (1989) ruled that petitioner had standing. The Court,
however, went on to elaborate that in any event, the question on the standing of petitioner Chavez
was rendered moot by the intervention of the Jopsons who are among the legitimate claimants to
the Marcos wealth.
16 384 SCRA 152 (2002). In Chavez v. PEA-Amari Coastal Bay Development Corporation,
wherein the petition sought to compel the Public Estates Authority (PEA) to disclose all facts on its
then on-going negotiations with Amari Coastal Development Corporation to reclaim portions of
Manila Bay, the Supreme Court said that petitioner Chavez had the standing to bring a taxpayer's
suit because the petition sought to compel PEA to comply with its constitutional duties.
17 224 SCRA 792 (1993).
18 Subsequent petitions were filed before this Court seeking similar relief. Other than the petitions,
this Court also received Motions for Intervention from among others, Sen. Aquilino Pimentel, Jr.,
and Special Appearances by House Speaker Jose C. de Venecia, Jr., and Senate President
Franklin Drilon.
19 Supra note 2 at 10.
20 Justice Florenz D. Regalado, Former Constitutional Commissioners Justice Regalado E.
Maambong and Father Joaquin G. Bernas, SJ, Justice Hugo E. Gutierrez, Jr., Former Minister of
Justice and Solicitor General Estelito P. Mendoza, Deans Pacifico Agabin and Raul C.
Pangalangan, and Former Senate President Jovito R. Salonga,.
21 Rollo, G.R. No. 160261 at 275-292.
22 Id. at 292.
23 63 Phil 139 (1936).
24 Id. at 157-159.
25 Vide Alejandrino v. Quezon, 46 Phil 83 (1924); Tañada v. Cuenco, 103 Phil 1051 (1957); Ynot
v. Intermediate Appellate Court, 148 SCRA 659, 665 (1987).
26 Const., art. VIII, sec. 1.
27 5 US 137 (1803).
28 Id. at 180.
29 In In re Prautch, 1 Phil 132 (1902), this Court held that a statute allowing for imprisonment for
non-payment of a debt was invalid. In Casanovas v. Hord, 8 Phil 125 (1907), this Court invalidated
a statute imposing a tax on mining claims on the ground that a government grant stipulating that
the payment of certain taxes by the grantee would be in lieu of other taxes was a contractual
obligation which could not be impaired by subsequent legislation. In Concepcion v. Paredes, 42
Phil 599 (1921), Section 148 (2) of the Administrative Code, as amended, which provided that
judges of the first instance with the same salaries would, by lot, exchange judicial districts every
five years, was declared invalid for being a usurpation of the power of appointment vested in the
Governor General. In McDaniel v. Apacible, 42 Phil 749 (1922), Act No. 2932, in so far as it
declares open to lease lands containing petroleum which have been validly located and held, was
declared invalid for being a depravation of property without due process of law. In U.S. v. Ang
Tang Ho, 43 Phil 1 (1922), Act No. 2868, in so far as it authorized the Governor-General to fix the
price of rice by proclamation and to make the sale of rice in violation of such a proclamation a
crime, was declared an invalid delegation of legislative power.
30 Vicente V. Mendoza, Sharing The Passion and Action of our Time 62-53 (2003).
31 Supra note 23.
32 Id. at 156-157.
33 Florentino P. Feliciano, The Application of Law: Some Recurring Aspects Of The Process Of
Judicial Review And Decision Making, 37 AMJJUR 17, 24 (1992).
34 Ibid.
35 I Record of the Constitutional Commission 434-436 (1986).
36 31 SCRA 413 (1970)
37 Id. at 422-423; Vide Baranda v. Gustilo, 165 SCRA 757, 770 (1988); Luz Farms v. Secretary of
the Department of Agrarian Reform, 192 SCRA 51 (1990); Ordillo v. Commission on Elections,
192 SCRA 100 (1990).
38 194 SCRA 317 (1991).
39 Id. at 325 citing Maxwell v. Dow, 176 US 581.
40 152 SCRA 284 (1987).
41 Id. at 291 citing Gold Creek Mining v. Rodriguez, 66 Phil 259 (1938), J.M. Tuason & Co., Inc v.
Land Tenure Administration, supra note 36, and I Tañada and Fernando, Constitution of the
Philippines 21 ( Fourth Ed. ).
42 82 Phil 771 (1949).
43 Id. at 775.
44 Supra note 38.
45 Id. at 330-331.
46 Id. at 337-338 citing 16 CJS 2.31; Commonwealth v. Ralph, 111 Pa. 365, 3 Atl. 220 and
Household Finance Corporation v. Shaffner, 203, SW 2d, 734, 356 Mo. 808.
47 Supra note 2.
48 Citing Section 3 (6), Article VIII of the Constitution provides:
148
(6) The Senate shall have the sole power to try and decide all cases of impeachment. When sitting
for that purpose, the Senators shall be on oath or affirmation. When the President of the
Philippines is on trial, the Chief Justice of the Supreme Court shall preside, but shall not vote. No
person shall be convicted without the concurrence of two-thirds of all the Members of the Senate.
49 Supra note 21.
50 506 U.S. 224 (1993).
51 Supra note 2 at 349-350 citing Gerhardt, Michael J. The Federal Impeachment Process: A
Constitutional and Historical Analysis, 1996, p. 119.
52 227 SCRA 100 (1993).
53 Id. at 112.
54 US Constititon. Section 2. x x x The House of Representatives shall have the sole Power of
Impeachment.
55 1987 Constitution, Article XI, Section 3 (1). The House of Representatives shall have the
exclusive power to initiate all cases of impeachment.
56 Supra note 2 at 355 citing Agresto, The Supreme Court and Constitutional Democracy, 1984,
pp. 112-113.
57 369 U.S. 186 (1962).
58 141 SCRA 263 (1986).
59 Supra note 25.
60 298 SCRA 756 (1998).
61 272 SCRA 18 (1997).
62 201 SCRA 792 (1991).
63 187 SCRA 377 (1990).
64 180 SCRA 496 (1989).
65 Supra note 25.
66 Supra note 23.
67 Civil Liberties Union v. Executive Secretary, supra note 38 at 330-331.
68 Id. at 158-159.
69 IBP v. Zamora, 338 SCRA 81 (2000) citing Joya v. PCGG, 225 SCRA 568 (1993); House
International Building Tenants Association, Inc. v. Intermediate Appellate Court, 151 SCRA 703
(1987); Baker v. Carr, supra note 57.
70 Citing Kilosbayan, Inc. v. Morato, 250 SCRA 130 (1995).
71 Citing Tatad v. Secretary of the Department of Energy, 281 SCRA 330 (1997).
72 Citing Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, 163 SCRA 371, 378 (1988).
73 Rule 3, Section 2. Parties in interest. — A 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. Unless
otherwise authorized by law or these Rules, every action must be prosecuted or defended in the
name of the real party in interest.
74 JG Summit Holdings, Inc. v. Court of Appeals, 345 SCRA 143, 152 (2000).
75 246 SCRA 540 (1995).
76 Id. at 562-564.
77 Agan v. PIATCO, G.R. No. 155001, May 5, 2003 citing BAYAN v. Zamora, 342 SCRA 449,
562-563 (2000) and Baker v. Carr, supra note 57; Vide Gonzales v. Narvasa, 337 SCRA 733
(2000); TELEBAP v. COMELEC, 289 SCRA 337 (1998).
78 Chavez v. PCGG, supra note 15.
79 Del Mar v. PAGCOR 346 SCRA 485, 501 (2000) citing Kilosbayan, Inc., et.al. v. Morato, supra
note 70; Dumlao v. COMELEC, 95 SCRA 392 (1980); Sanidad v. Comelec, 73 SCRA 333 (1976);
Philconsa v. Mathay, 18 SCRA 300 (1966); Pascual v. Secretary of Public Works, 110 Phil 331
(1960); Vide Gonzales v. Narvasa, supra note 77; Pelaez v. Auditor General, 15 SCRA 569
(1965); Philconsa v. Gimenez, 15 SCRA 479 (1965); Iloilo Palay & Corn Planters Association v.
Feliciano, 13 SCRA 377 (1965).
80 BAYAN v. Zamora, supra note 77 citing Bugnay v. Laron, 176 SCRA 240, 251-252 (1989);
Vide Del Mar v. PAGCOR, supra note 79; Gonzales v. Narvasa, supra note 77; TELEBAP v.
COMELEC, supra note 77; Kilosbayan, Inc. v. Morato, supra note 70; Joya v. PCGG, supra note
69; Dumlao v. COMELEC, supra note 79; Sanidad v. COMELEC, supra note 79; Philconsa v.
Mathay, supra note 79; Pelaez v. Auditor General, supra note 79; Philconsa v. Gimenez, supra
note 79; Iloilo Palay & Corn Planters Association v. Feliciano, supra note 79; Pascual v. Sec. of
Public Works, supra note 79.
81 Gonzales v. Narvasa, supra note 77 citing Dumlao v. COMELEC, supra note 79; Sanidad v.
COMELEC, supra note 79; Tan v. Macapagal, 43 SCRA 677 (1972).
82 Tatad v. Garcia, Jr., 243 SCRA 436 (1995); Kilosbayan, Inc. v. Morato, supra note 70 at 140-
141 citing Philconsa v. Enriquez, 235 SCRA 506 (1994); Guingona v. PCGG, 207 SCRA 659
(1992); Gonzales v. Macaraig, 191 SCRA 452 (1990); Tolentino v. COMELEC, 41 SCRA 702
(1971).
83 Del Mar v. PAGCOR, supra note 79 at 502-503 citing Philconsa v. Mathay, supra note 79.
84 Chinese Flour Importers Association v. Price Stabilization Board, 89 Phil 439, 461 (1951) citing
Gallego et al. vs. Kapisanan Timbulan ng mga Manggagawa, 46 Off. Gaz, 4245.
85 Philippine Constitution Association v. Gimenez, supra note 79 citing Gonzales v. Hechanova,
118 Phil. 1065 (1963); Pascual v. Secretary, supra note 79.
86 Integrated Bar of the Philippines v. Zamora, 338 SCRA 81 (2000).
87 MVRS Publications, Inc. v. Islamic Da'wah Council of the Philippines, G.R. No. 135306,
January 28, 2003, citing Industrial Generating Co. v. Jenkins 410 SW 2d 658; Los Angeles County
Winans, 109 P 640; Weberpals v. Jenny, 133 NE 62.
88 Mathay v. Consolidated Bank and Trust Company, 58 SCRA 559, 570-571 (1974), citing
Moore's Federal Practice 2d ed., Vol. III, pages 3423-3424; 4 Federal Rules Service, pages 454-
455; Johnson, et al., vs. Riverland Levee Dist., et al., 117 2d 711, 715; Borlasa v. Polistico, 47
Phil. 345, 348 (1925).
89 MVRS Publications, Inc. v. Islamic Da'wah Council of the Philippines, supra note 87, dissenting
opinion of Justice Carpio; Bulig-bulig Kita Kamag-Anak Assoc. v. Sulpicio Lines, 173 SCRA 514,
514-515 (1989); Re: Request of the Heirs of the Passengers of Doña Paz, 159 SCRA 623, 627
(1988) citing Moore, Federal Practice, 2d ed., Vol. 3B, 23-257, 23-258; Board of Optometry v.
Colet, 260 SCRA 88 (1996), citing Section 12, Rule 3, Rules of Court; Mathay v. Consolidated
Bank and Trust Co., supra note 88; Oposa v. Factoran, supra note 17.
90 Kilosbayan v. Guingona, 232 SCRA 110 (1994).
91 Kilosbayan, Inc. v. Morato, supra note 70 citing Civil Liberties Union v. Executive Secretary,
supra note 38; Philconsa v. Giménez, supra note 79; Iloilo Palay and Corn Planters Association v.
Feliciano, supra note 79; Araneta v. Dinglasan, 84 Phil. 368 (1949); vide Tatad v. Secretary of the
Department of Energy, 281 SCRA 330 (1997); Santiago v. COMELEC, 270 SCRA 106 (1997);
KMU v. Garcia, Jr., 239 SCRA 386 (1994); Joya v. PCGG, 225 SCRA 368 (1993); Carpio v.
Executive Secretary, 206 SCRA 290 (1992); Osmeña v. COMELEC, 199 SCRA 750 (1991);
Basco v. PAGCOR, 197 SCRA 52 (1991); Guingona v. Carague, 196 SCRA 221 (1991); Daza v.
Singson, supra note 64; Dumlao v. COMELEC, supra note 79.
92 Firestone Ceramics, Inc. v. Court of Appeals, 313 SCRA 522, 531 (1999) citing Gibson vs.
Revilla, 92 SCRA 219; Magsaysay-Labrador v. Court of Appeals, 180 SCRA 266, 271 (1989).
93 Supra note 79.
94 Id. at 403.
95 Supra note 81.
96 Id. at 681.
97 SECTION 3. x x x
(2) A verified complaint for impeachment may be filed by any Member of the House of
Representatives or by any citizen upon a resolution of endorsement by any Member thereof,
which shall be included in the Order of Business within ten session days, and referred to the
proper Committee within three session days thereafter. The Committee, after hearing, and by a
majority vote of all its Members, shall submit its report to the House within sixty session days from
such referral, together with the corresponding resolution. The resolution shall be calendared for
consideration by the House within ten session days from receipt thereof.
(3) A vote of at least one-third of all the Members of the House shall be necessary either to affirm
a favorable resolution with the Articles of Impeachment of the Committee, or override its contrary
resolution. The vote of each Member shall be recorded.
98 Supra note 25.
99 Id. at 1067.
100 Vide Barcelon v. Baker, 5 Phil. 87 (1905); Montenegro v. Castañeda, 91 Phil. 882 (1952); De
la Llana v. COMELEC, 80 SCRA 525 (1977).
101 Vide Avelino v. Cuenco, 83 Phil. 17 (1949); Macias v. COMELEC, 3 SCRA 1 (1961); Cunanan
v. Tan, Jr., 5 SCRA 1 (1962); Gonzales v. COMELEC, 21 SCRA 774 (1967); Lansang v. Garcia,
42 SCRA 448 (1971); Tolentino v. COMELEC, supra note 82.
149
102 50 SCRA 30 (1973). 149 109 Phil. 863 (1960).
103 Record of the Constitution Commission, Vol. 1, July 10, 1986 at 434-436. 150 40 SCRA 58, 68 (1971).
104 Id. at 439-443. 151 286 U.S. 6, 33 (1932).
105 177 SCRA 668 (1989). 152 277 SCRA 268, 286 (1997).
106 Id. at 695. 153 144 U.S. 1 (1862).
107 203 SCRA 767 (1991). 154 Supra note 152 at 304-306.
108 Id. at 776 citing Gonzales v. Macaraig, 191 SCRA 452, 463 (1990). 155 Id. at 311.
109 Supra note 64. 156 Id. at 313.
110 Id. at 501. 157 Supra note 152 at 314-315.
111 Supra note 57. 158 Supra note 50.
112 Id. at 217.
113 2 Record of the Constitutional Commission at 286.
114 Id. at 278, 316, 272, 283-284, 286.
115 76 Phil 516 (1946).
116 Id. at 522.
117 Supra note 37.
118 Id. at 58 citing Association of Small Landowners in the Philippines, Inc. v. Secretary of
Agrarian Reform, 175 SCRA 343 (1989).
119 Vide concurring opinion of Justice Vicente Mendoza in Estrada v.Desierto, 353 SCRA 452,
550 (2001); Demetria v. Alba, 148 SCRA 208, 210-211 (1987) citing Ashwander v. TVA, 297 U.S.
288 (1936).
120 As adverted to earlier, neither a copy the Resolution nor a record of the hearings conducted
by the House Committee on Justice pursuant to said Resolution was submitted to the Court by
any of the parties.
121 Rollo, G.R. No. 160310 at 38.
122 Supra note 107.
123 Id. at 777 (citations omitted).
124 Rollo, G.R. No. 160262 at 73.
125 Supra note 2 at 342.
126 Perfecto v. Meer, 85 Phil 552, 553 (1950).
127 Estrada v. Desierto, 356 SCRA 108, 155-156 (2001); Vide Abbas v. Senate Electoral
Tribunal, 166 SCRA 651 (1988); Vargas v. Rilloraza, et al., 80 Phil. 297, 315-316 (1948); Planas
v. COMELEC, 49 SCRA 105 (1973), concurring opinion of J. Concepcion.
128 Philippine Judges Association v. Prado, 227 SCRA 703, 705 (1993).
129 Ibid.
130 Ramirez v. Corpuz-Macandog, 144 SCRA 462, 477 (1986).
131 Supra note 127.
132 Estrada v. Desierto, supra note 127.
133 Id. at 155-156 citing Abbas, et al. v. Senate Electoral Tribunal, supra note 127; Vargas v.
Rilloraza, et al., supra note 127.
134 Supra note 119 at 210-211.
135 Supra note 119.
136 Board of Optometry v. Colet, 260 SCRA 88, 103 (1996); Joya v. PCGG, supra note 69 at 575;
Macasiano v. National Housing Authority, 224 SCRA 236, 242 (1993); Santos III v. Northwestern
Airlines, 210 SCRA 256, 261-262 (1992), National Economic Protectionism Association v. Ongpin,
171 SCRA 657, 665 (1989).
137 Supra note 2 at 353.
138 Supra note 33 at 32.
139 Supra note 102.
140 Supra note 33.
141 249 SCRA 244, 251 (1995).
142 Id. at 251.
143 2 Records of the Constitutional Commission at 342-416.
144 Id. at 416.
145 Commissioner Maambong's Amicus Curiae Brief at 15.
146 2 Record of the Constitutional Commission at 375-376, 416
147 77 Phil. 192 (1946).
148 Justice Hugo Guiterrez's Amicus Curiae Brief at 7.

150
 x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 191149
JOHN G. PERALTA, Petitioner,
vs.
JUDICIAL AND BAR COUNCIL (JBC). Respondent.
PETER IRVING CORVERA; CHRISTIAN ROBERT S. LIM; ALFONSO V. TAN, JR.; NATIONAL
UNION OF PEOPLE’S LAWYERS; MARLOU B. UBANO; INTEGRATED BAR OF THE
PHILIPPINES-DAVAO DEL SUR CHAPTER, represented by its Immediate Past President, ATTY.
ISRAELITO P. TORREON, and the latter in his own personal capacity as a MEMBER of the
PHILIPPINE BAR; MITCHELL JOHN L. BOISER; BAGONG ALYANSANG BAYAN (BAYAN)
CHAIRMAN DR. CAROLINA P. ARAULLO; BAYAN SECRETARY GENERAL RENATO M.
REYES, JR.; CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCE-MENT OF
GOVERNMENT EMPLOYEES (COURAGE) CHAIRMAN FERDINAND GAITE; KALIPUNAN NG
DAMAYANG MAHIHIRAP (KADAMAY) SECRETARY GENERAL GLORIA ARELLANO;
ALYANSA NG NAGKAKAISANG KABATAAN NG SAMBAYANAN PARA SA KAUNLARAN
(ANAKBAYAN) CHAIRMAN KEN LEONARD RAMOS; TAYO ANG PAG-ASA CONVENOR ALVIN
PETERS; LEAGUE OF FILIPINO STUDENTS (LFS) CHAIRMAN JAMES MARK TERRY
LACUANAN RIDON; NATIONAL UNION OF STUDENTS OF THE PHILIPPINES (NUSP)
CHAIRMAN EINSTEIN RECEDES; COLLEGE EDITORS GUILD OF THE PHILIPPINES (CEGP)
CHAIRMAN VIJAE ALQUISOLA; and STUDENT CHRISTIAN MOVEMENT OF THE
PHILIPPINES (SCMP) CHAIRMAN MA. CRISTINA ANGELA GUEVARRA; WALDEN F. BELLO
and LORETTA ANN P. ROSALES; WOMEN TRIAL LAWYERS ORGANIZATION OF THE
PHILIPPINES, represented by YOLANDA QUISUMBING-JAVELLANA; BELLEZA ALOJADO
DEMAISIP; TERESITA GANDIONCO-OLEDAN; MA. VERENA KASILAG-VILLANUEVA;
MARILYN STA. ROMANA; LEONILA DE JESUS; and GUINEVERE DE LEON; AQUILINO Q.
PIMENTEL, JR.; Intervenors.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 191342
ATTY. AMADOR Z. TOLENTINO, JR., (IBP Governor-Southern Luzon), and ATTY. ROLAND B.
INTING (IBP Governor-Eastern Visayas), Petitioners,
vs.
JUDICIAL AND BAR COUNCIL (JBC), Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 191420
11. EN BANC PHILIPPINE BAR ASSOCIATION, INC., Petitioner,
G.R. No. 191002 April 20, 2010 vs.
JUDICIAL AND BAR COUNCIL and HER EXCELLENCY GLORIA MACAPAGAL-ARROYO,
Respondents.
ARTURO M. DE CASTRO, Petitioner,
RESOLUTION
BERSAMIN, J.:
vs.
On March 17, 2010, the Court promulgated its decision, holding:
WHEREFORE, the Court:
JUDICIAL AND BAR COUNCIL (JBC) and PRESIDENT GLORIA MACAPAGAL - 1. Dismisses the petitions for certiorari and mandamus in G.R. No. 191002 and G.R. No. 191149,
ARROYO, Respondents. and the petition for mandamus in G.R. No. 191057 for being premature;
x - - - - - - - - - - - - - - - - - - - - - - -x 2. Dismisses the petitions for prohibition in G.R. No. 191032 and G.R. No. 191342 for lack of
G.R. No. 191032 merit; and
JAIME N. SORIANO, Petitioner, 3. Grants the petition in A.M. No. 10-2-5-SC and, accordingly, directs the Judicial and Bar Council:
vs. (a) To resume its proceedings for the nomination of candidates to fill the vacancy to be created by
JUDICIAL AND BAR COUNCIL (JBC), Respondent. the compulsory retirement of Chief Justice Reynato S. Puno by May 17, 2010;
x - - - - - - - - - - - - - - - - - - - - - - -x (b) To prepare the short list of nominees for the position of Chief Justice;
G.R. No. 191057 (c) To submit to the incumbent President the short list of nominees for the position of Chief Justice
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), Petitioner, on or before May 17, 2010; and
vs. (d) To continue its proceedings for the nomination of candidates to fill other vacancies in the
JUDICIAL AND BAR COUNCIL (JBC), Respondent. Judiciary and submit to the President the short list of nominees corresponding thereto in
x - - - - - - - - - - - - - - - - - - - - - - -x accordance with this decision.
A.M. No. 10-2-5-SC SO ORDERED.
IN RE APPLICABILITY OF SECTION 15, ARTICLE VII OF THE CONSTITUTION TO Motions for Reconsideration
APPOINTMENTS TO THE JUDICIARY, ESTELITO P. MENDOZA, Petitioner,

151
Petitioners Jaime N. Soriano (G.R. No. 191032), Amador Z. Tolentino and Roland B. Inting (G.R.
No. 191342), and Philippine Bar Association (G.R. No. 191420), as well as intervenors Integrated
Bar of the Philippines-Davao del Sur (IBP-Davao del Sur, et al.); Christian Robert S. Lim; Peter
Irving Corvera; Bagong Alyansang Bayan and others (BAYAN, et al.); Alfonso V. Tan, Jr.; the
Women Trial Lawyers Organization of the Philippines (WTLOP); Marlou B. Ubano; Mitchell John
L. Boiser; and Walden F. Bello and Loretta Ann P. Rosales (Bello, et al.), filed their respective
motions for reconsideration. Also filing a motion for reconsideration was Senator Aquilino Q.
Pimentel, Jr., whose belated intervention was allowed.
We summarize the arguments and submissions of the various motions for reconsideration, in the
aforegiven order:
Soriano
1. The Court has not squarely ruled upon or addressed the issue of whether or not the power to
designate the Chief Justice belonged to the Supreme Court en banc.
2. The Mendoza petition should have been dismissed, because it sought a mere declaratory
judgment and did not involve a justiciable controversy.
3. All Justices of the Court should participate in the next deliberations. The mere fact that the Chief
Justice sits as ex officio head of the JBC should not prevail over the more compelling state interest
for him to participate as a Member of the Court.
Tolentino and Inting
1. A plain reading of Section 15, Article VII does not lead to an interpretation that exempts judicial
appointments from the express ban on midnight appointments.
2. In excluding the Judiciary from the ban, the Court has made distinctions and has created
exemptions when none exists.
3. The ban on midnight appointments is placed in Article VII, not in Article VIII, because it limits an
executive, not a judicial, power.
4. Resort to the deliberations of the Constitutional Commission is superfluous, and is powerless to
vary the terms of the clear prohibition.
5. The Court has given too much credit to the position taken by Justice Regalado. Thereby, the
Court has raised the Constitution to the level of a venerated text whose intent can only be divined
by its framers as to be outside the realm of understanding by the sovereign people that ratified it.
6. Valenzuela should not be reversed.
7. The petitioners, as taxpayers and lawyers, have the clear legal standing to question the illegal
composition of the JBC.
Philippine Bar Association
1. The Court’s strained interpretation of the Constitution violates the basic principle that the Court
should not formulate a rule of constitutional law broader than what is required by the precise facts
of the case.
2. Considering that Section 15, Article VII is clear and straightforward, the only duty of the Court is
to apply it. The provision expressly and clearly provides a general limitation on the appointing
power of the President in prohibiting the appointment of any person to any position in the
Government without any qualification and distinction.
3. The Court gravely erred in unilaterally ignoring the constitutional safeguard against midnight
appointments.
4. The Constitution has installed two constitutional safeguards:- the prohibition against midnight
appointments, and the creation of the JBC. It is not within the authority of the Court to prefer one
over the other, for the Court’s duty is to apply the safeguards as they are, not as the Court likes
them to be.
5. The Court has erred in failing to apply the basic principles of statutory construction in
interpreting the Constitution.
6. The Court has erred in relying heavily on the title, chapter or section headings, despite
precedents on statutory construction holding that such headings carried very little weight.
7. The Constitution has provided a general rule on midnight appointments, and the only exception
is that on temporary appointments to executive positions.
8. The Court has erred in directing the JBC to resume the proceedings for the nomination of the
candidates to fill the vacancy to be created by the compulsory retirement of Chief Justice Puno
with a view to submitting the list of nominees for Chief Justice to President Arroyo on or before
May 17, 2010. The Constitution grants the Court only the power of supervision over the JBC;
hence, the Court cannot tell the JBC what to do, how to do it, or when to do it, especially in the
absence of a real and justiciable case assailing any specific action or inaction of the JBC.
9. The Court has engaged in rendering an advisory opinion and has indulged in speculations.
10. The constitutional ban on appointments being already in effect, the Court’s directing the JBC
to comply with the decision constitutes a culpable violation of the Constitution and the commission
of an election offense.
11. The Court cannot reverse on the basis of a secondary authority a doctrine unanimously
formulated by the Court en banc.
12. The practice has been for the most senior Justice to act as Chief Justice whenever the
incumbent is indisposed. Thus, the appointment of the successor Chief Justice is not urgently
necessary.
13. The principal purpose for the ban on midnight appointments is to arrest any attempt to prolong
the outgoing President’s powers by means of proxies. The attempt of the incumbent President to
appoint the next Chief Justice is undeniably intended to perpetuate her power beyond her term of
office.
IBP-Davao del Sur, et al.
1. Its language being unambiguous, Section 15, Article VII of the Constitution applies to
appointments to the Judiciary. Hence, no cogent reason exists to warrant the reversal of the
Valenzuela pronouncement.
2. Section 16, Article VII of the Constitution provides for presidential appointments to the
Constitutional Commissions and the JBC with the consent of the Commission on Appointments.
Its phrase "other officers whose appointments are vested in him in this Constitution" is enough
proof that the limitation on the appointing power of the President extends to appointments to the
Judiciary. Thus, Section 14, Section 15, and Section 16 of Article VII apply to all presidential
appointments in the Executive and Judicial Branches of the Government.
3. There is no evidence that the framers of the Constitution abhorred the idea of an Acting Chief
Justice in all cases.
Lim
1. There is no justiciable controversy that warrants the Court’s exercise of judicial review.
2. The election ban under Section 15, Article VII applies to appointments to fill a vacancy in the
Court and to other appointments to the Judiciary.
3. The creation of the JBC does not justify the removal of the safeguard under Section 15 of
Article VII against midnight appointments in the Judiciary.
Corvera
1. The Court’s exclusion of appointments to the Judiciary from the Constitutional ban on midnight
appointments is based on an interpretation beyond the plain and unequivocal language of the
Constitution.
2. The intent of the ban on midnight appointments is to cover appointments in both the Executive
and Judicial Departments. The application of the principle of verba legis (ordinary meaning) would
have obviated dwelling on the organization and arrangement of the provisions of the Constitution.
If there is any ambiguity in Section 15, Article VII, the intent behind the provision, which is to
prevent political partisanship in all branches of the Government, should have controlled.
3. A plain reading is preferred to a contorted and strained interpretation based on
compartmentalization and physical arrangement, especially considering that the Constitution must
be interpreted as a whole.
4. Resort to the deliberations or to the personal interpretation of the framers of the Constitution
should yield to the plain and unequivocal language of the Constitution.
5. There is no sufficient reason for reversing Valenzuela, a ruling that is reasonable and in accord
with the Constitution.
BAYAN, et al.
1. The Court erred in granting the petition in A.M. No. 10-2-5-SC, because the petition did not
present a justiciable controversy. The issues it raised were not yet ripe for adjudication,
considering that the office of the Chief Justice was not yet vacant and that the JBC itself has yet to
decide whether or not to submit a list of nominees to the President.
2. The collective wisdom of Valenzuela Court is more important and compelling than the opinion of
Justice Regalado.
3. In ruling that Section 15, Article VII is in conflict with Section 4(1), Article VIII, the Court has
violated the principle of ut magis valeat quam pereat (which mandates that the Constitution should
152
be interpreted as a whole, such that any conflicting provisions are to be harmonized as to fully
give effect to all). There is no conflict between the provisions; they complement each other.
4. The form and structure of the Constitution’s titles, chapters, sections, and draftsmanship carry
little weight in statutory construction. The clear and plain language of Section 15, Article VII
precludes interpretation.
Tan, Jr.
1. The factual antecedents do not present an actual case or controversy. The clash of legal rights
and interests in the present case are merely anticipated. Even if it is anticipated with certainty, no
actual vacancy in the position of the Chief Justice has yet occurred.
2. The ruling that Section 15, Article VII does not apply to a vacancy in the Court and the Judiciary
runs in conflict with long standing principles and doctrines of statutory construction. The provision
admits only one exception, temporary appointments in the Executive Department. Thus, the Court
should not distinguish, because the law itself makes no distinction.
3. Valenzuela was erroneously reversed. The framers of the Constitution clearly intended the ban
on midnight appointments to cover the members of the Judiciary. Hence, giving more weight to the
opinion of Justice Regalado to reverse the en banc decision in Valenzuela was unwarranted.
4. Section 15, Article VII is not incompatible with Section 4(1), Article VIII. The 90-day mandate to
fill any vacancy lasts until August 15, 2010, or a month and a half after the end of the ban. The
next President has roughly the same time of 45 days as the incumbent President (i.e., 44 days)
within which to scrutinize and study the qualifications of the next Chief Justice. Thus, the JBC has
more than enough opportunity to examine the nominees without haste and political
uncertainty.1avvphi1
5. When the constitutional ban is in place, the 90-day period under Section 4(1), Article VIII is
suspended.
6. There is no basis to direct the JBC to submit the list of nominees on or before May 17, 2010.
The directive to the JBC sanctions a culpable violation of the Constitution and constitutes an
election offense.
7. There is no pressing necessity for the appointment of a Chief Justice, because the Court sits en
banc, even when it acts as the sole judge of all contests relative to the election, returns and
qualifications of the President and Vice-President. Fourteen other Members of the Court can
validly comprise the Presidential Electoral Tribunal.
WTLOP
1. The Court exceeded its jurisdiction in ordering the JBC to submit the list of nominees for Chief
Justice to the President on or before May 17, 2010, and to continue its proceedings for the
nomination of the candidates, because it granted a relief not prayed for; imposed on the JBC a
deadline not provided by law or the Constitution; exercised control instead of mere supervision
over the JBC; and lacked sufficient votes to reverse Valenzuela.
2. In interpreting Section 15, Article VII, the Court has ignored the basic principle of statutory
construction to the effect that the literal meaning of the law must be applied when it is clear and
unambiguous; and that we should not distinguish where the law does not distinguish.
3. There is no urgency to appoint the next Chief Justice, considering that the Judiciary Act of 1948
already provides that the power and duties of the office devolve on the most senior Associate
Justice in case of a vacancy in the office of the Chief Justice.
Ubano
1. The language of Section 15, Article VII, being clear and unequivocal, needs no interpretation
2. The Constitution must be construed in its entirety, not by resort to the organization and
arrangement of its provisions.
3. The opinion of Justice Regalado is irrelevant, because Section 15, Article VII and the pertinent
records of the Constitutional Commission are clear and unambiguous.
4. The Court has erred in ordering the JBC to submit the list of nominees to the President by May
17, 2010 at the latest, because no specific law requires the JBC to submit the list of nominees
even before the vacancy has occurred.
Boiser
1. Under Section 15, Article VII, the only exemption from the ban on midnight appointments is the
temporary appointment to an executive position. The limitation is in keeping with the clear intent of
the framers of the Constitution to place a restriction on the power of the outgoing Chief Executive
to make appointments.
2. To exempt the appointment of the next Chief Justice from the ban on midnight appointments
makes the appointee beholden to the outgoing Chief Executive, and compromises the
independence of the Chief Justice by having the outgoing President be continually influential.
3. The Court’s reversal of Valenzuela without stating the sufficient reason violates the principle of
stare decisis.
Bello, et al.
1. Section 15, Article VII does not distinguish as to the type of appointments an outgoing President
is prohibited from making within the prescribed period. Plain textual reading and the records of the
Constitutional Commission support the view that the ban on midnight appointments extends to
judicial appointments.
2. Supervision of the JBC by the Court involves oversight. The subordinate subject to oversight
must first act not in accord with prescribed rules before the act can be redone to conform to the
prescribed rules.
3. The Court erred in granting the petition in A.M. No. 10-2-5-SC, because the petition did not
present a justiciable controversy.
Pimentel
1. Any constitutional interpretative changes must be reasonable, rational, and conformable to the
general intent of the Constitution as a limitation to the powers of Government and as a bastion for
the protection of the rights of the people. Thus, in harmonizing seemingly conflicting provisions of
the Constitution, the interpretation should always be one that protects the citizenry from an ever
expanding grant of authority to its representatives.
2. The decision expands the constitutional powers of the President in a manner totally repugnant
to republican constitutional democracy, and is tantamount to a judicial amendment of the
Constitution without proper authority.
Comments
The Office of the Solicitor General (OSG) and the JBC separately represent in their respective
comments, thus:
OSG
1. The JBC may be compelled to submit to the President a short list of its nominees for the
position of Chief Justice.
2. The incumbent President has the power to appoint the next Chief Justice.
3. Section 15, Article VII does not apply to the Judiciary.
4. The principles of constitutional construction favor the exemption of the Judiciary from the ban
on midnight appointments.1awph!1
5. The Court has the duty to consider and resolve all issues raised by the parties as well as other
related matters.
JBC
1. The consolidated petitions should have been dismissed for prematurity, because the JBC has
not yet decided at the time the petitions were filed whether the incumbent President has the power
to appoint the new Chief Justice, and because the JBC, having yet to interview the candidates,
has not submitted a short list to the President.
2. The statement in the decision that there is a doubt on whether a JBC short list is necessary for
the President to appoint a Chief Justice should be struck down as bereft of constitutional and legal
basis. The statement undermines the independence of the JBC.
3. The JBC will abide by the final decision of the Court, but in accord with its constitutional
mandate and its implementing rules and regulations.
For his part, petitioner Estelito P. Mendoza (A.M. No. 10-2-5-SC) submits his comment even if the
OSG and the JBC were the only ones the Court has required to do so. He states that the motions
for reconsideration were directed at the administrative matter he initiated and which the Court
resolved. His comment asserts:
1. The grounds of the motions for reconsideration were already resolved by the decision and the
separate opinion.
2. The administrative matter he brought invoked the Court’s power of supervision over the JBC as
provided by Section 8(1), Article VIII of the Constitution, as distinguished from the Court’s
adjudicatory power under Section 1, Article VIII. In the former, the requisites for judicial review are
not required, which was why Valenzuela was docketed as an administrative matter. Considering
that the JBC itself has yet to take a position on when to submit the short list to the proper
153
appointing authority, it has effectively solicited the exercise by the Court of its power of supervision
over the JBC.
3. To apply Section 15, Article VII to Section 4(1) and Section 9, Article VIII is to amend the
Constitution.
4. The portions of the deliberations of the Constitutional Commission quoted in the dissent of
Justice Carpio Morales, as well as in some of the motions for reconsideration do not refer to either
Section 15, Article VII or Section 4(1), Article VIII, but to Section 13, Article VII (on nepotism).
Ruling
We deny the motions for reconsideration for lack of merit, for all the matters being thereby raised
and argued, not being new, have all been resolved by the decision of March 17, 2010.
Nonetheless, the Court opts to dwell on some matters only for the purpose of clarification and
emphasis.
First: Most of the movants contend that the principle of stare decisis is controlling, and accordingly
insist that the Court has erred in disobeying or abandoning Valenzuela.1
The contention has no basis.
Stare decisis derives its name from the Latin maxim stare decisis et non quieta movere, i.e., to
adhere to precedent and not to unsettle things that are settled. It simply means that a principle
underlying the decision in one case is deemed of imperative authority, controlling the decisions of
like cases in the same court and in lower courts within the same jurisdiction, unless and until the
decision in question is reversed or overruled by a court of competent authority. The decisions
relied upon as precedents are commonly those of appellate courts, because the decisions of the
trial courts may be appealed to higher courts and for that reason are probably not the best
evidence of the rules of law laid down. 2
Judicial decisions assume the same authority as a statute itself and, until authoritatively
abandoned, necessarily become, to the extent that they are applicable, the criteria that must
control the actuations, not only of those called upon to abide by them, but also of those duty-
bound to enforce obedience to them.3 In a hierarchical judicial system like ours, the decisions of
the higher courts bind the lower courts, but the courts of co-ordinate authority do not bind each
other. The one highest court does not bind itself, being invested with the innate authority to rule
according to its best lights.4
The Court, as the highest court of the land, may be guided but is not controlled by precedent.
Thus, the Court, especially with a new membership, is not obliged to follow blindly a particular
decision that it determines, after re-examination, to call for a rectification.5 The adherence to
precedents is strict and rigid in a common-law setting like the United Kingdom, where judges
make law as binding as an Act of Parliament.6 But ours is not a common-law system; hence,
judicial precedents are not always strictly and rigidly followed. A judicial pronouncement in an
earlier decision may be followed as a precedent in a subsequent case only when its reasoning and
justification are relevant, and the court in the latter case accepts such reasoning and justification
to be applicable to the case. The application of the precedent is for the sake of convenience and
stability.
For the intervenors to insist that Valenzuela ought not to be disobeyed, or abandoned, or
reversed, and that its wisdom should guide, if not control, the Court in this case is, therefore,
devoid of rationality and foundation. They seem to conveniently forget that the Constitution itself
recognizes the innate authority of the Court en banc to modify or reverse a doctrine or principle of
law laid down in any decision rendered en banc or in division.7
Second: Some intervenors are grossly misleading the public by their insistence that the
Constitutional Commission extended to the Judiciary the ban on presidential appointments during
the period stated in Section 15, Article VII.
The deliberations that the dissent of Justice Carpio Morales quoted from the records of the
Constitutional Commission did not concern either Section 15, Article VII or Section 4(1), Article
VIII, but only Section 13, Article VII, a provision on nepotism. The records of the Constitutional
Commission show that Commissioner Hilario G. Davide, Jr. had proposed to include judges and
justices related to the President within the fourth civil degree of consanguinity or affinity among the
persons whom the President might not appoint during his or her tenure. In the end, however,
Commissioner Davide, Jr. withdrew the proposal to include the Judiciary in Section 13, Article VII
"(t)o avoid any further complication,"8 such that the final version of the second paragraph of
Section 13, Article VII even completely omits any reference to the Judiciary, to wit:
Section 13. xxx
The spouse and relatives by consanguinity or affinity within the fourth civil degree of the President
shall not during his tenure be appointed as Members of the Constitutional Commissions, or the
Office of the Ombudsman, or as Secretaries, Undersecretaries, chairmen or heads of bureaus or
offices, including government-owned or controlled corporations and their subsidiaries.
Last: The movants take the majority to task for holding that Section 15, Article VII does not apply
to appointments in the Judiciary. They aver that the Court either ignored or refused to apply many
principles of statutory construction.
The movants gravely err in their posture, and are themselves apparently contravening their
avowed reliance on the principles of statutory construction.
For one, the movants, disregarding the absence from Section 15, Article VII of the express
extension of the ban on appointments to the Judiciary, insist that the ban applied to the Judiciary
under the principle of verba legis. That is self-contradiction at its worst.
Another instance is the movants’ unhesitating willingness to read into Section 4(1) and Section 9,
both of Article VIII, the express applicability of the ban under Section 15, Article VII during the
period provided therein, despite the silence of said provisions thereon. Yet, construction cannot
supply the omission, for doing so would generally constitute an encroachment upon the field of the
Constitutional Commission. Rather, Section 4(1) and Section 9 should be left as they are, given
that their meaning is clear and explicit, and no words can be interpolated in them.9 Interpolation of
words is unnecessary, because the law is more than likely to fail to express the legislative intent
with the interpolation. In other words, the addition of new words may alter the thought intended to
be conveyed. And, even where the meaning of the law is clear and sensible, either with or without
the omitted word or words, interpolation is improper, because the primary source of the legislative
intent is in the language of the law itself.10
Thus, the decision of March 17, 2010 has fittingly observed:
Had the framers intended to extend the prohibition contained in Section 15, Article VII to the
appointment of Members of the Supreme Court, they could have explicitly done so. They could not
have ignored the meticulous ordering of the provisions. They would have easily and surely written
the prohibition made explicit in Section 15, Article VII as being equally applicable to the
appointment of Members of the Supreme Court in Article VIII itself, most likely in Section 4 (1),
Article VIII. That such specification was not done only reveals that the prohibition against the
President or Acting President making appointments within two months before the next presidential
elections and up to the end of the President’s or Acting President’s term does not refer to the
Members of the Supreme Court.
We cannot permit the meaning of the Constitution to be stretched to any unintended point in order
to suit the purposes of any quarter.
Final Word
It has been insinuated as part of the polemics attendant to the controversy we are resolving that
because all the Members of the present Court were appointed by the incumbent President, a
majority of them are now granting to her the authority to appoint the successor of the retiring Chief
Justice.
The insinuation is misguided and utterly unfair.
The Members of the Court vote on the sole basis of their conscience and the merits of the issues.
Any claim to the contrary proceeds from malice and condescension. Neither the outgoing
President nor the present Members of the Court had arranged the current situation to happen and
to evolve as it has. None of the Members of the Court could have prevented the Members
composing the Court when she assumed the Presidency about a decade ago from retiring during
her prolonged term and tenure, for their retirements were mandatory. Yet, she is now left with an
imperative duty under the Constitution to fill up the vacancies created by such inexorable
retirements within 90 days from their occurrence. Her official duty she must comply with. So must
we ours who are tasked by the Constitution to settle the controversy.
ACCORDINGLY, the motions for reconsideration are denied with finality.
SO ORDERED.
LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
ANTONIO T. CARPIO
154
Associate Justice xxx
RENATO C. CORONA (3) Cases or matters heard by a division shall be decided or resolved with the concurrence of a
Associate Justice majority of the Members who actually took part in the deliberations on the issues in the case and
CONCHITA CARPIO MORALES voted thereon, and in no case, without the concurrence of at least three of such Members. When
Associate Justice the required number is not obtained, the case shall be decided en banc; Provided, that no doctrine
PRESBITERO J. VELASCO, JR. or principle of law laid down by the court in a decision rendered en banc or in division may be
Associate Justice modified or reversed except by the court sitting en banc.
ANTONIO EDUARDO B. NACHURA 8 Record of the 1986 Constitutional Commission, Vol. 2, July 31, 1986, RCC No. 44. pp. 542-543.
Associate Justice 9 Smith v. State, 66 Md. 215, 7 Atl. 49.
TERESITA J. LEONARDO-DE CASTRO 10 State ex rel Everding v. Simon, 20 Ore. 365, 26 Pac. 170.
Associate Justice
ARTURO D. BRION The Lawphil Project - Arellano Law Foundation
Associate Justice
DIOSDADO M. PERALTA
Associate Justice DISSENTING OPINION
MARIANO C. DEL CASTILLO CARPIO MORALES, J.:
Associate Justice No compelling reason exists for the Court to deny a reconsideration of the assailed Decision. The
ROBERTO A. ABAD various motions for reconsideration raise hollering substantial arguments and legitimately nagging
Associate Justice questions which the Court must meet head on.
MARTIN S. VILLARAMA, JR. If this Court is to deserve or preserve its revered place not just in the hierarchy but also in history,
Associate Justice passion for reason demands the issuance of an extended and extensive resolution that confronts
JOSE PORTUGAL PEREZ the ramifications and repercussions of its assailed Decision. Only then can it offer an illumination
Associate Justice that any self-respecting student of the law clamors and any adherent of the law deserves.
JOSE CATRAL MENDOZA Otherwise, it takes the risk of reeking of an objectionable air of supreme judicial arrogance.
Associate Justice It is thus imperative to settle the following issues and concerns:
CERTIFICATION Whether the incumbent President is constitutionally proscribed from appointing the successor of
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in Chief Justice Reynato S. Puno upon his retirement on May 17, 2010 until the ban ends at 12:00
the above Resolution had been reached in consultation before the case was assigned to the writer noon of June 30, 2010
of the opinion of the Court. 1. In interpreting the subject constitutional provisions, the Decision disregarded established
REYNATO S. PUNO canons of statutory construction. Without explaining the inapplicability of each of the relevant
Chief Justice rules, the Decision immediately placed premium on the arrangement and ordering of provisions,
one of the weakest tools of construction, to arrive at its conclusion.
Footnotes 2. In reversing Valenzuela, the Decision held that the Valenzuela dictum did not firmly rest on
1 In Re Appointments Dated March 30, 1998 of Hon. Mateo A. Valenzuela and Hon. Placido B. ConCom deliberations, yet it did not offer to cite a material ConCom deliberation. It instead opted
Vallarta as Judges of the Regional Trial Court of Branch 62, Bago City and of Branch 24, to rely on the memory of Justice Florenz Regalado which incidentally mentioned only the "Court of
Cabanatuan City, respectively, A.M. No. 98-5-01-SC, November 9, 1998, 298 SCRA 408. Appeals." The Decision’s conclusion must rest on the strength of its own favorable Concom
2 Price & Bitner, Effective Legal Research, Little, Brown & Co., New York (1962), § 9.7. deliberation, none of which to date has been cited.
3 Caltex (Phil.), Inc. v. Palomar, No. L-19650, September 29, 1966, 18 SCRA 247 3. Instead of choosing which constitutional provision carves out an exception from the other
4 E.g., Dias, Jurisprudence, Butterworths, London, 1985, Fifth Edition, p. 127. provision, the most legally feasible interpretation (in the limited cases of temporary physical or
5 Limketkai Sons Milling, Inc. v. Court of Appeals, G.R. No. 118509, September 5, 1996, 261 legal impossibility of compliance, as expounded in my Dissenting Opinion) is to consider the
SCRA 464. appointments ban or other substantial obstacle as a temporary impossibility which excuses or
6 See Calabresi, A Common Law for the Age of Statutes, Harvard University Press, p. 4 (1982) releases the constitutional obligation of the Office of the President for the duration of the ban or
and endnote 12 of the page, which essentially recounts that the strict application of the doctrine of obstacle.
stare decisis is true only in a common-law jurisdiction like England (citing Wise, The Doctrine of In view of the temporary nature of the circumstance causing the impossibility of performance, the
Stare Decisis, 21 Wayne Law Review, 1043, 1046-1047 (1975). Calabresi recalls that the English outgoing President is released from non-fulfillment of the obligation to appoint, and the duty
House of Lords decided in 1898 (London Tramways Co. v. London County Council, A.C. 375) that devolves upon the new President. The delay in the fulfillment of the obligation becomes
they could not alter precedents laid down by the House of Lords acting as the supreme court in excusable, since the law cannot exact compliance with what is impossible. The 90-day period
previous cases, but that such precedents could only be altered by an Act of Parliament, for to do within which to appoint a member of the Court is thus suspended and the period could only start or
otherwise would mean that the courts would usurp legislative function; he mentions that in 1966, resume to run when the temporary obstacle disappears (i.e., after the period of the appointments
Lord Chancellor Gardiner announced in a Practice Statement a kind of general memorandum from ban; when there is already a quorum in the JBC; or when there is already at least three
the court that while: "Their Lordships regard the use of precedent as an indispensable foundation applicants).
upon which to decide what is the law," they "nevertheless recognize that too rigid adherence to Whether the Judicial and Bar Council is obliged to submit to the President the shortlist of
precedent may lead to injustice in a particular case and also unduly restrict the proper nominees for the position of Chief Justice (or Justice of this Court) on or before the occurrence of
development of the law. They propose, therefore, to modify their present practice and, while the vacancy.
treating former decisions of this House as normally binding, to depart from a previous decision 1. The ruling in the Decision that obligates the JBC to submit the shortlist to the President on or
when it appears right to do so." (Calabresi cites Leach, Revisionism in the House of Lords: The before the occurrence of the vacancy in the Court runs counter to the Concom deliberations which
Bastion of Rigid Stare Decisis Falls, 80 Harvard Law Review, 797 (1967). explain that the 90-day period is allotted for both the nomination by the JBC and the appointment
7 Section 4 (2), Article VIII, provides: by the President. In the move to increase the period to 90 days, Commissioner Romulo stated that

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"[t]he sense of the Committee is that 60 days is awfully short and that the [Judicial and Bar]
Council, as well as the President, may have difficulties with that."
2. To require the JBC to submit to the President a shortlist of nominees on or before the
occurrence of vacancy in the Court leads to preposterous results. It bears reiterating that the
requirement is absurd when, inter alia, the vacancy is occasioned by the death of a member of the
Court, in which case the JBC could never anticipate the death of a Justice, and could never submit
a list to the President on or before the occurrence of vacancy.
3. The express allowance in the Constitution of a 90-day period of vacancy in the membership of
the Court rebuts any public policy argument on avoiding a vacuum of even a single day without a
duly appointed Chief Justice. Moreover, as pointed out in my Dissenting Opinion, the practice of
having an acting Chief Justice in the interregnum is provided for by law, confirmed by tradition,
and settled by jurisprudence to be an internal matter.
The Resolution of the majority, in denying the present Motions for Reconsideration, failed to rebut
the foregoing crucial matters.
I, therefore, maintain my dissent and vote to GRANT the Motions for Reconsideration of the
Decision of March 17, 2010 insofar as it holds that the incumbent President is not constitutionally
proscribed from appointing the successor of Chief Justice Reynato S. Puno upon his retirement on
May 17, 2010 until the ban ends at 12:00 noon of June 30, 2010 and that the Judicial and Bar
Council is obliged to submit to the President the shortlist of nominees for the position of Chief
Justice on or before May 17, 2010.
CONCHITA CARPIO MORALES
Associate Justice
CONCURRING AND DISSENTING OPINION
BRION, J.:
The Motions for Reconsideration
After sifting through the motions for reconsideration, I found that the arguments are largely the
same arguments that we have passed upon, in one form or another, in the various petitions.
Essentially, the issues boil down to justiciability; the conflict of constitutional provisions; the merits
of the cited constitutional deliberations; and the status and effect of the Valenzuela1 ruling. Even
the motion for reconsideration of the Philippine Bar Association (G.R. No. 191420), whose petition
I did not expressly touch upon in my Separate Opinion, basically dwells on these issues.
I have addressed most, if not all, of these issues and I submit my Separate Opinion2 as my basic
response to the motions for reconsideration, supplemented by the discussions below.
As I reflected in my Separate Opinion (which three other Justices joined),3 the election
appointment ban under Article VII, Section 15 of the Constitution should not apply to the
appointment of Members of the Supreme Court whose period for appointment is separately
provided for under Article VIII, Section 4(1). I shared this conclusion with the Court’s Decision
although our reasons differed on some points.
I diverged fully from the Decision on the question of whether we should maintain or reverse our
ruling in Valenzuela. I maintained that it is still good law; no reason exists to touch the ruling as its
main focus – the application of the election ban on the appointment of lower court judges under
Article VIII, Section 9 of the Constitution – is not even an issue in the present case and was
discussed only because the petitions incorrectly cited the ruling as authority on the issue of the
Chief Justice’s appointment. The Decision proposed to reverse Valenzuela but only secured the
support of five (5) votes, while my Separate Opinion in support of Valenzuela had four (4) votes.
Thus, on the whole, the Decision did not prevail in reversing Valenzuela, as it only had five (5)
votes in a field of 12 participating Members of the Court. Valenzuela should therefore remain, as
of the filing of this Opinion, as a valid precedent.
Acting on the present motions for reconsideration, I join the majority in denying the motions with
respect to the Chief Justice issue, although we differ in some respects on the reasons supporting
the denial. I dissent from the conclusion that the Valenzuela ruling should be reversed. My
divergence from the majority’s reasons and conclusions compels me to write this Concurring and
Dissenting Opinion.
The Basic Requisites / Justiciability
One marked difference between the Decision and my Separate Opinion is our approach on the
basic requisites/justiciability issues. The Decision apparently glossed over this aspect of the case,
while I fully explained why the De Castro4 and Peralta5 petitions should be dismissed outright. In
my view, these petitions violated the most basic requirements of their chosen medium for review –
a petition for certiorari and mandamus under Rule 65 of the Rules of Court.
The petitions commonly failed to allege that the Judicial and Bar Council (JBC) performs judicial or
quasi-judicial functions, an allegation that the petitions could not really make, since the JBC does
not really undertake these functions and, for this reason, cannot be the subject of a petition for
certiorari; hence, the petitions should be dismissed outright. They likewise failed to facially show
any failure or refusal by the JBC to undertake a constitutional duty to justify the issuance of a writ
of mandamus; they invoked judicial notice that we could not give because there was, and is, no
JBC refusal to act.6 Thus, the mandamus aspects of these petitions should have also been
dismissed outright. The ponencia, unfortunately, failed to fully discuss these legal infirmities.
The motions for reconsideration lay major emphasis on the alleged lack of an actual case or
controversy that made the Chief Justice’s appointment a justiciable issue. They claim that the
Court cannot exercise the power of judicial review where there is no clash of legal rights and
interests or where this clash is merely anticipated, although the anticipated event shall come with
certainty.7
What the movants apparently forgot, focused as they were on their respective petitions, is that the
present case is not a single-petition case that rises or falls on the strength of that single petition.
The present case involves various petitions and interventions,8 not necessarily pulling towards the
same direction, although each one is focused on the issue of whether the election appointment
ban under Article VII, Section 15 of the Constitution should apply to the appointment of the next
Chief Justice of the Supreme Court.
Among the petitions filed were those of Tolentino (G.R. No. 191342), Soriano (G.R. No. 191032)
and Mendoza (A.M. No. 10-2-5-SC). The first two are petitions for prohibition under Section 2 of
Rule 65 of the Rules of Court.9 While they commonly share this medium of review, they differ in
their supporting reasons. The Mendoza petition, on the other hand, is totally different – it is a
petition presented as an administrative matter (A.M.) in the manner that the Valenzuela case was
an A.M. case. As I pointed out in the Separate Opinion, the Court uses the A.M. docket
designation on matters relating to its exercise of supervision over all courts and their personnel.10
I failed to note then, but I make of record now, that court rules and regulations – the outputs in the
Court’s rulemaking function – are also docketed as A.M. cases.
That an actual case or controversy involving a clash of rights and interests exists is immediately
and patently obvious in the Tolentino and Soriano petitions. At the time the petitions were filed, the
JBC had started its six-phase nomination process that would culminate in the submission of a list
of nominees to the President of the Philippines for appointive action. Tolentino and Soriano –
lawyers and citizens with interest in the strict observance of the election ban – sought to prohibit
the JBC from continuing with this process. The JBC had started to act, without any prodding from
the Court, because of its duty to start the nomination process but was hampered by the petitions
filed and the legal questions raised that only the Supreme Court can settle with finality.11 Thus, a
clash of interests based on law existed between the petitioners and the JBC. To state the obvious,
a decision in favor of Tolentino or Soriano would result in a writ of prohibition that would direct the
JBC not to proceed with the nomination process.
The Mendoza petition cited the effect of a complete election ban on judicial appointments (in view
of the already high level of vacancies and the backlog of cases) as basis, and submitted the
question as an administrative matter that the Court, in the exercise of its supervisory authority over
the Judiciary and the JBC itself, should act upon. At the same time, it cited the "public discourse
and controversy" now taking place because of the application of the election ban on the
appointment of the Chief Justice, pointing in this regard to the very same reasons mentioned in
Valenzuela about the need to resolve the issue and avoid the recurrence of conflict between the
Executive and the Judiciary, and the need to "avoid polemics concerning the matter."12
I recognized in the Separate Opinion that, unlike in Valenzuela where an outright defiance of the
election ban took place, no such obvious triggering event transpired in the Mendoza petition.13
Rather, the Mendoza petition looked to the supervisory power of the Court over judicial personnel
and over the JBC as basis to secure a resolution of the election ban issue. The JBC, at that time,
had indicated its intent to look up to the Court’s supervisory power and role as the final interpreter
of the Constitution to guide it in responding to the challenges it confronts.14 To me, this was "a
point no less critical, from the point of view of supervision, than the appointment of the two judges
during the election ban period in Valenzuela."15
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In making this conclusion, I pointed out in my Separate Opinion the unavoidable surrounding
realities evident from the confluence of events, namely: (1) an election to be held on May 10,
2010; (2) the retirement of the Chief Justice on May 17, 2010; (3) the lapse of the terms of the
elective officials from the President to the congressmen on June 30, 2010; (4) the delay before the
Congress can organize and send its JBC representatives; and (5) the expiration of the term of a
non-elective JBC member in July 2010.16 All these – juxtaposed with the Court’s supervision over
the JBC, the latter’s need for guidance, and the existence of an actual controversy on the same
issues bedeviling the JBC – in my view, were sufficient to save the Mendoza petition from being a
mere request for opinion or a petition for declaratory relief that falls under the jurisdiction of the
lower court. This recognition is beyond the level of what this Court can do in handling a moot and
academic case – usually, one that no longer presents a judiciable controversy but one that can still
be ruled upon at the discretion of the court when the constitutional issue is of paramount public
interest and controlling principles are needed to guide the bench, the bar and the public.17
To be sure, this approach in recognizing when a petition is actionable is novel. An overriding
reason for this approach can be traced to the nature of the petition, as it rests on the Court’s
supervisory authority and relates to the exercise of the Court’s administrative rather than its
judicial functions (other than these two functions, the Court also has its rulemaking function under
Article VIII, Section 5(5) of the Constitution). Strictly speaking, the Mendoza petition calls for
directions from the Court in the exercise of its power of supervision over the JBC,18 not on the
basis of the power of judicial review.19 In this sense, it does not need the actual clash of interests
of the type that a judicial adjudication requires. All that must be shown is the active need for
supervision to justify the Court’s intervention as supervising authority.
Under these circumstances, the Court’s recognition of the Mendoza petition was not an undue
stretch of its constitutional powers. If the recognition is unusual at all, it is so only because of its
novelty; to my knowledge, this is the first time ever in Philippine jurisprudence that the supervisory
authority of the Court over an attached agency has been highlighted in this manner. Novelty, per
se, however, is not a ground for objection nor a mark of infirmity for as long as the novel move is
founded in law. In this case, as in the case of the writ of amparo and habeas data that were then
novel and avowedly activist in character, sufficient legal basis exists to actively invoke the Court’s
supervisory authority – granted under the Constitution, no less – as basis for action.
To partly quote the wording of the Constitution, Article VIII, Section 8(1) and (5) provide that "A
Judicial and Bar Council is hereby created under the supervision of the Supreme Court… It may
exercise such other functions and duties as the Supreme Court may assign to it." Supervision, as
a legal concept, more often than not, is defined in relation with the concept of control.20 In Social
Justice Society v. Atienza,21 we defined "supervision" as follows:
[Supervision] means overseeing or the power or authority of an officer to see that subordinate
officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such
action or step as prescribed by law to make them perform their duties. Control, on the other hand,
means the power of an officer to alter or modify or nullify or set aside what a subordinate officer
ha[s] done in the performance of his duties and to substitute the judgment of the former for that of
the latter.
Under this definition, the Court cannot dictate on the JBC the results of its assigned task, i.e., who
to recommend or what standards to use to determine who to recommend. It cannot even direct the
JBC on how and when to do its duty, but it can, under its power of supervision, direct the JBC to
"take such action or step as prescribed by law to make them perform their duties," if the duties are
not being performed because of JBC’s fault or inaction, or because of extraneous factors affecting
performance. Note in this regard that, constitutionally, the Court can also assign the JBC other
functions and duties – a power that suggests authority beyond what is purely supervisory.
Where the JBC itself is at a loss on how to proceed in light of disputed constitutional provisions
that require interpretation,22 the Court is not legally out of line – as the final authority on the
interpretation of the Constitution and as the entity constitutionally-tasked to supervise the JBC – in
exercising its oversight function by clarifying the interpretation of the disputed constitutional
provision to guide the JBC. In doing this, the Court is not simply rendering a general legal
advisory; it is providing concrete and specific legal guidance to the JBC in the exercise of its
supervisory authority, after the latter has asked for assistance in this regard. That the Court does
this while concretely resolving actual controversies (the Tolentino and Soriano petitions) on the
same issue immeasurably strengthens the intrinsic correctness of the Court’s action.
It may be asked: why does the Court have to recognize the Mendoza petition when it can resolve
the conflict between Article VII, Section 15 and Article VIII, Section 4(1) through the Tolentino and
Soriano petitions?
The answer is fairly simple and can be read between the lines of the above explanation on the
relationship between the Court and the JBC. First, administrative is different from judicial function
and providing guidance to the JBC can only be appropriate in the discharge of the Court’s
administrative function. Second, the resolution of the Tolentino and Soriano petitions will lead to
rulings directly related to the underlying facts of these petitions, without clear guidelines to the JBC
on the proper parameters to observe vis-à-vis the constitutional dispute along the lines the JBC
needs. In fact, concrete guidelines addressed to the JBC in the resolution of the Tolentino/Soriano
petitions may even lead to accusations that the Court’s resolution is broader than is required by
the facts of the petitions. The Mendoza petition, because it pertains directly to the performance of
the JBC’s duty and the Court’s supervisory authority, allows the issuance of precise guidelines
that will enable the JBC to fully and seasonably comply with its constitutional mandate.
I hasten to add that the JBC’s constitutional task is not as simple as some people think it to be.
The process of preparing and submitting a list of nominees is an arduous and time-consuming
task that cannot be done overnight. It is a six-step process lined with standards requiring the JBC
to attract the best available candidates, to examine and investigate them, to exhibit transparency
in all its actions while ensuring that these actions conform to constitutional and statutory standards
(such as the election ban on appointments), to submit the required list of nominees on time, and to
ensure as well that all these acts are politically neutral. On the time element, the JBC list for the
Supreme Court has to be submitted on or before the vacancy occurs given the 90-day deadline
that the appointing President is given in making the appointment. The list will be submitted, not to
the President as an outgoing President, nor to the election winner as an incoming President, but to
the President of the Philippines whoever he or she may be. If the incumbent President does not
act on the JBC list within the time left in her term, the same list shall be available to the new
President for him to act upon. In all these, the Supreme Court bears the burden of overseeing that
the JBC’s duty is done, unerringly and with utmost dispatch; the Court cannot undertake this
supervision in a manner consistent with the Constitution’s expectation from the JBC unless it
adopts a pro-active stance within the limits of its supervisory authority.
The Disputed Provisions
The movants present their arguments on the main issue at several levels. Some argue that the
disputed constitutional provisions – Article VII, Section 15 and Article VIII, Section 4(1) – are clear
and speak for themselves on what the Constitution covers in banning appointments during the
election period.23 One even posits that there is no conflict because both provisions can be given
effect without one detracting against the full effectiveness of the other,24 although the effect is to
deny the sitting President the option to appoint in favor of a deferment for the incoming President’s
action. Still others, repeating their original arguments, appeal to the principles of interpretation and
latin maxims to prove their point.25
In my discussions in the Separate Opinion, I stated upfront my views on how the disputed
provisions interact with each other. Read singly and in isolation, they appear clear (this reading
applies the "plain meaning rule" that Tolentino advocates in his motion for reconsideration, as
explained below). Arrayed side by side with each other and considered in relation with the other
provisions of the Constitution, particularly its structure and underlying intents, the conflict however
becomes obvious and unavoidable.
Section 15 on its face disallows any appointment in clear negative terms ("shall not make") without
specifying the appointments covered by the prohibition.26 From this literal and isolated reading
springs the argument that no exception is provided (except that found in Section 15 itself) so that
even the Judiciary is covered by the ban on appointments.
On the other hand, Section 4(1) is likewise very clear and categorical in its terms: any vacancy in
the Court shall be filled within 90 days from its occurrence.27 In the way of Section 15, Section
4(1) is also clear and categorical and provides no exception; the appointment refers solely to the
Members of the Supreme Court and does not mention any period that would interrupt, hold or
postpone the 90-day requirement.
From this perspective, the view that no conflict exists cannot be seriously made, unless with the
mindset that one provision controls and the other should yield. Many of the petitions in fact
advocate this kind of reading, some of them openly stating that the power of appointment should
be reserved for the incoming President.28 The question, however, is whether – from the viewpoint
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of strict law and devoid of the emotionalism and political partisanship that permeate the present
Philippine political environment – this kind of mindset can really be adopted in reading and
applying the Constitution.
In my view, this kind of mindset and the conclusion it inevitably leads to cannot be adopted; the
provisions of the Constitution cannot be read in isolation from what the whole contains. To be
exact, the Constitution must be read and understood as a whole, reconciling and harmonizing
apparently conflicting provisions so that all of them can be given full force and effect,29 unless the
Constitution itself expressly states otherwise.30
Not to be forgotten in reading and understanding the Constitution are the many established
underlying constitutional principles that we have to observe and respect if we are to be true to the
Constitution. These principles – among them the principles of checks and balances and
separation of powers – are not always expressly stated in the Constitution, but no one who
believes in and who has studied the Constitution can deny that they are there and deserve utmost
attention, respect, and even priority consideration.
In establishing the structures of government, the ideal that the Constitution seeks to achieve is
one of balance among the three great departments of government – the Executive, the Legislative
and the Judiciary, with each department undertaking its constitutionally-assigned task as a check
against the exercise of power by the others, while all three departments move forward in working
for the progress of the nation. Thus, the Legislature makes the laws and is supreme in this regard,
in the way that the Executive is supreme in enforcing and administering the law, while the
Judiciary interprets both the Constitution and the law. Any provision in each of the Articles on
these three departments31 that intrudes into the other must be closely examined if the provision
affects and upsets the desired balance.
Under the division of powers, the President as Chief Executive is given the prerogative of making
appointments, subject only to the legal qualification standards, to the checks provided by the
Legislature’s Commission on Appointments (when applicable) and by the JBC for appointments in
the Judiciary, and to the Constitution’s own limitations. Conflict comes in when the Constitution
laid down Article VII, Section 15 limiting the President’s appointing power during the election
period. This limitation of power would have been all-encompassing and would, thus, have
extended to all government positions the President can fill, had the Constitution not inserted a
provision, also on appointments, in the Article on the Judiciary with respect to appointments to the
Supreme Court. This conflict gives rise to the questions: which provision should prevail, or should
both be given effect? Or should both provisions yield to a higher concern – the need to maintain
the integrity of our elections?
A holistic reading of the Constitution – a must in constitutional interpretation – dictates as a
general rule that the tasks assigned to each department and their limitations should be given full
effect to fulfill the constitutional purposes under the check and balance principle, unless the
Constitution itself expressly indicates its preference for one task, concern or standard over the
others,32 or unless this Court, in its role as interpreter of the Constitution, has spoken on the
appropriate interpretation that should be made.33
In considering the interests of the Executive and the Judiciary, a holistic approach starts from the
premise that the constitutional scheme is to grant the President the power of appointment, subject
to the limitation provided under Article VII, Section 15. At the same time, the Judiciary is assured,
without qualifications under Article VIII, Section 4(1), of the immediate appointment of Members of
the Supreme Court, i.e., within 90 days from the occurrence of the vacancy. If both provisions
would be allowed to take effect, as I believe they should, the limitation on the appointment power
of the President under Article VII, Section 15 should itself be limited by the appointment of
Members of the Court pursuant to Article VIII, Section 4(1), so that the provision applicable to the
Judiciary can be given full effect without detriment to the President’s appointing authority. This
harmonization will result in restoring to the President the full authority to appoint Members of the
Supreme Court pursuant to the combined operation of Article VII, Section 15 and Article VIII,
Section 4(1).
Viewed in this light, there is essentially no conflict, in terms of the authority to appoint, between the
Executive and Judiciary; the President would effectively be allowed to exercise the Executive’s
traditional presidential power of appointment while respecting the Judiciary’s own prerogative. In
other words, the President retains full powers to appoint Members of the Court during the election
period, and the Judiciary is assured of a full membership within the time frame given.
Interestingly, the objection to the full application of Article VIII, Section 4(1) comes, not from the
current President, but mainly from petitioners echoing the present presidential candidates, one of
whom shall soon be the incoming President. They do not, of course, cite reasons of power and the
loss of the opportunity to appoint the Chief Justice; many of the petitioners/intervenors oppose the
full application of Article VIII, Section 4(1) based on the need to maintain the integrity of the
elections through the avoidance of a "midnight appointment."
This "integrity" reason is a given in a democracy and can hardly be opposed on the theoretical
plane, as the integrity of the elections must indeed prevail in a true democracy. The statement,
however, begs a lot of questions, among them the question of whether the appointment of a full
Court under the terms of Article VIII, Section 4(1) will adversely affect or enhance the integrity of
the elections.
In my Separate Opinion, I concluded that the appointment of a Member of the Court even during
the election period per se implies no adverse effect on the integrity of the election; a full Court is
ideal during this period in light of the Court’s unique role during elections. I maintain this view and
fully concur in this regard with the majority.
During the election period, the court is not only the interpreter of the Constitution and the election
laws; other than the Commission on Elections and the lower courts to a limited extent, the Court is
likewise the highest impartial recourse available to decisively address any problem or dispute
arising from the election. It is the leader and the highest court in the Judiciary, the only one of the
three departments of government directly unaffected by the election. The Court is likewise the
entity entrusted by the Constitution, no less, with the gravest election-related responsibilities. In
particular, it is the sole judge of all contests in the election of the President and the Vice-President,
with leadership and participation as well in the election tribunals that directly address Senate and
House of Representatives electoral disputes. With this grant of responsibilities, the Constitution
itself has spoken on the trust it reposes on the Court on election matters. This reposed trust, to my
mind, renders academic any question of whether an appointment during the election period will
adversely affect the integrity of the elections – it will not, as the maintenance of a full Court in fact
contributes to the enforcement of the constitutional scheme to foster a free and orderly election.
In reading the motions for reconsideration against the backdrop of the partisan political noise of
the coming elections, one cannot avoid hearing echoes from some of the arguments that the
objection is related, more than anything else, to their lack of trust in an appointment to be made by
the incumbent President who will soon be bowing out of office. They label the incumbent
President’s act as a "midnight appointment" – a term that has acquired a pejorative meaning in
contemporary society.
As I intimated in my Separate Opinion, the imputation of distrust can be made against any
appointing authority, whether outgoing or incoming. The incoming President himself will be before
this Court if an election contest arises; any President, past or future, would also naturally wish
favorable outcomes in legal problems that the Court would resolve. These possibilities and the
potential for continuing influence in the Court, however, cannot be active considerations in
resolving the election ban issue as they are, in their present form and presentation, all speculative.
If past record is to be the measure, the record of past Chief Justices and of this Court speaks for
itself with respect to the Justices’ relationship with, and deferral to, the appointing authority in their
decisions.
What should not be forgotten in examining the records of the Court, from the prism of problems an
electoral exercise may bring, is the Court’s unique and proven capacity to intervene and diffuse
situations that are potentially explosive for the nation. EDSA II particularly comes to mind in this
regard (although it was an event that was not rooted in election problems) as it is a perfect
example of the potential for damage to the nation that the Court can address and has addressed.
When acting in this role, a vacancy in the Court is not only a vote less, but a significant
contribution less in the Court’s deliberations and capacity for action, especially if the missing voice
is the voice of the Chief Justice.
Be it remembered that if any EDSA-type situation arises in the coming elections, it will be
compounded by the lack of leaders because of the lapse of the President’s term by June 30, 2010;
by a possible failure of succession if for some reason the election of the new leadership becomes
problematic; and by the similar absence of congressional leadership because Congress has not
yet convened to organize itself.34 In this scenario, only the Judiciary of the three great
departments of government stands unaffected by the election and should at least therefore be
complete to enable it to discharge its constitutional role to its fullest potential and capacity. To
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state the obvious, leaving the Judiciary without any permanent leader in this scenario may
immeasurably complicate the problem, as all three departments of government will then be
leaderless.
To stress what I mentioned on this point in my Separate Opinion, the absence of a Chief Justice
will make a lot of difference in the effectiveness of the Court as he or she heads the Judiciary, sits
as Chair of the JBC and of the Presidential Electoral Tribunal, presides over impeachment
proceedings, and provides the moral suasion and leadership that only the permanent mantle of
the Chief Justice can bestow. EDSA II is just one of the many lessons from the past when the
weightiest of issues were tackled and promptly resolved by the Court. Unseen by the general
public in all these was the leadership that was there to ensure that the Court would act as one, in
the spirit of harmony and stability although divergent in their individual views, as the Justices
individually make their contributions to the collegial result. To some, this leadership may only be
symbolic, as the Court has fully functioned in the past even with an incomplete membership or
under an Acting Chief Justice. But as I said before, an incomplete Court "is not a whole Supreme
Court; it will only be a Court with 14 members who would act and vote on all matters before it." To
fully recall what I have said on this matter:
The importance of the presence of one Member of the Court can and should never be
underestimated, particularly on issues that may gravely affect the nation. Many a case has been
won or lost on the basis of one vote. On an issue of the constitutionality of a law, treaty or statute,
a tie vote – which is possible in a 14 member court – means that the constitutionality is upheld.
This was our lesson in Isagani Cruz v. DENR Secretary.
More than the vote, Court deliberation is the core of the decision-making process and one voice is
less is not only a vote less but a contributed opinion, an observation, or a cautionary word less for
the Court. One voice can be a big difference if the missing voice is that of the Chief Justice.
Without meaning to demean the capability of an Acting Chief Justice, the ascendancy in the Court
of a permanent sitting Chief Justice cannot be equaled. He is the first among equals – a primus
inter pares – who sets the tone for the Court and the Judiciary, and who is looked up to on all
matters, whether administrative or judicial. To the world outside the Judiciary, he is the
personification of the Court and the whole Judiciary. And this is not surprising since, as Chief
Justice, he not only chairs the Court en banc, but chairs as well the Presidential Electoral Tribunal
that sits in judgment over election disputes affecting the President and the Vice-President. Outside
of his immediate Court duties, he sits as Chair of the Judicial and Bar Council, the Philippine
Judicial Academy and, by constitutional command, presides over the impeachment of the
President. To be sure, the Acting Chief Justice may be the ablest, but he is not the Chief Justice
without the mantle and permanent title of the Office, and even his presence as Acting Chief
Justice leaves the Court with one member less. Sadly, this member is the Chief Justice; even with
an Acting Chief Justice, the Judiciary and the Court remains headless. 35
Given these views, I see no point in re-discussing the finer points of technical interpretation and
their supporting latin maxims that I have addressed in my Separate Opinion and now feel need no
further elaboration; maxims can be found to serve a pleader’s every need and in any case are the
last interpretative tools in constitutional interpretation. Nor do I see any point in discussing
arguments based on the intent of the framers of the Constitution now cited by the parties in the
contexts that would serve their own ends. As may be evident in these discussions, other than the
texts of the disputed provisions, I prefer to examine their purposes and the consequences of their
application, understood within the context of democratic values. Past precedents are equally
invaluable for the lead, order, and stability they contribute, but only if they are in point, certain, and
still alive to current realities, while the history of provisions, including the intents behind them, are
primarily important to ascertain the purposes the provisions serve.
From these perspectives and without denigrating the framers’ historical contributions, I say that it
is the Constitution that now primarily speaks to us in this case and what we hear are its direct
words, not merely the recorded isolated debates reflecting the personal intents of the
constitutional commissioners as cited by the parties to fit their respective theories. The voice
speaking the words of the Constitution is our best guide, as these words will unalterably be there
for us to read in the context of their purposes and the nation’s needs and circumstances. This
Concurring and Dissenting Opinion hears and listens to that voice.
The Valenzuela Decision
The ponencia’s ruling reversing Valenzuela, in my view, is out of place in the present case, since
at issue here is the appointment of the Chief Justice during the period of the election ban, not the
appointment of lower court judges that Valenzuela resolved. To be perfectly clear, the conflict in
the constitutional provisions is not confined to Article VII, Section 15 and Article VIII, Section 4(1)
with respect to the appointment of Members of the Supreme Court; even before the Valenzuela
ruling, the conflict already existed between Article VII, Section 15 and Article VIII, Section 9 – the
provision on the appointment of the justices and judges of courts lower than the Supreme Court.
After this Court’s ruling in Valenzuela, no amount of hairsplitting can result in the conclusion that
Article VII, Section 15 applied the election ban over the whole Judiciary, including the Supreme
Court, as the facts and the fallo of Valenzuela plainly spoke of the objectionable appointment of
two Regional Trial Court judges. To reiterate, Valenzuela only resolved the conflict between Article
VII, Section 15 and appointments to the Judiciary under Article VIII, Section 9.
If Valenzuela did prominently figure at all in the present case, the prominence can be attributed to
the petitioners’ mistaken reading that this case is primary authority for the dictum that Article VII,
Section 15 completely bans all appointments to the Judiciary, including appointments to the
Supreme Court, during the election period up to the end of the incumbent President’s term.
In reality, this mistaken reading is an obiter dictum in Valenzuela, and hence, cannot be cited for
its primary precedential value. This legal situation still holds true as Valenzuela was not doctrinally
reversed as its proposed reversal was supported only by five (5) out of the 12 participating
Members of the Court. In other words, this ruling on how Article VII, Section 15 is to be interpreted
in relation with Article VIII, Section 9, should continue to stand unless otherwise expressly
reversed by this Court.
But separately from the mistaken use of an obiter ruling as primary authority, I believe that I
should sound the alarm bell about the Valenzuela ruling in light of a recent vacancy in the position
of Presiding Justice of the Sandiganbayan resulting from Presiding Justice Norberto Geraldez’s
death soon after we issued the decision in the present case. Reversing the Valenzuela ruling now,
in the absence of a properly filed case addressing an appointment at this time to the
Sandiganbayan or to any other vacancy in the lower courts, will be an irregular ruling of the first
magnitude by this Court, as it will effectively be a shortcut that lifts the election ban on
appointments to the lower courts without the benefit of a case whose facts and arguments would
directly confront the continued validity of the Valenzuela ruling. This is especially so after we have
placed the Court on notice that a reversal of Valenzuela is uncalled for because its ruling is not the
litigated issue in this case.
In any case, let me repeat what I stressed in my Separate Opinion about Valenzuela which rests
on the reasoning that the evils Section 15 seeks to remedy – vote buying, midnight appointments
and partisan reasons to influence the elections – exist, thus justifying an election appointment ban.
In particular, the "midnight appointment" justification, while fully applicable to the more numerous
vacancies at the lower echelons of the Judiciary (with an alleged current lower court vacancy level
of 537 or a 24.5% vacancy rate), should not apply to the Supreme Court which has only a total of
15 positions that are not even vacated at the same time. The most number of vacancies for any
one year occurred only last year (2009) when seven (7) positions were vacated by retirement, but
this vacancy rate is not expected to be replicated at any time within the next decade. Thus
"midnight appointments" to the extent that they were understood in Aytona36 will not occur in the
vacancies of this Court as nominations to its vacancies are all processed through the JBC under
the public’s close scrutiny. As already discussed above, the institutional integrity of the Court is
hardly an issue. If at all, only objections personal to the individual Members of the Court or against
the individual applicants can be made, but these are matters addressed in the first place by the
JBC before nominees are submitted. There, too, are specific reasons, likewise discussed above,
explaining why the election ban should not apply to the Supreme Court. These exempting
reasons, of course, have yet to be shown to apply to the lower courts. Thus, on the whole, the
reasons justifying the election ban in Valenzuela still obtain in so far as the lower courts are
concerned, and have yet to be proven otherwise in a properly filed case. Until then, Valenzuela,
except to the extent that it mentioned Section 4(1), should remain an authoritative ruling of this
Court.
CONCLUSION
In light of these considerations, a writ of prohibition cannot issue to prevent the JBC from
performing its principal function, under the Constitution, of recommending nominees for the
position of Chief Justice. Thus, I vote to deny with finality the Tolentino and Soriano motions for
reconsideration.
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The other motions for reconsideration in so far as they challenge the conclusion that the President
can appoint the Chief Justice even during the election period are likewise denied with finality for
lack of merit, but are granted in so far as they support the continued validity of the ruling of this
Court in In Re: Valenzuela and Vallarta, A.M. No. 98-5-01-SC, November 9, 1998.
My opinion on the Mendoza petition stands.
ARTURO D. BRION
Associate Justice
Footnotes
1 A.M. No. 98-5-01-SC, November 9, 1998, 298 SCRA 408. This A.M. involves the constitutional
validity of the appointment of two (2) RTC Judges on March 30, 1998 – a date that falls within the
supposed ban under Section 15, Article VII of the Constitution. We nullified the appointments.
2 G.R. No. 191002 and companion cases, promulgated on March 17, 2010.
3 Justices Diosdado M. Peralta, Mariano C. Del Castillo and Jose Catral Mendoza.
4 G.R. No. 191002, Petition for Certiorari and Mandamus.
5 G.R. No. 191149, Petition for Certiorari and Mandamus.
6 The JBC reiterates its position in its Comment (dated April 12, 2010) on the motions for
reconsideration that it is still acting on the preparation of the list of nominees and is set to interview
the nominees.
7 See, for instance, the motion for reconsideration of intervenor Alfonso Tan, Jr.
8 The docketed petitions were seven; the petitions-in-intervention were ten.
9 A prohibition petition seeks to stop the proceedings of a tribunal, corporation, board, officer or
person exercising judicial, quasi-judicial or ministerial functions if any of its act is without or in
excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.
10 Separate Opinion, p. 16.
11 The JBC position states:
xxxx
Likewise, the JBC has yet to take a position on when to submit the shortlist to the proper
appointing authority, in light of Section 4(1), Article VIII of the Constitution, which provides that
vacancy in the Supreme Court shall be filled within ninety (90) days from the occurrence thereof,
Section 15, Article VII of the Constitution concerning the ban on Presidential appointments "two (2)
months immediately before the next presidential elections and up to the end of his term" and
Section 261(g), Article XXIII of the Omnibus Election Code of the Philippines.
12. Since the Honorable Supreme Court is the final interpreter of the Constitution, the JBC will be
guided by its decision in these consolidated Petitions and Administrative Matter. [Emphasis
supplied.]
12 Mendoza Petition, pp. 5-6.
13 Separate Opinion, pp. 16-17.
14 Supra note 11.
15 Id. at 17.
16 Separate Opinion, pp. 19-22:
A first reality is that the JBC cannot, on its own due to lack of the proper authority, determine the
appropriate course of action to take under the Constitution. Its principal function is to recommend
appointees to the Judiciary and it has no authority to interpret constitutional provisions, even those
affecting its principal function; the authority to undertake constitutional interpretation belongs to the
courts alone.
A second reality is that the disputed constitutional provisions do not stand alone and cannot be
read independently of one another; the Constitution and its various provisions have to be read and
interpreted as one seamless whole, giving sufficient emphasis to every aspect in accordance with
the hierarchy of our constitutional values. The disputed provisions should be read together and, as
reflections of the will of the people, should be given effect to the extent that they should be
reconciled.
The third reality, closely related to the second, is that in resolving the coverage of the election ban
vis-à-vis the appointment of the Chief Justice and the Members of the Court, provisions of the
Constitution other than the disputed provisions must be taken into account. In considering when
and how to act, the JBC has to consider that:
1. The President has a term of six years which begins at noon of June 30 following the election,
which implies that the outgoing President remains President up to that time. (Section 4, Article
VII). The President assumes office at the beginning of his or her term, with provision for the
situations where the President fails to qualify or is unavailable at the beginning of his term (Section
7, Article VII).
2. The Senators and the Congressmen begin their respective terms also at midday of June 30
(Sections 4 and 7, Article VI). The Congress convenes on the 4th Monday of July for its regular
session, but the President may call a special session at any time. (Section 15, Article VI)
3. The Valenzuela case cited as authority for the position that the election ban provision applies to
the whole Judiciary, only decided the issue with respect to lower court judges, specifically, those
covered by Section 9, Article VIII of the Constitution. Any reference to the filling up of vacancies in
the Supreme Court pursuant to Section 4(1), Article VIII constitutes obiter dictum as this issue was
not directly in issue and was not ruled upon.
These provisions and interpretation of the Valenzuela ruling – when read together with disputed
provisions, related with one another, and considered with the May 17, 2010 retirement of the
current Chief Justice – bring into focus certain unavoidable realities, as follows:
1. If the election ban would apply fully to the Supreme Court, the incumbent President cannot
appoint a Member of the Court beginning March 10, 2010, all the way up to June 30, 2010.
2. The retirement of the incumbent Chief Justice – May 17, 2010 – falls within the period of the
election ban. (In an extreme example where the retirement of a Member of the Court falls on or
very close to the day the election ban starts, the Office of the Solicitor General calculates in its
Comment that the whole 90 days given to the President to make appointment would be covered
by the election ban.)
3. Beginning May 17, 2010, the Chief Justice position would be vacant, giving rise to the question
of whether an Acting Chief Justice can act in his place. While this is essentially a Supreme Court
concern, the Chief Justice is the ex officio Chair of the JBC; hence it must be concerned and be
properly guided.
4. The appointment of the new Chief Justice has to be made within 90 days from the time the
vacancy occurs, which translates to a deadline of August 15, 2010.
5. The deadline for the appointment is fixed (as it is not reckoned from the date of submission of
the JBC list, as in the lower courts) which means that the JBC ideally will have to make its list
available at the start of the 90-day period so that its process will not eat up the 90-day period
granted the President.
6. After noon of June 30, 2010, the JBC representation from Congress would be vacant; the
current representatives’ mandates to act for their principals extend only to the end of their present
terms; thus, the JBC shall be operating at that point at less than its full membership.
7. Congress will not convene until the 4th Monday of July, 2010, but would still need to organize
before the two Houses of Congress can send their representatives to the JBC – a process may
extend well into August, 2010.
8. By July 5, 2010, one regular member of the JBC would vacate his post. Filling up this vacancy
requires a presidential appointment and the concurrence of the Commission on Appointments.
9. Last but not the least, the prohibition in Section 15, Article VII is that "a President or Acting
President shall not make appointments." This prohibition is expressly addressed to the President
and covers the act of appointment; the prohibition is not against the JBC in the performance of its
function of "recommending appointees to the Judiciary" – an act that is one step away from the act
of making appointments.
17 The Province of North Cotabato v. Government of the Republic of the Philippines Peace Panel
Ancestral Domain, G.R. Nos. 183591, 183791, 183752, 183893, 183951 and 183962, October 14,
2008.
18 By virtue of its power of administrative supervision, the Supreme Court oversees the judges’
and court personnel’s compliance with the laws, rules and regulations. It may take the proper
administrative action against them if they commit any violation. See Ampong v. CSC, G.R. No.
107910, August 26, 2008, 563 SCRA 293. The Constitution separately provides for the Supreme
Court’s supervision over the JBC. See Article VIII, Section 8 of the CONSTITUTION.
19 Judicial Review is the power of the courts to test the validity of executive and legislative acts for
their conformity with the Constitution, Garcia v. Executive Secretary, G.R. No. 157584, April 2,
2009.
20 Control is the power of an officer 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 for
that of the latter. It is distinguished from supervision in that the latter means overseeing, or the
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power or authority of an officer to see that subordinate officers perform their duties, and if the latter PHILIP ELLA C. JUICO, as Secretary of Agrarian Reform; CARLOS DOMINGUEZ, as Secretary
fail or neglect to fulfill them, then the former may take such action or steps as prescribed by law to of Agriculture; LOURDES QUISUMBING, as Secretary of Education, Culture and Sports;
make them perform these duties. Nachura, J., Outline Reviewer in Political Law, 2006 ed., p. 276. FULGENCIO FACTORAN, JR., as Secretary of Environment and Natural Resources; VICENTE V.
21 G.R. No. 156052, February 13, 2008, 545 SCRA 92. JAYME, as Secretary of Finance; SEDFREY ORDOÑEZ, as Secretary of Justice; FRANKLIN N.
22 Supra notes 11 and 14. DRILON, as Secretary of Labor and Employment; LUIS SANTOS, as Secretary of Local
23 Philippine Bar Association (PBA), Women Trial Lawyers Organization of the Philippines Government; FIDEL V. RAMOS, as Secretary of National Defense; TEODORO F. BENIGNO, as
(WTLOP), Atty. Amador Z. Tolentino, Atty. Roland B. Inting, Peter Irving Corvera and Alfonso V. Press Secretary; JUANITO FERRER, as Secretary of Public Works and Highways; ANTONIO
Tan, Jr. ARRIZABAL, as Secretary of Science and Technology; JOSE CONCEPCION, as Secretary of
24 See PBA’s Motion for Reconsideration. Trade and Industry; JOSE ANTONIO GONZALEZ, as Secretary of Tourism; ALFREDO R.A.
25 See the Motions for Reconsideration for PBA, WTLOP, Atty. Amador Z. Tolentino, Atty. Roland BENGZON, as Secretary of Health; REINERIO D. REYES, as Secretary of Transportation and
B. Inting, Peter Irving Corvera and Alfonso V. Tan, Jr. Communication; GUILLERMO CARAGUE, as Commissioner of the Budget; and SOLITA
26 CONSTITUTION, Article VII, Section 15: MONSOD, as Head of the National Economic Development Authority, respondents.
Two months immediately before the next presidential elections and up to the end of his term, a Ignacio P. Lacsina, Luis R. Mauricio, Antonio R. Quintos and Juan T. David for petitioners in
President or Acting President shall not make appointments, except temporary appointments to 83896.
executive positions when continued vacancies therein will prejudice public service or endanger Antonio P. Coronel for petitioners in 83815.
public safety.
27 CONSTITUTION, Article VIII, Section 4(1): FERNAN, C.J.:p
(1) The Supreme Court shall be composed of a Chief Justice and fourteen Associate Justices. It These two (2) petitions were consolidated per resolution dated August 9, 19881 and are being
may sit en banc or, in its discretion, in divisions of three, five, or seven Members. Any vacancy resolved jointly as both seek a declaration of the unconstitutionality of Executive Order No. 284
shall be filled within ninety days from the occurrence thereof. issued by President Corazon C. Aquino on July 25, 1987. The pertinent provisions of the assailed
xxxx Executive Order are:
28 See Petition on Intervention of WTLOP, as cited in the decision in the above-captioned cases; Sec. 1. Even if allowed by law or by the ordinary functions of his position, a member of the
see also: PBA’s motion for reconsideration. Cabinet, undersecretary or assistant secretary or other appointive officials of the Executive
29 Francisco v. House of Representatives, G.R. No. 160261, November 10, 2003, 415 SCRA 44, Department may, in addition to his primary position, hold not more than two positions in the
citing Civil Liberties Union v. Executive Secretary, 194 SCRA 317 (1994); Peralta v. Commission government and government corporations and receive the corresponding compensation therefor;
on Elections, G.R. No. 47771, March 11, 1978, 82 SCRA 30 (1978); Ang-Angco v. Castillo, G.R. Provided, that this limitation shall not apply to ad hoc bodies or committees, or to boards, councils
No. 17169, November 30, 1963, 9 SCRA 619 (1963). or bodies of which the President is the Chairman.
30 Macalintal v. Commission on Elections, G.R. No. 157013, July 10, 2003, 310 SCRA 614, citing Sec. 2. If a member of the cabinet, undersecretary or assistant secretary or other appointive
Chiongbian v. De Leon, 82 Phil 771 (1949). official of the Executive Department holds more positions than what is allowed in Section 1 hereof,
31 Article VI for the Legislature, Article VII for the Executive, and Article VIII for the Judiciary. they (sic) must relinquish the excess position in favor of the subordinate official who is next in
32 See Matibag v. Benipayo, G.R. No. 149036, April 2, 2002, 380 SCRA 49; where the court rank, but in no case shall any official hold more than two positions other than his primary position.
resolved the clash between the power of the President to extend ad interim appointments and the Sec. 3. In order to fully protect the interest of the government in government-owned or controlled
power of the Commission on Appointments to confirm presidential appointments. corporations, at least one-third (1/3) of the members of the boards of such corporation should
33 Ibid. either be a secretary, or undersecretary, or assistant secretary.
34 Supra note 13. Petitioners maintain that this Executive Order which, in effect, allows members of the Cabinet,
35 Separate Opinion, p. 32. their undersecretaries and assistant secretaries to hold other government offices or positions in
36 Aytona v. Castillo, G.R. No. 19315, January 19, 1962, 4 SCRA 1. addition to their primary positions, albeit subject to the limitation therein imposed, runs counter to
Section 13, Article VII of the 1987 Constitution,2 which provides as follows:
Sec. 13. The President, Vice-President, the Members of the Cabinet, and their deputies or
assistants shall not, unless otherwise provided in this Constitution, hold any other office or
employment during their tenure. They shall not, during said tenure, directly or indirectly practice
any other profession, participate in any business, or be financially interested in any contract with,
or in any franchise, or special privilege granted by the Government or any subdivision, agency, or
instrumentality thereof, including government-owned or controlled corporations or their
subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office.
12. EN BANC It is alleged that the above-quoted Section 13, Article VII prohibits public respondents, as
G.R. No. 83896 February 22, 1991 members of the Cabinet, along with the other public officials enumerated in the list attached to the
petitions as Annex "C" in G.R. No.
838153 and as Annex "B" in G.R. No. 838964 from holding any other office or employment during
CIVIL LIBERTIES UNION, petitioner,
their tenure. In addition to seeking a declaration of the unconstitutionality of Executive Order No.
284, petitioner Anti-Graft League of the Philippines further seeks in G.R. No. 83815 the issuance
vs.
of the extraordinary writs of prohibition and mandamus, as well as a temporary restraining order
directing public respondents therein to cease and desist from holding, in addition to their primary
THE EXECUTIVE SECRETARY, respondent. positions, dual or multiple positions other than those authorized by the 1987 Constitution and from
G.R. No. 83815 February 22, 1991 receiving any salaries, allowances, per diems and other forms of privileges and the like
ANTI-GRAFT LEAGUE OF THE PHILIPPINES, INC. and CRISPIN T. REYES, petitioners, appurtenant to their questioned positions, and compelling public respondents to return, reimburse
vs. or refund any and all amounts or benefits that they may have received from such positions.

161
Specifically, petitioner Anti-Graft League of the Philippines charges that notwithstanding the
aforequoted "absolute and self-executing" provision of the 1987 Constitution, then Secretary of
Justice Sedfrey Ordoñez, construing Section 13, Article VII in relation to Section 7, par. (2), Article
IX-B, rendered on July 23, 1987 Opinion No. 73, series of 1987,5 declaring that Cabinet members,
their deputies (undersecretaries) and assistant secretaries may hold other public office, including
membership in the boards of government corporations: (a) when directly provided for in the
Constitution as in the case of the Secretary of Justice who is made an ex-officio member of the
Judicial and Bar Council under Section 8, paragraph 1, Article VIII; or (b) if allowed by law; or (c) if
allowed by the primary functions of their respective positions; and that on the basis of this Opinion,
the President of the Philippines, on July 25, 1987 or two (2) days before Congress convened on
July 27, 1987: promulgated Executive Order No. 284.6
Petitioner Anti-Graft League of the Philippines objects to both DOJ Opinion No. 73 and Executive
Order No. 284 as they allegedly "lumped together" Section 13, Article VII and the general
provision in another article, Section 7, par. (2), Article I-XB. This "strained linkage" between the
two provisions, each addressed to a distinct and separate group of public officers –– one, the
President and her official family, and the other, public servants in general –– allegedly "abolished
the clearly separate, higher, exclusive, and mandatory constitutional rank assigned to the
prohibition against multiple jobs for the President, the Vice-President, the members of the Cabinet,
and their deputies and subalterns, who are the leaders of government expected to lead by
example."7 Article IX-B, Section 7, par. (2)8 provides:
Sec. 7. . . . . .
Unless otherwise allowed by law or by the primary functions of his position, no appointive official
shall hold any other office or employment in the government or any subdivision, agency or
instrumentality thereof, including government-owned or controlled corporations or their
subsidiaries.
The Solicitor General counters that Department of Justice DOJ Opinion No. 73, series of 1987, as
further elucidated and clarified by DOJ Opinion No. 129, series of 19879 and DOJ Opinion No.
155, series of 1988,10 being the first official construction and interpretation by the Secretary of
Justice of Section 13, Article VII and par. (2) of Section 7, Article I-XB of the Constitution, involving
the same subject of appointments or designations of an appointive executive official to positions
other than his primary position, is "reasonably valid and constitutionally firm," and that Executive
Order No. 284, promulgated pursuant to DOJ Opinion No. 73, series of 1987 is consequently
constitutional. It is worth noting that DOJ Opinion No. 129, series of 1987 and DOJ Opinion No.
155, series of 1988 construed the limitation imposed by E.O. No. 284 as not applying to ex-officio
positions or to positions which, although not so designated as ex-officio are allowed by the primary
functions of the public official, but only to the holding of multiple positions which are not related to
or necessarily included in the position of the public official concerned (disparate positions).
In sum, the constitutionality of Executive Order No. 284 is being challenged by petitioners on the
principal submission that it adds exceptions to Section 13, Article VII other than those provided in
the Constitution. According to petitioners, by virtue of the phrase "unless otherwise provided in this
Constitution," the only exceptions against holding any other office or employment in Government
are those provided in the Constitution, namely: (1) The Vice-President may be appointed as a
Member of the Cabinet under Section 3, par. (2), Article VII thereof; and (2) the Secretary of
Justice is an ex-officio member of the Judicial and Bar Council by virtue of Section 8 (1), Article
VIII.
Petitioners further argue that the exception to the prohibition in Section 7, par. (2), Article I-XB on
the Civil Service Commission applies to officers and employees of the Civil Service in general and
that said exceptions do not apply and cannot be extended to Section 13, Article VII which applies
specifically to the President, Vice-President, Members of the Cabinet and their deputies or
assistants.
There is no dispute that the prohibition against the President, Vice-President, the members of the
Cabinet and their deputies or assistants from holding dual or multiple positions in the Government
admits of certain exceptions. The disagreement between petitioners and public respondents lies
on the constitutional basis of the exception. Petitioners insist that because of the phrase "unless
otherwise provided in this Constitution" used in Section 13 of Article VII, the exception must be
expressly provided in the Constitution, as in the case of the Vice-President being allowed to
become a Member of the Cabinet under the second paragraph of Section 3, Article VII or the
Secretary of Justice being designated an ex-officio member of the Judicial and Bar Council under
Article VIII, Sec. 8 (1). Public respondents, on the other hand, maintain that the phrase "unless
otherwise provided in the Constitution" in Section 13, Article VII makes reference to Section 7, par.
(2), Article I-XB insofar as the appointive officials mentioned therein are concerned.
The threshold question therefore is: does the prohibition in Section 13, Article VII of the 1987
Constitution insofar as Cabinet members, their deputies or assistants are concerned admit of the
broad exceptions made for appointive officials in general under Section 7, par. (2), Article I-XB
which, for easy reference is quoted anew, thus: "Unless otherwise allowed by law or by the
primary functions of his position, no appointive official shall hold any other office or employment in
the Government or any subdivision, agency or instrumentality thereof, including government-
owned or controlled corporation or their subsidiaries."
We rule in the negative.
A foolproof yardstick in constitutional construction is the intention underlying the provision under
consideration. Thus, it has been held that the Court in construing a Constitution should bear in
mind the object sought to be accomplished by its adoption, and the evils, if any, sought to be
prevented or remedied. A doubtful provision will be examined in the light of the history of the
times, and the condition and circumstances under which the Constitution was framed. The object
is to ascertain the reason which induced the framers of the Constitution to enact the particular
provision and the purpose sought to be accomplished thereby, in order to construe the whole as to
make the words consonant to that reason and calculated to effect that purpose.11
The practice of designating members of the Cabinet, their deputies and assistants as members of
the governing bodies or boards of various government agencies and instrumentalities, including
government-owned and controlled corporations, became prevalent during the time legislative
powers in this country were exercised by former President Ferdinand E. Marcos pursuant to his
martial law authority. There was a proliferation of newly-created agencies, instrumentalities and
government-owned and controlled corporations created by presidential decrees and other modes
of presidential issuances where Cabinet members, their deputies or assistants were designated to
head or sit as members of the board with the corresponding salaries, emoluments, per diems,
allowances and other perquisites of office. Most of these instrumentalities have remained up to the
present time.
This practice of holding multiple offices or positions in the government soon led to abuses by
unscrupulous public officials who took advantage of this scheme for purposes of self-enrichment.
In fact, the holding of multiple offices in government was strongly denounced on the floor of the
Batasang Pambansa.12 This condemnation came in reaction to the published report of the
Commission on Audit, entitled "1983 Summary Annual Audit Report on: Government-Owned and
Controlled Corporations, Self-Governing Boards and Commissions" which carried as its Figure No.
4 a "Roaster of Membership in Governing Boards of Government-Owned and Controlled
Corporations as of December 31, 1983."
Particularly odious and revolting to the people's sense of propriety and morality in government
service were the data contained therein that Roberto V. Ongpin was a member of the governing
boards of twenty-nine (29) governmental agencies, instrumentalities and corporations; Imelda R.
Marcos of twenty-three (23); Cesar E.A. Virata of twenty-two (22); Arturo R. Tanco, Jr. of fifteen
(15); Jesus S. Hipolito and Geronimo Z. Velasco, of fourteen each (14); Cesar C. Zalamea of
thirteen (13); Ruben B. Ancheta and Jose A. Roño of twelve (12) each; Manuel P. Alba, Gilberto
O. Teodoro, and Edgardo Tordesillas of eleven (11) each; and Lilia Bautista and Teodoro Q. Peña
of ten (10) each.13
The blatant betrayal of public trust evolved into one of the serious causes of discontent with the
Marcos regime. It was therefore quite inevitable and in consonance with the overwhelming
sentiment of the people that the 1986 Constitutional Commission, convened as it was after the
people successfully unseated former President Marcos, should draft into its proposed Constitution
the provisions under consideration which are envisioned to remedy, if not correct, the evils that
flow from the holding of multiple governmental offices and employment. In fact, as keenly
observed by Mr. Justice Isagani A. Cruz during the deliberations in these cases, one of the
strongest selling points of the 1987 Constitution during the campaign for its ratification was the
assurance given by its proponents that the scandalous practice of Cabinet members holding
multiple positions in the government and collecting unconscionably excessive compensation
therefrom would be discontinued.
But what is indeed significant is the fact that although Section 7, Article I-XB already contains a
blanket prohibition against the holding of multiple offices or employment in the government
162
subsuming both elective and appointive public officials, the Constitutional Commission should see
it fit to formulate another provision, Sec. 13, Article VII, specifically prohibiting the President, Vice-
President, members of the Cabinet, their deputies and assistants from holding any other office or
employment during their tenure, unless otherwise provided in the Constitution itself.
Evidently, from this move as well as in the different phraseologies of the constitutional provisions
in question, the intent of the framers of the Constitution was to impose a stricter prohibition on the
President and his official family in so far as holding other offices or employment in the government
or elsewhere is concerned.
Moreover, such intent is underscored by a comparison of Section 13, Article VII with other
provisions of the Constitution on the disqualifications of certain public officials or employees from
holding other offices or employment. Under Section 13, Article VI, "(N)o Senator or Member of the
House of Representatives may hold any other office or employment in the Government . . .".
Under Section 5(4), Article XVI, "(N)o member of the armed forces in the active service shall, at
any time, be appointed in any capacity to a civilian position in the Government, including
government-owned or controlled corporations or any of their subsidiaries." Even Section 7 (2),
Article IX-B, relied upon by respondents provides "(U)nless otherwise allowed by law or by the
primary functions of his position, no appointive official shall hold any other office or employment in
the Government."
It is quite notable that in all these provisions on disqualifications to hold other office or
employment, the prohibition pertains to an office or employment in the government and
government-owned or controlled corporations or their subsidiaries. In striking contrast is the
wording of Section 13, Article VII which states that "(T)he President, Vice-President, the Members
of the Cabinet, and their deputies or assistants shall not, unless otherwise provided in this
Constitution, hold any other office or employment during their tenure." In the latter provision, the
disqualification is absolute, not being qualified by the phrase "in the Government." The prohibition
imposed on the President and his official family is therefore all-embracing and covers both public
and private office or employment.
Going further into Section 13, Article VII, the second sentence provides: "They shall not, during
said tenure, directly or indirectly, practice any other profession, participate in any business, or be
financially interested in any contract with, or in any franchise, or special privilege granted by the
Government or any subdivision, agency or instrumentality thereof, including government-owned or
controlled corporations or their subsidiaries." These sweeping, all-embracing prohibitions imposed
on the President and his official family, which prohibitions are not similarly imposed on other public
officials or employees such as the Members of Congress, members of the civil service in general
and members of the armed forces, are proof of the intent of the 1987 Constitution to treat the
President and his official family as a class by itself and to impose upon said class stricter
prohibitions.
Such intent of the 1986 Constitutional Commission to be stricter with the President and his official
family was also succinctly articulated by Commissioner Vicente Foz after Commissioner Regalado
Maambong noted during the floor deliberations and debate that there was no symmetry between
the Civil Service prohibitions, originally found in the General Provisions and the anticipated report
on the Executive Department. Commissioner Foz Commented, "We actually have to be stricter
with the President and the members of the Cabinet because they exercise more powers and,
therefore, more cheeks and restraints on them are called for because there is more possibility of
abuse in their case."14
Thus, while all other appointive officials in the civil service are allowed to hold other office or
employment in the government during their tenure when such is allowed by law or by the primary
functions of their positions, members of the Cabinet, their deputies and assistants may do so only
when expressly authorized by the Constitution itself. In other words, Section 7, Article I-XB is
meant to lay down the general rule applicable to all elective and appointive public officials and
employees, while Section 13, Article VII is meant to be the exception applicable only to the
President, the Vice- President, Members of the Cabinet, their deputies and assistants.
This being the case, the qualifying phrase "unless otherwise provided in this Constitution" in
Section 13, Article VII cannot possibly refer to the broad exceptions provided under Section 7,
Article I-XB of the 1987 Constitution. To construe said qualifying phrase as respondents would
have us do, would render nugatory and meaningless the manifest intent and purpose of the
framers of the Constitution to impose a stricter prohibition on the President, Vice-President,
Members of the Cabinet, their deputies and assistants with respect to holding other offices or
employment in the government during their tenure. Respondents' interpretation that Section 13 of
Article VII admits of the exceptions found in Section 7, par. (2) of Article IX-B would obliterate the
distinction so carefully set by the framers of the Constitution as to when the high-ranking officials
of the Executive Branch from the President to Assistant Secretary, on the one hand, and the
generality of civil servants from the rank immediately below Assistant Secretary downwards, on
the other, may hold any other office or position in the government during their tenure.
Moreover, respondents' reading of the provisions in question would render certain parts of the
Constitution inoperative. This observation applies particularly to the Vice-President who, under
Section 13 of Article VII is allowed to hold other office or employment when so authorized by the
Constitution, but who as an elective public official under Sec. 7, par. (1) of Article I-XB is
absolutely ineligible "for appointment or designation in any capacity to any public office or position
during his tenure." Surely, to say that the phrase "unless otherwise provided in this Constitution"
found in Section 13, Article VII has reference to Section 7, par. (1) of Article I-XB would render
meaningless the specific provisions of the Constitution authorizing the Vice-President to become a
member of the Cabinet,15 and to act as President without relinquishing the Vice-Presidency
where the President shall not nave been chosen or fails to qualify.16 Such absurd consequence
can be avoided only by interpreting the two provisions under consideration as one, i.e., Section 7,
par. (1) of Article I-XB providing the general rule and the other, i.e., Section 13, Article VII as
constituting the exception thereto. In the same manner must Section 7, par. (2) of Article I-XB be
construed vis-a-vis Section 13, Article VII.
It is a well-established rule in Constitutional construction that no one provision of the Constitution
is to be separated from all the others, to be considered alone, but that all the provisions bearing
upon a particular subject are to be brought into view and to be so interpreted as to effectuate the
great purposes of the instrument.17 Sections bearing on a particular subject should be considered
and interpreted together as to effectuate the whole purpose of the Constitution18 and one section
is not to be allowed to defeat another, if by any reasonable construction, the two can be made to
stand together.19
In other words, the court must harmonize them, if practicable, and must lean in favor of a
construction which will render every word operative, rather than one which may make the words
idle and nugatory.20
Since the evident purpose of the framers of the 1987 Constitution is to impose a stricter prohibition
on the President, Vice-President, members of the Cabinet, their deputies and assistants with
respect to holding multiple offices or employment in the government during their tenure, the
exception to this prohibition must be read with equal severity. On its face, the language of Section
13, Article VII is prohibitory so that it must be understood as intended to be a positive and
unequivocal negation of the privilege of holding multiple government offices or employment. Verily,
wherever the language used in the constitution is prohibitory, it is to be understood as intended to
be a positive and unequivocal negation.21 The phrase "unless otherwise provided in this
Constitution" must be given a literal interpretation to refer only to those particular instances cited in
the Constitution itself, to wit: the Vice-President being appointed as a member of the Cabinet
under Section 3, par. (2), Article VII; or acting as President in those instances provided under
Section 7, pars. (2) and (3), Article VII; and, the Secretary of Justice being ex-officio member of
the Judicial and Bar Council by virtue of Section 8 (1), Article VIII.
The prohibition against holding dual or multiple offices or employment under Section 13, Article VII
of the Constitution must not, however, be construed as applying to posts occupied by the
Executive officials specified therein without additional compensation in an ex-officio capacity as
provided by law and as required22 by the primary functions of said officials' office. The reason is
that these posts do no comprise "any other office" within the contemplation of the constitutional
prohibition but are properly an imposition of additional duties and functions on said officials.23 To
characterize these posts otherwise would lead to absurd consequences, among which are: The
President of the Philippines cannot chair the National Security Council reorganized under
Executive Order No. 115 (December 24, 1986). Neither can the Vice-President, the Executive
Secretary, and the Secretaries of National Defense, Justice, Labor and Employment and Local
Government sit in this Council, which would then have no reason to exist for lack of a chairperson
and members. The respective undersecretaries and assistant secretaries, would also be
prohibited.
The Secretary of Labor and Employment cannot chair the Board of Trustees of the National
Manpower and Youth Council (NMYC) or the Philippine Overseas Employment Administration
163
(POEA), both of which are attached to his department for policy coordination and guidance.
Neither can his Undersecretaries and Assistant Secretaries chair these agencies.
The Secretaries of Finance and Budget cannot sit in the Monetary Board.24 Neither can their
respective undersecretaries and assistant secretaries. The Central Bank Governor would then be
assisted by lower ranking employees in providing policy direction in the areas of money, banking
and credit.25
Indeed, the framers of our Constitution could not have intended such absurd consequences. A
Constitution, viewed as a continuously operative charter of government, is not to be interpreted as
demanding the impossible or the impracticable; and unreasonable or absurd consequences, if
possible, should be avoided.26
To reiterate, the prohibition under Section 13, Article VII is not to be interpreted as covering
positions held without additional compensation in ex-officio capacities as provided by law and as
required by the primary functions of the concerned official's office. The term ex-officio means "from
office; by virtue of office." It refers to an "authority derived from official character merely, not
expressly conferred upon the individual character, but rather annexed to the official position." Ex-
officio likewise denotes an "act done in an official character, or as a consequence of office, and
without any other appointment or authority than that conferred by the office."27 An ex-officio
member of a board is one who is a member by virtue of his title to a certain office, and without
further warrant or appointment.28 To illustrate, by express provision of law, the Secretary of
Transportation and Communications is the ex-officio Chairman of the Board of the Philippine Ports
Authority,29 and the Light Rail Transit Authority.30
The Court had occasion to explain the meaning of an ex-officio position in Rafael vs. Embroidery
and Apparel Control and Inspection Board,31 thus: "An examination of section 2 of the questioned
statute (R.A. 3137) reveals that for the chairman and members of the Board to qualify they need
only be designated by the respective department heads. With the exception of the representative
from the private sector, they sit ex-officio. In order to be designated they must already be holding
positions in the offices mentioned in the law. Thus, for instance, one who does not hold a previous
appointment in the Bureau of Customs, cannot, under the act, be designated a representative
from that office. The same is true with respect to the representatives from the other offices. No
new appointments are necessary. This is as it should be, because the representatives so
designated merely perform duties in the Board in addition to those already performed under their
original appointments."32
The term "primary" used to describe "functions" refers to the order of importance and thus means
chief or principal function. The term is not restricted to the singular but may refer to the plural.33
The additional duties must not only be closely related to, but must be required by the official's
primary functions. Examples of designations to positions by virtue of one's primary functions are
the Secretaries of Finance and Budget sitting as members of the Monetary Board, and the
Secretary of Transportation and Communications acting as Chairman of the Maritime Industry
Authority34 and the Civil Aeronautics Board.
If the functions required to be performed are merely incidental, remotely related, inconsistent,
incompatible, or otherwise alien to the primary function of a cabinet official, such additional
functions would fall under the purview of "any other office" prohibited by the Constitution. An
example would be the Press Undersecretary sitting as a member of the Board of the Philippine
Amusement and Gaming Corporation. The same rule applies to such positions which confer on
the cabinet official management functions and/or monetary compensation, such as but not limited
to chairmanships or directorships in government-owned or controlled corporations and their
subsidiaries.
Mandating additional duties and functions to the President, Vice-President, Cabinet Members,
their deputies or assistants which are not inconsistent with those already prescribed by their
offices or appointments by virtue of their special knowledge, expertise and skill in their respective
executive offices is a practice long-recognized in many jurisdictions. It is a practice justified by the
demands of efficiency, policy direction, continuity and coordination among the different offices in
the Executive Branch in the discharge of its multifarious tasks of executing and implementing laws
affecting national interest and general welfare and delivering basic services to the people. It is
consistent with the power vested on the President and his alter egos, the Cabinet members, to
have control of all the executive departments, bureaus and offices and to ensure that the laws are
faithfully executed.35 Without these additional duties and functions being assigned to the
President and his official family to sit in the governing bodies or boards of governmental agencies
or instrumentalities in an ex-officio capacity as provided by law and as required by their primary
functions, they would be supervision, thereby deprived of the means for control and resulting in an
unwieldy and confused bureaucracy.
It bears repeating though that in order that such additional duties or functions may not transgress
the prohibition embodied in Section 13, Article VII of the 1987 Constitution, such additional duties
or functions must be required by the primary functions of the official concerned, who is to perform
the same in an ex-officio capacity as provided by law, without receiving any additional
compensation therefor.
The ex-officio position being actually and in legal contemplation part of the principal office, it
follows that the official concerned has no right to receive additional compensation for his services
in the said position. The reason is that these services are already paid for and covered by the
compensation attached to his principal office. It should be obvious that if, say, the Secretary of
Finance attends a meeting of the Monetary Board as an ex-officio member thereof, he is actually
and in legal contemplation performing the primary function of his principal office in defining policy
in monetary and banking matters, which come under the jurisdiction of his department. For such
attendance, therefore, he is not entitled to collect any extra compensation, whether it be in the
form of a per them or an honorarium or an allowance, or some other such euphemism. By
whatever name it is designated, such additional compensation is prohibited by the Constitution.
It is interesting to note that during the floor deliberations on the proposal of Commissioner
Christian Monsod to add to Section 7, par. (2), Article IX-B, originally found as Section 3 of the
General Provisions, the exception "unless required by the functions of his position,"36 express
reference to certain high-ranking appointive public officials like members of the Cabinet were
made.37 Responding to a query of Commissioner Blas Ople, Commissioner Monsod pointed out
that there are instances when although not required by current law, membership of certain high-
ranking executive officials in other offices and corporations is necessary by reason of said officials'
primary functions. The example given by Commissioner Monsod was the Minister of Trade and
Industry.38
While this exchange between Commissioners Monsod and Ople may be used as authority for
saying that additional functions and duties flowing from the primary functions of the official may be
imposed upon him without offending the constitutional prohibition under consideration, it cannot,
however, be taken as authority for saying that this exception is by virtue of Section 7, par. (2) of
Article I-XB. This colloquy between the two Commissioners took place in the plenary session of
September 27, 1986. Under consideration then was Section 3 of Committee Resolution No. 531
which was the proposed article on General Provisions.39 At that time, the article on the Civil
Service Commission had been approved on third reading on July 22, 1986,40 while the article on
the Executive Department, containing the more specific prohibition in Section 13, had also been
earlier approved on third reading on August 26, 1986.41 It was only after the draft Constitution had
undergone reformatting and "styling" by the Committee on Style that said Section 3 of the General
Provisions became Section 7, par. (2) of Article IX-B and reworded "Unless otherwise allowed by
law or by the primary functions of his position. . . ."
What was clearly being discussed then were general principles which would serve as
constitutional guidelines in the absence of specific constitutional provisions on the matter. What
was primarily at issue and approved on that occasion was the adoption of the qualified and
delimited phrase "primary functions" as the basis of an exception to the general rule covering all
appointive public officials. Had the Constitutional Commission intended to dilute the specific
prohibition in said Section 13 of Article VII, it could have re-worded said Section 13 to conform to
the wider exceptions provided in then Section 3 of the proposed general Provisions, later placed
as Section 7, par. (2) of Article IX-B on the Civil Service Commission.
That this exception would in the final analysis apply also to the President and his official family is
by reason of the legal principles governing additional functions and duties of public officials rather
than by virtue of Section 7, par. 2, Article IX-B At any rate, we have made it clear that only the
additional functions and duties "required," as opposed to "allowed," by the primary functions may
be considered as not constituting "any other office."
While it is permissible in this jurisdiction to consult the debates and proceedings of the
constitutional convention in order to arrive at the reason and purpose of the resulting Constitution,
resort thereto may be had only when other guides fail42 as said proceedings are powerless to
vary the terms of the Constitution when the meaning is clear.1âwphi1 Debates in the constitutional
convention "are of value as showing the views of the individual members, and as indicating the
164
reasons for their votes, but they give us no light as to the views of the large majority who did not emoluments received by the respondents by virtue of actual services rendered in the questioned
talk, much less of the mass of our fellow citizens whose votes at the polls gave that instrument the positions may therefore be retained by them.
force of fundamental law. We think it safer to construe the constitution from what appears upon its WHEREFORE, subject to the qualification above-stated, the petitions are GRANTED. Executive
face."43 The proper interpretation therefore depends more on how it was understood by the Order No. 284 is hereby declared null and void and is accordingly set aside.
people adopting it than in the framers's understanding thereof.44 SO ORDERED.
It being clear, as it was in fact one of its best selling points, that the 1987 Constitution seeks to Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
prohibit the President, Vice-President, members of the Cabinet, their deputies or assistants from Medialdea, Regalado and Davide, Jr., JJ., concur.
holding during their tenure multiple offices or employment in the government, except in those Sarmiento and Griño-Aquino, JJ., took no part.
cases specified in the Constitution itself and as above clarified with respect to posts held without
additional compensation in an ex-officio capacity as provided by law and as required by the Footnotes
primary functions of their office, the citation of Cabinet members (then called Ministers) as 1 P. 71, Rollo in G.R. No. 83815 and p. 28, Rollo in G.R. No. 83896.
examples during the debate and deliberation on the general rule laid down for all appointive 2 Emphasis supplied.
officials should be considered as mere personal opinions which cannot override the constitution's 3 pp. 29-30, Rollo.
manifest intent and the people' understanding thereof. 4 pp. 10-21, Rollo.
In the light of the construction given to Section 13, Article VII in relation to Section 7, par. (2), 5 Annex "A", Petition, G.R. No. 83815, pp. 21-24, Rollo.
Article IX-B of the 1987 Constitution, Executive Order No. 284 dated July 23, 1987 is 6 Thereby, petitioner alleges, eliciting adverse published commentaries from CONCOM
unconstitutional. Ostensibly restricting the number of positions that Cabinet members, Commissioners Fr. Joaquin G. Bernas, S. J. and Regalado E. Maambong, Congressman Rodolfo
undersecretaries or assistant secretaries may hold in addition to their primary position to not more Albano of Isabela, and retired Supreme Court Justice Felix Q. Antonio, Annexes "D", "E" and "F",
than two (2) positions in the government and government corporations, Executive Order No. 284 Petition, G.R. No. 83815, pp. 40-64, Rollo. CONCOM Vice-President Ambrosio B. Padilla, in a
actually allows them to hold multiple offices or employment in direct contravention of the express published article cited in the annexes, also commented on EO 284.
mandate of Section 13, Article VII of the 1987 Constitution prohibiting them from doing so, unless 7 p. 11, Rollo in G.R. No. 83815.
otherwise provided in the 1987 Constitution itself. 8 Emphasis supplied.
The Court is alerted by respondents to the impractical consequences that will result from a strict 9 Annex "I", Comment, G.R. No. 83896, pp. 62-67, Rollo.
application of the prohibition mandated under Section 13, Article VII on the operations of the 10 Annex "2", Ibid., pp. 68-71, Rollo.
Government, considering that Cabinet members would be stripped of their offices held in an ex- 11 Maxwell vs. Dow, 176 U.S. 581, 20 Sup. Ct. 448, 44 L. Ed. 597.
officio capacity, by reason of their primary positions or by virtue of legislation. As earlier clarified in 12 R.B. No. 95, Monday, March 11, 1985, Record of the Batasan, Volume IV, pp. 835-836.
this decision, ex-officio posts held by the executive official concerned without additional 13 pp. 11-14.
compensation as provided by law and as required by the primary functions of his office do not fall 14 Record of the 1986 Constitutional Commission, Vol. 1, p. 553.
under the definition of "any other office" within the contemplation of the constitutional prohibition. 15 Sec. 3, Ibid.
With respect to other offices or employment held by virtue of legislation, including chairmanships 16 Sec. 7, Article VII.
or directorships in government-owned or controlled corporations and their subsidiaries, suffice it to 17 Old Wayne Mut. Life Asso. vs. McDonough, 204 U.S. 8, 51 L Ed 345, 27 S Ct 236; Wallace vs.
say that the feared impractical consequences are more apparent than real. Being head of an Payne, 197 Cal 539, 241 P. 879.
executive department is no mean job. It is more than a full-time job, requiring full attention, 18 Grantz vs. Grauman (Ky) 320 SW 2d 364; Runyon vs. Smith, 308 Ky 73, 212 SW 2d 521.
specialized knowledge, skills and expertise. If maximum benefits are to be derived from a 19 People vs. Wright, 6 Col. 92.
department head's ability and expertise, he should be allowed to attend to his duties and 20 Thomas M. Colley, A Treatise on the Constitutional Limitations, Vol. I, p. 128, citing Attorney-
responsibilities without the distraction of other governmental offices or employment. He should be General vs. Detroit and Erin Plank Road Co., 2 Mich. 114; People vs. Burns, 5 Mich. 114 ; District
precluded from dissipating his efforts, attention and energy among too many positions of Township vs. Dubuque, 7 Iowa 262.
responsibility, which may result in haphazardness and inefficiency. Surely the advantages to be 21 Varney vs. Justice, 86 Ky 596; 6 S.W. 457; Hunt vs. State, 22 Tex. App. 396, 3 S.W. 233.
derived from this concentration of attention, knowledge and expertise, particularly at this stage of 22 As opposed to the term "allowed" used in Section 7, par. (2), Article IX-B of the Constitution,
our national and economic development, far outweigh the benefits, if any, that may be gained from which is permissive. "Required" suggests an imposition, and therefore, obligatory in nature.
a department head spreading himself too thin and taking in more than what he can handle. 23 Martin v. Smith, 140 A.L.R. 1073; Ashmore v. Greater Greenville Sewer District, 173 A.L.R.
Finding Executive Order No. 284 to be constitutionally infirm, the court hereby orders respondents 407.
Secretary of Environment and Natural Resources Fulgencio Factoran, Jr., Secretary of Local 24 Executive Order No. 16, May 9, 1986, 82 O.G. 2117.
Government45 Luis Santos, Secretary of National Defense Fidel V. Ramos, Secretary of Health 25 Sec. 20, Art. XII, 1987 Constitution.
Alfredo R.A. Bengzon and Secretary of the Budget Guillermo Carague to immediately relinquish 26 Hirabayashi vs. United States, 320 U.S. 81, 87 L. Ed. 1774, 63 S. Ct. 1375; Opp Cotton Mills,
their other offices or employment, as herein defined, in the government, including government- Inc. vs. Administrator of Wage and Hour Div., 312 U.S. 126, 85 L. Ed. 624, 61 S. Ct. 524; Gage
owned or controlled corporations and their subsidiaries. With respect to the other named vs. Jordan, 23 Cal 2d 794, 174 P 2d, 287 cited in 16 Am Jur 2d, pp. 100, 464.
respondents, the petitions have become moot and academic as they are no longer occupying the 27 Black's Law Dictionary, p. 516; 15A Words and Phrases, p. 392.
positions complained of. 28 15A Words and Phrases, p. 392.
During their tenure in the questioned positions, respondents may be considered de facto officers 29 Sec. 7, E.O. 778.
and as such entitled to emoluments for actual services rendered.46 It has been held that "in cases 30 Sec. 1, E.O. 210.
where there is no de jure, officer, a de facto officer, who, in good faith has had possession of the 31 21 SCRA 336 (1967).
office and has discharged the duties pertaining thereto, is legally entitled to the emoluments of the 32 Emphasis supplied.
office, and may in an appropriate action recover the salary, fees and other compensations 33 33A Words and Phrases, p. 210, citing Collector of Revenue vs. Louisiana Ready Mix Co., La.
attached to the office. This doctrine is, undoubtedly, supported on equitable grounds since it App., 197 S. 2d 141, 145.
seems unjust that the public should benefit by the services of an officer de facto and then be freed 34 Sec. 7, P.D. No. 474.
from all liability to pay any one for such services.47 Any per diem, allowances or other 35 Section 17, Article VII.

165
36 The phrase that appears in the Constitution is not "Unless required by the primary functions"
but "Unless otherwise allowed by law or by the primary functions . . ." TONDO MEDICAL CENTER EMPLOYEES ASSOCIATION, RESEARCH
37 Record of the 1986 Constitutional Commission, Vol. V, pp. 165-166.
INSTITUTE FOR TROPICAL MEDICINE EMPLOYEES ASSOCIATION,
38 Emphasis supplied, Ibid., p. 165.
NATIONAL ORTHOPEDIC WORKERS UNION, DR. JOSE R. REYES MEMORIAL HOSPITAL
39 Ibid., Vol. V., pp. 80-81.
EMPLOYEES UNION, SAN LAZARO HOSPITAL EMPLOYEES ASSOCIATION, ALLIANCE OF
40 Ibid., Vol. II, p, 94.
HEALTH WORKERS, INC., HEALTH ALLIANCE FOR DEMOCRACY, COUNCIL FOR HEALTH
41 Ibid., Vol. III, p. 710.
DEVELOPMENT, NETWORK OPPOSED TO PRIVATIZATION, COMMUNITY MEDICINE
42 16 Corpus Juris Secundum, 2. 31, p. 105.
DEVELOPMENT FOUNDATION INC., PHILIPPINE SOCIETY OF SANITARY ENGINEERS INC.,
43 Commonwealth vs. Ralph, 111 Pa. 365, 3 Atl 220.
KILUSANG MAYO UNO, GABRIELA, KILUSANG MAGBUBUKID NG PILIPINAS, KALIPUNAN
44 Household Finance Corporation vs. Shaffner, 203, S.W. 2d 734. 356 Mo. 808.
NG DAMAYAN NG MGA MARALITA, ELSA O. GUEVARRA, ARCADIO B. GONZALES, JOSE G.
45 Now Department of Interior and Local Governments.
GALANG, DOMINGO P. MANAY, TITO P. ESTEVES, EDUARDO P. GALOPE, REMEDIOS M.
46 Castillo vs. Arrieta, G.R. No. L-31444, November 13, 1974, 61 SCRA 55.
YSMAEL, ALFREDO BACUATA, EDGARDO J. DAMICOG, REMEDIOS M. MALTU AND
47 Patterson vs. Benson, 112 Pac. 801, 32 L.R.A. (NS) 949.
REMEGIO S. MERCADO,
Petitioners,

- versus -

THE COURT OF APPEALS, EXECUTIVE SECRETARY ALBERTO G. ROMULO,

SECRETARY OF HEALTH MANUEL M. DAYRIT, SECRETARY OF BUDGET AND
MANAGEMENT EMILIA T. BONCODIN,
Respondents.

G.R. No. 167324

Present:

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
AZCUNA,
TINGA,
CHICO-NAZARIO,
GARCIA,
VELASCO, JR., and
NACHURA, JJ.

Promulgated:

July 17, 2007

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

DECISION

CHICO-NAZARIO, J.:

13. EN BANC

166
This is a Petition for Review on Certiorari, under Rule 45 of the Rules of Court, assailing the
Decision,[1] promulgated by the Court of Appeals on 26 November 2004, denying a petition for the
nullification of the Health Sector Reform Agenda (HSRA) Philippines 1999-2004 of the Department
of Health (DOH); and Executive Order No. 102, Redirecting the Functions and Operations of the
Department of Health, which was issued by then President Joseph Ejercito Estrada on 24 May
1999.
Prior hereto, petitioners originally filed a Petition for Certiorari, Prohibition and Mandamus under
Rule 65 of the 1997 Revised Rules of Civil Procedure before the Supreme Court on 15 August
2001. However, the Supreme Court, in a Resolution dated 29 August 2001, referred the petition to
the Court of Appeals for appropriate action.
HEALTH SECTOR REFORM AGENDA (HSRA)
In 1999, the DOH launched the HSRA, a reform agenda developed by the HSRA Technical
Working Group after a series of workshops and analyses with inputs from several consultants,
program managers and technical staff possessing the adequate expertise and experience in the
health sector. It provided for five general areas of reform: (1) to provide fiscal autonomy to
government hospitals; (2) secure funding for priority public health programs; (3) promote the
development of local health systems and ensure its effective performance; (4) strengthen the
capacities of health regulatory agencies; and (5) expand the coverage of the National Health
Insurance Program (NHIP).[2]
Petitioners questioned the first reform agenda involving the fiscal autonomy of government
hospitals, particularly the collection of socialized user fees and the corporate restructuring of
government hospitals. The said provision under the HSRA reads:
Provide fiscal autonomy to government hospitals. Government hospitals must be allowed to collect
socialized user fees so they can reduce the dependence on direct subsidies from the government.
Their critical capacities like diagnostic equipment, laboratory facilities and medical staff capability
must be upgraded to effectively exercise fiscal autonomy. Such investment must be cognizant of
complimentary capacity provided by public-private networks. Moreover such capacities will allow
government hospitals to supplement priority public health programs. Appropriate institutional
arrangement must be introduced such as allowing them autonomy towards converting them into
government corporations without compromising their social responsibilities. As a result,
government hospitals are expected to be more competitive and responsive to health needs.
Petitioners also assailed the issuance of a draft administrative order issued by the DOH, dated 5
January 2001, entitled Guidelines and Procedure in the Implementation of the Corporate
Restructuring of Selected DOH Hospitals to Achieve Fiscal Autonomy, and Managerial Flexibility
to Start by January 2001;[3] and Administrative Order No. 172 of the DOH, entitled Policies and
Guidelines on the Private Practice of Medical and Paramedical Professionals in Government
Health Facilities,[4] dated 9 January 2001, for imposing an added burden to indigent Filipinos, who
cannot afford to pay for medicine and medical services.[5]
Petitioners alleged that the implementation of the aforementioned reforms had resulted in making
free medicine and free medical services inaccessible to economically disadvantaged Filipinos.
Thus, they alleged that the HSRA is void for being in violation of the following constitutional
provisions:[6]
ART. III, SEC. 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 law.
ART II, SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property,
and the promotion of the general welfare are essential for the enjoyment of all the people of the
blessings of democracy.
ART II, SEC. 9. The State shall promote a just and dynamic social order that will ensure the
prosperity and independence of the nation and free the people from poverty through policies that
provide adequate social services, promote full employment, a rising standard of living and an
improved quality of life for all.
ART II, SEC. 10. The State shall promote social justice in all phases of national development.
ART II, SEC. 11. The State values the dignity of every human person and guarantees full respect
for human rights.
ART II, SEC. 13. The 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 x x x.
ART II, SEC. 18. The State affirms labor as a primary social economic force. It shall protect the
rights of workers and promote their welfare.
ART XV, 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.
ART XV, SEC. 3. The State shall defend:
xxxx
(2) the right of children to assistance, including proper care and nutrition, and special protection
from all forms of neglect, abuse, cruelty, exploitation and other conditions prejudicial to their
development.
xxxx
ART XIII, SEC. 14. The State shall protect working women by providing safe and healthful working
conditions, taking into account their maternal functions, and such facilities and opportunities that
will enhance their welfare and enable them to realize their full potential in the service of the nation.
ART II, SEC. 15. The State shall protect and promote the right to health of the people and instill
health consciousness among them.
ART XIII, SEC. 11. The State shall adopt an integrated and comprehensive approach to health
development which shall endeavor to make essential goods, health and other social services
available to all people at affordable cost. There shall be priority for the needs of the
underprivileged sick, elderly, disabled, women, and children. The State shall endeavor to provide
free medical care to paupers.
EXECUTIVE ORDER NO. 102
On 24 May 1999, then President Joseph Ejercito Estrada issued Executive Order No. 102, entitled
Redirecting the Functions and Operations of the Department of Health, which provided for the
changes in the roles, functions, and organizational processes of the DOH. Under the assailed
executive order, the DOH refocused its mandate from being the sole provider of health services to
being a provider of specific health services and technical assistance, as a result of the devolution
of basic services to local government units. The provisions for the streamlining of the DOH and the
deployment of DOH personnel to regional offices and hospitals read:
Sec. 4. Preparation of a Rationalization and Streamlining Plan. In view of the functional and
operational redirection in the DOH, and to effect efficiency and effectiveness in its activities, the
Department shall prepare a Rationalization and Streamlining Plan (RSP) which shall be the basis
of the intended changes. The RSP shall contain the following:
a) the specific shift in policy directions, functions, programs and activities/strategies;
167
b) the structural and organizational shift, stating the specific functions and activities by
organizational unit and the relationship of each units;
c) the staffing shift, highlighting and itemizing the existing filled and unfilled positions; and
d) the resource allocation shift, specifying the effects of the streamline set-up on the agency
budgetary allocation and indicating where possible, savings have been generated.
The RSP shall [be] submitted to the Department of Budget and Management for approval before
the corresponding shifts shall be affected (sic) by the DOH Secretary.
Sec. 5. Redeployment of Personnel. The redeployment of officials and other personnel on the
basis of the approved RSP shall not result in diminution in rank and compensation of existing
personnel. It shall take into account all pertinent Civil Service laws and rules.
Section 6. Funding. The financial resources needed to implement the Rationalization and
Streamlining Plan shall be taken from funds available in the DOH, provided that the total
requirements for the implementation of the revised staffing pattern shall not exceed available
funds for Personnel Services.
Section 7. Separation Benefits. Personnel who opt to be separated from the service as a
consequence of the implementation of this Executive Order shall be entitled to the benefits under
existing laws. In the case of those who are not covered by existing laws, they shall be entitled to
separation benefits equivalent to one month basic salary for every year of service or proportionate
share thereof in addition to the terminal fee benefits to which he/she is entitled under existing
laws.
Executive Order No. 102 was enacted pursuant to Section 17 of the Local Government Code
(Republic Act No. 7160), which provided for the devolution to the local government units of basic
services and facilities, as well as specific health-related functions and responsibilities.[7]
Petitioners contended that a law, such as Executive Order No. 102, which effects the
reorganization of the DOH, should be enacted by Congress in the exercise of its legislative
function. They argued that Executive Order No. 102 is void, having been issued in excess of the
Presidents authority.[8]
Moreover, petitioners averred that the implementation of the Rationalization and Streamlining Plan
(RSP) was not in accordance with law. The RSP was allegedly implemented even before the
Department of Budget and Management (DBM) approved it. They also maintained that the Office
of the President should have issued an administrative order to carry out the streamlining, but that
it failed to do so.[9]
Furthermore, petitioners Elsa O. Guevarra, Arcadio B. Gonzales, Jose G. Galang, Domingo P.
Manay, Eduardo P. Galope, Remedios M. Ysmael, Alfredo U. Bacuata and Edgardo J. Damicog,
all DOH employees, assailed the validity of Executive Order No. 102 on the ground that they were
likely to lose their jobs, and that some of them were suffering from the inconvenience of having to
travel a longer distance to get to their new place of work, while other DOH employees had to
relocate to far-flung areas.[10]
Petitioners also pointed out several errors in the implementation of the RSP. Certain employees
allegedly suffered diminution of compensation,[11] while others were supposedly assigned to
positions for which they were neither qualified nor suited.[12] In addition, new employees were
purportedly hired by the DOH and appointed to positions for which they were not qualified, despite
the fact that the objective of the ongoing streamlining was to cut back on costs.[13] It was also
averred that DOH employees were deployed or transferred even during the three-month period
before the national and local elections in May 2001,[14] in violation of Section 2 of the Republic
Act No. 7305, also known as Magna Carta for Public Health Workers.[15] Petitioners, however,
failed to identify the DOH employees referred to above, much less include them as parties to the
petition.
The Court of Appeals denied the petition due to a number of procedural defects, which proved
fatal: 1) Petitioners failed to show capacity or authority to sign the certification of non-forum
shopping and the verification; 2) Petitioners failed to show any particularized interest for bringing
the suit, nor any direct or personal injury sustained or were in the immediate danger of sustaining;
3) the Petition, brought before the Supreme Court on 15 August 1999, was filed out of time, or
beyond 60 days from the time the reorganization methods were implemented in 2000; and 4)
certiorari, Prohibition and Mandamus will not lie where the President, in issuing the assailed
Executive Order, was not acting as a tribunal, board or officer exercising judicial or quasi-judicial
functions.
In resolving the substantial issues of the case, the Court of Appeals ruled that the HSRA cannot
be declared void for violating Sections 5, 9, 10, 11, 13, 15, 18 of Article II; Section 1 of Article III;
Sections 11 and 14 of Article XIII; and Sections 1 and 3(2) of Article XV, all of the 1987
Constitution, which directly or indirectly pertain to the duty of the State to protect and promote the
peoples right to health and well-being. It reasoned that the aforementioned provisions of the
Constitution are not self-executing; they are not judicially enforceable constitutional rights and can
only provide guidelines for legislation.
Moreover, the Court of Appeals held that the petitioners assertion that Executive Order No. 102 is
detrimental to the health of the people cannot be made a justiciable issue. The question of
whether the HSRA will bring about the development or disintegration of the health sector is within
the realm of the political department.
Furthermore, the Court of Appeals decreed that the President was empowered to issue Executive
Order No. 102, in accordance with Section 17 Article VII of the 1987 Constitution. It also declared
that the DOH did not implement Executive Order No. 102 in bad faith or with grave abuse of
discretion, as alleged by the petitioners, as the DOH issued Department Circular No. 275-C,
Series of 2000, which created the different committees tasked with the implementation of the RSP,
only after both the DBM and Presidential Committee on Effective Governance (PCEG) approved
the RSP on 8 July 2000 and 17 July 2000, respectively.
Petitioners filed with the Court of Appeals a Motion for Reconsideration of the Decision rendered
on 26 November 2004, but the same was denied in a Resolution dated 7 March 2005.
Hence, the present petition, where the following issues are raised:
I.
THE HONORABLE COURT OF APPEALS COMMITTED MANIFEST ERROR IN RULING THAT
ANY QUESTION ON THE WISDOM AND EFFICACY OF THE HEALTH SECTOR REFORM
AGENDA IS NOT A JUSTICIABLE CONTROVERSY AND THAT THE CONSTITUTIONAL
PROVISIONS PROTECTING THE HEALTH OF THE FILIPINO PEOPLE ARE NOT JUDICIALLY
ENFORCEABLE;
II.
THE HONORABLE COURT OF APPEALS COMMITTED MANIFEST ERROR IN RULING THAT
PETITIONERS COMPLAINT THAT EXECUTIVE ORDER NO. 102 IS DETRIMENTAL TO THE
FILIPINO IS LIKEWISE NOT A JUSTICIABLE CONTROVERSY AND THAT THE PRESIDENT
HAS THE AUTHORITY TO ISSUE SAID ORDER; AND
III.
THE HONORABLE COURT OF APPEALS COMMITTED MANIFEST ERROR IN UPHOLDING
TECHNICALITIES OVER AND ABOVE THE ISSUES OF TRANSCENDENTAL IMPORTANCE
RAISED IN THE PETITION BELOW. [16]
168

The Court finds the present petition to be without merit.
Petitioners allege that the HSRA should be declared void, since it runs counter to the aspiration
and ideals of the Filipino people as embodied in the Constitution.[17] They claim that the HSRAs
policies of fiscal autonomy, income generation, and revenue enhancement violate Sections 5, 9,
10, 11, 13, 15 and 18 of Article II, Section 1 of Article III; Sections 11 and 14 of Article XIII; and
Sections 1 and 3 of Article XV of the 1987 Constitution. Such policies allegedly resulted in making
inaccessible free medicine and free medical services. This contention is unfounded.
As a general rule, the provisions of the Constitution are considered self-executing, and do not
require future legislation for their enforcement. For if they are not treated as self-executing, the
mandate of the fundamental law can be easily nullified by the inaction of Congress.[18] However,
some provisions have already been categorically declared by this Court as non self-executing.
In Tanada v. Angara,[19] the Court specifically set apart the sections found under Article II of the
1987 Constitution as non self-executing and ruled that such broad principles need legislative
enactments before they can be implemented:
By its very title, Article II of the Constitution is a declaration of principles and state policies. x x x.
These principles in Article II are not intended to be self-executing principles ready for enforcement
through the courts. They are used by the judiciary as aids or as guides in the exercise of its power
of judicial review, and by the legislature in its enactment of laws.
In Basco v. Philippine Amusement and Gaming Corporation,[20] this Court declared that Sections
11, 12, and 13 of Article II; Section 13 of Article XIII; and Section 2 of Article XIV of the 1987
Constitution are not self-executing provisions. In Tolentino v. Secretary of Finance,[21] the Court
referred to Section 1 of Article XIII and Section 2 of Article XIV of the Constitution as moral
incentives to legislation, not as judicially enforceable rights. These provisions, which merely lay
down a general principle, are distinguished from other constitutional provisions as non self-
executing and, therefore, cannot give rise to a cause of action in the courts; they do not embody
judicially enforceable constitutional rights.[22]
Some of the constitutional provisions invoked in the present case were taken from Article II of the
Constitution -- specifically, Sections 5, 9, 10, 11, 13, 15 and 18 -- the provisions of which the Court
categorically ruled to be non self-executing in the aforecited case of Taada v. Angara.[23]
Moreover, the records are devoid of any explanation of how the HSRA supposedly violated the
equal protection and due process clauses that are embodied in Section 1 of Article III of the
Constitution. There were no allegations of discrimination or of the lack of due process in
connection with the HSRA. Since they failed to substantiate how these constitutional guarantees
were breached, petitioners are unsuccessful in establishing the relevance of this provision to the
petition, and consequently, in annulling the HSRA.
In the remaining provisions, Sections 11 and 14 of Article XIII and Sections 1 and 3 of Article XV,
the State accords recognition to the protection of working women and the provision for safe and
healthful working conditions; to the adoption of an integrated and comprehensive approach to
health; to the Filipino family; and to the right of children to assistance and special protection,
including proper care and nutrition. Like the provisions that were declared as non self-executory in
the cases of Basco v. Philippine Amusement and Gaming Corporation[24] and Tolentino v.
Secretary of Finance,[25] they are mere statements of principles and policies. As such, they are
mere directives addressed to the executive and the legislative departments. If unheeded, the
remedy will not lie with the courts; but rather, the electorates displeasure may be manifested in
their votes.
The rationale for this is given by Justice Dante Tinga in his Separate Opinion in the case of
Agabon v. National Labor Relations Commission[26]:
x x x However, to declare that the constitutional provisions are enough to guarantee the full
exercise of the rights embodied therein, and the realization of the ideals therein expressed, would
be impractical, if not unrealistic. The espousal of such view presents the dangerous tendency of
being overbroad and exaggerated. x x x Subsequent legislation is still needed to define the
parameters of these guaranteed rights. x x x Without specific and pertinent legislation, judicial
bodies will be at a loss, formulating their own conclusion to approximate at least the aims of the
Constitution.
The HSRA cannot be nullified based solely on petitioners bare allegations that it violates the
general principles expressed in the non self-executing provisions they cite herein. There are two
reasons for denying a cause of action to an alleged infringement of broad constitutional principles:
basic considerations of due process and the limitations of judicial power.[27]
Petitioners also claim that Executive Order No. 102 is void on the ground that it was issued by the
President in excess of his authority. They maintain that the structural and functional reorganization
of the DOH is an exercise of legislative functions, which the President usurped when he issued
Executive Order No. 102.[28] This line of argument is without basis.
This Court has already ruled in a number of cases that the President may, by executive or
administrative order, direct the reorganization of government entities under the Executive
Department.[29] This is also sanctioned under the Constitution, as well as other statutes.
Section 17, Article VII of the 1987 Constitution, clearly states: [T]he president shall have control of
all executive departments, bureaus and offices. Section 31, Book III, Chapter 10 of Executive
Order No. 292, also known as the Administrative Code of 1987 reads:
SEC. 31. Continuing Authority of the President to Reorganize his Office - The President, subject to
the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall
have continuing authority to reorganize the administrative structure of the Office of the President.
For this purpose, he may take any of the following actions:
(1) Restructure the internal organization of the Office of the President Proper, including
the immediate offices, the Presidential Special Assistants/Advisers System and the Common Staff
Support System, by abolishing consolidating or merging units thereof or transferring functions from
one unit to another;
(2) Transfer any function under the Office of the President to any other Department or
Agency as well as transfer functions to the Office of the President from other Departments or
Agencies; and
(3) Transfer any agency under the Office of the President to any other department or
agency as well as transfer agencies to the Office of the President from other Departments or
agencies.
In Domingo v. Zamora,[30] this Court explained the rationale behind the Presidents continuing
authority under the Administrative Code to reorganize the administrative structure of the Office of
the President. The law grants the President the power to reorganize the Office of the President in
recognition of the recurring need of every President to reorganize his or her office to achieve
simplicity, economy and efficiency. To remain effective and efficient, it must be capable of being
shaped and reshaped by the President in the manner the Chief Executive deems fit to carry out
presidential directives and policies.
169
The Administrative Code provides that the Office of the President consists of the Office of the
President Proper and the agencies under it.[31] The agencies under the Office of the President
are identified in Section 23, Chapter 8, Title II of the Administrative Code:
Sec. 23. The Agencies under the Office of the President.The agencies under the Office of the
President refer to those offices placed under the chairmanship of the President, those under the
supervision and control of the President, those under the administrative supervision of the Office
of the President, those attached to it for policy and program coordination, and those that are not
placed by law or order creating them under any specific department. (Emphasis provided.)
Section 2(4) of the Introductory Provisions of the Administrative Code defines the term agency of
the government as follows:
Agency of the Government refers to any of the various units of the Government, including a
department, bureau, office, instrumentality, or government-owned or controlled corporation, or a
local government or a distinct unit therein.
Furthermore, the DOH is among the cabinet-level departments enumerated under Book IV of the
Administrative Code, mainly tasked with the functional distribution of the work of the President.[32]
Indubitably, the DOH is an agency which is under the supervision and control of the President
and, thus, part of the Office of the President. Consequently, Section 31, Book III, Chapter 10 of the
Administrative Code, granting the President the continued authority to reorganize the Office of the
President, extends to the DOH.
The power of the President to reorganize the executive department is likewise recognized in
general appropriations laws. As early as 1993, Sections 48 and 62 of Republic Act No. 7645, the
General Appropriations Act for Fiscal Year 1993, already contained a provision stating that:
Sec. 48. Scaling Down and Phase Out of Activities Within the Executive Branch.The heads of
departments, bureaus and offices and agencies are hereby directed to identify their respective
activities which are no longer essential in the delivery of public services and which may be scaled
down, phased out, or abolished, subject to civil service rules and regulations. x x x. Actual scaling
down, phasing out, or abolition of activities shall be effected pursuant to Circulars or Orders issued
for the purpose by the Office of the President. (Emphasis provided.)
Sec. 62. Unauthorized Organizational Changes. Unless otherwise created by law or directed by
the President of the Philippines, no organizational unit or changes in key positions in any
department or agency shall be authorized in their respective organizational structures and be
funded form appropriations by this Act.
Again, in the year when Executive Order No. 102 was issued, The General Appropriations Act of
Fiscal Year 1999 (Republic Act No. 8745) conceded to the President the power to make any
changes in any of the key positions and organizational units in the executive department thus:
Sec. 77. Organized Changes. Unless otherwise provided by law or directed by the President of the
Philippines, no changes in key positions or organizational units in any department or agency shall
be authorized in their respective organizational structures and funded from appropriations
provided by this Act.
Clearly, Executive Order No. 102 is well within the constitutional power of the President to issue.
The President did not usurp any legislative prerogative in issuing Executive Order No. 102. It is an
exercise of the Presidents constitutional power of control over the executive department,
supported by the provisions of the Administrative Code, recognized by other statutes, and
consistently affirmed by this Court.
Petitioners also pointed out several flaws in the implementation of Executive Order No. 102,
particularly the RSP. However, these contentions are without merit and are insufficient to
invalidate the executive order.
The RSP was allegedly implemented even before the DBM approved it. The facts show otherwise.
It was only after the DBM approved the Notice of Organization, Staffing and Compensation Action
on 8 July 2000,[33] and after the Presidential Committee on Effective Governance (PCEG) issued
on 17 July 2000 Memorandum Circular No. 62,[34] approving the RSP, that then DOH Secretary
Alberto G. Romualdez issued on 28 July 2000 Department Circular No. 275-C, Series of 2000,[35]
creating the different committees to implement the RSP.
Petitioners also maintain that the Office of the President should have issued an administrative
order to carry out the streamlining, but that it failed to do so. Such objection cannot be given any
weight considering that the acts of the DOH Secretary, as an alter ego of the President, are
presumed to be the acts of the President. The members of the Cabinet are subject at all times to
the disposition of the President since they are merely his alter egos.[36] Thus, their acts,
performed and promulgated in the regular course of business, are, unless disapproved by the
President, presumptively acts of the President.[37] Significantly, the acts of the DOH Secretary
were clearly authorized by the President, who, thru the PCEG, issued the aforementioned
Memorandum Circular No. 62, sanctioning the implementation of the RSP.
Petitioners Elsa Odonzo Guevarra, Arcadio B. Gonzales, Jose G. Galang, Domingo P. Manay,
Eduardo P. Galope, Remedios M. Ysmael, Alfredo U. Bacuata, and Edgardo Damicog, all DOH
employees, assailed the validity of Executive Order No. 102 on the ground that they were likely to
lose their jobs, and that some of them were suffering from the inconvenience of having to travel a
longer distance to get to their new place of work, while other DOH employees had to relocate to
far-flung areas.
In several cases, this Court regarded reorganizations of government units or departments as valid,
for so long as they are pursued in good faiththat is, for the purpose of economy or to make
bureaucracy more efficient.[38] On the other hand, if the reorganization is done for the purpose of
defeating security of tenure or for ill-motivated political purposes, any abolition of position would
be invalid. None of these circumstances are applicable since none of the petitioners were
removed from public service, nor did they identify any action taken by the DOH that would
unquestionably result in their dismissal. The reorganization that was pursued in the present case
was made in good faith. The RSP was clearly designed to improve the efficiency of the
department and to implement the provisions of the Local Government Code on the devolution of
health services to local governments. While this Court recognizes the inconvenience suffered by
public servants in their deployment to distant areas, the executive departments finding of a need
to make health services available to these areas and to make delivery of health services more
efficient and more compelling is far from being unreasonable or arbitrary, a determination which is
well within its authority. In all, this Court finds petitioners contentions to be insufficient to invalidate
Executive Order No. 102.
Without identifying the DOH employees concerned, much less including them as parties to the
petition, petitioners went on identifying several errors in the implementation of Executive Order No.
102. First, they alleged that unidentified DOH employees suffered from a diminution of
compensation by virtue of the provision on Salaries and Benefits found in Department Circular No.
312, Series of 2000, issued on 23 October 2000, which reads:
2. Any employee who was matched to a position with lower salary grade (SG) shall not suffer a
reduction in salary except where his/her current salary is higher than the maximum step of the SG
of the new position, in which case he/she shall be paid the salary corresponding to the maximum
step of the SG of the new position. RATA shall no longer be received, if employee was matched to
a Non-Division Chief Position.
170
Incidentally, the petition shows that none of the petitioners, who are working in the DOH, were
entitled to receive RATA at the time the petition was filed. Nor was it alleged that they suffered any WE CONCUR:
diminution of compensation. Secondly, it was claimed that certain unnamed DOH employees were
matched with unidentified positions for which they were supposedly neither qualified nor suited. REYNATO S. PUNO
New employees, again unnamed and not included as parties, were hired by the DOH and Chief Justice
appointed to unidentified positions for which they were purportedly not qualified, despite the fact LEONARDO A. QUISUMBING
that the objective of the ongoing streamlining was to cut back on costs. Lastly, unspecified DOH Associate Justice
employees were deployed or transferred during the three-month period before the national and CONSUELO YNARES-SANTIAGO
local elections in May 2001, in violation of Section 2 of the Republic Act No. 7305, also known as Associate Justice
Magna Carta for Public Health Workers. ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
Petitioners allegations are too general and unsubstantiated by the records for the Court to pass ANTONIO T. CARPIO
upon. The persons involved are not identified, details of their appointments and transfers such as Associate Justice
position, salary grade, and the date they were appointed - are not given; and the circumstances MA. ALICIA AUSTRIA-MARTINEZ
which attended the alleged violations are not specified. Associate Justice
RENATO C. CORONA
Even granting that these alleged errors were adequately proven by the petitioners, they would still Associate Justice
not invalidate Executive Order No. 102. Any serious legal errors in laying down the compensation CONCHITA CARPIO MORALES
of the DOH employees concerned can only invalidate the pertinent provisions of Department Associate Justice
Circular No. 312, Series of 2000. Likewise, any questionable appointments or transfers are ADOLFO S. AZCUNA
properly addressed by an appeal process provided under Administrative Order No. 94, series of Associate Justice
2000;[39] and if the appeal is meritorious, such appointment or transfer may be invalidated. The DANTE O. TINGA
validity of Executive Order No. 102 would, nevertheless, remain unaffected. Settled is the rule that Associate Justice
courts are not at liberty to declare statutes invalid, although they may be abused or misabused, CANCIO C. GARCIA
and may afford an opportunity for abuse in the manner of application. The validity of a statute or Associate Justice
ordinance is to be determined from its general purpose and its efficiency to accomplish the end PRESBITERO J. VELASCO, JR.
desired, not from its effects in a particular case.[40] Associate Justice
ANTONIO EDUARDO B. NACHURA
In a number of cases,[41] the Court upheld the standing of citizens who filed suits, wherein the Associate Justice
transcendental importance of the constitutional question justified the granting of relief. In spite of
these rulings, the Court, in Domingo v. Carague,[42] dismissed the petition when petitioners CERTIFICATION
therein failed to show any present substantial interest. It demonstrated how even in the cases in
which the Court declared that the matter of the case was of transcendental importance, the Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in
petitioners must be able to assert substantial interest. Present substantial interest, which will the above Decision were reached in consultation before the case was assigned to the writer of the
enable a party to question the validity of the law, requires that a party sustained or will sustain opinion of the Court.
direct injury as a result of its enforcement.[43] It is distinguished from a mere expectancy or future,
contingent, subordinate, or inconsequential interest.[44] REYNATO S. PUNO
Chief Justice
In the same way, the Court, in Telecommunications & Broadcast Attorneys of the Philippines, Inc.
v. Comelec,[45] ruled that a citizen is allowed to raise a constitutional question only when he can [1] Penned by Associate Justice Celia C. Librea-Leagogo with Associate Justices Andres B.
show that he has personally suffered some actual or threatened injury as a result of the allegedly Reyes, Jr. and Lucas P. Bersamin, concurring; rollo, pp. 214-254.
illegal conduct of the government; the injury is fairly traceable to the challenged action; and the [2] Id. at 294-296.
injury is likely to be redressed by a favorable action. This case likewise stressed that the rule on [3] The rationale for this draft administrative order reads:
constitutional questions which are of transcendental importance cannot be invoked where a partys In line with the goal of the Health Sector Reform Agenda (HSRA) of providing equitable quality
substantive claim is without merit. Thus, a partys standing is determined by the substantive merit health services, the hospital reforms were initiated to complement the other HSRA components.
of his case or a preliminary estimate thereof. After a careful scrutiny of the petitioners substantive The objectives of the Hospital Reform component include among others, the following to promote
claims, this Court finds that the petitioners miserably failed to show any merit to their claims. efficiency in hospital operations and management; to enhance the capabilities through facilities
and human resource upgrading; and to attain fiscal autonomy and managerial flexibility while
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. This Court AFFIRMS the assailed maintain the governments social responsibility for the indigent patients.
Decision of the Court of Appeals, promulgated on 26 November 2004, declaring both the HSRA With this framework, the corporate restructuring of DOH Hospitals into government owned and
and Executive Order No. 102 as valid. No costs. controlled corporations (GOCC) was identified as the most effective means to attain the above
objectives.
SO ORDERED. [4] The rationale for this administrative order reads:
The Department of Health encourages the employment of physicians and paramedical personnel
who are experts in their field of practice in various government hospitals and other government
MINITA V. CHICO-NAZARIO health facilities. It is envisioned to attract the best and the brightest professionals for medical and
Associate Justice paramedical positions, in order to 1) provide adequate quality medical care to patients especially
the indigent; 2) teach, train and interact with the other medical and paramedical professionals and;

171
3) Conduct relevant studies and research thereby enhancing the quality of medical and health [25] Supra note 21.
care delivery systems. [26] Supra note 18 at 686.
As an incentive and in recognition for their commitment to remain as Members of the hospital staff [27] Tanada, v. Angara, supra note 19 at 581.
for a longer period for continuous improvement of the health care delivery service of the facility, [28] Rollo, p. 132.
private practice is allowed. [29] Bagaoisan v. National Tobacco Administration, 455 Phil. 761, 774-775 (2003); Domingo v.
[5] Rollo, pp. 96-98. Zamora, 445 Phil. 7, 12-13 (2003); Secretary of the Department of Transportation and
[6] Id. at 98-102. Communications v. Mabalot, 428 Phil. 154, 164-165 (2002); Buklod ng Kawaning EIIB v. Zamora,
[7] SEC. 17. Basic Services and Facilities. - (a) Local government units shall endeavor to be self- 413 Phil. 281, 291 (2001); Larin v. Executive Secretary, G.R. No. 112745, 280 SCRA 713, 729-
reliant and shall continue exercising the powers and discharging the duties and functions currently 730.
vested upon them. They shall also discharge the functions and responsibilities of national [30] Id.
agencies and offices devolved to them pursuant to this Code. Local government units shall [31] Section 21, Chapter 8, Title II of the Administrative Code.
likewise exercise such other powers and discharge such other functions and responsibilities as [32] Section 1, Chapter 1, Book IV of the Administrative Code reads:
are necessary, appropriate, or incidental to efficient and effective provision of the basic services SECTION 1. Purpose and Number of Departments. - The Executive Branch shall have
and facilities enumerated herein. Departments as are necessary for the functional distribution of the work of the President and for
(b) Such basic services and facilities include, but are not limited to, the following: the performance of their functions.
(1) For a Barangay: [33] Rollo, pp. 384-388.
xxxx [34] Id. at 389-390.
(ii) Health and social welfare services which include maintenance of barangay health center and [35] Id. at 384-398.
day-care center; [36] Secretary of the Department of Transportation and Communications v. Mabalot, supra note
xxxx 29 at 166-167.
(2) For a municipality: [37] Villena v. Secretary of Interior, 67 Phil. 451, 463-465 (1939).
xxxx [38] Secretary of the Department of Transportation and Communications v. Mabalot, supra note
(iii) Subject to the provisions of Title Five, Book I of this Code, health services which include the 29 at 170; Buklod ng Kawaning EIIB v. Zamora, supra note 29 at 294; and Larin v. Executive
implementation of programs and projects on primary health care, maternal and child care, and Secretary, supra note 29.
communicable and non-communicable disease control services; access to secondary and [39] The procedure for appeals, as provided under Administrative Order No. 94, series of 2000,
tertiary health services; purchase of medicines, medical supplies, and equipment needed to carry reads:
out the services herein enumerated; General Guidelines on Appeals
xxxx In order to properly and immediately address the appeals, issues and concerns of personnel, the
(3) For a Province: following rules shall apply:
xxxx 1. Appeals, oversights, issues and concerns related to personnel selection and placement
(iv) Subject to the provisions of Title Five, Book I of this Code, health services which include shall be handled by an Appeals Committee.
hospitals and other tertiary health services; 2. For proper documentation, all appeals shall be made in writing. An Appeals Form shall
xxxx be made available for all personnel.
(4) For a City: 3. All personnel concerned shall be given opportunity to present their side to assure
All the services and facilities of the municipality and province, and in addition thereto, the utmost objectivity and impartiality. If and when necessary, hearings shall be conducted.
following: 4. The Appeals Committee shall be expected to resolve issues, recommend options to the
[8] Rollo, pp. 131-151. EXECOM or the concerned personnel within 15 working days upon receipt of the said appeal.
[9] Id. [40] David v. Macapagal-Arroyo, G.R. Nos. 171396, 171409, 171485, 171483, 171400, 171489,
[10] Id. at 114-122. 171424, 3 May 2006, 489 SCRA 160, 258.
[11] Id. at 109-110. [41] Agan, Sr. v. Philippine International Air Terminals Co., Inc., 450 Phil. 744, 803-804 (2003);
[12] Id. at 105. Chavez v. Public Estates Authority, 433 Phil. 506, 526-528 (2002); and Kilosbayan, Inc. v.
[13] Id. at 111. Guingona, G.R. 113375, 5 May 1994, 232 SCRA 110, 139.
[14] Id. at 125-126. [42] G.R. No. 161065, 15 April 2005, 456 SCRA 450, 454-456.
[15] Section 2 of Republic Act No. 7305 reads: [43] National Economic Protectionism Association v. Ongpin, G.R. No. 67752, 10 April 1989, 171
SEC. 2. No transfer nor reassignment shall be made three months before any local or national SCRA 657, 665.
elections. [44] Montesclaros v. Commission on Elections, 433 Phil. 620, 635-636 (2002).
[16] Rollo, p. 78.
[17] Id. at 98-102.
[18] Manila Prince Hotel v. Government Service Insurance System, G.R. No. 122156, 3 February
1997, 267 SCRA 408, 473; Agabon v. National Labor Relations Commission, G.R. No. 158693, 17
November 2004, 442 SCRA 573, 684.
[19] 338 Phil. 546, 580-581 (1997).
[20] 274 Phil. 323 (1991).
[21] G.R. No. 115455, 25 August 1994, 235 SCRA 630, 685.
[22] Kilosbayan v. Morato, 316 Phil. 652, 697-698 (1995); and Manila Prince Hotel v. Government
Service Insurance System, 335 Phil. 82, 102-103 (1997).
[23] Supra note 19.
[24] 274 Phil. 323 (1991).

172
14. EN BANC
G.R. No. 204819 April 8, 2014

JAMES M. IMBONG and LOVELY-ANN C. IMBONG, for themselves and in behalf of their
minor children, LUCIA CARLOS IMBONG and BERNADETTE CARLOS IMBONG and
MAGNIFICAT CHILD DEVELOPMENT CENTER, INC., Petitioners,

vs.

HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO B. ABAD,

Secretary, Department of Budget and Management, HON. ENRIQUE T. ONA, Secretary,
Department of Health, HON. ARMIN A. LUISTRO, Secretary, Department of Education, Culture
and Sports and HON. MANUELA. ROXAS II, Secretary, Department of Interior and Local
Government, Respondents.
x---------------------------------x
G.R. No. 204934
ALLIANCE FOR THE FAMILY FOUNDATION PHILIPPINES, INC. [ALFI], represented by its
President, Maria Concepcion S. Noche, Spouses Reynaldo S. Luistro & Rosie B . Luistro, Jose S.
Sandejas & Elenita S.A. Sandejas, Arturo M. Gorrez & Marietta C. Gorrez, Salvador S. Mante, Jr.
& Hazeleen L. Mante, Rolando M. Bautista & Maria Felisa S. Bautista, Desiderio Racho &
Traquilina Racho, F emand Antonio A. Tansingco & Carol Anne C. Tansingco for themselves and
on behalf of their minor children, Therese Antonette C. Tansingco, Lorenzo Jose C. Tansingco,
Miguel F emando C. Tangsingco, Carlo Josemaria C. Tansingco & Juan Paolo C. Tansingco,
Spouses Mariano V. Araneta & Eileen Z. Araneta for themselves and on behalf of their minor
children, Ramon Carlos Z. Araneta & Maya Angelica Z. Araneta, Spouses Renato C. Castor &
Mildred C. Castor for themselves and on behalf of their minor children, Renz Jeffrey C. Castor,
Joseph Ramil C. Castor, John Paul C. Castor & Raphael C. Castor, Spouses Alexander R. Racho
& Zara Z. Racho for themselves and on behalf of their minor children Margarita Racho, Mikaela
Racho, Martin Racho, Mari Racho & Manolo Racho, Spouses Alfred R. Racho & Francine V.
Racho for themselves and on behalf of their minor children Michael Racho, Mariana Racho,
Rafael Racho, Maxi Racho, Chessie Racho & Laura Racho, Spouses David R. Racho & Armilyn
A. Racho for themselves and on behalf of their minor child Gabriel Racho, Mindy M. Juatas and on
behalf of her minor children Elijah Gerald Juatas and Elian Gabriel Juatas, Salvacion M. Monteiro,
Emily R. Laws, Joseph R . Laws & Katrina R. Laws, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. ENRIQUE T. ONA, Secretary,
Department of Health, HON. ARMIN A. LUISTRO, Secretary, Department of Education, Culture
and Sports, HON. CORAZON SOLIMAN, Secretary, Department of Social Welfare and
Development, HON. MANUELA. ROXAS II, Secretary, Department of Interior and Local
Government, HON. FLORENCIO B. ABAD, Secretary, Department of Budget and Management,
HON. ARSENIO M. BALISACAN, Socio-Economic Planning Secretary and NEDA Director-
General, THE PHILIPPINE COMMISSION ON WOMEN, represented by its Chairperson,
Remedios lgnacio-Rikken, THE PHILIPPINE HEALTH INSURANCE CORPORATION,

173
represented by its President Eduardo Banzon, THE LEAGUE OF PROVINCES OF THE
PHILIPPINES, represented by its President Alfonso Umali, THE LEAGUE OF CITIES OF THE
PHILIPPINES, represented by its President Oscar Rodriguez, and THE LEAGUE OF
MUNICIPALITIES OF THE PHILIPPINES, represented by its President Donato Marcos,
Respondents.
x---------------------------------x
G.R. No. 204957
TASK FORCE FOR FAMILY AND LIFE VISAYAS, INC. and VALERIANO S. AVILA, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary; HON. FLORENCIO B. ABAD, Secretary,
Department of Budget and Management; HON. ENRIQUE T. ONA, Secretary, Department of
Education; and HON. MANUELA. ROXAS II, Secretary, Department of Interior and Local
Government, Respondents.
x---------------------------------x
G.R. No. 204988
SERVE LIFE CAGAYAN DE ORO CITY, INC., represented by Dr. Nestor B. Lumicao, M.D., as
President and in his personal capacity, ROSEVALE FOUNDATION INC., represented by Dr.
Rodrigo M. Alenton, M.D., as member of the school board and in his personal capacity,
ROSEMARIE R. ALENTON, IMELDA G. IBARRA, CPA, LOVENIAP. NACES, Phd., ANTHONY G.
NAGAC, EARL ANTHONY C. GAMBE and MARLON I. YAP, Petitioners,
vs.
OFFICE OF THE PRESIDENT, SENATE OF THE PHILIPPINES, HOUSE OF
REPRESENTATIVES, HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO
B. ABAD, Secretary, Department of Budget and Management; HON. ENRIQUE T. ONA,
Secretary, Department of Health; HON. ARMIN A. LUISTRO, Secretary, Department of Education
and HON. MANUELA. ROXAS II, Secretary, Department of Interior and Local Government,
Respondents.
x---------------------------------x
G.R. No. 205003
EXPEDITO A. BUGARIN, JR., Petitioner,
vs.
OFFICE OF THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES, HON. SENATE
PRESIDENT, HON. SPEAKER OF THE HOUSE OF REPRESENTATIVES and HON.
SOLICITOR GENERAL, Respondents.
x---------------------------------x
G.R. No. 205043
EDUARDO B. OLAGUER and THE CATHOLIC XYBRSPACE APOSTOLATE OF THE
PHILIPPINES, Petitioners,
vs.
DOH SECRETARY ENRIQUE T. ONA, FDA DIRECTOR SUZETTE H. LAZO, DBM SECRETARY
FLORENCIO B. ABAD, DILG SECRETARY MANUELA. ROXAS II, DECS SECRETARY ARMIN
A. LUISTRO, Respondents.
x---------------------------------x
G.R. No. 205138
PHILIPPINE ALLIANCE OF XSEMINARIANS, INC. (PAX), herein represented by its National
President, Atty. Ricardo M . Ribo, and in his own behalf, Atty. Lino E.A. Dumas, Romeo B.
Almonte, Osmundo C. Orlanes, Arsenio Z. Menor, Samuel J. Yap, Jaime F. Mateo, Rolly Siguan,
Dante E. Magdangal, Michael Eugenio O. Plana, Bienvenido C. Miguel, Jr., Landrito M. Diokno
and Baldomero Falcone, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO B. ABAD, Secretary,
Department of Budget and Management, HON. ENRIQUE T. ONA, Secretary, Department of
Health, HON. ARMIN A. LUISTRO, Secretary, Department of Education, HON. MANUELA.
ROXAS II, Secretary, Department of Interior and Local Government, HON. CORAZON J.
SOLIMAN, Secretary, Department of Social Welfare and Development, HON. ARSENIO
BALISACAN, Director-General, National Economic and Development Authority, HON. SUZETTE
H. LAZO, Director-General, Food and Drugs Administration, THE BOARD OF DIRECTORS,
Philippine Health Insurance Corporation, and THE BOARD OF COMMISSIONERS, Philippine
Commission on Women, Respondents.
x---------------------------------x
G.R. No. 205478
REYNALDO J. ECHAVEZ, M.D., JACQUELINE H. KING, M.D., CYNTHIA T. DOMINGO, M.D.,
AND JOSEPHINE MILLADO-LUMITAO, M.D., collectively known as Doctors For Life, and
ANTHONY PEREZ, MICHAEL ANTHONY G. MAPA, CARLOS ANTONIO PALAD, WILFREDO
JOSE, CLAIRE NAVARRO, ANNA COSIO, and GABRIEL DY LIACCO collectively known as
Filipinos For Life, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary; HON. FLORENCIO B. ABAD, Secretary of
the Department of Budget and Management; HON. ENRIQUE T. ONA, Secretary of the
Department of Health; HON. ARMIN A. LUISTRO, Secretary of the Department of Education; and
HON. MANUELA. ROXAS II, Secretary of the Department of Interior and Local Government,
Respondents.
x---------------------------------x
G.R. No. 205491
SPOUSES FRANCISCO S. TATAD AND MARIA FENNY C. TATAD & ALA F. PAGUIA, for
themselves, their Posterity, and the rest of Filipino posterity, Petitioners,
vs.
OFFICE OF THE PRESIDENT of the Republic of the Philippines, Respondent.
x---------------------------------x
G.R. No. 205720
PRO-LIFE PHILIPPINES FOUNDATION, Inc., represented by Loma Melegrito, as Executive
Director, and in her personal capacity, JOSELYN B. BASILIO, ROBERT Z. CORTES, ARIEL A.
CRISOSTOMO, JEREMY I. GATDULA, CRISTINA A. MONTES, RAUL ANTONIO A. NIDOY,
WINSTON CONRAD B. PADOJINOG, RUFINO L. POLICARPIO III, Petitioners,
vs.
OFFICE OF THE PRESIDENT, SENATE OF THE PHILIPPINES, HOUSE OF
REPRESENTATIVES, HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO
B. ABAD, Secretary, Department of Budget and Management, HON. ENRIQUE T. ONA,
Secretary, Department of Health, HON. ARMIN A. LUISTRO, Secretary, Department of Education
and HON. MANUEL A. ROXAS II, Secretary, Department of Interior and Local Government,
Respondents.
x---------------------------------x
G.R. No. 206355
MILLENNIUM SAINT FOUNDATION, INC., ATTY. RAMON PEDROSA, ATTY. CITA
BORROMEO-GARCIA, STELLAACEDERA, ATTY. BERTENI CATALUNA CAUSING, Petitioners,
vs.
OFFICE OF THE PRESIDENT, OFFICE OF THE EXECUTIVE SECRETARY, DEPARTMENT OF
HEALTH, DEPARTMENT OF EDUCATION, Respondents.
x---------------------------------x
G.R. No. 207111
JOHN WALTER B. JUAT, MARY M. IMBONG, ANTHONY VICTORIO B. LUMICAO, JOSEPH
MARTIN Q. VERDEJO, ANTONIA EMMA R. ROXAS and LOTA LAT-GUERRERO, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO ABAD, Secretary,
Department of Budget and Management, HON. ENRIQUE T. ONA, Secretary, Department of
Health, HON. ARMIN A. LUISTRO, Secretary, Department of Education, Culture and Sports and
HON. MANUEL A. ROXAS II, Secretary, Department of Interior and Local Government,
Respondents.
x---------------------------------x
G.R. No. 207172
COUPLES FOR CHRIST FOUNDATION, INC., SPOUSES JUAN CARLOS ARTADI SARMIENTO
AND FRANCESCA ISABELLE BESINGA-SARMIENTO, AND SPOUSES LUIS FRANCIS A.
RODRIGO, JR. and DEBORAH MARIE VERONICA N. RODRIGO, Petitioners,
vs.
174
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. FLORENCIO B. ABAD, Secretary,
Department of Budget and Management, HON. ENRIQUE T. ONA, Secretary, Department of
Health, HON. ARMIN A. LUISTRO, Secretary, Department of Education, Culture and Sports and
HON. MANUELA. ROXAS II, Secretary, Department of Interior and Local Government,
Respondents.
x---------------------------------x
G.R. No. 207563
ALMARIM CENTI TILLAH and ABDULHUSSEIN M. KASHIM, Petitioners,
vs.
HON. PAQUITO N. OCHOA, JR., Executive Secretary, HON. ENRIQUE T. ONA, Secretary of the
Department of Health, and HON. ARMIN A. LUISTRO,Secretary of the Department of Budget and
Management, Respondents.
DECISION
MENDOZA, J.:
Freedom of religion was accorded preferred status by the framers of our fundamental law. And
this Court has consistently affirmed this preferred status, well aware that it is "designed to protect
the broadest possible liberty of conscience, to allow each man to believe as his conscience
directs, to profess his beliefs , and to live as he believes he ought to live, consistent with the liberty
of others and with the common good."1
To this day, poverty is still a major stumbling block to the nation's emergence as a developed
country, leaving our people beleaguered in a state of hunger, illiteracy and unemployment. While
governmental policies have been geared towards the revitalization of the economy, the
bludgeoning dearth in social services remains to be a problem that concerns not only the poor, but
every member of society. The government continues to tread on a trying path to the realization of
its very purpose, that is, the general welfare of the Filipino people and the development of the
country as a whole. The legislative branch, as the main facet of a representative government,
endeavors to enact laws and policies that aim to remedy looming societal woes, while the
executive is closed set to fully implement these measures and bring concrete and substantial
solutions within the reach of Juan dela Cruz. Seemingly distant is the judicial branch, oftentimes
regarded as an inert governmental body that merely casts its watchful eyes on clashing
stakeholders until it is called upon to adjudicate. Passive, yet reflexive when called into action, the
Judiciary then willingly embarks on its solemn duty to interpret legislation vis-a-vis the most vital
and enduring principle that holds Philippine society together - the supremacy of the Philippine
Constitution.
Nothing has polarized the nation more in recent years than the issues of population growth
control, abortion and contraception. As in every democratic society, diametrically opposed views
on the subjects and their perceived consequences freely circulate in various media. From
television debates2 to sticker campaigns,3 from rallies by socio-political activists to mass
gatherings organized by members of the clergy4 - the clash between the seemingly antithetical
ideologies of the religious conservatives and progressive liberals has caused a deep division in
every level of the society. Despite calls to withhold support thereto, however, Republic Act (R.A.)
No. 10354, otherwise known as the Responsible Parenthood and Reproductive Health Act of 2012
(RH Law), was enacted by Congress on December 21, 2012.
Shortly after the President placed his imprimatur on the said law, challengers from various sectors
of society came knocking on the doors of the Court, beckoning it to wield the sword that strikes
down constitutional disobedience. Aware of the profound and lasting impact that its decision may
produce, the Court now faces the iuris controversy, as presented in fourteen (14) petitions and two
(2) petitions- in-intervention, to wit:
(1) Petition for Certiorari and Prohibition,5 filed by spouses Attys. James M. Imbong and Lovely
Ann C. Imbong, in their personal capacities as citizens, lawyers and taxpayers and on behalf of
their minor children; and the Magnificat Child Leaming Center, Inc., a domestic, privately-owned
educational institution (Jmbong);
(2) Petition for Prohibition,6 filed by the Alliance for the Family Foundation Philippines, Inc.,
through its president, Atty. Maria Concepcion S. Noche7 and several others8 in their personal
capacities as citizens and on behalf of the generations unborn (ALFI);
(3) Petition for Certiorari,9 filed by the Task Force for Family and Life Visayas, Inc., and Valeriano
S. Avila, in their capacities as citizens and taxpayers (Task Force Family);
(4) Petition for Certiorari and Prohibition,10 filed by Serve Life Cagayan De Oro City, Inc.,11
Rosevale Foundation, Inc.,12 a domestic, privately-owned educational institution, and several
others,13 in their capacities as citizens (Serve Life);
(5) Petition,14 filed by Expedito A. Bugarin, Jr. in his capacity as a citizen (Bugarin);
(6) Petition for Certiorari and Prohibition,15 filed by Eduardo Olaguer and the Catholic Xybrspace
Apostolate of the Philippines,16 in their capacities as a citizens and taxpayers (Olaguer);
(7) Petition for Certiorari and Prohibition,17 filed by the Philippine Alliance of Xseminarians Inc.,18
and several others19 in their capacities as citizens and taxpayers (PAX);
(8) Petition,20 filed by Reynaldo J. Echavez, M.D. and several others,21 in their capacities as
citizens and taxpayers (Echavez);
(9) Petition for Certiorari and Prohibition,22 filed by spouses Francisco and Maria Fenny C. Tatad
and Atty. Alan F. Paguia, in their capacities as citizens, taxpayers and on behalf of those yet
unborn. Atty. Alan F. Paguia is also proceeding in his capacity as a member of the Bar (Tatad);
(10) Petition for Certiorari and Prohibition,23 filed by Pro-Life Philippines Foundation Inc.24 and
several others,25 in their capacities as citizens and taxpayers and on behalf of its associates who
are members of the Bar (Pro-Life);
(11) Petition for Prohibition,26 filed by Millennium Saint Foundation, Inc.,27 Attys. Ramon
Pedrosa, Cita Borromeo-Garcia, Stella Acedera, and Berteni Catalufia Causing, in their capacities
as citizens, taxpayers and members of the Bar (MSF);
(12) Petition for Certiorari and Prohibition,28 filed by John Walter B. Juat and several others,29 in
their capacities as citizens (Juat) ;
(13) Petition for Certiorari and Prohibition,30 filed by Couples for Christ Foundation, Inc. and
several others,31 in their capacities as citizens (CFC);
(14) Petition for Prohibition32 filed by Almarim Centi Tillah and Abdulhussein M. Kashim in their
capacities as citizens and taxpayers (Tillah); and
(15) Petition-In-Intervention,33 filed by Atty. Samson S. Alcantara in his capacity as a citizen and a
taxpayer (Alcantara); and
(16) Petition-In-Intervention,34 filed by Buhay Hayaang Yumabong (B UHAY) , an accredited
political party.
A perusal of the foregoing petitions shows that the petitioners are assailing the constitutionality of
RH Law on the following GROUNDS:
• The RH Law violates the right to life of the unborn. According to the petitioners, notwithstanding
its declared policy against abortion, the implementation of the RH Law would authorize the
purchase of hormonal contraceptives, intra-uterine devices and injectables which are abortives, in
violation of Section 12, Article II of the Constitution which guarantees protection of both the life of
the mother and the life of the unborn from conception.35
• The RH Law violates the right to health and the right to protection against hazardous products.
The petitioners posit that the RH Law provides universal access to contraceptives which are
hazardous to one's health, as it causes cancer and other health problems.36
• The RH Law violates the right to religious freedom. The petitioners contend that the RH Law
violates the constitutional guarantee respecting religion as it authorizes the use of public funds for
the procurement of contraceptives. For the petitioners, the use of public funds for purposes that
are believed to be contrary to their beliefs is included in the constitutional mandate ensuring
religious freedom.37
It is also contended that the RH Law threatens conscientious objectors of criminal prosecution,
imprisonment and other forms of punishment, as it compels medical practitioners 1] to refer
patients who seek advice on reproductive health programs to other doctors; and 2] to provide full
and correct information on reproductive health programs and service, although it is against their
religious beliefs and convictions.38
In this connection, Section 5 .23 of the Implementing Rules and Regulations of the RH Law (RH-
IRR),39 provides that skilled health professionals who are public officers such as, but not limited
to, Provincial, City, or Municipal Health Officers, medical officers, medical specialists, rural health
physicians, hospital staff nurses, public health nurses, or rural health midwives, who are
specifically charged with the duty to implement these Rules, cannot be considered as
conscientious objectors.40
It is also argued that the RH Law providing for the formulation of mandatory sex education in
schools should not be allowed as it is an affront to their religious beliefs.41
175
While the petit10ners recognize that the guarantee of religious freedom is not absolute, they argue
that the RH Law fails to satisfy the "clear and present danger test" and the "compelling state
interest test" to justify the regulation of the right to free exercise of religion and the right to free
speech.42
• The RH Law violates the constitutional provision on involuntary servitude. According to the
petitioners, the RH Law subjects medical practitioners to involuntary servitude because, to be
accredited under the PhilHealth program, they are compelled to provide forty-eight (48) hours of
pro bona services for indigent women, under threat of criminal prosecution, imprisonment and
other forms of punishment.43
The petitioners explain that since a majority of patients are covered by PhilHealth, a medical
practitioner would effectively be forced to render reproductive health services since the lack of
PhilHealth accreditation would mean that the majority of the public would no longer be able to
avail of the practitioners services.44
• The RH Law violates the right to equal protection of the law. It is claimed that the RH Law
discriminates against the poor as it makes them the primary target of the government program that
promotes contraceptive use. The petitioners argue that, rather than promoting reproductive health
among the poor, the RH Law seeks to introduce contraceptives that would effectively reduce the
number of the poor.45
• The RH Law is "void-for-vagueness" in violation of the due process clause of the Constitution. In
imposing the penalty of imprisonment and/or fine for "any violation," it is vague because it does
not define the type of conduct to be treated as "violation" of the RH Law.46
In this connection, it is claimed that "Section 7 of the RH Law violates the right to due process by
removing from them (the people) the right to manage their own affairs and to decide what kind of
health facility they shall be and what kind of services they shall offer."47 It ignores the
management prerogative inherent in corporations for employers to conduct their affairs in
accordance with their own discretion and judgment.
• The RH Law violates the right to free speech. To compel a person to explain a full range of family
planning methods is plainly to curtail his right to expound only his own preferred way of family
planning. The petitioners note that although exemption is granted to institutions owned and
operated by religious groups, they are still forced to refer their patients to another healthcare
facility willing to perform the service or procedure.48
• The RH Law intrudes into the zone of privacy of one's family protected by the Constitution. It is
contended that the RH Law providing for mandatory reproductive health education intrudes upon
their constitutional right to raise their children in accordance with their beliefs.49
It is claimed that, by giving absolute authority to the person who will undergo reproductive health
procedure, the RH Law forsakes any real dialogue between the spouses and impedes the right of
spouses to mutually decide on matters pertaining to the overall well-being of their family. In the
same breath, it is also claimed that the parents of a child who has suffered a miscarriage are
deprived of parental authority to determine whether their child should use contraceptives.50
• The RH Law violates the constitutional principle of non-delegation of legislative authority. The
petitioners question the delegation by Congress to the FDA of the power to determine whether a
product is non-abortifacient and to be included in the Emergency Drugs List (EDL).51
• The RH Law violates the one subject/one bill rule provision under Section 26( 1 ), Article VI of the
Constitution.52
• The RH Law violates Natural Law.53
• The RH Law violates the principle of Autonomy of Local Government Units (LGUs) and the
Autonomous Region of Muslim Mindanao {ARMM). It is contended that the RH Law, providing for
reproductive health measures at the local government level and the ARMM, infringes upon the
powers devolved to LGUs and the ARMM under the Local Government Code and R.A . No.
9054.54
Various parties also sought and were granted leave to file their respective comments-in-
intervention in defense of the constitutionality of the RH Law. Aside from the Office of the Solicitor
General (OSG) which commented on the petitions in behalf of the respondents,55 Congressman
Edcel C. Lagman,56 former officials of the Department of Health Dr. Esperanza I. Cabral, Jamie
Galvez-Tan, and Dr. Alberto G. Romualdez,57 the Filipino Catholic Voices for Reproductive
Health (C4RH),58 Ana Theresa "Risa" Hontiveros,59 and Atty. Joan De Venecia60 also filed their
respective Comments-in-Intervention in conjunction with several others. On June 4, 2013, Senator
Pia Juliana S. Cayetano was also granted leave to intervene.61
The respondents, aside from traversing the substantive arguments of the petitioners, pray for the
dismissal of the petitions for the principal reasons that 1] there is no actual case or controversy
and, therefore, the issues are not yet ripe for judicial determination.; 2] some petitioners lack
standing to question the RH Law; and 3] the petitions are essentially petitions for declaratory relief
over which the Court has no original jurisdiction.
Meanwhile, on March 15, 2013, the RH-IRR for the enforcement of the assailed legislation took
effect.
On March 19, 2013, after considering the issues and arguments raised, the Court issued the
Status Quo Ante Order (SQAO), enjoining the effects and implementation of the assailed
legislation for a period of one hundred and twenty (120) days, or until July 17, 2013.62
On May 30, 2013, the Court held a preliminary conference with the counsels of the parties to
determine and/or identify the pertinent issues raised by the parties and the sequence by which
these issues were to be discussed in the oral arguments. On July 9 and 23, 2013, and on August
6, 13, and 27, 2013, the cases were heard on oral argument. On July 16, 2013, the SQAO was
ordered extended until further orders of the Court.63
Thereafter, the Court directed the parties to submit their respective memoranda within sixty (60)
days and, at the same time posed several questions for their clarification on some contentions of
the parties.64
The Status Quo Ante
(Population, Contraceptive and Reproductive Health Laws
Prior to the RH Law
Long before the incipience of the RH Law, the country has allowed the sale, dispensation and
distribution of contraceptive drugs and devices. As far back as June 18, 1966, the country enacted
R.A. No. 4729 entitled "An Act to Regu,late the Sale, Dispensation, and/or Distribution of
Contraceptive Drugs and Devices." Although contraceptive drugs and devices were allowed, they
could not be sold, dispensed or distributed "unless such sale, dispensation and distribution is by a
duly licensed drug store or pharmaceutical company and with the prescription of a qualified
medical practitioner."65
In addition, R.A. No. 5921,66 approved on June 21, 1969, contained provisions relative to
"dispensing of abortifacients or anti-conceptional substances and devices." Under Section 37
thereof, it was provided that "no drug or chemical product or device capable of provoking abortion
or preventing conception as classified by the Food and Drug Administration shall be delivered or
sold to any person without a proper prescription by a duly licensed physician."
On December 11, 1967, the Philippines, adhering to the UN Declaration on Population, which
recognized that the population problem should be considered as the principal element for long-
term economic development, enacted measures that promoted male vasectomy and tubal ligation
to mitigate population growth.67 Among these measures included R.A. No. 6365, approved on
August 16, 1971, entitled "An Act Establishing a National Policy on Population, Creating the
Commission on Population and for Other Purposes. " The law envisioned that "family planning will
be made part of a broad educational program; safe and effective means will be provided to
couples desiring to space or limit family size; mortality and morbidity rates will be further reduced."
To further strengthen R.A. No. 6365, then President Ferdinand E . Marcos issued Presidential
Decree. (P.D.) No. 79,68 dated December 8, 1972, which, among others, made "family planning a
part of a broad educational program," provided "family planning services as a part of over-all
health care," and made "available all acceptable methods of contraception, except abortion, to all
Filipino citizens desirous of spacing, limiting or preventing pregnancies."
Through the years, however, the use of contraceptives and family planning methods evolved from
being a component of demographic management, to one centered on the promotion of public
health, particularly, reproductive health.69 Under that policy, the country gave priority to one's right
to freely choose the method of family planning to be adopted, in conformity with its adherence to
the commitments made in the International Conference on Population and Development.70 Thus,
on August 14, 2009, the country enacted R.A. No. 9710 or "The Magna Carta for Women, " which,
among others, mandated the State to provide for comprehensive health services and programs for
women, including family planning and sex education.71
The RH Law
Despite the foregoing legislative measures, the population of the country kept on galloping at an
uncontrollable pace. From a paltry number of just over 27 million Filipinos in 1960, the population
of the country reached over 76 million in the year 2000 and over 92 million in 2010.72 The
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executive and the legislative, thus, felt that the measures were still not adequate. To rein in the
problem, the RH Law was enacted to provide Filipinos, especially the poor and the marginalized,
access and information to the full range of modem family planning methods, and to ensure that its
objective to provide for the peoples' right to reproductive health be achieved. To make it more
effective, the RH Law made it mandatory for health providers to provide information on the full
range of modem family planning methods, supplies and services, and for schools to provide
reproductive health education. To put teeth to it, the RH Law criminalizes certain acts of refusals
to carry out its mandates.
Stated differently, the RH Law is an enhancement measure to fortify and make effective the
current laws on contraception, women's health and population control.
Prayer of the Petitioners - Maintain the Status Quo
The petitioners are one in praying that the entire RH Law be declared unconstitutional. Petitioner
ALFI, in particular, argues that the government sponsored contraception program, the very
essence of the RH Law, violates the right to health of women and the sanctity of life, which the
State is mandated to protect and promote. Thus, ALFI prays that "the status quo ante - the
situation prior to the passage of the RH Law - must be maintained."73 It explains:
x x x. The instant Petition does not question contraception and contraceptives per se. As provided
under Republic Act No. 5921 and Republic Act No. 4729, the sale and distribution of
contraceptives are prohibited unless dispensed by a prescription duly licensed by a physician.
What the Petitioners find deplorable and repugnant under the RH Law is the role that the State
and its agencies - the entire bureaucracy, from the cabinet secretaries down to the barangay
officials in the remotest areas of the country - is made to play in the implementation of the
contraception program to the fullest extent possible using taxpayers' money. The State then will be
the funder and provider of all forms of family planning methods and the implementer of the
program by ensuring the widespread dissemination of, and universal access to, a full range of
family planning methods, devices and supplies.74
ISSUES
After a scrutiny of the various arguments and contentions of the parties, the Court has synthesized
and refined them to the following principal issues:
I. PROCEDURAL: Whether the Court may exercise its power of judicial review over the
controversy.
1] Power of Judicial Review
2] Actual Case or Controversy
3] Facial Challenge
4] Locus Standi
5] Declaratory Relief
6] One Subject/One Title Rule
II. SUBSTANTIVE: Whether the RH law is unconstitutional:
1] Right to Life
2] Right to Health
3] Freedom of Religion and the Right to Free Speech
4] The Family
5] Freedom of Expression and Academic Freedom
6] Due Process
7] Equal Protection
8] Involuntary Servitude
9] Delegation of Authority to the FDA
10] Autonomy of Local Govemments/ARMM
DISCUSSION
Before delving into the constitutionality of the RH Law and its implementing rules, it behooves the
Court to resolve some procedural impediments.
I. PROCEDURAL ISSUE: Whether the Court can exercise its power of judicial review over the
controversy.
The Power of Judicial Review
In its attempt to persuade the Court to stay its judicial hand, the OSG asserts that it should submit
to the legislative and political wisdom of Congress and respect the compromises made in the
crafting of the RH Law, it being "a product of a majoritarian democratic process"75 and
"characterized by an inordinate amount of transparency."76 The OSG posits that the authority of
the Court to review social legislation like the RH Law by certiorari is "weak," since the Constitution
vests the discretion to implement the constitutional policies and positive norms with the political
departments, in particular, with Congress.77 It further asserts that in view of the Court's ruling in
Southern Hemisphere v. Anti-Terrorism Council,78 the remedies of certiorari and prohibition
utilized by the petitioners are improper to assail the validity of the acts of the legislature.79
Moreover, the OSG submits that as an "as applied challenge," it cannot prosper considering that
the assailed law has yet to be enforced and applied to the petitioners, and that the government
has yet to distribute reproductive health devices that are abortive. It claims that the RH Law
cannot be challenged "on its face" as it is not a speech-regulating measure.80
In many cases involving the determination of the constitutionality of the actions of the Executive
and the Legislature, it is often sought that the Court temper its exercise of judicial power and
accord due respect to the wisdom of its co-equal branch on the basis of the principle of separation
of powers. To be clear, the separation of powers is a fundamental principle in our system of
government, which obtains not through express provision but by actual division in our Constitution.
Each department of the government has exclusive cognizance of matters within its jurisdiction and
is supreme within its own sphere.81
Thus, the 1987 Constitution provides that: (a) the legislative power shall be vested in the
Congress of the Philippines;82 (b) the executive power shall be vested in the President of the
Philippines;83 and (c) the judicial power shall be vested in one Supreme Court and in such lower
courts as may be established by law.84 The Constitution has truly blocked out with deft strokes
and in bold lines, the allotment of powers among the three branches of government.85
In its relationship with its co-equals, the Judiciary recognizes the doctrine of separation of powers
which imposes upon the courts proper restraint, born of the nature of their functions and of their
respect for the other branches of government, in striking down the acts of the Executive or the
Legislature as unconstitutional. Verily, the policy is a harmonious blend of courtesy and caution.86
It has also long been observed, however, that in times of social disquietude or political instability,
the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely
obliterated.87 In order to address this, the Constitution impresses upon the Court to respect the
acts performed by a co-equal branch done within its sphere of competence and authority, but at
the same time, allows it to cross the line of separation - but only at a very limited and specific point
- to determine whether the acts of the executive and the legislative branches are null because they
were undertaken with grave abuse of discretion.88 Thus, while the Court may not pass upon
questions of wisdom, justice or expediency of the RH Law, it may do so where an attendant
unconstitutionality or grave abuse of discretion results.89 The Court must demonstrate its
unflinching commitment to protect those cherished rights and principles embodied in the
Constitution.
In this connection, it bears adding that while the scope of judicial power of review may be limited,
the Constitution makes no distinction as to the kind of legislation that may be subject to judicial
scrutiny, be it in the form of social legislation or otherwise. The reason is simple and goes back to
the earlier point. The Court may pass upon the constitutionality of acts of the legislative and the
executive branches, since its duty is not to review their collective wisdom but, rather, to make sure
that they have acted in consonance with their respective authorities and rights as mandated of
them by the Constitution. 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.90 This is in line with
Article VIII, Section 1 of the Constitution which expressly provides:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as
may be established by law.
Judicial power 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 abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government. [Emphases supplied]
As far back as Tanada v. Angara,91 the Court has unequivocally declared that certiorari,
prohibition and mandamus are appropriate remedies to raise constitutional issues and to review
and/or prohibit/nullify, when proper, acts of legislative and executive officials, as there is no other
plain, speedy or adequate remedy in the ordinary course of law. This ruling was later on applied in
Macalintal v. COMELEC,92 Aldaba v. COMELEC,93 Magallona v. Ermita,94 and countless others.
In Tanada, the Court wrote:
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In seeking to nullify an act of the Philippine Senate on the ground that it contravenes the
Constitution, the petition no doubt raises a justiciable controversy. Where an action of the
legislative branch is seriously alleged to have infringed the Constitution, it becomes not only the
right but in fact the duty of the judiciary to settle the dispute. "The question thus posed is judicial
rather than political. The duty (to adjudicate) remains to assure that the supremacy of the
Constitution is upheld. " Once a "controversy as to the application or interpretation of constitutional
provision is raised before this Court (as in the instant case), it becomes a legal issue which the
Court is bound by constitutional mandate to decide. [Emphasis supplied]
In the scholarly estimation of former Supreme Court Justice Florentino Feliciano, "judicial review is
essential for the maintenance and enforcement of the separation of powers and the balancing of
powers among the three great departments of government through the definition and maintenance
of the boundaries of authority and control between them. To him, judicial review is the chief,
indeed the only, medium of participation - or instrument of intervention - of the judiciary in that
balancing operation.95
Lest it be misunderstood, it bears emphasizing that the Court does not have the unbridled
authority to rule on just any and every claim of constitutional violation. Jurisprudence is replete
with the rule that the power of judicial review is limited by four exacting requisites, viz : (a) there
must be an actual case or controversy; (b) the petitioners must possess locus standi; (c) the
question of constitutionality must be raised at the earliest opportunity; and (d) the issue of
constitutionality must be the lis mota of the case.96
Actual Case or Controversy
Proponents of the RH Law submit that the subj ect petitions do not present any actual case or
controversy because the RH Law has yet to be implemented.97 They claim that the questions
raised by the petitions are not yet concrete and ripe for adjudication since no one has been
charged with violating any of its provisions and that there is no showing that any of the petitioners'
rights has been adversely affected by its operation.98 In short, it is contended that judicial review
of the RH Law is premature.
An actual case or controversy means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory, lest the decision of the court would amount to an
advisory opinion.99 The rule is that courts do not sit to adjudicate mere academic questions to
satisfy scholarly interest, however intellectually challenging. The controversy must be justiciable-
definite and concrete, touching on the legal relations of parties having adverse legal interests. In
other words, the pleadings must show an active antagonistic assertion of a legal right, on the one
hand, and a denial thereof, on the other; that is, it must concern a real, tangible and not merely a
theoretical question or issue. There ought to be an actual and substantial controversy admitting of
specific relief through a decree conclusive in nature, as distinguished from an opinion advising
what the law would be upon a hypothetical state of facts.100
Corollary to the requirement of an actual case or controversy is the requirement of ripeness.101 A
question is ripe for adjudication when the act being challenged has had a direct adverse effect on
the individual challenging it. For a case to be considered ripe for adjudication, it is a prerequisite
that something has then been accomplished or performed by either branch before a court may
come into the picture, and the petitioner must allege the existence of an immediate or threatened
injury to himself as a result of the challenged action. He must show that he has sustained or is
immediately in danger of sustaining some direct injury as a result of the act complained of102
In The Province of North Cotabato v. The Government of the Republic of the Philippines,103
where the constitutionality of an unimplemented Memorandum of Agreement on the Ancestral
Domain (MOA-AD) was put in question, it was argued that the Court has no authority to pass upon
the issues raised as there was yet no concrete act performed that could possibly violate the
petitioners' and the intervenors' rights. Citing precedents, the Court ruled that the fact of the law or
act in question being not yet effective does not negate ripeness. Concrete acts under a law are not
necessary to render the controversy ripe. Even a singular violation of the Constitution and/or the
law is enough to awaken judicial duty.
In this case, the Court is of the view that an actual case or controversy exists and that the same is
ripe for judicial determination. Considering that the RH Law and its implementing rules have
already taken effect and that budgetary measures to carry out the law have already been passed,
it is evident that the subject petitions present a justiciable controversy. As stated earlier, when an
action of the legislative branch is seriously alleged to have infringed the Constitution, it not only
becomes a right, but also a duty of the Judiciary to settle the dispute.104
Moreover, the petitioners have shown that the case is so because medical practitioners or medical
providers are in danger of being criminally prosecuted under the RH Law for vague violations
thereof, particularly public health officers who are threatened to be dismissed from the service with
forfeiture of retirement and other benefits. They must, at least, be heard on the matter NOW.
Facial Challenge
The OSG also assails the propriety of the facial challenge lodged by the subject petitions,
contending that the RH Law cannot be challenged "on its face" as it is not a speech regulating
measure.105
The Court is not persuaded.
In United States (US) constitutional law, a facial challenge, also known as a First Amendment
Challenge, is one that is launched to assail the validity of statutes concerning not only protected
speech, but also all other rights in the First Amendment.106 These include religious freedom,
freedom of the press, and the right of the people to peaceably assemble, and to petition the
Government for a redress of grievances.107 After all, the fundamental right to religious freedom,
freedom of the press and peaceful assembly are but component rights of the right to one's
freedom of expression, as they are modes which one's thoughts are externalized.
In this jurisdiction, the application of doctrines originating from the U.S. has been generally
maintained, albeit with some modifications. While this Court has withheld the application of facial
challenges to strictly penal statues,108 it has expanded its scope to cover statutes not only
regulating free speech, but also those involving religious freedom, and other fundamental
rights.109 The underlying reason for this modification is simple. For unlike its counterpart in the
U.S., this Court, under its expanded jurisdiction, is mandated by the Fundamental Law not only to
settle actual controversies involving rights which are legally demandable and enforceable, but also
to determine whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government.110 Verily,
the framers of Our Constitution envisioned a proactive Judiciary, ever vigilant with its duty to
maintain the supremacy of the Constitution.
Consequently, considering that the foregoing petitions have seriously alleged that the
constitutional human rights to life, speech and religion and other fundamental rights mentioned
above have been violated by the assailed legislation, the Court has authority to take cognizance of
these kindred petitions and to determine if the RH Law can indeed pass constitutional scrutiny. To
dismiss these petitions on the simple expedient that there exist no actual case or controversy,
would diminish this Court as a reactive branch of government, acting only when the Fundamental
Law has been transgressed, to the detriment of the Filipino people.
Locus Standi
The OSG also attacks the legal personality of the petitioners to file their respective petitions. It
contends that the "as applied challenge" lodged by the petitioners cannot prosper as the assailed
law has yet to be enforced and applied against them,111 and the government has yet to distribute
reproductive health devices that are abortive.112
The petitioners, for their part, invariably invoke the "transcendental importance" doctrine and their
status as citizens and taxpayers in establishing the requisite locus standi.
Locus standi or legal standing is defined as a personal and substantial interest in a case such that
the party has sustained or will sustain direct injury as a result of the challenged governmental
act.113 It requires a personal stake in the outcome of the controversy as to assure the concrete
adverseness which sharpens the presentation of issues upon which the court so largely depends
for illumination of difficult constitutional questions.114
In relation to locus standi, the "as applied challenge" embodies the rule that one can challenge the
constitutionality of a statute only if he asserts a violation of his own rights. The rule prohibits one
from challenging the constitutionality of the statute grounded on a violation of the rights of third
persons not before the court. This rule is also known as the prohibition against third-party
standing.115
Transcendental Importance
Notwithstanding, the Court leans on the doctrine that "the rule on standing is a matter of
procedure, hence, can be relaxed for non-traditional 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."116
In Coconut Oil Refiners Association, Inc. v. Torres,117 the Court held that in cases of paramount
importance where serious constitutional questions are involved, the standing requirement may be
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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,118 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.
With these said, even if the constitutionality of the RH Law may not be assailed through an "as-
applied challenge, still, the Court has time and again acted liberally on the locus s tandi
requirement. It has accorded certain individuals standing to sue, not otherwise directly injured or
with material interest affected by a Government act, provided a constitutional issue of
transcendental importance is invoked. The rule on locus standi is, after all, a procedural
technicality which the Court has, on more than one occasion, waived or relaxed, thus allowing
non-traditional plaintiffs, such as concerned citizens, taxpayers, voters or legislators, to sue in the
public interest, albeit they may not have been directly injured by the operation of a law or any
other government act. As held in Jaworski v. PAGCOR:119
Granting arguendo that the present action cannot be properly treated as a petition for prohibition,
the transcendental importance of the issues involved in this case warrants that we set aside the
technical defects and take primary jurisdiction over the petition at bar. One cannot deny that the
issues raised herein have potentially pervasive influence on the social and moral well being of this
nation, specially the youth; hence, their proper and just determination is an imperative need. This
is in accordance with the well-entrenched principle that rules of procedure are not inflexible tools
designed to hinder or delay, but to facilitate and promote the administration of justice. Their strict
and rigid application, which would result in technicalities that tend to frustrate, rather than promote
substantial justice, must always be eschewed. (Emphasis supplied)
In view of the seriousness, novelty and weight as precedents, not only to the public, but also to the
bench and bar, the issues raised must be resolved for the guidance of all. After all, the RH Law
drastically affects the constitutional provisions on the right to life and health, the freedom of
religion and expression and other constitutional rights. Mindful of all these and the fact that the
issues of contraception and reproductive health have already caused deep division among a
broad spectrum of society, the Court entertains no doubt that the petitions raise issues of
transcendental importance warranting immediate court adjudication. More importantly, considering
that it is the right to life of the mother and the unborn which is primarily at issue, the Court need
not wait for a life to be taken away before taking action.
The Court cannot, and should not, exercise judicial restraint at this time when rights enshrined in
the Constitution are being imperilled to be violated. To do so, when the life of either the mother or
her child is at stake, would lead to irreparable consequences.
Declaratory Relief
The respondents also assail the petitions because they are essentially petitions for declaratory
relief over which the Court has no original jurisdiction.120 Suffice it to state that most of the
petitions are praying for injunctive reliefs and so the Court would just consider them as petitions
for prohibition under Rule 65, over which it has original jurisdiction. Where the case has far-
reaching implications and prays for injunctive reliefs, the Court may consider them as petitions for
prohibition under Rule 65.121
One Subject-One Title
The petitioners also question the constitutionality of the RH Law, claiming that it violates Section
26(1 ), Article VI of the Constitution,122 prescribing the one subject-one title rule. According to
them, being one for reproductive health with responsible parenthood, the assailed legislation
violates the constitutional standards of due process by concealing its true intent - to act as a
population control measure.123
To belittle the challenge, the respondents insist that the RH Law is not a birth or population control
measure,124 and that the concepts of "responsible parenthood" and "reproductive health" are
both interrelated as they are inseparable.125
Despite efforts to push the RH Law as a reproductive health law, the Court sees it as principally a
population control measure. The corpus of the RH Law is geared towards the reduction of the
country's population. While it claims to save lives and keep our women and children healthy, it
also promotes pregnancy-preventing products. As stated earlier, the RH Law emphasizes the
need to provide Filipinos, especially the poor and the marginalized, with access to information on
the full range of modem family planning products and methods. These family planning methods,
natural or modem, however, are clearly geared towards the prevention of pregnancy.
For said reason, the manifest underlying objective of the RH Law is to reduce the number of births
in the country.
It cannot be denied that the measure also seeks to provide pre-natal and post-natal care as well.
A large portion of the law, however, covers the dissemination of information and provisions on
access to medically-safe, non-abortifacient, effective, legal, affordable, and quality reproductive
health care services, methods, devices, and supplies, which are all intended to prevent
pregnancy.
The Court, thus, agrees with the petitioners' contention that the whole idea of contraception
pervades the entire RH Law. It is, in fact, the central idea of the RH Law.126 Indeed, remove the
provisions that refer to contraception or are related to it and the RH Law loses its very
foundation.127 As earlier explained, "the other positive provisions such as skilled birth attendance,
maternal care including pre-and post-natal services, prevention and management of reproductive
tract infections including HIV/AIDS are already provided for in the Magna Carta for Women."128
Be that as it may, the RH Law does not violate the one subject/one bill rule. In Benjamin E.
Cawaling, Jr. v. The Commission on Elections and Rep. Francis Joseph G Escudero, it was
written:
It is well-settled that the "one title-one subject" rule does not require the Congress to employ in the
title of the enactment language of such precision as to mirror, fully index or catalogue all the
contents and the minute details therein. The rule is sufficiently complied with if the title is
comprehensive enough as to include the general object which the statute seeks to effect, and
where, as here, the persons interested are informed of the nature, scope and consequences of the
proposed law and its operation. Moreover, this Court has invariably adopted a liberal rather than
technical construction of the rule "so as not to cripple or impede legislation." [Emphases supplied]
In this case, a textual analysis of the various provisions of the law shows that both "reproductive
health" and "responsible parenthood" are interrelated and germane to the overriding objective to
control the population growth. As expressed in the first paragraph of Section 2 of the RH Law:
SEC. 2. Declaration of Policy. - The State recognizes and guarantees the human rights of all
persons including their right to equality and nondiscrimination of these rights, the right to
sustainable human development, the right to health which includes reproductive health, the right to
education and information, and the right to choose and make decisions for themselves in
accordance with their religious convictions, ethics, cultural beliefs, and the demands of
responsible parenthood.
The one subject/one title rule expresses the principle that the title of a law must not be "so
uncertain that the average person reading it would not be informed of the purpose of the
enactment or put on inquiry as to its contents, or which is misleading, either in referring to or
indicating one subject where another or different one is really embraced in the act, or in omitting
any expression or indication of the real subject or scope of the act."129
Considering the close intimacy between "reproductive health" and "responsible parenthood" which
bears to the attainment of the goal of achieving "sustainable human development" as stated under
its terms, the Court finds no reason to believe that Congress intentionally sought to deceive the
public as to the contents of the assailed legislation.
II - SUBSTANTIVE ISSUES:
1-The Right to Life
Position of the Petitioners
The petitioners assail the RH Law because it violates the right to life and health of the unborn child
under Section 12, Article II of the Constitution. The assailed legislation allowing access to
abortifacients/abortives effectively sanctions abortion.130
According to the petitioners, despite its express terms prohibiting abortion, Section 4(a) of the RH
Law considers contraceptives that prevent the fertilized ovum to reach and be implanted in the
mother's womb as an abortifacient; thus, sanctioning contraceptives that take effect after
fertilization and prior to implantation, contrary to the intent of the Framers of the Constitution to
afford protection to the fertilized ovum which already has life.
They argue that even if Section 9 of the RH Law allows only "non-abortifacient" hormonal
contraceptives, intrauterine devices, injectables and other safe, legal, non-abortifacient and
effective family planning products and supplies, medical research shows that contraceptives use
results in abortion as they operate to kill the fertilized ovum which already has life.131
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As it opposes the initiation of life, which is a fundamental human good, the petitioners assert that
the State sanction of contraceptive use contravenes natural law and is an affront to the dignity of
man.132
Finally, it is contended that since Section 9 of the RH Law requires the Food and Drug
Administration (FDA) to certify that the product or supply is not to be used as an abortifacient, the
assailed legislation effectively confirms that abortifacients are not prohibited. Also considering that
the FDA is not the agency that will actually supervise or administer the use of these products and
supplies to prospective patients, there is no way it can truthfully make a certification that it shall
not be used for abortifacient purposes.133
Position of the Respondents
For their part, the defenders of the RH Law point out that the intent of the Framers of the
Constitution was simply the prohibition of abortion. They contend that the RH Law does not violate
the Constitution since the said law emphasizes that only "non-abortifacient" reproductive health
care services, methods, devices products and supplies shall be made accessible to the public.134
According to the OSG, Congress has made a legislative determination that contraceptives are not
abortifacients by enacting the RH Law. As the RH Law was enacted with due consideration to
various studies and consultations with the World Health Organization (WHO) and other experts in
the medical field, it is asserted that the Court afford deference and respect to such a determination
and pass judgment only when a particular drug or device is later on determined as an abortive.135
For his part, respondent Lagman argues that the constitutional protection of one's right to life is not
violated considering that various studies of the WHO show that life begins from the implantation of
the fertilized ovum. Consequently, he argues that the RH Law is constitutional since the law
specifically provides that only contraceptives that do not prevent the implantation of the fertilized
ovum are allowed.136
The Court's Position
It is a universally accepted principle that every human being enjoys the right to life.137
Even if not formally established, the right to life, being grounded on natural law, is inherent and,
therefore, not a creation of, or dependent upon a particular law, custom, or belief. It precedes and
transcends any authority or the laws of men.
In this jurisdiction, the right to life is given more than ample protection. Section 1, Article III of the
Constitution provides:
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.
As expounded earlier, the use of contraceptives and family planning methods in the Philippines is
not of recent vintage. From the enactment of R.A. No. 4729, entitled "An Act To Regulate The
Sale, Dispensation, and/or Distribution of Contraceptive Drugs and Devices "on June 18, 1966,
prescribing rules on contraceptive drugs and devices which prevent fertilization,138 to the
promotion of male vasectomy and tubal ligation,139 and the ratification of numerous international
agreements, the country has long recognized the need to promote population control through the
use of contraceptives in order to achieve long-term economic development. Through the years,
however, the use of contraceptives and other family planning methods evolved from being a
component of demographic management, to one centered on the promotion of public health,
particularly, reproductive health.140
This has resulted in the enactment of various measures promoting women's rights and health and
the overall promotion of the family's well-being. Thus, aside from R.A. No. 4729, R.A. No. 6365 or
"The Population Act of the Philippines" and R.A. No. 9710, otherwise known as the "The Magna
Carta of Women" were legislated. Notwithstanding this paradigm shift, the Philippine national
population program has always been grounded two cornerstone principles: "principle of no-
abortion" and the "principle of non-coercion."141 As will be discussed later, these principles are
not merely grounded on administrative policy, but rather, originates from the constitutional
protection expressly provided to afford protection to life and guarantee religious freedom.
When Life Begins*
Majority of the Members of the Court are of the position that the question of when life begins is a
scientific and medical issue that should not be decided, at this stage, without proper hearing and
evidence. During the deliberation, however, it was agreed upon that the individual members of the
Court could express their own views on this matter.
In this regard, the ponente, is of the strong view that life begins at fertilization.
In answering the question of when life begins, focus should be made on the particular phrase of
Section 12 which reads:
Section 12. The 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.
Textually, the Constitution affords protection to the unborn from conception. This is undisputable
because before conception, there is no unborn to speak of. For said reason, it is no surprise that
the Constitution is mute as to any proscription prior to conception or when life begins. The problem
has arisen because, amazingly, there are quarters who have conveniently disregarded the
scientific fact that conception is reckoned from fertilization. They are waving the view that life
begins at implantation. Hence, the issue of when life begins.
In a nutshell, those opposing the RH Law contend that conception is synonymous with
"fertilization" of the female ovum by the male sperm.142 On the other side of the spectrum are
those who assert that conception refers to the "implantation" of the fertilized ovum in the
uterus.143
Plain and Legal Meaning
It is a canon in statutory construction that the words of the Constitution should be interpreted in
their plain and ordinary meaning. As held in the recent case of Chavez v. Judicial Bar Council:144
One of the primary and basic rules in statutory construction is that where the words of a statute
are clear, plain, and free from ambiguity, it must be given its literal meaning and applied without
attempted interpretation. It is a well-settled principle of constitutional construction that the
language employed in the Constitution must be given their ordinary meaning except where
technical terms are employed. As much as possible, the words of the Constitution should be
understood in the sense they have in common use. What it says according to the text of the
provision to be construed compels acceptance and negates the power of the courts to alter it,
based on the postulate that the framers and the people mean what they say. Verba legis non est
recedendum - from the words of a statute there should be no departure.
The raison d' etre for the rule is essentially two-fold: First, because it is assumed that the words in
which constitutional provisions are couched express the objective sought to be attained; and
second, because the Constitution is not primarily a lawyer's document but essentially that of the
people, in whose consciousness it should ever be present as an important condition for the rule of
law to prevail.
In conformity with the above principle, the traditional meaning of the word "conception" which, as
described and defined by all reliable and reputable sources, means that life begins at fertilization.
Webster's Third New International Dictionary describes it as the act of becoming pregnant,
formation of a viable zygote; the fertilization that results in a new entity capable of developing into
a being like its parents.145
Black's Law Dictionary gives legal meaning to the term "conception" as the fecundation of the
female ovum by the male spermatozoon resulting in human life capable of survival and maturation
under normal conditions.146
Even in jurisprudence, an unborn child has already a legal personality. In Continental Steel
Manufacturing Corporation v. Hon. Accredited Voluntary Arbitrator Allan S. Montano,147 it was
written:
Life is not synonymous with civil personality. One need not acquire civil personality first before
he/she could die. Even a child inside the womb already has life. No less than the Constitution
recognizes the life of the unborn from conception, that the State must protect equally with the life
of the mother. If the unborn already has life, then the cessation thereof even prior to the child
being delivered, qualifies as death. [Emphases in the original]
In Gonzales v. Carhart,148 Justice Anthony Kennedy, writing for the US Supreme Court, said that
the State "has respect for human life at all stages in the pregnancy" and "a legitimate and
substantial interest in preserving and promoting fetal life." Invariably, in the decision, the fetus was
referred to, or cited, as a baby or a child.149
Intent of the Framers
Records of the Constitutional Convention also shed light on the intention of the Framers regarding
the term "conception" used in Section 12, Article II of the Constitution. From their deliberations, it
clearly refers to the moment of "fertilization." The records reflect the following:
180
Rev. Rigos: In Section 9, page 3, there is a sentence which reads:
"The State shall equally protect the life of the mother and the life of the unborn from the moment of
conception."
When is the moment of conception?
xxx
Mr. Villegas: As I explained in the sponsorship speech, it is when the ovum is fertilized by the
sperm that there is human life. x x x.150
xxx
As to why conception is reckoned from fertilization and, as such, the beginning of human life, it
was explained:
Mr. Villegas: I propose to review this issue in a biological manner. The first question that needs to
be answered is: Is the fertilized ovum alive? Biologically categorically says yes, the fertilized ovum
is alive. First of all, like all living organisms, it takes in nutrients which it processes by itself. It
begins doing this upon fertilization. Secondly, as it takes in these nutrients, it grows from within.
Thirdly, it multiplies itself at a geometric rate in the continuous process of cell division. All these
processes are vital signs of life. Therefore, there is no question that biologically the fertilized ovum
has life.
The second question: Is it human? Genetics gives an equally categorical "yes." At the moment of
conception, the nuclei of the ovum and the sperm rupture. As this happens 23 chromosomes from
the ovum combine with 23 chromosomes of the sperm to form a total of 46 chromosomes. A
chromosome count of 46 is found only - and I repeat, only in human cells. Therefore, the fertilized
ovum is human.
Since these questions have been answered affirmatively, we must conclude that if the fertilized
ovum is both alive and human, then, as night follows day, it must be human life. Its nature is
human.151
Why the Constitution used the phrase "from the moment of conception" and not "from the moment
of fertilization" was not because of doubt when human life begins, but rather, because:
Mr. Tingson: x x x x the phrase from the moment of conception" was described by us here before
with the scientific phrase "fertilized ovum" may be beyond the comprehension of some people; we
want to use the simpler phrase "from the moment of conception."152
Thus, in order to ensure that the fertilized ovum is given ample protection under the Constitution, it
was discussed:
Rev. Rigos: Yes, we think that the word "unborn" is sufficient for the purpose of writing a
Constitution, without specifying "from the moment of conception."
Mr. Davide: I would not subscribe to that particular view because according to the Commissioner's
own admission, he would leave it to Congress to define when life begins. So, Congress can define
life to begin from six months after fertilization; and that would really be very, very, dangerous. It is
now determined by science that life begins from the moment of conception. There can be no doubt
about it. So we should not give any doubt to Congress, too.153
Upon further inquiry, it was asked:
Mr. Gascon: Mr. Presiding Officer, I would like to ask a question on that point. Actually, that is one
of the questions I was going to raise during the period of interpellations but it has been expressed
already. The provision, as proposed right now states:
The State shall equally protect the life of the mother and the life of the unborn from the moment of
conception.
When it speaks of "from the moment of conception," does this mean when the egg meets the
sperm?
Mr. Villegas: Yes, the ovum is fertilized by the sperm.
Mr. Gascon: Therefore that does not leave to Congress the right to determine whether certain
contraceptives that we know today are abortifacient or not because it is a fact that some of the so-
called contraceptives deter the rooting of the ovum in the uterus. If fertilization has already
occurred, the next process is for the fertilized ovum to travel towards the uterus and to take root.
What happens with some contraceptives is that they stop the opportunity for the fertilized ovum to
reach the uterus. Therefore, if we take the provision as it is proposed, these so called
contraceptives should be banned.
Mr. Villegas: Yes, if that physical fact is established, then that is what is called abortifacient and,
therefore, would be unconstitutional and should be banned under this provision.
Mr. Gascon: Yes. So my point is that I do not think it is up to Congress to state whether or not
these certain contraceptives are abortifacient. Scientifically and based on the provision as it is now
proposed, they are already considered abortifacient.154
From the deliberations above-quoted, it is apparent that the Framers of the Constitution
emphasized that the State shall provide equal protection to both the mother and the unborn child
from the earliest opportunity of life, that is, upon fertilization or upon the union of the male sperm
and the female ovum. It is also apparent is that the Framers of the Constitution intended that to
prohibit Congress from enacting measures that would allow it determine when life begins.
Equally apparent, however, is that the Framers of the Constitution did not intend to ban all
contraceptives for being unconstitutional. In fact, Commissioner Bernardo Villegas, spearheading
the need to have a constitutional provision on the right to life, recognized that the determination of
whether a contraceptive device is an abortifacient is a question of fact which should be left to the
courts to decide on based on established evidence.155
From the discussions above, contraceptives that kill or destroy the fertilized ovum should be
deemed an abortive and thus prohibited. Conversely, contraceptives that actually prevent the
union of the male sperm and the female ovum, and those that similarly take action prior to
fertilization should be deemed non-abortive, and thus, constitutionally permissible.
As emphasized by the Framers of the Constitution:
xxx xxx xxx
Mr. Gascon: xx xx. As I mentioned in my speech on the US bases, I am pro-life, to the point that I
would like not only to protect the life of the unborn, but also the lives of the millions of people in the
world by fighting for a nuclear-free world. I would just like to be assured of the legal and pragmatic
implications of the term "protection of the life of the unborn from the moment of conception." I
raised some of these implications this afternoon when I interjected in the interpellation of
Commissioner Regalado. I would like to ask that question again for a categorical answer.
I mentioned that if we institutionalize the term "the life of the unborn from the moment of
conception" we are also actually saying "no," not "maybe," to certain contraceptives which are
already being encouraged at this point in time. Is that the sense of the committee or does it
disagree with me?
Mr. Azcuna: No, Mr. Presiding Officer, because contraceptives would be preventive. There is no
unborn yet. That is yet unshaped.
Mr. Gascon: Yes, Mr. Presiding Officer, but I was speaking more about some contraceptives, such
as the intra-uterine device which actually stops the egg which has already been fertilized from
taking route to the uterus. So if we say "from the moment of conception," what really occurs is that
some of these contraceptives will have to be unconstitutionalized.
Mr. Azcuna: Yes, to the extent that it is after the fertilization.
Mr. Gascon: Thank you, Mr. Presiding Officer.156
The fact that not all contraceptives are prohibited by the 1987 Constitution is even admitted by
petitioners during the oral arguments. There it was conceded that tubal ligation, vasectomy, even
condoms are not classified as abortifacients.157
Atty. Noche:
Before the union of the eggs, egg and the sperm, there is no life yet.
Justice Bersamin:
There is no life.
Atty. Noche:
So, there is no life to be protected.
Justice Bersamin:
To be protected.
Atty. Noche:
Under Section 12, yes.
Justice Bersamin:
So you have no objection to condoms?
Atty. Noche:
Not under Section 12, Article II.
Justice Bersamin:
Even if there is already information that condoms sometimes have porosity?
Atty. Noche:
181
Well, yes, Your Honor, there are scientific findings to that effect, Your Honor, but I am discussing
here Section 12, Article II, Your Honor, yes.
Justice Bersamin:
Alright.
Atty. Noche:
And it's not, I have to admit it's not an abortifacient, Your Honor.158
Medical Meaning
That conception begins at fertilization is not bereft of medical foundation. Mosby s Medical,
Nursing, and Allied Health Dictionary defines conception as "the beginning of pregnancy usually
taken to be the instant a spermatozoon enters an ovum and forms a viable zygote."159
It describes fertilization as "the union of male and female gametes to form a zygote from which the
embryo develops."160
The Textbook of Obstetrics (Physiological & Pathological Obstetrics),161 used by medical schools
in the Philippines, also concludes that human life (human person) begins at the moment of
fertilization with the union of the egg and the sperm resulting in the formation of a new individual,
with a unique genetic composition that dictates all developmental stages that ensue.
Similarly, recent medical research on the matter also reveals that: "Human development begins
after the union of male and female gametes or germ cells during a process known as fertilization
(conception). Fertilization is a sequence of events that begins with the contact of a sperm
(spermatozoon) with a secondary oocyte (ovum) and ends with the fusion of their pronuclei (the
haploid nuclei of the sperm and ovum) and the mingling of their chromosomes to form a new cell.
This fertilized ovum, known as a zygote, is a large diploid cell that is the beginning, or primordium,
of a human being."162
The authors of Human Embryology & Teratology163 mirror the same position. They wrote:
"Although life is a continuous process, fertilization is a critical landmark because, under ordinary
circumstances, a new, genetically distinct human organism is thereby formed.... The combination
of 23 chromosomes present in each pronucleus results in 46 chromosomes in the zygote. Thus
the diploid number is restored and the embryonic genome is formed. The embryo now exists as a
genetic unity."
In support of the RH Bill, The Philippine Medical Association came out with a "Paper on the
Reproductive Health Bill (Responsible Parenthood Bill)" and therein concluded that:
CONCLUSION
The PMA throws its full weight in supporting the RH Bill at the same time that PMA maintains its
strong position that fertilization is sacred because it is at this stage that conception, and thus
human life, begins. Human lives are sacred from the moment of conception, and that destroying
those new lives is never licit, no matter what the purported good outcome would be. In terms of
biology and human embryology, a human being begins immediately at fertilization and after that,
there is no point along the continuous line of human embryogenesis where only a "potential"
human being can be posited. Any philosophical, legal, or political conclusion cannot escape this
objective scientific fact.
The scientific evidence supports the conclusion that a zygote is a human organism and that the
life of a new human being commences at a scientifically well defined "moment of conception." This
conclusion is objective, consistent with the factual evidence, and independent of any specific
ethical, moral, political, or religious view of human life or of human embryos.164
Conclusion: The Moment of Conception is Reckoned from
Fertilization
In all, whether it be taken from a plain meaning, or understood under medical parlance, and more
importantly, following the intention of the Framers of the Constitution, the undeniable conclusion is
that a zygote is a human organism and that the life of a new human being commences at a
scientifically well-defined moment of conception, that is, upon fertilization.
For the above reasons, the Court cannot subscribe to the theory advocated by Hon. Lagman that
life begins at implantation.165 According to him, "fertilization and conception are two distinct and
successive stages in the reproductive process. They are not identical and synonymous."166 Citing
a letter of the WHO, he wrote that "medical authorities confirm that the implantation of the fertilized
ovum is the commencement of conception and it is only after implantation that pregnancy can be
medically detected."167
This theory of implantation as the beginning of life is devoid of any legal or scientific mooring. It
does not pertain to the beginning of life but to the viability of the fetus. The fertilized ovum/zygote
is not an inanimate object - it is a living human being complete with DNA and 46
chromosomes.168 Implantation has been conceptualized only for convenience by those who had
population control in mind. To adopt it would constitute textual infidelity not only to the RH Law but
also to the Constitution.
Not surprisingly, even the OSG does not support this position.
If such theory would be accepted, it would unnervingly legitimize the utilization of any drug or
device that would prevent the implantation of the fetus at the uterine wall. It would be provocative
and further aggravate religious-based divisiveness.
It would legally permit what the Constitution proscribes - abortion and abortifacients.
The RH Law and Abortion
The clear and unequivocal intent of the Framers of the 1987 Constitution in protecting the life of
the unborn from conception was to prevent the Legislature from enacting a measure legalizing
abortion. It was so clear that even the Court cannot interpret it otherwise. This intent of the
Framers was captured in the record of the proceedings of the 1986 Constitutional Commission.
Commissioner Bernardo Villegas, the principal proponent of the protection of the unborn from
conception, explained:
The intention .. .is to make sure that there would be no pro-abortion laws ever passed by
Congress or any pro-abortion decision passed by the Supreme Court.169
A reading of the RH Law would show that it is in line with this intent and actually proscribes
abortion. While the Court has opted not to make any determination, at this stage, when life begins,
it finds that the RH Law itself clearly mandates that protection be afforded from the moment of
fertilization. As pointed out by Justice Carpio, the RH Law is replete with provisions that embody
the policy of the law to protect to the fertilized ovum and that it should be afforded safe travel to
the uterus for implantation.170
Moreover, the RH Law recognizes that abortion is a crime under Article 256 of the Revised Penal
Code, which penalizes the destruction or expulsion of the fertilized ovum. Thus:
1] xx x.
Section 4. Definition of Terms. - For the purpose of this Act, the following terms shall be defined as
follows:
xxx.
(q) Reproductive health care refers to the access to a full range of methods, facilities, services and
supplies that contribute to reproductive health and well-being by addressing reproductive health-
related problems. It also includes sexual health, the purpose of which is the enhancement of life
and personal relations. The elements of reproductive health care include the following:
xxx.
(3) Proscription of abortion and management of abortion complications;
xxx.
2] xx x.
Section 4. x x x.
(s) Reproductive health rights refers to the rights of individuals and couples, to decide freely and
responsibly whether or not to have children; the number, spacing and timing of their children; to
make other decisions concerning reproduction, free of discrimination, coercion and violence; to
have the information and means to do so; and to attain the highest standard of sexual health and
reproductive health: Provided, however, That reproductive health rights do not include abortion,
and access to abortifacients.
3] xx x.
SEC. 29. Repealing Clause. - Except for prevailing laws against abortion, any law, presidential
decree or issuance, executive order, letter of instruction, administrative order, rule or regulation
contrary to or is inconsistent with the provisions of this Act including Republic Act No. 7392,
otherwise known as the Midwifery Act, is hereby repealed, modified or amended accordingly.
The RH Law and Abortifacients
In carrying out its declared policy, the RH Law is consistent in prohibiting abortifacients. To be
clear, Section 4(a) of the RH Law defines an abortifacient as:
Section 4. Definition of Terms - x x x x
(a) Abortifacient refers to any drug or device that induces abortion or the destruction of a fetus
inside the mother's womb or the prevention of the fertilized ovum to reach and be implanted in the
mother's womb upon determination of the FDA.
182
As stated above, the RH Law mandates that protection must be afforded from the moment of
fertilization. By using the word " or," the RH Law prohibits not only drugs or devices that prevent
implantation, but also those that induce abortion and those that induce the destruction of a fetus
inside the mother's womb. Thus, an abortifacient is any drug or device that either:
(a) Induces abortion; or
(b) Induces the destruction of a fetus inside the mother's womb; or
(c) Prevents the fertilized ovum to reach and be implanted in the mother's womb, upon
determination of the FDA.
Contrary to the assertions made by the petitioners, the Court finds that the RH Law, consistent
with the Constitution, recognizes that the fertilized ovum already has life and that the State has a
bounden duty to protect it. The conclusion becomes clear because the RH Law, first, prohibits any
drug or device that induces abortion (first kind), which, as discussed exhaustively above, refers to
that which induces the killing or the destruction of the fertilized ovum, and, second, prohibits any
drug or device the fertilized ovum to reach and be implanted in the mother's womb (third kind).
By expressly declaring that any drug or device that prevents the fertilized ovum to reach and be
implanted in the mother's womb is an abortifacient (third kind), the RH Law does not intend to
mean at all that life only begins only at implantation, as Hon. Lagman suggests. It also does not
declare either that protection will only be given upon implantation, as the petitioners likewise
suggest. Rather, it recognizes that: one, there is a need to protect the fertilized ovum which
already has life, and two, the fertilized ovum must be protected the moment it becomes existent -
all the way until it reaches and implants in the mother's womb. After all, if life is only recognized
and afforded protection from the moment the fertilized ovum implants - there is nothing to prevent
any drug or device from killing or destroying the fertilized ovum prior to implantation.
From the foregoing, the Court finds that inasmuch as it affords protection to the fertilized ovum,
the RH Law does not sanction abortion. To repeat, it is the Court's position that life begins at
fertilization, not at implantation. When a fertilized ovum is implanted in the uterine wall , its viability
is sustained but that instance of implantation is not the point of beginning of life. It started earlier.
And as defined by the RH Law, any drug or device that induces abortion, that is, which kills or
destroys the fertilized ovum or prevents the fertilized ovum to reach and be implanted in the
mother's womb, is an abortifacient.
Proviso Under Section 9 of the RH Law
This notwithstanding, the Court finds that the proviso under Section 9 of the law that "any product
or supply included or to be included in the EDL must have a certification from the FDA that said
product and supply is made available on the condition that it is not to be used as an abortifacient"
as empty as it is absurd. The FDA, with all its expertise, cannot fully attest that a drug or device
will not all be used as an abortifacient, since the agency cannot be present in every instance when
the contraceptive product or supply will be used.171
Pursuant to its declared policy of providing access only to safe, legal and non-abortifacient
contraceptives, however, the Court finds that the proviso of Section 9, as worded, should bend to
the legislative intent and mean that "any product or supply included or to be included in the EDL
must have a certification from the FDA that said product and supply is made available on the
condition that it cannot be used as abortifacient." Such a construction is consistent with the
proviso under the second paragraph of the same section that provides:
Provided, further, That the foregoing offices shall not purchase or acquire by any means
emergency contraceptive pills, postcoital pills, abortifacients that will be used for such purpose
and their other forms or equivalent.
Abortifacients under the RH-IRR
At this juncture, the Court agrees with ALFI that the authors of the RH-IRR gravely abused their
office when they redefined the meaning of abortifacient. The RH Law defines "abortifacient" as
follows:
SEC. 4. Definition of Terms. - For the purpose of this Act, the following terms shall be defined as
follows:
(a) Abortifacient refers to any drug or device that induces abortion or the destruction of a fetus
inside the mother's womb or the prevention of the fertilized ovum to reach and be implanted in the
mother's womb upon determination of the FDA.
Section 3.0l (a) of the IRR, however, redefines "abortifacient" as:
Section 3.01 For purposes of these Rules, the terms shall be defined as follows:
a) Abortifacient refers to any drug or device that primarily induces abortion or the destruction of a
fetus inside the mother's womb or the prevention of the fertilized ovum to reach and be implanted
in the mother's womb upon determination of the Food and Drug Administration (FDA). [Emphasis
supplied]
Again in Section 3.0lG) of the RH-IRR, "contraceptive," is redefined, viz:
j) Contraceptive refers to any safe, legal, effective and scientifically proven modern family planning
method, device, or health product, whether natural or artificial, that prevents pregnancy but does
not primarily destroy a fertilized ovum or prevent a fertilized ovum from being implanted in the
mother's womb in doses of its approved indication as determined by the Food and Drug
Administration (FDA).
The above-mentioned section of the RH-IRR allows "contraceptives" and recognizes as
"abortifacient" only those that primarily induce abortion or the destruction of a fetus inside the
mother's womb or the prevention of the fertilized ovum to reach and be implanted in the mother's
womb.172
This cannot be done.
In this regard, the observations of Justice Brion and Justice Del Castillo are well taken. As they
pointed out, with the insertion of the word "primarily," Section 3.0l(a) and G) of the RH-IRR173
must be struck down for being ultra vires.
Evidently, with the addition of the word "primarily," in Section 3.0l(a) and G) of the RH-IRR is
indeed ultra vires. It contravenes Section 4(a) of the RH Law and should, therefore, be declared
invalid. There is danger that the insertion of the qualifier "primarily" will pave the way for the
approval of contraceptives which may harm or destroy the life of the unborn from
conception/fertilization in violation of Article II, Section 12 of the Constitution. With such
qualification in the RH-IRR, it appears to insinuate that a contraceptive will only be considered as
an "abortifacient" if its sole known effect is abortion or, as pertinent here, the prevention of the
implantation of the fertilized ovum.
For the same reason, this definition of "contraceptive" would permit the approval of contraceptives
which are actually abortifacients because of their fail-safe mechanism.174
Also, as discussed earlier, Section 9 calls for the certification by the FDA that these contraceptives
cannot act as abortive. With this, together with the definition of an abortifacient under Section 4 (a)
of the RH Law and its declared policy against abortion, the undeniable conclusion is that
contraceptives to be included in the PNDFS and the EDL will not only be those contraceptives that
do not have the primary action of causing abortion or the destruction of a fetus inside the mother's
womb or the prevention of the fertilized ovum to reach and be implanted in the mother's womb, but
also those that do not have the secondary action of acting the same way.
Indeed, consistent with the constitutional policy prohibiting abortion, and in line with the principle
that laws should be construed in a manner that its constitutionality is sustained, the RH Law and
its implementing rules must be consistent with each other in prohibiting abortion. Thus, the word "
primarily" in Section 3.0l(a) and G) of the RH-IRR should be declared void. To uphold the validity
of Section 3.0l(a) and G) of the RH-IRR and prohibit only those contraceptives that have the
primary effect of being an abortive would effectively "open the floodgates to the approval of
contraceptives which may harm or destroy the life of the unborn from conception/fertilization in
violation of Article II, Section 12 of the Constitution."175
To repeat and emphasize, in all cases, the "principle of no abortion" embodied in the constitutional
protection of life must be upheld.
2-The Right to Health
The petitioners claim that the RH Law violates the right to health because it requires the inclusion
of hormonal contraceptives, intrauterine devices, injectables and family products and supplies in
the National Drug Formulary and the inclusion of the same in the regular purchase of essential
medicines and supplies of all national hospitals.176 Citing various studies on the matter, the
petitioners posit that the risk of developing breast and cervical cancer is greatly increased in
women who use oral contraceptives as compared to women who never use them. They point out
that the risk is decreased when the use of contraceptives is discontinued. Further, it is contended
that the use of combined oral contraceptive pills is associated with a threefold increased risk of
venous thromboembolism, a twofold increased risk of ischematic stroke, and an indeterminate
effect on risk of myocardial infarction.177 Given the definition of "reproductive health" and "sexual
health" under Sections 4(p)178 and (w)179 of the RH Law, the petitioners assert that the assailed
legislation only seeks to ensure that women have pleasurable and satisfying sex lives.180
183
The OSG, however, points out that Section 15, Article II of the Constitution is not self-executory, it
being a mere statement of the administration's principle and policy. Even if it were self-executory,
the OSG posits that medical authorities refute the claim that contraceptive pose a danger to the
health of women.181
The Court's Position
A component to the right to life is the constitutional right to health. In this regard, the Constitution
is replete with provisions protecting and promoting the right to health. Section 15, Article II of the
Constitution provides:
Section 15. The State shall protect and promote the right to health of the people and instill health
consciousness among them.
A portion of Article XIII also specifically provides for the States' duty to provide for the health of the
people, viz:
HEALTH
Section 11. The State shall adopt an integrated and comprehensive approach to health
development which shall endeavor to make essential goods, health and other social services
available to all the people at affordable cost. There shall be priority for the needs of the
underprivileged, sick, elderly, disabled, women, and children. The State shall endeavor to provide
free medical care to paupers.
Section 12. The State shall establish and maintain an effective food and drug regulatory system
and undertake appropriate health, manpower development, and research, responsive to the
country's health needs and problems.
Section 13. The State shall establish a special agency for disabled person for their rehabilitation,
self-development, and self-reliance, and their integration into the mainstream of society.
Finally, Section 9, Article XVI provides:
Section 9. The State shall protect consumers from trade malpractices and from substandard or
hazardous products.
Contrary to the respondent's notion, however, these provisions are self-executing. Unless the
provisions clearly express the contrary, the provisions of the Constitution should be considered
self-executory. There is no need for legislation to implement these self-executing provisions.182 In
Manila Prince Hotel v. GSIS,183 it was stated:
x x x 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 can be cataclysmic. That is why the prevailing view is, as it has always
been, that –
... in case of doubt, the Constitution should be considered self-executing rather than non-self-
executing. . . . 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. (Emphases supplied)
This notwithstanding, it bears mentioning that the petitioners, particularly ALFI, do not question
contraception and contraceptives per se.184 In fact, ALFI prays that the status quo - under R.A.
No. 5921 and R.A. No. 4729, the sale and distribution of contraceptives are not prohibited when
they are dispensed by a prescription of a duly licensed by a physician - be maintained.185
The legislative intent in the enactment of the RH Law in this regard is to leave intact the provisions
of R.A. No. 4729. There is no intention at all to do away with it. It is still a good law and its
requirements are still in to be complied with. Thus, the Court agrees with the observation of
respondent Lagman that the effectivity of the RH Law will not lead to the unmitigated proliferation
of contraceptives since the sale, distribution and dispensation of contraceptive drugs and devices
will still require the prescription of a licensed physician. With R.A. No. 4729 in place, there exists
adequate safeguards to ensure the public that only contraceptives that are safe are made
available to the public. As aptly explained by respondent Lagman:
D. Contraceptives cannot be
dispensed and used without
prescription
108. As an added protection to voluntary users of contraceptives, the same cannot be dispensed
and used without prescription.
109. Republic Act No. 4729 or "An Act to Regulate the Sale, Dispensation, and/ or Distribution of
Contraceptive Drugs and Devices" and Republic Act No. 5921 or "An Act Regulating the Practice
of Pharmacy and Setting Standards of Pharmaceutical Education in the Philippines and for Other
Purposes" are not repealed by the RH Law and the provisions of said Acts are not inconsistent
with the RH Law.
110. Consequently, the sale, distribution and dispensation of contraceptive drugs and devices are
particularly governed by RA No. 4729 which provides in full:
"Section 1. It shall be unlawful for any person, partnership, or corporation, to sell, dispense or
otherwise distribute whether for or without consideration, any contraceptive drug or device, unless
such sale, dispensation or distribution is by a duly licensed drug store or pharmaceutical company
and with the prescription of a qualified medical practitioner.
"Sec. 2 . For the purpose of this Act:
"(a) "Contraceptive drug" is any medicine, drug, chemical, or portion which is used exclusively for
the purpose of preventing fertilization of the female ovum: and
"(b) "Contraceptive device" is any instrument, device, material, or agent introduced into the female
reproductive system for the primary purpose of preventing conception.
"Sec. 3 Any person, partnership, or corporation, violating the provisions of this Act shall be
punished with a fine of not more than five hundred pesos or an imprisonment of not less than six
months or more than one year or both in the discretion of the Court.
"This Act shall take effect upon its approval.
"Approved: June 18, 1966"
111. Of the same import, but in a general manner, Section 25 of RA No. 5921 provides:
"Section 25. Sale of medicine, pharmaceuticals, drugs and devices. No medicine, pharmaceutical,
or drug of whatever nature and kind or device shall be compounded, dispensed, sold or resold, or
otherwise be made available to the consuming public except through a prescription drugstore or
hospital pharmacy, duly established in accordance with the provisions of this Act.
112. With all of the foregoing safeguards, as provided for in the RH Law and other relevant
statutes, the pretension of the petitioners that the RH Law will lead to the unmitigated proliferation
of contraceptives, whether harmful or not, is completely unwarranted and baseless.186
[Emphases in the Original. Underlining supplied.]
In Re: Section 10 of the RH Law:
The foregoing safeguards should be read in connection with Section 10 of the RH Law which
provides:
SEC. 10. Procurement and Distribution of Family Planning Supplies. - The DOH shall procure,
distribute to LGUs and monitor the usage of family planning supplies for the whole country. The
DOH shall coordinate with all appropriate local government bodies to plan and implement this
procurement and distribution program. The supply and budget allotments shall be based on,
among others, the current levels and projections of the following:
(a) Number of women of reproductive age and couples who want to space or limit their children;
(b) Contraceptive prevalence rate, by type of method used; and
(c) Cost of family planning supplies.
Provided, That LGUs may implement its own procurement, distribution and monitoring program
consistent with the overall provisions of this Act and the guidelines of the DOH.
Thus, in the distribution by the DOH of contraceptive drugs and devices, it must consider the
provisions of R.A. No. 4729, which is still in effect, and ensure that the contraceptives that it will
procure shall be from a duly licensed drug store or pharmaceutical company and that the actual
dispensation of these contraceptive drugs and devices will done following a prescription of a
qualified medical practitioner. The distribution of contraceptive drugs and devices must not be
indiscriminately done. The public health must be protected by all possible means. As pointed out
by Justice De Castro, a heavy responsibility and burden are assumed by the government in
supplying contraceptive drugs and devices, for it may be held accountable for any injury, illness or
loss of life resulting from or incidental to their use.187
At any rate, it bears pointing out that not a single contraceptive has yet been submitted to the FDA
pursuant to the RH Law. It behooves the Court to await its determination which drugs or devices
are declared by the FDA as safe, it being the agency tasked to ensure that food and medicines
available to the public are safe for public consumption. Consequently, the Court finds that, at this
184
point, the attack on the RH Law on this ground is premature. Indeed, the various kinds of
contraceptives must first be measured up to the constitutional yardstick as expounded herein, to
be determined as the case presents itself.
At this point, the Court is of the strong view that Congress cannot legislate that hormonal
contraceptives and intra-uterine devices are safe and non-abortifacient. The first sentence of
Section 9 that ordains their inclusion by the National Drug Formulary in the EDL by using the
mandatory "shall" is to be construed as operative only after they have been tested, evaluated, and
approved by the FDA. The FDA, not Congress, has the expertise to determine whether a
particular hormonal contraceptive or intrauterine device is safe and non-abortifacient. The
provision of the third sentence concerning the requirements for the inclusion or removal of a
particular family planning supply from the EDL supports this construction.
Stated differently, the provision in Section 9 covering the inclusion of hormonal contraceptives,
intra-uterine devices, injectables, and other safe, legal, non-abortifacient and effective family
planning products and supplies by the National Drug Formulary in the EDL is not mandatory.
There must first be a determination by the FDA that they are in fact safe, legal, non-abortifacient
and effective family planning products and supplies. There can be no predetermination by
Congress that the gamut of contraceptives are "safe, legal, non-abortifacient and effective" without
the proper scientific examination.
3 -Freedom of Religion
and the Right to Free Speech
Position of the Petitioners:
1. On Contraception
While contraceptives and procedures like vasectomy and tubal ligation are not covered by the
constitutional proscription, there are those who, because of their religious education and
background, sincerely believe that contraceptives, whether abortifacient or not, are evil. Some of
these are medical practitioners who essentially claim that their beliefs prohibit not only the use of
contraceptives but also the willing participation and cooperation in all things dealing with
contraceptive use. Petitioner PAX explained that "contraception is gravely opposed to marital
chastity, it is contrary to the good of the transmission of life, and to the reciprocal self-giving of the
spouses; it harms true love and denies the sovereign rule of God in the transmission of Human
life."188
The petitioners question the State-sponsored procurement of contraceptives, arguing that the
expenditure of their taxes on contraceptives violates the guarantee of religious freedom since
contraceptives contravene their religious beliefs.189
2. On Religious Accommodation and
The Duty to Refer
Petitioners Imbong and Luat note that while the RH Law attempts to address religious sentiments
by making provisions for a conscientious objector, the constitutional guarantee is nonetheless
violated because the law also imposes upon the conscientious objector the duty to refer the
patient seeking reproductive health services to another medical practitioner who would be able to
provide for the patient's needs. For the petitioners, this amounts to requiring the conscientious
objector to cooperate with the very thing he refuses to do without violating his/her religious
beliefs.190
They further argue that even if the conscientious objector's duty to refer is recognized, the
recognition is unduly limited, because although it allows a conscientious objector in Section 23
(a)(3) the option to refer a patient seeking reproductive health services and information - no
escape is afforded the conscientious objector in Section 23 (a)(l) and (2), i.e. against a patient
seeking reproductive health procedures. They claim that the right of other individuals to
conscientiously object, such as: a) those working in public health facilities referred to in Section 7;
b) public officers involved in the implementation of the law referred to in Section 23(b ); and c)
teachers in public schools referred to in Section 14 of the RH Law, are also not recognize.191
Petitioner Echavez and the other medical practitioners meanwhile, contend that the requirement to
refer the matter to another health care service provider is still considered a compulsion on those
objecting healthcare service providers. They add that compelling them to do the act against their
will violates the Doctrine of Benevolent Neutrality. Sections 9, 14 and 1 7 of the law are too
secular that they tend to disregard the religion of Filipinos. Authorizing the use of contraceptives
with abortive effects, mandatory sex education, mandatory pro-bono reproductive health services
to indigents encroach upon the religious freedom of those upon whom they are required.192
Petitioner CFC also argues that the requirement for a conscientious objector to refer the person
seeking reproductive health care services to another provider infringes on one's freedom of
religion as it forces the objector to become an unwilling participant in the commission of a serious
sin under Catholic teachings. While the right to act on one's belief may be regulated by the State,
the acts prohibited by the RH Law are passive acts which produce neither harm nor injury to the
public.193
Petitioner CFC adds that the RH Law does not show compelling state interest to justify regulation
of religious freedom because it mentions no emergency, risk or threat that endangers state
interests. It does not explain how the rights of the people (to equality, non-discrimination of rights,
sustainable human development, health, education, information, choice and to make decisions
according to religious convictions, ethics, cultural beliefs and the demands of responsible
parenthood) are being threatened or are not being met as to justify the impairment of religious
freedom.194
Finally, the petitioners also question Section 15 of the RH Law requiring would-be couples to
attend family planning and responsible parenthood seminars and to obtain a certificate of
compliance. They claim that the provision forces individuals to participate in the implementation of
the RH Law even if it contravenes their religious beliefs.195 As the assailed law dangles the threat
of penalty of fine and/or imprisonment in case of non-compliance with its provisions, the
petitioners claim that the RH Law forcing them to provide, support and facilitate access and
information to contraception against their beliefs must be struck down as it runs afoul to the
constitutional guarantee of religious freedom.
The Respondents' Positions
The respondents, on the other hand, contend that the RH Law does not provide that a specific
mode or type of contraceptives be used, be it natural or artificial. It neither imposes nor sanctions
any religion or belief.196 They point out that the RH Law only seeks to serve the public interest by
providing accessible, effective and quality reproductive health services to ensure maternal and
child health, in line with the State's duty to bring to reality the social justice health guarantees of
the Constitution,197 and that what the law only prohibits are those acts or practices, which deprive
others of their right to reproductive health.198 They assert that the assailed law only seeks to
guarantee informed choice, which is an assurance that no one will be compelled to violate his
religion against his free will.199
The respondents add that by asserting that only natural family planning should be allowed, the
petitioners are effectively going against the constitutional right to religious freedom, the same right
they invoked to assail the constitutionality of the RH Law.200 In other words, by seeking the
declaration that the RH Law is unconstitutional, the petitioners are asking that the Court recognize
only the Catholic Church's sanctioned natural family planning methods and impose this on the
entire citizenry.201
With respect to the duty to refer, the respondents insist that the same does not violate the
constitutional guarantee of religious freedom, it being a carefully balanced compromise between
the interests of the religious objector, on one hand, who is allowed to keep silent but is required to
refer -and that of the citizen who needs access to information and who has the right to expect that
the health care professional in front of her will act professionally. For the respondents, the
concession given by the State under Section 7 and 23(a)(3) is sufficient accommodation to the
right to freely exercise one's religion without unnecessarily infringing on the rights of others.202
Whatever burden is placed on the petitioner's religious freedom is minimal as the duty to refer is
limited in duration, location and impact.203
Regarding mandatory family planning seminars under Section 15 , the respondents claim that it is
a reasonable regulation providing an opportunity for would-be couples to have access to
information regarding parenthood, family planning, breastfeeding and infant nutrition. It is argued
that those who object to any information received on account of their attendance in the required
seminars are not compelled to accept information given to them. They are completely free to reject
any information they do not agree with and retain the freedom to decide on matters of family life
without intervention of the State.204
For their part, respondents De Venecia et al., dispute the notion that natural family planning is the
only method acceptable to Catholics and the Catholic hierarchy. Citing various studies and
surveys on the matter, they highlight the changing stand of the Catholic Church on contraception
throughout the years and note the general acceptance of the benefits of contraceptives by its
followers in planning their families.
185
The Church and The State
At the outset, it cannot be denied that we all live in a heterogeneous society. It is made up of
people of diverse ethnic, cultural and religious beliefs and backgrounds. History has shown us that
our government, in law and in practice, has allowed these various religious, cultural, social and
racial groups to thrive in a single society together. It has embraced minority groups and is tolerant
towards all - the religious people of different sects and the non-believers. The undisputed fact is
that our people generally believe in a deity, whatever they conceived Him to be, and to whom they
call for guidance and enlightenment in crafting our fundamental law. Thus, the preamble of the
present Constitution reads:
We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a just and
humane society, and establish a Government that shall embody our ideals and aspirations,
promote the common good, conserve and develop our patrimony, and secure to ourselves and our
posterity, the blessings of independence and democracy under the rule of law and a regime of
truth, justice, freedom, love, equality, and peace, do ordain and promulgate this Constitution.
The Filipino people in "imploring the aid of Almighty God " manifested their spirituality innate in our
nature and consciousness as a people, shaped by tradition and historical experience. As this is
embodied in the preamble, it means that the State recognizes with respect the influence of religion
in so far as it instills into the mind the purest principles of morality.205 Moreover, in recognition of
the contributions of religion to society, the 1935, 1973 and 1987 constitutions contain benevolent
and accommodating provisions towards religions such as tax exemption of church property, salary
of religious officers in government institutions, and optional religious instructions in public schools.
The Framers, however, felt the need to put up a strong barrier so that the State would not
encroach into the affairs of the church, and vice-versa. The principle of separation of Church and
State was, thus, enshrined in Article II, Section 6 of the 1987 Constitution, viz:
Section 6. The separation of Church and State shall be inviolable.
Verily, the principle of separation of Church and State is based on mutual respect.1âwphi1
Generally, the State cannot meddle in the internal affairs of the church, much less question its
faith and dogmas or dictate upon it. It cannot favor one religion and discriminate against another.
On the other hand, the church cannot impose its beliefs and convictions on the State and the rest
of the citizenry. It cannot demand that the nation follow its beliefs, even if it sincerely believes that
they are good for the country.
Consistent with the principle that not any one religion should ever be preferred over another, the
Constitution in the above-cited provision utilizes the term "church" in its generic sense, which
refers to a temple, a mosque, an iglesia, or any other house of God which metaphorically
symbolizes a religious organization. Thus, the "Church" means the religious congregations
collectively.
Balancing the benefits that religion affords and the need to provide an ample barrier to protect the
State from the pursuit of its secular objectives, the Constitution lays down the following mandate in
Article III, Section 5 and Article VI, Section 29 (2), of the 1987 Constitution:
Section. 5. No law shall be made respecting an establishment of religion, or prohibiting the free
exercise thereof. The free exercise and enjoyment of religious profession and worship, without
discrimination or preference, shall forever be allowed. No religious test shall be required for the
exercise of civil or political rights.
Section 29.
xxx.
No public money or property shall be appropriated, applied, paid, or employed, directly or
indirectly, for the use, benefit, or support of any sect, church, denomination, sectarian institution,
or system of religion, or of any priest, preacher, minister, other religious teacher, or dignitary as
such, except when such priest, preacher, minister, or dignitary is assigned to the armed forces, or
to any penal institution, or government orphanage or leprosarium.
In short, the constitutional assurance of religious freedom provides two guarantees: the
Establishment Clause and the Free Exercise Clause.
The establishment clause "principally prohibits the State from sponsoring any religion or favoring
any religion as against other religions. It mandates a strict neutrality in affairs among religious
groups."206 Essentially, it prohibits the establishment of a state religion and the use of public
resources for the support or prohibition of a religion.
On the other hand, the basis of the free exercise clause is the respect for the inviolability of the
human conscience.207 Under this part of religious freedom guarantee, the State is prohibited from
unduly interfering with the outside manifestations of one's belief and faith.208 Explaining the
concept of religious freedom, the Court, in Victoriano v. Elizalde Rope Workers Union209 wrote:
The constitutional provisions not only prohibits legislation for the support of any religious tenets or
the modes of worship of any sect, thus forestalling compulsion by law of the acceptance of any
creed or the practice of any form of worship (U.S. Ballard, 322 U.S. 78, 88 L. ed. 1148, 1153), but
also assures the free exercise of one's chosen form of religion within limits of utmost amplitude. It
has been said that the religion clauses of the Constitution are all designed to protect the broadest
possible liberty of conscience, to allow each man to believe as his conscience directs, to profess
his beliefs, and to live as he believes he ought to live, consistent with the liberty of others and with
the common good. Any legislation whose effect or purpose is to impede the observance of one or
all religions, or to discriminate invidiously between the religions, is invalid, even though the burden
may be characterized as being only indirect. (Sherbert v. Verner, 374 U.S. 398, 10 L.ed.2d 965,
83 S. Ct. 1970) But if the state regulates conduct by enacting, within its power, a general law
which has for its purpose and effect to advance the state's secular goals, the statute is valid
despite its indirect burden on religious observance, unless the state can accomplish its purpose
without imposing such burden. (Braunfeld v. Brown, 366 U.S. 599, 6 Led. 2d. 563, 81 S. Ct. 144;
McGowan v. Maryland, 366 U.S. 420, 444-5 and 449).
As expounded in Escritor,
The establishment and free exercise clauses were not designed to serve contradictory purposes.
They have a single goal-to promote freedom of individual religious beliefs and practices. In
simplest terms, the free exercise clause prohibits government from inhibiting religious beliefs with
penalties for religious beliefs and practice, while the establishment clause prohibits government
from inhibiting religious belief with rewards for religious beliefs and practices. In other words, the
two religion clauses were intended to deny government the power to use either the carrot or the
stick to influence individual religious beliefs and practices.210
Corollary to the guarantee of free exercise of one's religion is the principle that the guarantee of
religious freedom is comprised of two parts: the freedom to believe, and the freedom to act on
one's belief. The first part is absolute. As explained in Gerona v. Secretary of Education:211
The realm of belief and creed is infinite and limitless bounded only by one's imagination and
thought. So is the freedom of belief, including religious belief, limitless and without bounds. One
may believe in most anything, however strange, bizarre and unreasonable the same may appear
to others, even heretical when weighed in the scales of orthodoxy or doctrinal standards. But
between the freedom of belief and the exercise of said belief, there is quite a stretch of road to
travel.212
The second part however, is limited and subject to the awesome power of the State and can be
enjoyed only with proper regard to the rights of others. It is "subject to regulation where the belief
is translated into external acts that affect the public welfare."213
Legislative Acts and the
Free Exercise Clause
Thus, in case of conflict between the free exercise clause and the State, the Court adheres to the
doctrine of benevolent neutrality. This has been clearly decided by the Court in Estrada v. Escritor,
(Escritor)214 where it was stated "that benevolent neutrality-accommodation, whether mandatory
or permissive, is the spirit, intent and framework underlying the Philippine Constitution."215 In the
same case, it was further explained that"
The benevolent neutrality theory believes that with respect to these governmental actions,
accommodation of religion may be allowed, not to promote the government's favored form of
religion, but to allow individuals and groups to exercise their religion without hindrance. "The
purpose of accommodation is to remove a burden on, or facilitate the exercise of, a person's or
institution's religion."216 "What is sought under the theory of accommodation is not a declaration
of unconstitutionality of a facially neutral law, but an exemption from its application or its
'burdensome effect,' whether by the legislature or the courts."217
In ascertaining the limits of the exercise of religious freedom, the compelling state interest test is
proper.218 Underlying the compelling state interest test is the notion that free exercise is a
fundamental right and that laws burdening it should be subject to strict scrutiny.219 In Escritor, it
was written:
Philippine jurisprudence articulates several tests to determine these limits. Beginning with the first
case on the Free Exercise Clause, American Bible Society, the Court mentioned the "clear and
present danger" test but did not employ it. Nevertheless, this test continued to be cited in
186
subsequent cases on religious liberty. The Gerona case then pronounced that the test of
permissibility of religious freedom is whether it violates the established institutions of society and
law. The Victoriano case mentioned the "immediate and grave danger" test as well as the doctrine
that a law of general applicability may burden religious exercise provided the law is the least
restrictive means to accomplish the goal of the law. The case also used, albeit inappropriately, the
"compelling state interest" test. After Victoriano , German went back to the Gerona rule. Ebralinag
then employed the "grave and immediate danger" test and overruled the Gerona test. The fairly
recent case of Iglesia ni Cristo went back to the " clear and present danger" test in the maiden
case of A merican Bible Society. Not surprisingly, all the cases which employed the "clear and
present danger" or "grave and immediate danger" test involved, in one form or another, religious
speech as this test is often used in cases on freedom of expression. On the other hand, the
Gerona and German cases set the rule that religious freedom will not prevail over established
institutions of society and law. Gerona, however, which was the authority cited by German has
been overruled by Ebralinag which employed the "grave and immediate danger" test . Victoriano
was the only case that employed the "compelling state interest" test, but as explained previously,
the use of the test was inappropriate to the facts of the case.
The case at bar does not involve speech as in A merican Bible Society, Ebralinag and Iglesia ni
Cristo where the "clear and present danger" and "grave and immediate danger" tests were
appropriate as speech has easily discernible or immediate effects. The Gerona and German
doctrine, aside from having been overruled, is not congruent with the benevolent neutrality
approach, thus not appropriate in this jurisdiction. Similar to Victoriano, the present case involves
purely conduct arising from religious belief. The "compelling state interest" test is proper where
conduct is involved for the whole gamut of human conduct has different effects on the state's
interests: some effects may be immediate and short-term while others delayed and far-reaching. A
test that would protect the interests of the state in preventing a substantive evil, whether
immediate or delayed, is therefore necessary. However, not any interest of the state would suffice
to prevail over the right to religious freedom as this is a fundamental right that enjoys a preferred
position in the hierarchy of rights - "the most inalienable and sacred of all human rights", in the
words of Jefferson. This right is sacred for an invocation of the Free Exercise Clause is an appeal
to a higher sovereignty. The entire constitutional order of limited government is premised upon an
acknowledgment of such higher sovereignty, thus the Filipinos implore the "aid of Almighty God in
order to build a just and humane society and establish a government." As held in Sherbert, only
the gravest abuses, endangering paramount interests can limit this fundamental right. A mere
balancing of interests which balances a right with just a colorable state interest is therefore not
appropriate. Instead, only a compelling interest of the state can prevail over the fundamental right
to religious liberty. The test requires the state to carry a heavy burden, a compelling one, for to do
otherwise would allow the state to batter religion, especially the less powerful ones until they are
destroyed. In determining which shall prevail between the state's interest and religious liberty,
reasonableness shall be the guide. The "compelling state interest" serves the purpose of revering
religious liberty while at the same time affording protection to the paramount interests of the state.
This was the test used in Sherbert which involved conduct, i.e. refusal to work on Saturdays. In
the end, the "compelling state interest" test, by upholding the paramount interests of the state,
seeks to protect the very state, without which, religious liberty will not be preserved. [Emphases in
the original. Underlining supplied.]
The Court's Position
In the case at bench, it is not within the province of the Court to determine whether the use of
contraceptives or one's participation in the support of modem reproductive health measures is
moral from a religious standpoint or whether the same is right or wrong according to one's dogma
or belief. For the Court has declared that matters dealing with "faith, practice, doctrine, form of
worship, ecclesiastical law, custom and rule of a church ... are unquestionably ecclesiastical
matters which are outside the province of the civil courts."220 The jurisdiction of the Court extends
only to public and secular morality. Whatever pronouncement the Court makes in the case at
bench should be understood only in this realm where it has authority. Stated otherwise, while the
Court stands without authority to rule on ecclesiastical matters, as vanguard of the Constitution, it
does have authority to determine whether the RH Law contravenes the guarantee of religious
freedom.
At first blush, it appears that the RH Law recognizes and respects religion and religious beliefs
and convictions. It is replete with assurances the no one can be compelled to violate the tenets of
his religion or defy his religious convictions against his free will. Provisions in the RH Law
respecting religious freedom are the following:
1. The State recognizes and guarantees the human rights of all persons including their right to
equality and nondiscrimination of these rights, the right to sustainable human development, the
right to health which includes reproductive health, the right to education and information, and the
right to choose and make decisions for themselves in accordance with their religious convictions,
ethics, cultural beliefs, and the demands of responsible parenthood. [Section 2, Declaration of
Policy]
2 . The State recognizes marriage as an inviolable social institution and the foundation of the
family which in turn is the foundation of the nation. Pursuant thereto, the State shall defend:
(a) The right of spouses to found a family in accordance with their religious convictions and the
demands of responsible parenthood." [Section 2, Declaration of Policy]
3. The State shall promote and provide information and access, without bias, to all methods of
family planning, including effective natural and modern methods which have been proven
medically safe, legal, non-abortifacient, and effective in accordance with scientific and evidence-
based medical research standards such as those registered and approved by the FDA for the poor
and marginalized as identified through the NHTS-PR and other government measures of
identifying marginalization: Provided, That the State shall also provide funding support to promote
modern natural methods of family planning, especially the Billings Ovulation Method, consistent
with the needs of acceptors and their religious convictions. [Section 3(e), Declaration of Policy]
4. The State shall promote programs that: (1) enable individuals and couples to have the number
of children they desire with due consideration to the health, particularly of women, and the
resources available and affordable to them and in accordance with existing laws, public morals
and their religious convictions. [Section 3CDJ
5. The State shall respect individuals' preferences and choice of family planning methods that are
in accordance with their religious convictions and cultural beliefs, taking into consideration the
State's obligations under various human rights instruments. [Section 3(h)]
6. Active participation by nongovernment organizations (NGOs) , women's and people's
organizations, civil society, faith-based organizations, the religious sector and communities is
crucial to ensure that reproductive health and population and development policies, plans, and
programs will address the priority needs of women, the poor, and the marginalized. [Section 3(i)]
7. Responsible parenthood refers to the will and ability of a parent to respond to the needs and
aspirations of the family and children. It is likewise a shared responsibility between parents to
determine and achieve the desired number of children, spacing and timing of their children
according to their own family life aspirations, taking into account psychological preparedness,
health status, sociocultural and economic concerns consistent with their religious convictions.
[Section 4(v)] (Emphases supplied)
While the Constitution prohibits abortion, laws were enacted allowing the use of contraceptives. To
some medical practitioners, however, the whole idea of using contraceptives is an anathema.
Consistent with the principle of benevolent neutrality, their beliefs should be respected.
The Establishment Clause
and Contraceptives
In the same breath that the establishment clause restricts what the government can do with
religion, it also limits what religious sects can or cannot do with the government. They can neither
cause the government to adopt their particular doctrines as policy for everyone, nor can they not
cause the government to restrict other groups. To do so, in simple terms, would cause the State to
adhere to a particular religion and, thus, establishing a state religion.
Consequently, the petitioners are misguided in their supposition that the State cannot enhance its
population control program through the RH Law simply because the promotion of contraceptive
use is contrary to their religious beliefs. Indeed, the State is not precluded to pursue its legitimate
secular objectives without being dictated upon by the policies of any one religion. One cannot
refuse to pay his taxes simply because it will cloud his conscience. The demarcation line between
Church and State demands that one render unto Caesar the things that are Caesar's and unto
God the things that are God's.221
The Free Exercise Clause and the Duty to Refer
While the RH Law, in espousing state policy to promote reproductive health manifestly respects
diverse religious beliefs in line with the Non-Establishment Clause, the same conclusion cannot be
reached with respect to Sections 7, 23 and 24 thereof. The said provisions commonly mandate
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that a hospital or a medical practitioner to immediately refer a person seeking health care and
services under the law to another accessible healthcare provider despite their conscientious
objections based on religious or ethical beliefs.
In a situation where the free exercise of religion is allegedly burdened by government legislation or
practice, the compelling state interest test in line with the Court's espousal of the Doctrine of
Benevolent Neutrality in Escritor, finds application. In this case, the conscientious objector's claim
to religious freedom would warrant an exemption from obligations under the RH Law, unless the
government succeeds in demonstrating a more compelling state interest in the accomplishment of
an important secular objective. Necessarily so, the plea of conscientious objectors for exemption
from the RH Law deserves no less than strict scrutiny.
In applying the test, the first inquiry is whether a conscientious objector's right to religious freedom
has been burdened. As in Escritor, there is no doubt that an intense tug-of-war plagues a
conscientious objector. One side coaxes him into obedience to the law and the abandonment of
his religious beliefs, while the other entices him to a clean conscience yet under the pain of
penalty. The scenario is an illustration of the predicament of medical practitioners whose religious
beliefs are incongruent with what the RH Law promotes.
The Court is of the view that the obligation to refer imposed by the RH Law violates the religious
belief and conviction of a conscientious objector. Once the medical practitioner, against his will,
refers a patient seeking information on modem reproductive health products, services, procedures
and methods, his conscience is immediately burdened as he has been compelled to perform an
act against his beliefs. As Commissioner Joaquin A. Bernas (Commissioner Bernas) has written,
"at the basis of the free exercise clause is the respect for the inviolability of the human
conscience.222
Though it has been said that the act of referral is an opt-out clause, it is, however, a false
compromise because it makes pro-life health providers complicit in the performance of an act that
they find morally repugnant or offensive. They cannot, in conscience, do indirectly what they
cannot do directly. One may not be the principal, but he is equally guilty if he abets the offensive
act by indirect participation.
Moreover, the guarantee of religious freedom is necessarily intertwined with the right to free
speech, it being an externalization of one's thought and conscience. This in turn includes the right
to be silent. With the constitutional guarantee of religious freedom follows the protection that
should be afforded to individuals in communicating their beliefs to others as well as the protection
for simply being silent. The Bill of Rights guarantees the liberty of the individual to utter what is in
his mind and the liberty not to utter what is not in his mind.223 While the RH Law seeks to provide
freedom of choice through informed consent, freedom of choice guarantees the liberty of the
religious conscience and prohibits any degree of compulsion or burden, whether direct or indirect,
in the practice of one's religion.224
In case of conflict between the religious beliefs and moral convictions of individuals, on one hand,
and the interest of the State, on the other, to provide access and information on reproductive
health products, services, procedures and methods to enable the people to determine the timing,
number and spacing of the birth of their children, the Court is of the strong view that the religious
freedom of health providers, whether public or private, should be accorded primacy. Accordingly, a
conscientious objector should be exempt from compliance with the mandates of the RH Law. If he
would be compelled to act contrary to his religious belief and conviction, it would be violative of
"the principle of non-coercion" enshrined in the constitutional right to free exercise of religion.
Interestingly, on April 24, 2013, Scotland's Inner House of the Court of Session, found in the case
of Doogan and Wood v. NHS Greater Glasgow and Clyde Health Board,225 that the midwives
claiming to be conscientious objectors under the provisions of Scotland's Abortion Act of 1967,
could not be required to delegate, supervise or support staff on their labor ward who were involved
in abortions.226 The Inner House stated "that if 'participation' were defined according to whether
the person was taking part 'directly' or ' indirectly' this would actually mean more complexity and
uncertainty."227
While the said case did not cover the act of referral, the applicable principle was the same - they
could not be forced to assist abortions if it would be against their conscience or will.
Institutional Health Providers
The same holds true with respect to non-maternity specialty hospitals and hospitals owned and
operated by a religious group and health care service providers. Considering that Section 24 of
the RH Law penalizes such institutions should they fail or refuse to comply with their duty to refer
under Section 7 and Section 23(a)(3), the Court deems that it must be struck down for being
violative of the freedom of religion. The same applies to Section 23(a)(l) and (a)(2) in relation to
Section 24, considering that in the dissemination of information regarding programs and services
and in the performance of reproductive health procedures, the religious freedom of health care
service providers should be respected.
In the case of Islamic Da'wah Council of the Philippines, Inc. v. Office of the Executive
Secretary228 it was stressed:
Freedom of religion was accorded preferred status by the framers of our fundamental law. And
this Court has consistently affirmed this preferred status, well aware that it is "designed to protect
the broadest possible liberty of conscience, to allow each man to believe as his conscience
directs, to profess his beliefs, and to live as he believes he ought to live, consistent with the liberty
of others and with the common good."10
The Court is not oblivious to the view that penalties provided by law endeavour to ensure
compliance. Without set consequences for either an active violation or mere inaction, a law tends
to be toothless and ineffectual. Nonetheless, when what is bartered for an effective
implementation of a law is a constitutionally-protected right the Court firmly chooses to stamp its
disapproval. The punishment of a healthcare service provider, who fails and/or refuses to refer a
patient to another, or who declines to perform reproductive health procedure on a patient because
incompatible religious beliefs, is a clear inhibition of a constitutional guarantee which the Court
cannot allow.
The Implementing Rules and Regulation (RH-IRR)
The last paragraph of Section 5.24 of the RH-IRR reads:
Provided, That skilled health professional such as provincial, city or municipal health officers,
chiefs of hospital, head nurses, supervising midwives, among others, who by virtue of their office
are specifically charged with the duty to implement the provisions of the RPRH Act and these
Rules, cannot be considered as conscientious objectors.
This is discriminatory and violative of the equal protection clause. The conscientious objection
clause should be equally protective of the religious belief of public health officers. There is no
perceptible distinction why they should not be considered exempt from the mandates of the law.
The protection accorded to other conscientious objectors should equally apply to all medical
practitioners without distinction whether they belong to the public or private sector. After all, the
freedom to believe is intrinsic in every individual and the protective robe that guarantees its free
exercise is not taken off even if one acquires employment in the government.
It should be stressed that intellectual liberty occupies a place inferior to none in the hierarchy of
human values. The mind must be free to think what it wills, whether in the secular or religious
sphere, to give expression to its beliefs by oral discourse or through the media and, thus, seek
other candid views in occasions or gatherings or in more permanent aggrupation. Embraced in
such concept then are freedom of religion, freedom of speech, of the press, assembly and petition,
and freedom of association.229
The discriminatory provision is void not only because no such exception is stated in the RH Law
itself but also because it is violative of the equal protection clause in the Constitution. Quoting
respondent Lagman, if there is any conflict between the RH-IRR and the RH Law, the law must
prevail.
Justice Mendoza:
I'll go to another point. The RH law .. .in your Comment- in-Intervention on page 52, you
mentioned RH Law is replete with provisions in upholding the freedom of religion and respecting
religious convictions. Earlier, you affirmed this with qualifications. Now, you have read, I presumed
you have read the IRR-Implementing Rules and Regulations of the RH Bill?
Congressman Lagman:
Yes, Your Honor, I have read but I have to admit, it's a long IRR and I have not thoroughly
dissected the nuances of the provisions.
Justice Mendoza:
I will read to you one provision. It's Section 5.24. This I cannot find in the RH Law. But in the IRR it
says: " .... skilled health professionals such as provincial, city or municipal health officers, chief of
hospitals, head nurses, supervising midwives, among others, who by virtue of their office are
specifically charged with the duty to implement the provisions of the RPRH Act and these Rules,
cannot be considered as conscientious objectors." Do you agree with this?
Congressman Lagman:
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I will have to go over again the provisions, Your Honor.
Justice Mendoza:
In other words, public health officers in contrast to the private practitioners who can be
conscientious objectors, skilled health professionals cannot be considered conscientious
objectors. Do you agree with this? Is this not against the constitutional right to the religious belief?
Congressman Lagman:
Your Honor, if there is any conflict between the IRR and the law, the law must prevail.230
Compelling State Interest
The foregoing discussion then begets the question on whether the respondents, in defense of the
subject provisions, were able to: 1] demonstrate a more compelling state interest to restrain
conscientious objectors in their choice of services to render; and 2] discharge the burden of proof
that the obligatory character of the law is the least intrusive means to achieve the objectives of the
law.
Unfortunately, a deep scrutiny of the respondents' submissions proved to be in vain. The OSG
was curiously silent in the establishment of a more compelling state interest that would rationalize
the curbing of a conscientious objector's right not to adhere to an action contrary to his religious
convictions. During the oral arguments, the OSG maintained the same silence and evasion. The
Transcripts of the Stenographic Notes disclose the following:
Justice De Castro:
Let's go back to the duty of the conscientious objector to refer. ..
Senior State Solicitor Hilbay:
Yes, Justice.
Justice De Castro:
... which you are discussing awhile ago with Justice Abad. What is the compelling State interest in
imposing this duty to refer to a conscientious objector which refuses to do so because of his
religious belief?
Senior State Solicitor Hilbay:
Ahh, Your Honor, ..
Justice De Castro:
What is the compelling State interest to impose this burden?
Senior State Solicitor Hilbay:
In the first place, Your Honor, I don't believe that the standard is a compelling State interest, this is
an ordinary health legislation involving professionals. This is not a free speech matter or a pure
free exercise matter. This is a regulation by the State of the relationship between medical doctors
and their patients.231
Resultantly, the Court finds no compelling state interest which would limit the free exercise clause
of the conscientious objectors, however few in number. Only the prevention of an immediate and
grave danger to the security and welfare of the community can justify the infringement of religious
freedom. If the government fails to show the seriousness and immediacy of the threat, State
intrusion is constitutionally unacceptable.232
Freedom of religion means more than just the freedom to believe. It also means the freedom to act
or not to act according to what one believes. And this freedom is violated when one is compelled
to act against one's belief or is prevented from acting according to one's belief.233
Apparently, in these cases, there is no immediate danger to the life or health of an individual in the
perceived scenario of the subject provisions. After all, a couple who plans the timing, number and
spacing of the birth of their children refers to a future event that is contingent on whether or not the
mother decides to adopt or use the information, product, method or supply given to her or whether
she even decides to become pregnant at all. On the other hand, the burden placed upon those
who object to contraceptive use is immediate and occurs the moment a patient seeks consultation
on reproductive health matters.
Moreover, granting that a compelling interest exists to justify the infringement of the conscientious
objector's religious freedom, the respondents have failed to demonstrate "the gravest abuses,
endangering paramount interests" which could limit or override a person's fundamental right to
religious freedom. Also, the respondents have not presented any government effort exerted to
show that the means it takes to achieve its legitimate state objective is the least intrusive
means.234 Other than the assertion that the act of referring would only be momentary,
considering that the act of referral by a conscientious objector is the very action being contested
as violative of religious freedom, it behooves the respondents to demonstrate that no other means
can be undertaken by the State to achieve its objective without violating the rights of the
conscientious objector. The health concerns of women may still be addressed by other
practitioners who may perform reproductive health-related procedures with open willingness and
motivation. Suffice it to say, a person who is forced to perform an act in utter reluctance deserves
the protection of the Court as the last vanguard of constitutional freedoms.
At any rate, there are other secular steps already taken by the Legislature to ensure that the right
to health is protected. Considering other legislations as they stand now, R.A . No. 4 729 or the
Contraceptive Act, R.A. No. 6365 or "The Population Act of the Philippines" and R.A. No. 9710,
otherwise known as "The Magna Carta of Women," amply cater to the needs of women in relation
to health services and programs. The pertinent provision of Magna Carta on comprehensive
health services and programs for women, in fact, reads:
Section 17. Women's Right to Health. - (a) Comprehensive Health Services. - The State shall, at
all times, provide for a comprehensive, culture-sensitive, and gender-responsive health services
and programs covering all stages of a woman's life cycle and which addresses the major causes
of women's mortality and morbidity: Provided, That in the provision for comprehensive health
services, due respect shall be accorded to women's religious convictions, the rights of the spouses
to found a family in accordance with their religious convictions, and the demands of responsible
parenthood, and the right of women to protection from hazardous drugs, devices, interventions,
and substances.
Access to the following services shall be ensured:
(1) Maternal care to include pre- and post-natal services to address pregnancy and infant health
and nutrition;
(2) Promotion of breastfeeding;
(3) Responsible, ethical, legal, safe, and effective methods of family planning;
(4) Family and State collaboration in youth sexuality education and health services without
prejudice to the primary right and duty of parents to educate their children;
(5) Prevention and management of reproductive tract infections, including sexually transmitted
diseases, HIV, and AIDS;
(6) Prevention and management of reproductive tract cancers like breast and cervical cancers,
and other gynecological conditions and disorders;
(7) Prevention of abortion and management of pregnancy-related complications;
(8) In cases of violence against women and children, women and children victims and survivors
shall be provided with comprehensive health services that include psychosocial, therapeutic,
medical, and legal interventions and assistance towards healing, recovery, and empowerment;
(9) Prevention and management of infertility and sexual dysfunction pursuant to ethical norms and
medical standards;
(10) Care of the elderly women beyond their child-bearing years; and
(11) Management, treatment, and intervention of mental health problems of women and girls. In
addition, healthy lifestyle activities are encouraged and promoted through programs and projects
as strategies in the prevention of diseases.
(b) Comprehensive Health Information and Education. - The State shall provide women in all
sectors with appropriate, timely, complete, and accurate information and education on all the
above-stated aspects of women's health in government education and training programs, with due
regard to the following:
(1) The natural and primary right and duty of parents in the rearing of the youth and the
development of moral character and the right of children to be brought up in an atmosphere of
morality and rectitude for the enrichment and strengthening of character;
(2) The formation of a person's sexuality that affirms human dignity; and
(3) Ethical, legal, safe, and effective family planning methods including fertility awareness.
As an afterthought, Asst. Solicitor General Hilbay eventually replied that the compelling state
interest was "Fifteen maternal deaths per day, hundreds of thousands of unintended pregnancies,
lives changed, x x x."235 He, however, failed to substantiate this point by concrete facts and
figures from reputable sources.
The undisputed fact, however, is that the World Health Organization reported that the Filipino
maternal mortality rate dropped to 48 percent from 1990 to 2008, 236 although there was still no
RH Law at that time. Despite such revelation, the proponents still insist that such number of
maternal deaths constitute a compelling state interest.
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Granting that there are still deficiencies and flaws in the delivery of social healthcare programs for
Filipino women, they could not be solved by a measure that puts an unwarrantable stranglehold
on religious beliefs in exchange for blind conformity.
Exception: Life Threatening Cases
All this notwithstanding, the Court properly recognizes a valid exception set forth in the law. While
generally healthcare service providers cannot be forced to render reproductive health care
procedures if doing it would contravene their religious beliefs, an exception must be made in life-
threatening cases that require the performance of emergency procedures. In these situations, the
right to life of the mother should be given preference, considering that a referral by a medical
practitioner would amount to a denial of service, resulting to unnecessarily placing the life of a
mother in grave danger. Thus, during the oral arguments, Atty. Liban, representing CFC,
manifested: "the forced referral clause that we are objecting on grounds of violation of freedom of
religion does not contemplate an emergency."237
In a conflict situation between the life of the mother and the life of a child, the doctor is morally
obliged always to try to save both lives. If, however, it is impossible, the resulting death to one
should not be deliberate. Atty. Noche explained:
Principle of Double-Effect. - May we please remind the principal author of the RH Bill in the House
of Representatives of the principle of double-effect wherein intentional harm on the life of either
the mother of the child is never justified to bring about a "good" effect. In a conflict situation
between the life of the child and the life of the mother, the doctor is morally obliged always to try to
save both lives. However, he can act in favor of one (not necessarily the mother) when it is
medically impossible to save both, provided that no direct harm is intended to the other. If the
above principles are observed, the loss of the child's life or the mother's life is not intentional and,
therefore, unavoidable. Hence, the doctor would not be guilty of abortion or murder. The mother is
never pitted against the child because both their lives are equally valuable.238
Accordingly, if it is necessary to save the life of a mother, procedures endangering the life of the
child may be resorted to even if is against the religious sentiments of the medical practitioner. As
quoted above, whatever burden imposed upon a medical practitioner in this case would have been
more than justified considering the life he would be able to save.
Family Planning Seminars
Anent the requirement imposed under Section 15239 as a condition for the issuance of a marriage
license, the Court finds the same to be a reasonable exercise of police power by the government.
A cursory reading of the assailed provision bares that the religious freedom of the petitioners is not
at all violated. All the law requires is for would-be spouses to attend a seminar on parenthood,
family planning breastfeeding and infant nutrition. It does not even mandate the type of family
planning methods to be included in the seminar, whether they be natural or artificial. As correctly
noted by the OSG, those who receive any information during their attendance in the required
seminars are not compelled to accept the information given to them, are completely free to reject
the information they find unacceptable, and retain the freedom to decide on matters of family life
without the intervention of the State.
4-The Family and the Right to Privacy
Petitioner CFC assails the RH Law because Section 23(a) (2) (i) thereof violates the provisions of
the Constitution by intruding into marital privacy and autonomy. It argues that it cultivates disunity
and fosters animosity in the family rather than promote its solidarity and total development.240
The Court cannot but agree.
The 1987 Constitution is replete with provisions strengthening the family as it is the basic social
institution. In fact, one article, Article XV, is devoted entirely to the family.
ARTICLE XV
THE FAMILY
Section 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.
Section 2. Marriage, as an inviolable social institution, is the foundation of the family and shall be
protected by the State.
Section 3. The State shall defend:
The right of spouses to found a family in accordance with their religious convictions and the
demands of responsible parenthood;
The right of children to assistance, including proper care and nutrition, and special protection from
all forms of neglect, abuse, cruelty, exploitation and other conditions prejudicial to their
development;
The right of the family to a family living wage and income; and
The right of families or family assoc1at1ons to participate in the planning and implementation of
policies and programs that affect them.
In this case, the RH Law, in its not-so-hidden desire to control population growth, contains
provisions which tend to wreck the family as a solid social institution. It bars the husband and/or
the father from participating in the decision making process regarding their common future
progeny. It likewise deprives the parents of their authority over their minor daughter simply
because she is already a parent or had suffered a miscarriage.
The Family and Spousal Consent
Section 23(a) (2) (i) of the RH Law states:
The following acts are prohibited:
(a) Any health care service provider, whether public or private, who shall: ...
(2) refuse to perform legal and medically-safe reproductive health procedures on any
person of legal age on the ground of lack of consent or authorization of the following
persons in the following instances:
(i) Spousal consent in case of married persons: provided, That in case of disagreement,
the decision of the one undergoing the procedures shall prevail. [Emphasis supplied]
The above provision refers to reproductive health procedures like tubal litigation and vasectomy
which, by their very nature, should require mutual consent and decision between the husband and
the wife as they affect issues intimately related to the founding of a family. Section 3, Art. XV of
the Constitution espouses that the State shall defend the "right of the spouses to found a family."
One person cannot found a family. The right, therefore, is shared by both spouses. In the same
Section 3, their right "to participate in the planning and implementation of policies and programs
that affect them " is equally recognized.
The RH Law cannot be allowed to infringe upon this mutual decision-making. By giving absolute
authority to the spouse who would undergo a procedure, and barring the other spouse from
participating in the decision would drive a wedge between the husband and wife, possibly result in
bitter animosity, and endanger the marriage and the family, all for the sake of reducing the
population. This would be a marked departure from the policy of the State to protect marriage as
an inviolable social institution.241
Decision-making involving a reproductive health procedure is a private matter which belongs to
the couple, not just one of them. Any decision they would reach would affect their future as a
family because the size of the family or the number of their children significantly matters. The
decision whether or not to undergo the procedure belongs exclusively to, and shared by, both
spouses as one cohesive unit as they chart their own destiny. It is a constitutionally guaranteed
private right. Unless it prejudices the State, which has not shown any compelling interest, the
State should see to it that they chart their destiny together as one family.
As highlighted by Justice Leonardo-De Castro, Section 19( c) of R.A. No. 9710, otherwise known
as the "Magna Carta for Women," provides that women shall have equal rights in all matters
relating to marriage and family relations, including the joint decision on the number and spacing of
their children. Indeed, responsible parenthood, as Section 3(v) of the RH Law states, is a shared
responsibility between parents. Section 23(a)(2)(i) of the RH Law should not be allowed to betray
the constitutional mandate to protect and strengthen the family by giving to only one spouse the
absolute authority to decide whether to undergo reproductive health procedure.242
The right to chart their own destiny together falls within the protected zone of marital privacy and
such state intervention would encroach into the zones of spousal privacy guaranteed by the
Constitution. In our jurisdiction, the right to privacy was first recognized in Marje v. Mutuc,243
where the Court, speaking through Chief Justice Fernando, held that "the right to privacy as such
is accorded recognition independently of its identification with liberty; in itself, it is fully deserving of
constitutional protection."244 Marje adopted the ruling of the US Supreme Court in Griswold v.
Connecticut,245 where Justice William O. Douglas wrote:
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We deal with a right of privacy older than the Bill of Rights -older than our political parties, older
than our school system. Marriage is a coming together for better or for worse, hopefully enduring,
and intimate to the degree of being sacred. It is an association that promotes a way of life, not
causes; a harmony in living, not political faiths; a bilateral loyalty, not commercial or social
projects. Yet it is an association for as noble a purpose as any involved in our prior decisions.
Ironically, Griswold invalidated a Connecticut statute which made the use of contraceptives a
criminal offense on the ground of its amounting to an unconstitutional invasion of the right to
privacy of married persons. Nevertheless, it recognized the zone of privacy rightfully enjoyed by
couples. Justice Douglas in Grisworld wrote that "specific guarantees in the Bill of Rights have
penumbras, formed by emanations from those guarantees that help give them life and substance.
Various guarantees create zones of privacy."246
At any rate, in case of conflict between the couple, the courts will decide.
The Family and Parental Consent
Equally deplorable is the debarment of parental consent in cases where the minor, who will be
undergoing a procedure, is already a parent or has had a miscarriage. Section 7 of the RH law
provides:
SEC. 7. Access to Family Planning. – x x x.
No person shall be denied information and access to family planning services, whether natural or
artificial: Provided, That minors will not be allowed access to modern methods of family planning
without written consent from their parents or guardian/s except when the minor is already a parent
or has had a miscarriage.
There can be no other interpretation of this provision except that when a minor is already a parent
or has had a miscarriage, the parents are excluded from the decision making process of the minor
with regard to family planning. Even if she is not yet emancipated, the parental authority is already
cut off just because there is a need to tame population growth.
It is precisely in such situations when a minor parent needs the comfort, care, advice, and
guidance of her own parents. The State cannot replace her natural mother and father when it
comes to providing her needs and comfort. To say that their consent is no longer relevant is
clearly anti-family. It does not promote unity in the family. It is an affront to the constitutional
mandate to protect and strengthen the family as an inviolable social institution.
More alarmingly, it disregards and disobeys the constitutional mandate that "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."247 In this regard,
Commissioner Bernas wrote:
The 1987 provision has added the adjective "primary" to modify the right of parents. It imports the
assertion that the right of parents is superior to that of the State.248 [Emphases supplied]
To insist on a rule that interferes with the right of parents to exercise parental control over their
minor-child or the right of the spouses to mutually decide on matters which very well affect the
very purpose of marriage, that is, the establishment of conjugal and family life, would result in the
violation of one's privacy with respect to his family. It would be dismissive of the unique and
strongly-held Filipino tradition of maintaining close family ties and violative of the recognition that
the State affords couples entering into the special contract of marriage to as one unit in forming
the foundation of the family and society.
The State cannot, without a compelling state interest, take over the role of parents in the care and
custody of a minor child, whether or not the latter is already a parent or has had a miscarriage.
Only a compelling state interest can justify a state substitution of their parental authority.
First Exception: Access to Information
Whether with respect to the minor referred to under the exception provided in the second
paragraph of Section 7 or with respect to the consenting spouse under Section 23(a)(2)(i), a
distinction must be made. There must be a differentiation between access to information about
family planning services, on one hand, and access to the reproductive health procedures and
modern family planning methods themselves, on the other. Insofar as access to information is
concerned, the Court finds no constitutional objection to the acquisition of information by the minor
referred to under the exception in the second paragraph of Section 7 that would enable her to take
proper care of her own body and that of her unborn child. After all, Section 12, Article II of the
Constitution mandates the State to protect both the life of the mother as that of the unborn child.
Considering that information to enable a person to make informed decisions is essential in the
protection and maintenance of ones' health, access to such information with respect to
reproductive health must be allowed. In this situation, the fear that parents might be deprived of
their parental control is unfounded because they are not prohibited to exercise parental guidance
and control over their minor child and assist her in deciding whether to accept or reject the
information received.
Second Exception: Life Threatening Cases
As in the case of the conscientious objector, an exception must be made in life-threatening cases
that require the performance of emergency procedures. In such cases, the life of the minor who
has already suffered a miscarriage and that of the spouse should not be put at grave risk simply
for lack of consent. It should be emphasized that no person should be denied the appropriate
medical care urgently needed to preserve the primordial right, that is, the right to life.
In this connection, the second sentence of Section 23(a)(2)(ii)249 should be struck down. By
effectively limiting the requirement of parental consent to "only in elective surgical procedures," it
denies the parents their right of parental authority in cases where what is involved are "non-
surgical procedures." Save for the two exceptions discussed above, and in the case of an abused
child as provided in the first sentence of Section 23(a)(2)(ii), the parents should not be deprived of
their constitutional right of parental authority. To deny them of this right would be an affront to the
constitutional mandate to protect and strengthen the family.
5 - Academic Freedom
It is asserted that Section 14 of the RH Law, in relation to Section 24 thereof, mandating the
teaching of Age-and Development-Appropriate Reproductive Health Education under threat of fine
and/or imprisonment violates the principle of academic freedom . According to the petitioners,
these provisions effectively force educational institutions to teach reproductive health education
even if they believe that the same is not suitable to be taught to their students.250 Citing various
studies conducted in the United States and statistical data gathered in the country, the petitioners
aver that the prevalence of contraceptives has led to an increase of out-of-wedlock births; divorce
and breakdown of families; the acceptance of abortion and euthanasia; the "feminization of
poverty"; the aging of society; and promotion of promiscuity among the youth.251
At this point, suffice it to state that any attack on the validity of Section 14 of the RH Law is
premature because the Department of Education, Culture and Sports has yet to formulate a
curriculum on age-appropriate reproductive health education. One can only speculate on the
content, manner and medium of instruction that will be used to educate the adolescents and
whether they will contradict the religious beliefs of the petitioners and validate their apprehensions.
Thus, considering the premature nature of this particular issue, the Court declines to rule on its
constitutionality or validity.
At any rate, Section 12, Article II of the 1987 Constitution provides that the natural and primary
right and duty of parents in the rearing of the youth for civic efficiency and development of moral
character shall receive the support of the Government. Like the 1973 Constitution and the 1935
Constitution, the 1987 Constitution affirms the State recognition of the invaluable role of parents in
preparing the youth to become productive members of society. Notably, it places more importance
on the role of parents in the development of their children by recognizing that said role shall be
"primary," that is, that the right of parents in upbringing the youth is superior to that of the
State.252
It is also the inherent right of the State to act as parens patriae to aid parents in the moral
development of the youth. Indeed, the Constitution makes mention of the importance of
developing the youth and their important role in nation building.253 Considering that Section 14
provides not only for the age-appropriate-reproductive health education, but also for values
formation; the development of knowledge and skills in self-protection against discrimination;
sexual abuse and violence against women and children and other forms of gender based violence
and teen pregnancy; physical, social and emotional changes in adolescents; women's rights and
children's rights; responsible teenage behavior; gender and development; and responsible
parenthood, and that Rule 10, Section 11.01 of the RH-IRR and Section 4(t) of the RH Law itself
provides for the teaching of responsible teenage behavior, gender sensitivity and physical and
emotional changes among adolescents - the Court finds that the legal mandate provided under the
assailed provision supplements, rather than supplants, the rights and duties of the parents in the
moral development of their children.
Furthermore, as Section 14 also mandates that the mandatory reproductive health education
program shall be developed in conjunction with parent-teacher-community associations, school
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officials and other interest groups, it could very well be said that it will be in line with the religious
beliefs of the petitioners. By imposing such a condition, it becomes apparent that the petitioners'
contention that Section 14 violates Article XV, Section 3(1) of the Constitution is without merit.254
While the Court notes the possibility that educators might raise their objection to their participation
in the reproductive health education program provided under Section 14 of the RH Law on the
ground that the same violates their religious beliefs, the Court reserves its judgment should an
actual case be filed before it.
6 - Due Process
The petitioners contend that the RH Law suffers from vagueness and, thus violates the due
process clause of the Constitution. According to them, Section 23 (a)(l) mentions a "private health
service provider" among those who may be held punishable but does not define who is a "private
health care service provider." They argue that confusion further results since Section 7 only makes
reference to a "private health care institution."
The petitioners also point out that Section 7 of the assailed legislation exempts hospitals operated
by religious groups from rendering reproductive health service and modern family planning
methods. It is unclear, however, if these institutions are also exempt from giving reproductive
health information under Section 23(a)(l), or from rendering reproductive health procedures under
Section 23(a)(2).
Finally, it is averred that the RH Law punishes the withholding, restricting and providing of
incorrect information, but at the same time fails to define "incorrect information."
The arguments fail to persuade.
A statute or act suffers from the defect of vagueness when it lacks comprehensible standards that
men of common intelligence must necessarily guess its meaning and differ as to its application. It
is repugnant to the Constitution in two respects: (1) it violates due process for failure to accord
persons, especially the parties targeted by it, fair notice of the conduct to avoid; and (2) it leaves
law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of
the Government muscle.255 Moreover, in determining whether the words used in a statute are
vague, words must not only be taken in accordance with their plain meaning alone, but also in
relation to other parts of the statute. It is a rule that every part of the statute must be interpreted
with reference to the context, that is, every part of it must be construed together with the other
parts and kept subservient to the general intent of the whole enactment.256
As correctly noted by the OSG, in determining the definition of "private health care service
provider," reference must be made to Section 4(n) of the RH Law which defines a "public health
service provider," viz:
(n) Public health care service provider refers to: (1) public health care institution, which is duly
licensed and accredited and devoted primarily to the maintenance and operation of facilities for
health promotion, disease prevention, diagnosis, treatment and care of individuals suffering from
illness, disease, injury, disability or deformity, or in need of obstetrical or other medical and
nursing care; (2) public health care professional, who is a doctor of medicine, a nurse or a
midvvife; (3) public health worker engaged in the delivery of health care services; or (4) barangay
health worker who has undergone training programs under any accredited government and NGO
and who voluntarily renders primarily health care services in the community after having been
accredited to function as such by the local health board in accordance with the guidelines
promulgated by the Department of Health (DOH) .
Further, the use of the term "private health care institution" in Section 7 of the law, instead of
"private health care service provider," should not be a cause of confusion for the obvious reason
that they are used synonymously.
The Court need not belabor the issue of whether the right to be exempt from being obligated to
render reproductive health service and modem family planning methods, includes exemption from
being obligated to give reproductive health information and to render reproductive health
procedures. Clearly, subject to the qualifications and exemptions earlier discussed, the right to be
exempt from being obligated to render reproductive health service and modem family planning
methods, necessarily includes exemption from being obligated to give reproductive health
information and to render reproductive health procedures. The terms "service" and "methods" are
broad enough to include the providing of information and the rendering of medical procedures.
The same can be said with respect to the contention that the RH Law punishes health care service
providers who intentionally withhold, restrict and provide incorrect information regarding
reproductive health programs and services. For ready reference, the assailed provision is hereby
quoted as follows:
SEC. 23. Prohibited Acts. - The following acts are prohibited:
(a) Any health care service provider, whether public or private, who shall:
(1) Knowingly withhold information or restrict the dissemination thereof, and/ or intentionally
provide incorrect information regarding programs and services on reproductive health including
the right to informed choice and access to a full range of legal, medically-safe, non-abortifacient
and effective family planning methods;
From its plain meaning, the word "incorrect" here denotes failing to agree with a copy or model or
with established rules; inaccurate, faulty; failing to agree with the requirements of duty, morality or
propriety; and failing to coincide with the truth. 257 On the other hand, the word "knowingly"
means with awareness or deliberateness that is intentional.258 Used together in relation to
Section 23(a)(l), they connote a sense of malice and ill motive to mislead or misrepresent the
public as to the nature and effect of programs and services on reproductive health. Public health
and safety demand that health care service providers give their honest and correct medical
information in accordance with what is acceptable in medical practice. While health care service
providers are not barred from expressing their own personal opinions regarding the programs and
services on reproductive health, their right must be tempered with the need to provide public
health and safety. The public deserves no less.
7-Egual Protection
The petitioners also claim that the RH Law violates the equal protection clause under the
Constitution as it discriminates against the poor because it makes them the primary target of the
government program that promotes contraceptive use . They argue that, rather than promoting
reproductive health among the poor, the RH Law introduces contraceptives that would effectively
reduce the number of the poor. Their bases are the various provisions in the RH Law dealing with
the poor, especially those mentioned in the guiding principles259 and definition of terms260 of the
law.
They add that the exclusion of private educational institutions from the mandatory reproductive
health education program imposed by the RH Law renders it unconstitutional.
In Biraogo v. Philippine Truth Commission,261 the Court had the occasion to expound on the
concept of equal protection. Thus:
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.
"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."
It "requires public bodies and inst itutions to treat similarly situated individuals in a similar manner."
"The purpose of the equal protection clause is to secure every person within a state's jurisdiction
against intentional and arbitrary discrimination, whether occasioned by the express terms of a
statue or by its improper execution through the state's duly constituted authorities." "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."
The equal protection clause is aimed at all official state actions, not just those of the legislature. 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.
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
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not limited to existing conditions only; and (4) It applies equally to all members of the same class.
"Superficial differences do not make for a valid classification."
For a classification to meet the requirements of constitutionality, it must include or embrace all
persons who naturally belong to the class. "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."
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. [Emphases supplied;
citations excluded]
To provide that the poor are to be given priority in the government's reproductive health care
program is not a violation of the equal protection clause. In fact, it is pursuant to Section 11, Article
XIII of the Constitution which recognizes the distinct necessity to address the needs of the
underprivileged by providing that they be given priority in addressing the health development of
the people. Thus:
Section 11. The State shall adopt an integrated and comprehensive approach to health
development which shall endeavor to make essential goods, health and other social services
available to all the people at affordable cost. There shall be priority for the needs of the
underprivileged, sick, elderly, disabled, women, and children. The State shall endeavor to provide
free medical care to paupers.
It should be noted that Section 7 of the RH Law prioritizes poor and marginalized couples who are
suffering from fertility issues and desire to have children. There is, therefore, no merit to the
contention that the RH Law only seeks to target the poor to reduce their number. While the RH
Law admits the use of contraceptives, it does not, as elucidated above, sanction abortion. As
Section 3(1) explains, the "promotion and/or stabilization of the population growth rate is incidental
to the advancement of reproductive health."
Moreover, the RH Law does not prescribe the number of children a couple may have and does not
impose conditions upon couples who intend to have children. While the petitioners surmise that
the assailed law seeks to charge couples with the duty to have children only if they would raise
them in a truly humane way, a deeper look into its provisions shows that what the law seeks to do
is to simply provide priority to the poor in the implementation of government programs to promote
basic reproductive health care.
With respect to the exclusion of private educational institutions from the mandatory reproductive
health education program under Section 14, suffice it to state that the mere fact that the children of
those who are less fortunate attend public educational institutions does not amount to substantial
distinction sufficient to annul the assailed provision. On the other hand, substantial distinction rests
between public educational institutions and private educational institutions, particularly because
there is a need to recognize the academic freedom of private educational institutions especially
with respect to religious instruction and to consider their sensitivity towards the teaching of
reproductive health education.
8-Involuntary Servitude
The petitioners also aver that the RH Law is constitutionally infirm as it violates the constitutional
prohibition against involuntary servitude. They posit that Section 17 of the assailed legislation
requiring private and non-government health care service providers to render forty-eight (48)
hours of pro bono reproductive health services, actually amounts to involuntary servitude because
it requires medical practitioners to perform acts against their will.262
The OSG counters that the rendition of pro bono services envisioned in Section 17 can hardly be
considered as forced labor analogous to slavery, as reproductive health care service providers
have the discretion as to the manner and time of giving pro bono services. Moreover, the OSG
points out that the imposition is within the powers of the government, the accreditation of medical
practitioners with PhilHealth being a privilege and not a right.
The point of the OSG is well-taken.
It should first be mentioned that the practice of medicine is undeniably imbued with public interest
that it is both a power and a duty of the State to control and regulate it in order to protect and
promote the public welfare. Like the legal profession, the practice of medicine is not a right but a
privileged burdened with conditions as it directly involves the very lives of the people. A fortiori,
this power includes the power of Congress263 to prescribe the qualifications for the practice of
professions or trades which affect the public welfare, the public health, the public morals, and the
public safety; and to regulate or control such professions or trades, even to the point of revoking
such right altogether.264
Moreover, as some petitioners put it, the notion of involuntary servitude connotes the presence of
force, threats, intimidation or other similar means of coercion and compulsion.265 A reading of the
assailed provision, however, reveals that it only encourages private and non- government
reproductive healthcare service providers to render pro bono service. Other than non-accreditation
with PhilHealth, no penalty is imposed should they choose to do otherwise. Private and non-
government reproductive healthcare service providers also enjoy the liberty to choose which kind
of health service they wish to provide, when, where and how to provide it or whether to provide it
all. Clearly, therefore, no compulsion, force or threat is made upon them to render pro bono
service against their will. While the rendering of such service was made a prerequisite to
accreditation with PhilHealth, the Court does not consider the same to be an unreasonable
burden, but rather, a necessary incentive imposed by Congress in the furtherance of a perceived
legitimate state interest.
Consistent with what the Court had earlier discussed, however, it should be emphasized that
conscientious objectors are exempt from this provision as long as their religious beliefs and
convictions do not allow them to render reproductive health service, pro bona or otherwise.
9-Delegation of Authority to the FDA
The petitioners likewise question the delegation by Congress to the FDA of the power to
determine whether or not a supply or product is to be included in the Essential Drugs List
(EDL).266
The Court finds nothing wrong with the delegation. The FDA does not only have the power but
also the competency to evaluate, register and cover health services and methods. It is the only
government entity empowered to render such services and highly proficient to do so. It should be
understood that health services and methods fall under the gamut of terms that are associated
with what is ordinarily understood as "health products."
In this connection, Section 4 of R.A. No. 3 720, as amended by R.A. No. 9711 reads:
SEC. 4. To carry out the provisions of this Act, there is hereby created an office to be called the
Food and Drug Administration (FDA) in the Department of Health (DOH). Said Administration shall
be under the Office of the Secretary and shall have the following functions, powers and duties:
"(a) To administer the effective implementation of this Act and of the rules and regulations issued
pursuant to the same;
"(b) To assume primary jurisdiction in the collection of samples of health products;
"(c) To analyze and inspect health products in connection with the implementation of this Act;
"(d) To establish analytical data to serve as basis for the preparation of health products standards,
and to recommend standards of identity, purity, safety, efficacy, quality and fill of container;
"(e) To issue certificates of compliance with technical requirements to serve as basis for the
issuance of appropriate authorization and spot-check for compliance with regulations regarding
operation of manufacturers, importers, exporters, distributors, wholesalers, drug outlets, and other
establishments and facilities of health products, as determined by the FDA;
"x x x
"(h) To conduct appropriate tests on all applicable health products prior to the issuance of
appropriate authorizations to ensure safety, efficacy, purity, and quality;
"(i) To require all manufacturers, traders, distributors, importers, exporters, wholesalers, retailers,
consumers, and non-consumer users of health products to report to the FDA any incident that
reasonably indicates that said product has caused or contributed to the death, serious illness or
serious injury to a consumer, a patient, or any person;
"(j) To issue cease and desist orders motu propio or upon verified complaint for health products,
whether or not registered with the FDA Provided, That for registered health products, the cease
and desist order is valid for thirty (30) days and may be extended for sixty ( 60) days only after due
process has been observed;
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"(k) After due process, to order the ban, recall, and/or withdrawal of any health product found to
have caused death, serious illness or serious injury to a consumer or patient, or is found to be
imminently injurious, unsafe, dangerous, or grossly deceptive, and to require all concerned to
implement the risk management plan which is a requirement for the issuance of the appropriate
authorization;
x x x.
As can be gleaned from the above, the functions, powers and duties of the FDA are specific to
enable the agency to carry out the mandates of the law. Being the country's premiere and sole
agency that ensures the safety of food and medicines available to the public, the FDA was
equipped with the necessary powers and functions to make it effective. Pursuant to the principle of
necessary implication, the mandate by Congress to the FDA to ensure public health and safety by
permitting only food and medicines that are safe includes "service" and "methods." From the
declared policy of the RH Law, it is clear that Congress intended that the public be given only
those medicines that are proven medically safe, legal, non-abortifacient, and effective in
accordance with scientific and evidence-based medical research standards. The philosophy
behind the permitted delegation was explained in Echagaray v. Secretary of Justice,267 as
follows:
The reason is the increasing complexity of the task of the government and the growing inability of
the legislature to cope directly with the many problems demanding its attention. The growth of
society has ramified its activities and created peculiar and sophisticated problems that the
legislature cannot be expected reasonably to comprehend. Specialization even in legislation has
become necessary. To many of the problems attendant upon present day undertakings, the
legislature may not have the competence, let alone the interest and the time, to provide the
required direct and efficacious, not to say specific solutions.
10- Autonomy of Local Governments and the Autonomous Region
of Muslim Mindanao (ARMM)
As for the autonomy of local governments, the petitioners claim that the RH Law infringes upon
the powers devolved to local government units (LGUs) under Section 17 of the Local Government
Code. Said Section 17 vested upon the LGUs the duties and functions pertaining to the delivery of
basic services and facilities, as follows:
SECTION 17. Basic Services and Facilities. –
(a) Local government units shall endeavor to be self-reliant and shall continue exercising the
powers and discharging the duties and functions currently vested upon them. They shall also
discharge the functions and responsibilities of national agencies and offices devolved to them
pursuant to this Code. Local government units shall likewise exercise such other powers and
discharge such other functions and responsibilities as are necessary, appropriate, or incidental to
efficient and effective provision of the basic services and facilities enumerated herein.
(b) Such basic services and facilities include, but are not limited to, x x x.
While the aforementioned provision charges the LGUs to take on the functions and responsibilities
that have already been devolved upon them from the national agencies on the aspect of providing
for basic services and facilities in their respective jurisdictions, paragraph (c) of the same provision
provides a categorical exception of cases involving nationally-funded projects, facilities, programs
and services.268 Thus:
(c) Notwithstanding the provisions of subsection (b) hereof, public works and infrastructure
projects and other facilities, programs and services funded by the National Government under the
annual General Appropriations Act, other special laws, pertinent executive orders, and those
wholly or partially funded from foreign sources, are not covered under this Section, except in those
cases where the local government unit concerned is duly designated as the implementing agency
for such projects, facilities, programs and services. [Emphases supplied]
The essence of this express reservation of power by the national government is that, unless an
LGU is particularly designated as the implementing agency, it has no power over a program for
which funding has been provided by the national government under the annual general
appropriations act, even if the program involves the delivery of basic services within the
jurisdiction of the LGU.269 A complete relinquishment of central government powers on the matter
of providing basic facilities and services cannot be implied as the Local Government Code itself
weighs against it.270
In this case, a reading of the RH Law clearly shows that whether it pertains to the establishment of
health care facilities,271 the hiring of skilled health professionals,272 or the training of barangay
health workers,273 it will be the national government that will provide for the funding of its
implementation. Local autonomy is not absolute. The national government still has the say when it
comes to national priority programs which the local government is called upon to implement like
the RH Law.
Moreover, from the use of the word "endeavor," the LG Us are merely encouraged to provide
these services. There is nothing in the wording of the law which can be construed as making the
availability of these services mandatory for the LGUs. For said reason, it cannot be said that the
RH Law amounts to an undue encroachment by the national government upon the autonomy
enjoyed by the local governments.
The ARMM
The fact that the RH Law does not intrude in the autonomy of local governments can be equally
applied to the ARMM. The RH Law does not infringe upon its autonomy. Moreover, Article III,
Sections 6, 10 and 11 of R.A. No. 9054, or the organic act of the ARMM, alluded to by petitioner
Tillah to justify the exemption of the operation of the RH Law in the autonomous region, refer to
the policy statements for the guidance of the regional government. These provisions relied upon
by the petitioners simply delineate the powers that may be exercised by the regional government,
which can, in no manner, be characterized as an abdication by the State of its power to enact
legislation that would benefit the general welfare. After all, despite the veritable autonomy granted
the ARMM, the Constitution and the supporting jurisprudence, as they now stand, reject the notion
of imperium et imperio in the relationship between the national and the regional governments.274
Except for the express and implied limitations imposed on it by the Constitution, Congress cannot
be restricted to exercise its inherent and plenary power to legislate on all subjects which extends
to all matters of general concern or common interest.275
11 - Natural Law
With respect to the argument that the RH Law violates natural law,276 suffice it to say that the
Court does not duly recognize it as a legal basis for upholding or invalidating a law. Our only
guidepost is the Constitution. While every law enacted by man emanated from what is perceived
as natural law, the Court is not obliged to see if a statute, executive issuance or ordinance is in
conformity to it. To begin with, it is not enacted by an acceptable legitimate body. Moreover,
natural laws are mere thoughts and notions on inherent rights espoused by theorists, philosophers
and theologists. The jurists of the philosophical school are interested in the law as an abstraction,
rather than in the actual law of the past or present.277 Unless, a natural right has been
transformed into a written law, it cannot serve as a basis to strike down a law. In Republic v.
Sandiganbayan,278 the very case cited by the petitioners, it was explained that the Court is not
duty-bound to examine every law or action and whether it conforms with both the Constitution and
natural law. Rather, natural law is to be used sparingly only in the most peculiar of circumstances
involving rights inherent to man where no law is applicable.279
At any rate, as earlier expounded, the RH Law does not sanction the taking away of life. It does
not allow abortion in any shape or form. It only seeks to enhance the population control program of
the government by providing information and making non-abortifacient contraceptives more readily
available to the public, especially to the poor.
Facts and Fallacies and the Wisdom of the Law
In general, the Court does not find the RH Law as unconstitutional insofar as it seeks to provide
access to medically-safe, non-abortifacient, effective, legal, affordable, and quality reproductive
healthcare services, methods, devices, and supplies. As earlier pointed out, however, the religious
freedom of some sectors of society cannot be trampled upon in pursuit of what the law hopes to
achieve. After all, the Constitutional safeguard to religious freedom is a recognition that man
stands accountable to an authority higher than the State.
In conformity with the principle of separation of Church and State, one religious group cannot be
allowed to impose its beliefs on the rest of the society. Philippine modem society leaves enough
room for diversity and pluralism. As such, everyone should be tolerant and open-minded so that
peace and harmony may continue to reign as we exist alongside each other.
As healthful as the intention of the RH Law may be, the idea does not escape the Court that what
it seeks to address is the problem of rising poverty and unemployment in the country. Let it be said
that the cause of these perennial issues is not the large population but the unequal distribution of
wealth. Even if population growth is controlled, poverty will remain as long as the country's wealth
remains in the hands of the very few.
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At any rate, population control may not be beneficial for the country in the long run. The European shall do any act that hinders the full implementation of a reproductive health program, regardless
and Asian countries, which embarked on such a program generations ago , are now burdened of his or her religious beliefs;
with ageing populations. The number of their young workers is dwindling with adverse effects on 7) Section 17 and the corresponding prov1s10n in the RH-IRR regarding the rendering of pro
their economy. These young workers represent a significant human capital which could have bona reproductive health service in so far as they affect the conscientious objector in securing
helped them invigorate, innovate and fuel their economy. These countries are now trying to PhilHealth accreditation; and
reverse their programs, but they are still struggling. For one, Singapore, even with incentives, is 8) Section 3.0l(a) and Section 3.01 G) of the RH-IRR, which added the qualifier "primarily" in
failing. defining abortifacients and contraceptives, as they are ultra vires and, therefore, null and void for
And in this country, the economy is being propped up by remittances from our Overseas Filipino contravening Section 4(a) of the RH Law and violating Section 12, Article II of the Constitution.
Workers. This is because we have an ample supply of young able-bodied workers. What would The Status Quo Ante Order issued by the Court on March 19, 2013 as extended by its Order,
happen if the country would be weighed down by an ageing population and the fewer younger dated July 16, 2013 , is hereby LIFTED, insofar as the provisions of R.A. No. 10354 which have
generation would not be able to support them? This would be the situation when our total fertility been herein declared as constitutional.
rate would go down below the replacement level of two (2) children per woman.280 SO ORDERED.
Indeed, at the present, the country has a population problem, but the State should not use JOSE CATRAL MENDOZA
coercive measures (like the penal provisions of the RH Law against conscientious objectors) to Associate Justice
solve it. Nonetheless, the policy of the Court is non-interference in the wisdom of a law. WE CONCUR:
x x x. But this Court cannot go beyond what the legislature has laid down. Its duty is to say what Tingnan ang aking opinyong
the law is as enacted by the lawmaking body. That is not the same as saying what the law should Sumasang-ayon at Sumasalungat
be or what is the correct rule in a given set of circumstances. It is not the province of the judiciary MARIA LOURDES P. A. SERENO
to look into the wisdom of the law nor to question the policies adopted by the legislative branch. Chief Justice
Nor is it the business of this Tribunal to remedy every unjust situation that may arise from the See Concurring Opinion
application of a particular law. It is for the legislature to enact remedial legislation if that would be ANTONIO T. CARPIO
necessary in the premises. But as always, with apt judicial caution and cold neutrality, the Court Associate Justice
must carry out the delicate function of interpreting the law, guided by the Constitution and existing PRESBITERO J. VELASCO, JR.
legislation and mindful of settled jurisprudence. The Court's function is therefore limited, and Associate Justice
accordingly, must confine itself to the judicial task of saying what the law is, as enacted by the With Separate concurring opinion
lawmaking body.281 TERESITA J. LEONARDO-DE CASTRO
Be that as it may, it bears reiterating that the RH Law is a mere compilation and enhancement of Associate Justice
the prior existing contraceptive and reproductive health laws, but with coercive measures. Even if See: Separate Concurring Opinion
the Court decrees the RH Law as entirely unconstitutional, there will still be the Population Act ARTURO D. BRION
(R.A. No. 6365), the Contraceptive Act (R.A. No. 4729) and the reproductive health for women or Associate Justice
The Magna Carta of Women (R.A. No. 9710), sans the coercive provisions of the assailed DIOSDADO M. PERALTA
legislation. All the same, the principle of "no-abortion" and "non-coercion" in the adoption of any Associate Justice
family planning method should be maintained. LUCAS P. BERSAMIN
WHEREFORE, the petitions are PARTIALLY GRANTED. Accordingly, the Court declares R.A. No. Associate Justice
10354 as NOT UNCONSTITUTIONAL except with respect to the following provisions which are See Concurring and dissenting
declared UNCONSTITUTIONAL: MARIANO C. DEL CASTILLO
1) Section 7 and the corresponding provision in the RH-IRR insofar as they: a) require private Associate Justice
health facilities and non-maternity specialty hospitals and hospitals owned and operated by a See Concurring Opinion
religious group to refer patients, not in an emergency or life-threatening case, as defined under ROBERTO A. ABAD
Republic Act No. 8344, to another health facility which is conveniently accessible; and b) allow Associate Justice
minor-parents or minors who have suffered a miscarriage access to modem methods of family MARTIN S. VILLARAMA, JR.
planning without written consent from their parents or guardian/s; Associate Justice
2) Section 23(a)(l) and the corresponding provision in the RH-IRR, particularly Section 5 .24 JOSE PORTUGAL PEREZ
thereof, insofar as they punish any healthcare service provider who fails and or refuses to Associate Justice
disseminate information regarding programs and services on reproductive health regardless of his See concurring and dissenting
or her religious beliefs. BIENVENIDO L. REYES
3) Section 23(a)(2)(i) and the corresponding provision in the RH-IRR insofar as they allow a Associate Justice
married individual, not in an emergency or life-threatening case, as defined under Republic Act See Concurring and Dissenting Opinion
No. 8344, to undergo reproductive health procedures without the consent of the spouse; ESTELA M. PERLAS-BERNABE
4) Section 23(a)(2)(ii) and the corresponding provision in the RH-IRR insofar as they limit the Associate Justice
requirement of parental consent only to elective surgical procedures. See Separate dissent
5) Section 23(a)(3) and the corresponding provision in the RH-IRR, particularly Section 5.24 MARVIC MARIO VICTOR F. LEONEN
thereof, insofar as they punish any healthcare service provider who fails and/or refuses to refer a Associate Justice
patient not in an emergency or life-threatening case, as defined under Republic Act No. 8344, to CERTIFICATION
another health care service provider within the same facility or one which is conveniently Pursuant to Section 13, Article VIII of the Constitution, I hereby certify that the conclusions in the
accessible regardless of his or her religious beliefs; above Decision had been reached in consultation before the case was assigned to the writer of
6) Section 23(b) and the corresponding provision in the RH-IRR, particularly Section 5 .24 thereof, the opinion of the Court.
insofar as they punish any public officer who refuses to support reproductive health programs or MARIA LOURDES P. A. SERENO

195
Chief Justice
Footnotes
1 Islamic Da'wah Council of the Philippines, Inc. v. Office of the Executive Secretary, G.R. No.
153888, July 9, 2003; 405 SCRA 497, 504.
2 See <http://wn.com/pro-rh_ bill_vs_anti-rh_ bi ll>, last visited on November 5, 20 13; See also
<http://www.abs-cbnnews.com/nation/04/ 19/ I O/h ontiveros-tatad-debate-rh-bill>, last vi sited on
November 5, 201 3.
3 See <http ://news info .inqu irer.net/inquirerheadlines/nation/view/ 20110321-326743/Stickers-
spread-anti-RH-bill-message>, last visited on November 5, 2 01 3; See also <http
://www.gmanetwork.com/news/story/ 218169/news/nation/carlos-celdran-distributes-pro-rh-
stickers-in-quiapo>, last visited on November 5, 201 3.
4 See <http ://newsinfo. inquirer.net/241 737/massive-church-rally-set-against-rh-bill>, last visited
November 5, 201 3; See also <http://www.splendorofthechurch.eom.ph/201 3/04/29/fi lipino-
catholics-flex-muscles-in-poll-clout/>, last visited November 5, 2013.
5 With Prayer for the issuance of a Temporary Restraining Order/ Writ of Preliminary Injunction;
docketed as G.R. No. 2048 19; rollo (G.R. No. 204819), pp. 3-32.
6 With Prayer for the Urgent Issuance of a Temporary Restraining Order and/or Writ of Preliminary
Injunction; docketed as G.R. No. 204934; rollo (G.R. No. 204934), pp. 3-76.
7 Also proceeding in her personal capacity a citizen and as a member of the Bar.
8 Spouses Reynaldo S. Luistro & Rosie B. Luistro, Jose S. Sandejas & Elenita S.A. Sandejas,
Arturo M. Gorrez & Marietta C . Gorrez, Salvador S. Mante, Jr. & Hazeleen L. Mante, Rolando M.
Bautista & Maria Felisa S. Bautista, Desiderio Racho & Traquilina Racho, Femand Antonio A.
Tansingco & Carol Anne C. Tansingco for themselves and on behalf of their minor children,
Therese Antonette C. Tansingco, Lorenzo Jose C. Tansingco, Miguel Fernando C . Tangsingco,
Carlo Josemaria C. Tansingco & Juan Paolo C. Tansingco, Spouses Mariano V. Araneta & Eileen
Z. Araneta for themselves and on behalf of their minor children, Ramon Carlos Z. Araneta & Maya
Angelica Z. Araneta, Spouses Renato C. Castor & Mildred C. Castor for themselves and on behalf
of their minor children, Renz Jeffrey C. Castor, Joseph Ramil C. Castor, John Paul C. Castor &
Raphae l C. Castor, Spouses Alexander R. Racho & Zara Z. Racho for themselves a nd on behalf
of their minor chi ldren Margarita Racho, Mikaela Racho, Martin Racho, Mari Racho & Manolo
Racho, Spouses Alfred R. Racho & Franc ine Y. Racho for themse lves and on behalf of their
minor children Michael Racho, Mariana Racho, Rafael Racho, Maxi Racho, C hessie Racho &
Laura Racho, Spouses David R. Racho & Armilyn A. Racho for themselves and on behalf of the ir
minor child Gabrie l Racho, Mindy M. Juatas and on behalf of her minor children Elijah General
Juatas and Elian Gabriel Juatas, Salvacion M. Monteiro, Emily R. Laws, Joseph R. Laws & Katrina
R. Laws
9 With Prayer for Injunction; docketed a s G.R. No. 204957.
10 With Prayer for the issuance of a Temporary Restraining Order/ Writ of Preliminary Injunction;
docketed as G.R. No. 204988; rollo (G.R. No. 204988), pp. 5-3 5.
11 Through and together with its president Nestor B. Lumicao, M.D.
12 Through and together with its representative/ member of the school board Dr. Rodrigo M.
Alenton, M.D.
13 Rosemarie R. Alenton, Imelda G. Ibarra, Cpa, Lovenia P. Naces, Phd. , Anthony G. Nagac,
Earl Anthony C. Gambe And, Marlon I. Yap.
14 Docketed as G.R. No. 205003; Petition is entitled "Petition (To Declare As Unconstitutional
Republic Act No. 10354)." The petition fails to provide any description as to nature of the suit
under the Rules of Court; rollo (G.R. No. 205003), pp. 3-40.
15 With prayer for the issuance of a Temporary Restraining Order; docketed as G.R. No. 205043 ;
rollo (G.R. No. 205043), pp. 3-16.
16 Through its vice president and co-founder, Eduardo B.Olaguer.
17 With Prayer for the issuance of a Temporary Restraining Order/ Writ of Prel iminary Injunction;
docketed as G.R. No. 205 138; rollo (G.R. No. 205138), pp. 3-50.
18 Through and together with its president Atty. Ricardo M. Ribo.
19 Atty. Lino E.A. Dumas, Romeo B. Almonte, Osmundo C. Orlanes, Arsenio Z. Menor, Samuel J.
Yap, Jaime F. Mateo, Rolly Siguan, Dante E. Magdangal, Michael Eugenio 0. Plana, Bienvenido
C. Miguel, Jr., Landrito M. Diokno And Baldomero Falcone.
20 With Prayer for the issuance of a Temporary Restraining Order/ Writ of Pre lim inary Injunction;
The petition fails to provide any description as to nature of the suit under the Rules of Court;
docketed as G.R. No. 205478; rollo (G.R. No. 205478), pp. 3-26.
21 Jacqueline H. King, M.D., Cynthia T. Domingo, M.D., Josephine Millado-Lumitao, M.D.,
Anthony Perez, Michael Anthony G. Mapa, Carlos Antonio Palad, Wilfredo Jose, Claire Navarro,
Anna Cosio, Gabrie l Dy Liacco
22 With Prayer for the issuance of a Temporary Restraining Order/ Writ of Prelim inary Injunction;
docketed as G.R. No. 20549 1; rollo (G.R. No. 20549 1), pp. 3-13.
23 With Prayer for the issuance of a Temporary Restraining Order/ Writ of Preliminary Injunction;
docketed as G.R. No. 205720; rollo (G.R. No. 205720), pp. 3-90.
24 Through and together with its executive director, Loma Melegrito.
25 Joselyn B. Basilio, Robert z. Cortes, Ariel A. Crisostomo, Jeremy I. Gatdula, Cri stina A.
Montes, Raul Antonio A. N idoy, Winston Conrad B. Padojinog, Rufino L. Policarpio III.
26 Docketed as G.R. No. 206355, rollo (G.R. No. 206355), pp. 3-32.
27 Through and together with its co-petitioners, Attys. Ramon Pedrosa, Cita Borromeo-Garcia,
Stella Acedera, and Berteni Cataluna Causing .
28 With prayer for a Writ of Preliminary Injunction; docketed as G.R. No. 207 111 ; rollo (G.R. No.
207111 ), pp. 3-51.
29 Mary M. lmbong, Anthony Victorio B. Lumicao, Joseph Martin Q. Verdejo, Antonio Emma R.
Roxas and Lota Lat-Guerrero.
30 With prayer for a Writ of Pre liminary Injunction; docketed as G.R. No. 207 172; rollo (G.R. No.
207 172), pp. 3-56.
31 Spouses Juan Carlos Artadi Sarmiento and Francesca Isabelle Besinga-Sarmiento, and
Spouses Luis Francis A. Rodrigo, Jr. and Deborah Marie Veronica N. Rodrigo.
32 Docketed as G.R. No. 2 07563; rollo (G.R. No. 2 07563), pp. 3-1 5.
33 Rollo (G.R. No. 204934), pp. 138-1 55.
34 Rollo (G.R. No. 204819), pp. 124 8-1 260.
35 Petition, lmbong v. Ochoa, rollo (G.R. No. 20481 9), pp. 8-1 O; Petit ion, Alliance for the Family
Foundation, Inc. (ALFI) v. Ochoa, rol!o (G.R. No. 20493 4), pp. 15-25; Petition, Serve Life
Cagayan De Oro City, Inc. v. Ochoa, rollo, (G.R. No. 204988), pp. 13-1 5; Petition, Olaguer v.
Ona, rollo (G.R. No. 205043), pp. 10-11 ; Petition, Philippine Alliance of XSeminarians (PAX) v.
Ochoa, rol!o (G.R. No. 205138), pp. 8-36; Petition, Echavez v. Ochoa, rollo (G.R. N o. 205478),
pp. 10-1 3; Petition, Millennium Saint Foundation, Inc. v. Office of the President, rollo (G.R. No .
20635 5), pp . 11-15 ; Petition, Juat v. Ochoa, rollo (G.R. No. 207111 ), pp. 17- 18; Petition, Buhay
Party-list (BUHAY) v. Ochoa, rollo (G.R. No. 204819), pp. 1255- 1256.
36 Petition, Alliance for the Family Foundation, Inc. (ALFI) v. Ochoa, rollo (G.R. No. 204934), pp.
26-28; Petition, Serve Life Cagayan De Oro City, Inc. v. Ochoa, rollo, (G. R. No. 204988), pp. 15-1
6; Petition, Echavez v. Ochoa, rollo (G.R. N o. 205478), pp. 13- 14; Petition, Pro-Life Philippines
Foundation, Inc. v. Ochoa, rollo (G.R. No. 205720), pp. 30-35.
37 Petition, Task Force for the Family and Life Visayas, Inc. v. Ochoa, rollo (G.R. No. 204957), pp.
26-27; Petition, Philippine Alliance of XSeminarians (PAX) v. Ochoa, rollo (G.R. No. 205138), pp.
39-44; Petition, Tatad v. Office of the President, rol/o (G. R. No. 205491), pp. 8-9; Petition, Pro-
Life Philippines Foundation, Inc. v. Ochoa, rollo (G.R. No. 205720), pp . 59-67; Petition,
Millennium Saint Foundation, Inc. v. Office of the President, rollo (G.R. No. 2 06355), pp. 25-26.
38 Petition, lmbong v. Ochoa, rollo (G.R. No. 2048 I 9), pp. 20-22; Petition, Alliance for the Family
Foundation, inc. (ALFI) v. Ochoa, rollo (G.R. No. 204934), pp. 34-38; Petition, Task Force for the
Family and Life Visayas, Inc. v. Ochoa, rollo (G.R. No. 204957), pp. 26-27; Petition, Echavez v.
Ochoa, rollo (G.R. No. 205478), pp. 6-7; Petition, Pro-Life Philippines Foundation, Inc. v. Ochoa,
rollo (G.R. No. 205720), pp. 56-75; Petition, Millennium Saint Foundation, Inc. v. Office of the
President, rollo (G.R. No. 206355), pp. 16-22; Petition, Juat v. Ochoa, rollo (G.R. No. 207 111),
pp.28-33 ; Petition, Couples for Christ Foundation, Inc. v. Ochoa, ro/lo (G.R. No. 207 172), pp. 12-
16.
39 Section 5.23 Skilled Health Professional as a Conscientious Objector. ln order to be considered
a conscientious objector, a skilled health professional shall comply with the following
requirements:
a) Submission to the DOH of an affidavit stating the modem family planning methods that he or
she refuses to provide and his or her reasons for objection;
196
b) Posting of a notice at the entrance of the clinic or place of practice, in a prominent location and
using a clear/legible font, enumerating the reproductive health services he or she refuses to
provide; and c) Other requirements as determined by the DOH. xxx.
Provided, That skilled health professionals who are pub lic officers such as, but not limited to,
Provincial, City, or Municipal Health Officers, medical officers, medical specialists, rural health
physicians, hospital staff nurses, public health nurses, or rural health midwives, who are
specifically charged with the duty to implement these Rules cannot be considered as
conscientious objectors. xx x (Emphases Ours)
40 Joint Memorandum, lmbong v. Ochoa, rollo (G.R. No. 204819), pp. 26 17-26 19.
41 Petition, Alliance for the Family Foundation, Inc. (ALFI) v. Ochoa, ro/lo (G.R. No. 204934), p.
40; Petition, Echavez v. Ochoa, rollo (G.R. No. 205478), pp.6-7; Petition, Pro-Life Philippines
Foundation, In c. v. Ochoa, rollo (G.R. No. 205720), p. 81.
42 Petition, Pro-l ife Philippines Foundation, Inc. v. Ochoa, rollo (G. R. No. 205720), pp. 63-64;
Petition, Couples for Christ Foundation, Inc. v. Ochoa, rollo (G.R. No. 207172), pp. 20-23.
43 Petition, Serve Life Cagayan De Oro City, In c. v. Ochoa, rollo, (G.R. No . 204988), pp. 16-48 ;
Petition , Echavez v. Ochoa, rollo (G.R. No. 2 05478), pp. 7-9.
44 Petition, Serve Life Cagayan De Oro City, Inc. v. Ochoa, rollo, (G.R. No. 204988), pp. 16-48;
Petition, Echavez v. Ochoa, rollo (G.R. No. 205478), pp. 7-9.
45 Petition, Task Force for the Family and Life Visayas, Inc. v. Ochoa, rollo (G.R. No. 204957), pp.
30-3 1; Memorandum, Echavez v. Ochoa, rollo (G.R. No. 205478), pp. 1247- 1250; Petition,
Millennium Saint Foundation, Inc. v. Office of the President, rollo (G.R. No. 2063 55), pp. 25;
Petition, Couples for Christ Foundation, Inc. v. Ochoa, rollo (G.R. No. 207 172 ), pp. 43-45.
46 Joint Memorandum, Im bong v. Ochoa, rollo (G.R. No. 2048 19), pp. 2626-2637; Petition,
Alcantara, pp. 9-1 3; rollo, (G.R. No. 204934), pp. 146- 150; Petition, Pro-l ife Philippines
Foundation, Inc. v. Ochoa, rollo (G.R. No. 205720), pp. 78-81.
47 Petition, Couples for Christ Foundation, Inc. v. Ochoa, ro//o (G.R. No. 207172), pp. 32-34.
48 Petition, l mbong v. Ochoa, rollo (G.R. No. 2048 19), pp. 2623-2626; Petition, Alcantara, pp.5-
9; rollo, (G.R. No. 204934), pp. 142- 148; Petition, Serve life Cagayan De Oro City, Inc. v. Ochoa,
rollo, (G.R. No. 204988), pp. 20-21; Petition, Bugarin v. Office of the President, rollo (G. R. No.
205003), pp. 14- 16; Petit ion, Millennium Saint Foundation, Inc. v. Office of the President, rollo
(G. R. No. 206355), p. 16; Petition, Couples for Christ Foundation, In c. v. Ochoa, ro//o (G. R. No.
207 172), pp. 16-20.
49 Petition, Imbong v. Ochoa, rollo (G. R. No. 2 0481 9), pp. 14- 19; Petition, Alliance for the
Family Foundation, Inc. (ALFI) v. Ochoa, rollo (G.R. No. 204934), pp. 42-44; Petition, Task Force
for the Family and Life Visayas, Inc. v. Ochoa, rollo (G.R. No. 204957), pp. 21-25; Petition,
Millennium Saint Foundation, Inc. v. Office of the President, rollo (G.R. No. 206355), pp. 23-25;
Petition, Couples for Christ Foundation, Inc. v. Ochoa, rollo (G.R. No. 207172), pp. 23 -28.
50 Jo int Memorandum, Jmbong v. Ochoa, rollo (G.R. No . 204819), pp. 257 1-2574; Petition,
Olaguer v. Ona, rollo (G.R. No. 205043), pp. 11-1 2; Petition, Tatad v. Office of the President, rollo
(G. R. No. 205491), pp. 7-8; Petition, Couples for Christ Foundation, Inc. v. Ochoa, rollo (G. R. No.
207172), pp. 28-32.
51 Petition, Alliance for the Family Foundation, Inc. (ALFI) v. Ochoa, rollo (G.R. No. 204934), pp.
28-33; Petition, Philippine Alliance of XSeminarians (PAX) v. Ochoa, rollo (G. R. No. 205138), pp.
37-38.
52 Section 26. ( I) Every bill passed by the Congress shall embrace only one subject which shall
be expressed in the title thereof; Task Force for the Family and l ife Visayas, Inc. v. Ochoa, rollo
(G.R. No. 204957), pp. 6-1 O; Echavez v. Ochoa, rollo (G. R. No. 205478), pp. 9-10.
53 Petition, Pro-Life Philippines Foundation, Inc. v. Ochoa, rollo (G.R. No. 205720), pp. 14-30.
54 Memorandum, Echavez v. Ochoa, rollo (G.R. No. 205478), pp. 894-900; Petition, Couples for
Christ Foundation, Inc. v. Ochoa, rollo (G.R. No. 207172), pp. 45-48; Petition, Tillah v. Executive
Secretary, rollo (G.R. No. 207563) pp. 6-12.
55 Rollo (G .. R. No. 204819), pp. 362-480.
56 Rollo (G .. R. No. 204819), pp. 195-353.
57 Rollo (G .. R. No. 204819), pp. 487-528.
58 Rollo (G.R. No. 204934), pp. 871-1007.
59 Rollo (G.R. No. 204819), pp.1 306-1334; rollo, (G.R. No. 204934), pp. 98-132.
60 Rollo (G.R. No. 204819), pp. 736-780.
61 In her Motion for Leave to Intervene, Senator Pilar Ju liana S. Cayetano manifested that she
was adopting as her own the arguments raised by respondents Dr. Esperanza I. Cabral, Jamie
Galvez-Tan, and Dr. Alberto G. Romualdez in their Petition for Intervention; See rollo (G..R. No.
20481 9), pp. 173 1-1 783. After being directed by the Court to file their respective memoranda,
intervenors Dr. Esperanza I. Cabral, Jamie Galvez-Tan, and Dr. Alberto G. Romualdez manjfested
on November 18, 201 3, that they were adopting the arguments raised by Congressman Lagman
in his Joint Memorandum; See rollo (G..R. No. 20481 9), pp. 3061-3070. On November 26, 201 3,
Senator Pilar Juliana S. Cayetano file d her separate Memorandum ; see, rollo (G. .R. No.
204819), pp. 3032-3059.
62 Resolution dated March 15, 201 3.
63 Resolution, dated July 16, 201 3.
64 In its Resolution, dated August 27, 201 3, the Court required the parties to also include the
following in their respective memoranda:
1. What is the relation of the first portion of Section 7 on Access to Family Planning to the theory
that R.A. No. I 0354 is an anti-poor program that seeks to reduce the population of the poor?
2. How is the second paragraph of the same section related to the proposition that R.A. No. 10354
encourages sex among minors?
3. In relation to Section 23 on Prohibited Acts, where in the law can you find the definition of the
term ' health care service provider' ? Is the definition of a ' public health care service provider '
found in Section 4, paragraph (n) of the law sufficient for the Court to understand the meaning of a
'private health care service provider' or should the Court refer to the Implementing Rules and
Regulations which refer to 'health care providers'?
4. With respect to ' health care providers' under the Implementing Rules and Regulations, does it
make a difference that they are called ' health care providers' and not ' health care service
providers'? Does the fact that there is a missing word indicate that there is a difference or that the
tautology being proposed actually refers to different objects? If in the affirmative, is there enough
basis to say that the law is a criminal statute that has sufficient definitions for purposes of punitive
action?
5. In relation to Section 23(a)(l), how will the State be able to locate the programs and services on
which the health care service provider has the duty to give information? If the terminology of '
health care service provider ' includes ' private health care service provider', which includes private
hospitals and private doctors, is the State duty-bound to consequently provide these providers
with information on the programs and services that these providers should give information on?
6. As regards programs, is there a duty on the part of the State to provide a way by which private
health care service providers can have access to information on reproductive health care
programs as defined in Section 4, paragraph (r)? What is the implication of the fact that the law
requires even private parties with the duty to provide information on government programs on the
criminal liability of private health care service providers?
7. As regards services, what is the distinction between 'information' and 'services' considering that
'services' in different portions of the statute include providing of information?
8. What are the specific elements of every sub-group of crime in Section 23 and what are the legal
bases for the determination of each element?
9. Are there existing provisions in other statutes relevant to the legal definitions found in R.A. No.
10354?
10. Why is there an exemption for the religious or conscientious objector in paragraph (3) of
Section 23 and not in paragraphs ( 1) and (2)? What is the distinction between paragraph (3) and
paragraphs ( 1) and (2)?
11 . Section 23(a)(3) penalizes refusal to extend quality health care services and information 'on
account of the person's marital status, gender, age, religious convictions, personal circumstances,
or nature of work.' What if the refusal is not on account of one's marital status, gender, age,
religious convictions, personal circumstances, or nature of work, or what if the refuser simply does
not state the reason for the refusal? Will there still be a criminal liability under Section 23(a)(3)?
12. Still on Section (23 )(a)(3) on referring a person to another facility or provider, is this the same
or analogous to referral of a person to seek second opinion? What is the medical standard for the
provision of a second opinion? In referring to another professional or service provider for a second
opinion, is it the patient who is not comfortable with the opinion given by the first doctor that
triggers the duty or option to refer? How is it different with the situation in Section 23(a)(3) when it
is the doctor who is not comfortable about giving an opinion? Is the difference legally material?
197
13. How does Section 23, paragraph (c) relate to Article 134 the Labor Code which requires
employers to provide family planning services?
14. Section 24 provides that in case the offender is a juridical person, the penalties in the statute
shall be imposed on the president or any responsible officer. For each offense in Section 23, how
will the corporate officer be made responsible if there is no actual participation by the hospital
board directors or officers of such action? Does Section 24 in relation to Section 23 require
corporate action? What is the situation being contemplated in the second paragraph of Section 24
before there can be accountability for criminal violations?
15. Section 7 provides that access of minors to information and family planning services must be
with the written consent of parents or guardians. Is the re a penalty in the law for those who will
make these information and services (e.g. , contraceptives) available to minors without the
parent's consent? How does this relate to Section 14 which requires the Department of Education
to formulate a curriculum which 'shall be used by public schools' and ' may be adopted by private
schools'? Is there a penalty for teaching sex education without the parents' or guardians' written
consent? Correlatively, is there a penalty for private schools which do not teach sex education as
formulated by the DepEd considering the use of the word ' may'?
65 Section I , R.A. No. 4729
66 Entitled "An Act Regulating the Practice of Pharmacy and Setting Standards of Pharmaceutical
Education in the Philippines."
67 See http://www.pop.org/content/coercive-population-ploys-in-ph ilippines-1428, last visited
October 17, 2013.
68 Entitled "Revising the Population Act of Nineteen Hundred And Seventy-One."
69 <http://www.senate.gov.ph/publications/PB%202009-03%20-
%20Promoting%20Reproductive%20Health.pdf->, last visited October 17, 2013.
70 Held in Cairo, Egypt from September 5- 13, 1994.
71 Section 17, R.A. 97 10.
72 See <www. nscb.gov.ph/secstat/d)pop.asp>; last accessed February 2 0, 2014.
73 Alliance /or the Family Foundation, Inc. (A LFI) v. Ochoa, rollo (G.R. No. 204934), p. 1408.
74 Id.
75 Consolidated Comment, OSG, rollo (G. R. No. 204819), p. 376.
76 Consolidated Comment, OSG, rollo (G. R. No. 20481 9), p. 377.
77 Consolidated Comment, OSG, rollo (G. R. No. 20481 9), p. 378.
78 G.R. No. 178552, October 5, 20 10, 632 SCRA 146, 166.
79 Consolidated Comment, OSG, rollo (G. R. No. 20481 9), p. 385, 387-388.
80 Consolidated Comment, OSG, rollo (G.R. No. 2048 19), pp .3 81-384.
81 Angara v. Electoral Commission, 63 Phil. 139, 158 ( 1936).
82 Constitution, Art. VI, Sec. I.
83 Constitution, Art. Vll , Sec. I.
84 Constitution, Art. VIII, Sec. 1.
85 Supra note 81.
86 See Association of Small Landowners in the Phil., Inc., et al. v. Secretary of Agrarian Reform,
256 Phil. 777, 799 (1989).
87 Francisco, Jr. v. Th e House of Representatives, G.R. No. 160261 , November I 0, 2003, citing
Angara v. Electoral Commission, 63 Phil. 139, 158 (1936).
88 Garcia v. Executive Secretary, 602 Phil. 64, 77-78 (2009).
89 Kida v. Senate of the Philippines, G. R. No. 19627 I, October 18, 20 I I, 659 SCRA 270, 326-
327.
90 Biraogo v. The Philippine Truth Commission, G. R. No. I 92935 & G.R. No. 193036, December
7, 2010, 637 SCRA 7 8, I 77.
91 Tañada v. Angara, 338 Phil. 546, 575 (I997).
92 453 Phil. 586 (2003).
93 G.R. No. 188078, 25 January 2010, 611 SCRA137.
94 G.R No. 187 167, July 16, 2011 , 655 SCRA 476.
95 Francisco v. House of Representatives, 460 Phil. 83 0, 882-883 (2003), citing Florentino P.
Feliciano, The Application of Law: Some Recurring Aspects Of The Process Of Judicial Review
And Decision Making, 37 A MJJUR 17, 24 (1 992).
96 Biraogo v. Philippine Truth Commission, G. R. No . 192935, December 7, 20 10, 637 SCRA 78,
148 ; Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council, G.R. No.
178552, October 5, 20 10, 632 SCRA 146, 166-1 67; Senate of the Philippines v. Ermita, 522 Phil.
I, 27 (2006); Francisco v. House of Representatives, 460 Phil. 83 0, 892 (2003).
97 Consolidated Comment, OSG, rollo, (G.R. No. 2 04819), pp. 375-376.
98 Comment-In-Intervention, Hontiveros, et al., rollo, (G.R. No. 204934), pp. 106- 109; Comment-
In-Intervention, Cabral et al., rollo, (G.R. No. 204819), pp. 500-501.
99 Republic Telecommunications Holding, Inc. v. Santiago, 556 Phil. 83, 9 1-92 (2007).
100 Jriformation Technology Foundation of the Philipp ines v. Commission on Elections , 499 Phil.
281, 304-305 (2005).
101 Lawyers Against Monopoly And Poverty (LAMP) v. Th e Secretary of Budget and
Management, G. R. No. 164987, April 24, 201 2, 670 SCRA 373 , 383.
102 The Province Of North Cotabato v. The Government of the Republic of the Philippines, 589
Phil. 387, 481 (2008).
103 Id. at 483 .
104 Tañada v. Angara, 338 Phil. 546, 574 ( 1997).
105 Consolidated Comment, OSG, rollo (G. R. No. 204819), p. 381.
106 See United States v. Salerno, 481 U.S. 739 ( 1987).
107 The First Amendment of the US Constitution reads: Congress shall make no law respecting
an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of
speech, or of the press; or the right of the people peaceably to assemble, and to petition the
government for a redress of grievances.
108 Romualdez v. Commission on Elections, 576 Phi l. 357 (2008); Romualdez v. Hon.
Sandiganbayan, 479 Phil. 265 (2004 ); Estrada v. Sandiganbayan, 421 Phi I. 290 (200 I).
109 Resolution, Romualdez v. Commission on Elect ions, 594 Phil. 305, 3 16 (2008).
110 Constitution, Article VIII , Section 1.
111 Consolidated Comment, OSG, rollo (G. R. No. 2048 19), pp. 375-376.
112 Consolidated Comment, OSG, rollo (G. R. No. 2048 19), p. 384.
113 Anak Mindanao Party-list Group v. Th e Executive Secretary, 558 Phil. 338, 350 (2007).
114 Integrated Bar of the Philippines v. Zamora, 392 Phil. 618, 633 (2000), citing Baker v. Carr,
369 U.S. 186 ( 1962).
115 Dissenting Opinion, J. Carpio; Romualdez v. Commission on Elections, 576 Phil. 357, 406
(2008).
116 Social Justice Society (SJS) v. Dangerous Drugs Board and Philippine Drug Enforcement
Agency, 591 Phil. 393, 404 (2008); Tatad v. Secretary of the Department of Energy, 346 Phil. 321
(1997); De Guia v. COMELEC, G .R . No. 104 71 2, May 6, I 992, 208 SCRA 420, 422.
117 503 Phil. 42, 53 (2005).
118 84 Phil. 368, 373 (1949).
119 464 Phil. 375, 385 (2004).
120 Consolidated Comment, OSG, rollo (G.R. No. 204819), pp. 388-389.
121 The Province Of North Cotabato v. The Government of the Republic of the Philippines, supra
note 102; Ortega v. Quezon City Government, 506 Phil. 373, 380 (2005); and Gonzales v.
Comelec, 137 Phil. 471 (1969).
122 Section 26. (I) Every bill passed by the Congress shall embrace only one subject which shall
be expressed in the title thereof.
123 Petition, Task Force for the Family and life Visayas, Inc. v. Ochoa, rollo (G.R. No. 204957),
pp. 6-10; Petition, Echavez v. Ochoa, rollo (G.R. No. 205478), pp. 9-10.
124 Joint Memorandum, Lagman, rollo, (G.R. No. 204819) pp. 212-214.
125 Consolidated Comment, OSG, rollo (G.R. No. 204819, pp.389-393.
126 ALFI Memorandum, rollo (G. .R. N o. 204934), p. 1396.
127 ALFI Memorandum, rollo (G. .R. No. 204934), p. 1396.
128 ALFI Memorandum, rollo (G. .R. No. 204934), p. 1396.
129 Cruz, Philippine Political Law, 2002 Edition, pp. 15 7-1 58; citing 82 CJS 365.
130 Petition, lmbong v. Ochoa, rol/o (G. R. No. 2048 19), pp. 8-10; Petition, Alliance for the Family
Foundation, Inc. (ALFI) v. Ochoa, rollo (G.R. No. 204934), pp. 15-25; Petition, Serve Life Cagayan
De Oro City, Inc. v. Ochoa, rollo, (G.R. No. 204988), pp. 13-1 5; Petition, Olaguer v. Ona, ro/lo (G.
R. No. 205043), pp. 10-11 ; Petition, Philippine Alliance of XSeminarians (PAX) v. Ochoa, ro/lo
(G.R. No . 2051 38), pp. 8-36; Petition, Echavez v. Ochoa, rollo (G.R. No. 2 05478), pp. 10-13;
Petition, Millennium Saint Foundation, Inc. v. Office of the President, rollo (G. R. No. 206355), pp.
198
11-15; Petition, Juat v. Ochoa, rollo (G.R. No. 207111 ), pp. 17-18; Petition, Buhay Partylist (BU
HAY) v. Ochoa, rollo (G. R. No. 2048 19), pp. 1255 -1256.
131 Petition, Alliance for the Family Foundation, inc. (ALFI) v. Ochoa, rollo (G. R. No. 204934), pp.
15-25; Petition, Serve Life Cagayan De Oro City, Inc. v. Ochoa, rollo, (G.R. No. 204988), pp. 13-1
5; Petition, Olaguer v. Ona, rollo (G.R. No. 205043), pp. 10-11; Petition, Philippine Alliance of
XSeminarians (PAX) v. Ochoa, rollo (G.R. No. 205138), pp. 8-36; Petition, Echavez v. Ochoa,
rollo (G. R. No . 205478), pp. 10-13; Petition, Millennium Saint Foundation, Inc. v. Office of the
President, rollo (G.R. No. 206355), pp. 11-1 5; Petition, Juat v. Ochoa, rollo (G.R. No. 207111),
pp. 17-18; Petition, Buhay Partylist (BUHAY) v. Ochoa, rollo (G.R. No. 204819), pp. 1255-1256.
132 Petition, Pro-Life Philippines Foundation, inc. v. Ochoa, rollo (G.R. No. 205720), pp. 14-30.
133 Memorandum, Alcantara, rollo (G.R. No. 204819), p. 2133; Reply, Olaguer v. Ona, rollo (G.R.
No. 205043), pp. 339-340.
134 Consolidated Comment, OSG, rollo, (G.R. No. 204819), pp. 393-396; Comment-In-
Intervention, Lagman, rollo, (G.R. No. 204819), pp. 230-233; Comment-In-Intervention, C4RH,
rollo (G.R. No. 2048 19), pp. 1091-11 92; Hontiveros, rollo (G.R. No. 204934), pp. 111-1 16;
Memorandum, Cayetano,, rollo (G.R. No. 204819), pp. 3038-3041.
135 Consolidated Comment, OSG, rollo, (G.R. No. 204819), pp. 396-410.
136 Comment-In-Intervention, Lagman, rollo, (G.R. No. 204819), pp. 225-342.
137 Article 3, Universal Declaration of Human Rights.
138 See Republic Act No. 4729, dated June 18, 1966.
139 See http://www.pop.org/content/coerci ve-population-ploys- in-philippines- 1428 , last visited
October 17, 2013.
140 <http://www.senate.gov.ph/publications/PB%202009-03%20-
%20Promoting%20Reproductive%20 Health.pdt>, last visited October 17, 2013.
141 <http://www.pop.org/content/ coercive-population-p loys-in-ph ii ippines-1428>
During the deliberation, it was agreed that the individual members of the Court ca n express their
own views on this matter.
142 Petition, Alliance/or the Family Foundation, Inc. (AL FI) v. Ochoa, rollo (G.R. No. 204934), pp
. 15-25; Petition, Serve Life Cagayan De Oro City, Inc. v. Ochoa, rollo, (G.R. No. 2 04988), pp. 13-
15; Petition, Olaguer v. Ona, rollo (G.R. No. 205043), pp. 10-11 ; Petition, Philippine Alliance of
XSeminarians (PAX) v. Ochoa, rollo (G.R. No. 205 138), pp. 8-36 ; Petition, Echavez v. Ochoa,
rollo (G.R. No. 205478), pp. 10-13 ; Petition, Millennium Saint Foundation, Inc. v. Office of the
President, rollo (G.R. No. 206355), pp. 11-15; Petition, Juat v. Ochoa, rollo (G.R. No. 207 111),
pp. 17-18; Petition, Buhay Party/isl (BUHAY) v. Ochoa, rollo (G.R. No. 2048 19), pp. 1255-1256.
143 Comment-ln-lntervention, Lag man, rollo, (G. R. No. 204819), pp. 225-342.
144 G.R. No. 202242, July 17, 201 2, 676 SCRA 579.
145 Webster's Third International Dictionary, 1993 Edition, p. 469.
146 Black's Law Dictionary, Fifth Edition, p. 262.
147 G.R. No. 182836, October 13, 2009, 618 Phil. 634 (2009).
148 Gonzales v. Carhart (Nos. 05-380 and 05-1382), No. 05- 380, 413 F. 3d 791 ; 05- 1382, 435
F. 3d 1163,
149 http: //www.law.comell.edu/supct/html/05-380.ZO.html, last visited February 15, 2014.
150 Record of the Constitutional Commission, Volume 4, September 16, 1986, p. 668.
151 Record of the Constitutional Commission, Volume 4, September 12, 1986, p. 596.
152 Record of the Constitutional Commission, Volume 4, September 12, 1986, p. 669.
153 Record of the Constitutional Commission, Volume 4, September 19, 1986, p. 800.
154 Record of the Constitutional Commission, Volume 4, September 17, 1986, p. 711 .
155 Record of the Constitutional Commission, Volume 4, September 17, 1986, p. 711.
156 Record of the Constitutional Commission, Volume 4 , September 17, 1986, p. 745 .
157 TSN, July 9, 2013 , pp. 23-24.
158 Id.
159 4th Edition, p. 375
160 Id, p. 609
161 Sumpaico, Gutierrez, Luna, Pareja, Ramos and Baja-Panlilio, 2"d Edition, (2002), pp. 76-77.
162 Moore, Persaud, Torchia, The Developing Human: Clinically Oriented Embryo logy,
International Edition, 9th Edition (2013), pp. 1-5, 13.
163 O'Rahilly, Ronan and Muller, Fabiola, Huma n Embryo logy & Teratology. 2nd edition. New
York: Wiley-Liss, 1996, pp. 8, 29, cited at: http://www.princeton.edu/-
prolife/articles/embryoguotes2.html, last visited February 15, 2014.
164 From https://www.philippinemedicalassociation .org/downloads/circular-forms/ Position-Paper-
on-the-Republic-Health-Bill-%28Responsible-Parenthood-Bill%29.pdf. last visited March 26, 2014.
165 Comment-In-Intervention, Lagman, rol/o, (G.R. No. 204819), pp. 225-342.
166 Id.
167 Id.
168 See <http://americanpregnancy.org/duringpregnancy/ fetaldevelopment I .htm>, last visited
April 7, 2014.
169 Joint Memorandum of the House of Representatives and Respondent- Intervenor Rep. Edee I
C. Lagman), Section 40, Rollo, G.R. No. 2048 19, p. 2343.
170 Concurring Opinion (Justice Carpio), p. 3.
171 See TSN, July 9, 2013, p. 100.
172 Separate Opinion (Justice Del Castillo), pp. 17-19; Separate Opinion (Justice Brion), p. 25.
173 Section 3.01 For purposes ofthese Rules, the terms shall be defin ed as fo llows:
a) Abortifacient refers to any drug or device that primarily induces abortion or the destruction of a
fetus inside the mother's womb or the prevention of the fertil ized ovum to reach and be implanted
in the mother's womb upon determination of the Food and Drug Admini stration (F DA) .
xxxx
j) Contraceptive refers to any safe, legal, effective and scientifically proven modern fam ily
planning method, device, or health product, whether natural or artificial, that prevents pregnancy
but does not primarily destroy a fertilized ovum or prevent a fertilized ovum from being implanted
in the mother's womb in doses of its approved indication as determined by the Food and Drug
Administration (FDA) .
174 Separate Opinion (Justice Del Castillo), pp. 17-19; Separate Opinion (Justice Brion), p. 25 .
175 Separate Opinion (Justice Del Castillo), p. 19 .
176 Petition, Alliance for the Family Foundation, Inc. (A LFI} v. Ochoa, rollo (G. R. No. 204934),
pp. 26-28; Petition, Serve l ife Cagayan De Oro City, Inc. v. Ochoa, rolfo, (G. R. No . 204988), pp.
15-16; Petition, Echavez v. Ochoa, rollo (G.R. No. 205478), pp. 13- 14; Petition, Pro-life
Philippines Foundation, Inc. v. Ochoa, rolfo (G.R. No. 205 720), pp. 30-35.
177 Memorandum, Alliance for the Family Foundation, rollo, (G.R. No . 204934), pp. 1419-1445.
178 Section 4. Definition of Terms. - For the purpose of this Act, the following terms shall be
defined as follows:
xxxx
(p) Reproductive Health (RH) refers to the state of complete physical, mental and social well-being
and not merely the absence of disease or infirmity, in all matters relating to the reproductive
system and to its functions and processes. This implies that people are able to have a
responsible, safe, consensual and satisfying sex life, that they have the capability to reproduce
and the freedom to decide if, when , and how often to do so. This further implies that women and
men attain equal relationships in matters related to sexual relations and reproduction.
179 Section 4. Definition of Terms . - For the purpose of this Act, the following terms shall be
defined as follows:
xxxx
(w) Sexual health refers to a state of physical, mental and social well-being in relation to sexuality.
It requires a positive and respectful approach to sexuality and sexual relationships, as well as the
possibility of having pleasurable and safe sexual experiences, free from coercion, discrimination
and violence.
180 Me morandum, Alcantara, rollo, (G.R. No. 204934)p. 2136; Memorandum , PAX, rollo (G.R.
No. 205 138), pp. 2154-2155.
181 Consolidated Comment, OSG, rollo (G.R. No. 204819), pp. 415-416.
182 Gamboa v. Finance Secretary, G.R. No. 176579, June 28, 2011 , 6 52 SCRA 690, 738-739.
183 335 Phil. 82 ( 1997).
184 Memorandum , Alliance for the Family Foundation, In c. (ALFI) v. Ochoa, rol/o (G.R. No.
204934), p. 1408.
185 Id.
186 Memorandum, Lagman, rollo (G.R. No. 204819), pp. 2359-2361.
187 Separate Opinion (Justice Leonardo-De Castro) p. 54.
199
188 Petition, Philippine Alliance of XSeminarians (PAX) v. Ochoa, rollo (G. R. No. 205138), pp.
40-41.
189 Petition, Task Force/or the Family and Life Visayas, Inc. v. Ochoa, rollo (G.R. No. 204957),
pp. 26-27; Petition, Philippine Alliance of XSem inarians (PAX) v. Ochoa, rollo (G.R. No. 205138),
pp. 39-44; Petition, Tatadv. Office of the President, rollo (G.R. No. 205491), pp. 8-9; Petition, Pro-
Life Philippines Foundation, Inc. v. Ochoa, rollo (G.R. No. 205720), pp . 59-67; Petition,
Millennium Saint Foundation, Inc. v. Office of the President, rollo (G.R. No. 2063 55), pp. 25-26.
190 Joint Memorandum, lmbong/Luat, rollo (G.R. No. 204819), p. 2615.
191 Joint Memorandum, Imbong/Luat, rollo (G.R. No. 204819), pp . 2616-2621.
192 Petition, Echavez v. Ochoa, rollo (GR. No. 205478), pp. 6-7.
193 Petition, Couples for Christ Foundation, Inc. v. Ochoa, rollo (G.R. No. 207172), pp. 20-23.
194 Petition, Coup les for Christ Foundation, Inc. v. Ochoa, rollo (G.R. No. 207 I 72), pp. 20-23.
195 Petition, Alliance for the Family Foundation, Inc. (A LFI) v. Ochoa, rollo (G.R. No. 204934),
pp. 35-37.; Petition, Millennium Saint Foundation, In c. v. Office of the President, rollo (G.R. No.
206355), pp. 17- 18.
196 Memorandum, Cayetano, rollo (G.R. No. 204819), p. 3050; Comment-in-Lntervention, Cabral,
rollo (G.R. No. 2 04819), p. 5 11.
197 Memorandum, OSG, rollo (G. R. No. 204819), p. 2677.
198 Memorandum, Cayetano, rollo (G.R. No. 2048 19), p. 3050.
199 Joint Memorandum Lagman, rol!o (G.R. No. 2048 19), p. 2361.
200 Memorandum . C4RH, rollo (G.R. No. 204819), p. 2189; Memorandum, Cayetano, rollo (G.R.
No. 204819), p. 3050-305 1.
201 Memorandum, Cayetano, rollo (G.R. No. 204 819), p. 3050 .
202 Memorandum, OSG, rollo (G.R. No. 204819), p. 2677.
203 Memorandum, OSG, rollo (G.R. No. 204819), p . 2679.
204 Memorandum, OSG, rollo (G.R. No. 204819), p. 2679.
205 Cruz, Philippine Political Law, 2000 ed ., p. 179, citing Justice Laurel in Engel v. Vitale, 370
US 421.
206 Gorospe, Constitutional Law, Vol. I, p. I 007
207 Bernas, The 1987 Constitution, 2009 Ed. , p. 330
208 Gorospe, Constitutional Law, Vol. I, p. I 066
209 59 SC RA 54 (1974).
210 Escritor v. Estrada, A.M. No. P-02-1651 , June 22, 2006, 525 Phil. 110, 140- 141 (2006).
211 106 Phil. 2 (1959).
212 Gerona v. Secretary of Education, 106 Phil. 2, 9- 10 ( 1959).
213 Ebralinag v. Division Superintendent of Schools, 219 SCRA 25 6 ( 1993 ), March 1, 1993.
214 525 Phil. 110 (2006).
215 Id. at 137.
216 Id. at 148.
217 Id . at 149.
218 Id. at 175.
219 Id. at 168- 169.
220 Estrada v. Escritor, 455 Phil. 4 11 , 560 (2003).
221 Cruz, Constitutional Law, 2000 edition, pp. 178-1 79.
222 Bernas, The 1987 Constitution, 2009 Ed. , p. 330.
223 Separate Opinion, Cruz, Ebralinag v. Division Superintendent of Schools, 219 SCRA 25 6 (
1993 ), March 1, 1993.
224 Estrada v. Escritor, supra note 220, at 537.
225 20 130 CSIH 36.
226 http://www. skepticink.com/tippling/201 3/05/0 5/conscientious-objection-to-abortion -cathoIic-
midwives-win-appeal/; last visited February 22, 2014
227 http://ukhumanrightsblog.com/20 13/05/03/conscientious-objection-to-abortion-catholic-
midwives-win-appeal; last visited February 22 , 2014
228 453 Phil. 440 (2003).
229 Fernando on the Philippine Constitution, 1974 ed. , p. 565; See Dissenting Opinion Makasiar,
Garcia v. The Faculty Admission Committee G. R. No. L-40779, November 28, 1975.
230 TSN , August 13, 201 3, pp. 52-54.
231 TSN, August27, 201 3, pp. 71-72
232 Islamic Da'wah Council of the Philippines v. Office of the Executive Secretary of the Office of
the President of the Philippines, supra note 228 at 450.
233 http://fatherbemasblogs. blogspot.com/2011 _02_0 !_archive.html ; last vi sited February 15,
2014.
234 Estrada v. Escritor, supra note 210.
235 TSN , Aug ust 27 , 201 3, p. 130.
236 http ://www. lifenews.com/2011 /09/01 /philippines-sees-matemal-mortalitv-decline-without-
abortion; last visited March 9, 2014 [Researchers from the Institute for Health Metrics and
Evaluation of the University of Washington in Seattle examined maternal mortality rates in 181
countries and found the rate (the number of women's deaths per 100,000) dropped by 81 percent
in the Philippines between .1980 and 2008. The decrease comes as the largely Catholic nation
has resister efforts to legalize abortions, even though the United Nations and pro-abortion groups
claim women will supposedly die in illegal abortions and increase the maternal mortality rate if
abortion is prohibited.
The 2010 study, published in Lancet, shows the Philippines outpaced first-world nations like
Germany, Russia and Israel - where abortions are legal - in cutting maternal mortality rates.
Meanwhile, the National Statistical Coordination Board in the Philippines, according to Spero
Forum, has shown the same results. From 1990-2010, the daily maternal mortality rate dropped
21 percent, its figures indicated. The World Health Organization also found that the Filipino
maternal mortality rate dropped 48 percent from 1990 to 2008.
237 TSN, July 23, 2013 , p. 23.
238 Memorandum, Alliance for the Family Foundation, Inc. {ALFI) v. Ochoa, rollo (G.R. No.
204934), p. 1407.
239 SEC. 15. Certificate of Compliance. - No marriage license shall be issued by the Local Civil
Registrar unless the applicants present a Certificate of Compliance issued for free by the local
Family Planning Office certifying that they had duly received adequate instructions and information
on responsible parenthood, family planning, breastfeeding and infant nutrition.
240 Petition, Couples for Christ Foundation, In c. v. Ochoa, rollo (G.R. No. 207 172), p. 29.
241 80 CONST. Art XV, §2 .
242 Separate Opinion (Justice Leonardo-De Castro), p. 42-43.
243 130 Phil. 415 (1968).
244 Id . at 436.
245 81 Griswold v. Connecticut,3 81U.S. 479, June7, 1965.
246 Id.
247 Section 12, Article II , 1987 Constitution.
248 Bernas, The 1987 Constitution, 2009 Ed., p . 85.
249 (ii) Parental consent or that of the person exercising parental authority in the case of abused
minors, where the parent or the person exercising parental authority is the respondent, accused or
convicted perpetrator as certified by the proper prosecutorial office of the court. In the case of
minors, the written consent of parents or legal guardian or, in their absence, persons exercising
parental authority or next-of-kin shall be required only in elective surgical procedures and in no
case shall consent be required in emergency or serious cases as defined in Republic Act No.
8344.
250 Petition, Echavez v. Ochoa, rollo (G.R. No. 205478), pp. 15- 16.
251 Memorandum, Alliance for the Family Foundation, Inc. (ALFI) v. Ochoa, rollo (G. R. No.
204934), pp. 1453- 1496.
252 Records, 1986 Constitutional Convention, Volume IV, pp. 401-402 .
253 Article II , Section 13, 1987 Constitution.
254 Petition, Task Force for the Family and life Visayas, Inc. v. Ochoa, rollo (G. R. No. 204957),
pp. 24-25.
255 Southern Hemisphere Engagement Network, Inc. v. Anti-Terrorism Council, G.R. No. 178552,
October 5, 2010; People v. Nazario, No. L-44 143, August 3 1, 1988, 165 SCRA 186, 195.
256 Philippine International Trading Corporation v. COA, G.R. No. 1835 17, June 22, 2010, 621
SC RA 461, 469.
257 Webster's Third New International Dictionary, 1993 Edition, p. 1145 .
258 Webster's Third New International Dictionary, 1993 Edition, p. 1252.
259 SEC. 3. Guiding Principles for Implementation. - Th is Act declares the following as guiding
principles:
200
xxxx 261 Biraogo v. Th e Philippine Truth Commission, supra note 90.
(d) The provision of ethical and medically safe, legal, accessible, affordable, non-abortifacient, 262 Petition, Serve Life Cagayan De Oro City, Inc. v. Ochoa, rollo, (G. R. No. 204988), pp. 16-48;
effective and quality reproductive health care services and supplies is essential in the promotion of Petition, Echavez v. Ochoa, rollo (G. R. No. 205478), pp. 7-9.
people's right to health, especially those of women, the poor, and the marginalized, and shall be 263 Except the practice of law which is under the supervision of the Supreme Court.
incorporated as a component of basic health care; 264 United States v. Jesus, 3 1 Phil. 218, 230 (1915).
(e) The State shall promote and provide information and access, without bias, to all methods of 265 Petition , Echavez v. Ochoa, rollo (G. R. N o. 205478), p. 8.
family planning, including effective natural and modem methods which have been proven 266 With reference to Section 2 , 3(E), 4(L), 9 and I 9(C) of the RH La w; Petition, ALFI, rollo (G.R.
medically safe, legal, non-abortifacient, and effective in accordance with scientific and evidence- No. 204934), pp. 28-33; Petition, Philippine Alliance of XSeminarians (PAX) v. Ochoa, rollo (G.R.
based medical research standards such as those registered and approved by the FDA for the poor No. 205138), pp. 37-38.
and marginalized as identified through the NHTS-PR and other government measures of 267 358 Phil. 410 (1998) .
identifying marginalization: Provided, That the State shall also provide fun ding support to promote 268 Pimentel, Jr. v. Executive Secretary, G.R. No. 195770, July 17, 201 2, 676 SCRA 551, 559.
modern natural methods of family planning, especially the Billings Ovulation Method, consistent 269 Id . at 559-560.
with the needs of acceptors and the irreligious convictions; 270 Id. at 561.
(f) The State shall promote programs that: (I) enable individuals and couples to have the number 271 See Section 6, R.A. No. 10354.
of children they desire with due consideration to the health, particularly of women, and the 272 See Section 5, R.A . No. 10354.
resources available and affordable to them and in accordance with existing laws, public morals 273 See Section 16, R.A . No. 1354.
and their religious convictions: Provided, That no one shall be deprived, for economic reasons, of 274 Kida v. Senate of the Philippines, G.R. No. 196271, October 18, 2011, 659 SCRA 270, 306.
the rights to have children; (2) achieve equitable allocation and utilization of resources; (3) ensure 275 Id. at 305.
effective partnership among national government, local government units (LGUs) and the private 276 Petition, Pro-life Philippines Foundation, Inc. v. Ochoa, rollo (GR. N o. 205 720), pp. 14-30.
sector in the design, implementation, coordination, integration, monitoring and evaluation of 277 Gettel , Political Science, Revised Edition, p. 180.
people-centered programs to enhance the quality of life and environmental protection; (4) conduct 278 454 Phil. 504 (2003).
studies to analyze demographic trends including demographic dividends from sound population 279 Separate Opinion, Chief Justice Reynato S. Puno, Republic v. Sandiganbayan, 454 Phi l. 504
policies towards sustainable human development in keeping with the principles of gender equality, (2003).
protection of mothers and children, born and unborn and the promotion and protection of women's 280 https://www.cia.gov/ library/ publications/the-world-factbook/rankorder/2127rank.html ; last
reproductive rights and health ; and (5) conduct scientific studies to determine the safety and visited March 21, 2014
efficacy of alternative medicines and methods for reproductive health care development; 281 St. Josephs College v. St. Josephs College Workers' Association (Samahan), 489 Phil. 559,
xxxx 572-573 (2005) ; and Cebu Institute of Technology v. Opie, G.R. No. L-58870, 18 December 1987,
(g) The provision of reproductive health care, information and supplies giving priority to poor 156 SCRA 629.
beneficiaries as identified through the NHTS-PR and other government measures of identifying
marginalization must be the primary responsibility of the national government consistent with its
obligation to respect, protect and promote the right to health and the right to life;
xxxx
(i) Active participation by nongovernment organizations (NGOs), women's and people's
organizations, civil society, faith-based organizations, the religious sector and communities is
crucial to ensure that reproductive health and population and development policies, plans, and
programs will address the priority needs of women, the poor, and the marginalized;
xxxx
(l) There shall be no demographic or population targets and the mitigation, promotion and/or
stabilization of the population growth rate is incidental to the advancement of reproductive health ;
xxxx
(n) The resources of the country must be made to serve the entire population, espec ially the poor,
and allocations thereof must be adequate and effective: Provided, That the life of the unborn is
protected;
(o) Development is a multi-faceted process that calls for the harmonization and integration of
policies, plans, programs and projects that seek to uplift the quality of life of the people, more
particularly the poor, the needy and the marginalized;
260 SEC. 4. Definition of Terms. - For the purpose of this Act, the following terms shall be defined
as follows:
xxxx
(r) Reproductive health care program refers to the systematic and integrated provision of
reproductive health care to all citizens prioritizing women, the poor, marginalized and those
invulnerable or crisis situations.
xxxx
(aa) Sustainable human development refers to bringing people, particularly the poor and
vulnerable, to the center of development process, the central purpose of which is the creation of
an enabling environment in which all can enjoy long, healthy and productive lives, done in the
manner that promotes their rights and protects the life opportunities of future generation s and the
natural ecosystem on which all life depends.

201

16. EN BANC
G.R. No. 161872 April 13, 2004
REV. ELLY CHAVEZ PAMATONG, ESQUIRE, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
RESOLUTION
TINGA, J.:
Petitioner Rev. Elly Velez Pamatong filed his Certificate of Candidacy for President on December
17, 2003. Respondent Commission on Elections (COMELEC) refused to give due course to
petitioner’s Certificate of Candidacy in its Resolution No. 6558 dated January 17, 2004. The
decision, however, was not unanimous since Commissioners Luzviminda G. Tancangco and
Mehol K. Sadain voted to include petitioner as they believed he had parties or movements to back
up his candidacy.
On January 15, 2004, petitioner moved for reconsideration of Resolution No. 6558. Petitioner’s
Motion for Reconsideration was docketed as SPP (MP) No. 04-001. The COMELEC, acting on
petitioner’s Motion for Reconsideration and on similar motions filed by other aspirants for national
elective positions, denied the same under the aegis of Omnibus Resolution No. 6604 dated
February 11, 2004. The COMELEC declared petitioner and thirty-five (35) others nuisance
candidates who could not wage a nationwide campaign and/or are not nominated by a political
party or are not supported by a registered political party with a national constituency.
Commissioner Sadain maintained his vote for petitioner. By then, Commissioner Tancangco had
retired.
In this Petition For Writ of Certiorari, petitioner seeks to reverse the resolutions which were
allegedly rendered in violation of his right to "equal access to opportunities for public service"
under Section 26, Article II of the 1987
Constitution,1 by limiting the number of qualified candidates only to those who can afford to wage
a nationwide campaign and/or are nominated by political parties. In so doing, petitioner argues
that the COMELEC indirectly amended the constitutional provisions on the electoral process and
limited the power of the sovereign people to choose their leaders. The COMELEC supposedly
erred in disqualifying him since he is the most qualified among all the presidential candidates, i.e.,
he possesses all the constitutional and legal qualifications for the office of the president, he is
capable of waging a national campaign since he has numerous national organizations under his
leadership, he also has the capacity to wage an international campaign since he has practiced law
in other countries, and he has a platform of government. Petitioner likewise attacks the validity of
the form for the Certificate of Candidacy prepared by the COMELEC. Petitioner claims that the
form does not provide clear and reasonable guidelines for determining the qualifications of
candidates since it does not ask for the candidate’s bio-data and his program of government.
First, the constitutional and legal dimensions involved.
Implicit in the petitioner’s invocation of the constitutional provision ensuring "equal access to
opportunities for public office" is the claim that there is a constitutional right to run for or hold public
office and, particularly in his case, to seek the presidency. There is none. What is recognized is
merely a privilege subject to limitations imposed by law. Section 26, Article II of the Constitution
neither bestows such a right nor elevates the privilege to the level of an enforceable right. There is
nothing in the plain language of the provision which suggests such a thrust or justifies an
interpretation of the sort.
The "equal access" provision is a subsumed part of Article II of the Constitution, entitled
"Declaration of Principles and State Policies." The provisions under the Article are generally
considered not self-executing,2 and there is no plausible reason for according a different
treatment to the "equal access" provision. Like the rest of the policies enumerated in Article II, the
provision does not contain any judicially enforceable constitutional right but merely specifies a
guideline for legislative or executive action.3 The disregard of the provision does not give rise to
any cause of action before the courts.4
An inquiry into the intent of the framers5 produces the same determination that the provision is not
self-executory. The original wording of the present Section 26, Article II had read, "The State shall
broaden opportunities to public office and prohibit public dynasties."6 Commissioner (now Chief
Justice) Hilario Davide, Jr. successfully brought forth an amendment that changed the word
"broaden" to the phrase "ensure equal access," and the substitution of the word "office" to
"service." He explained his proposal in this wise:
I changed the word "broaden" to "ENSURE EQUAL ACCESS TO" because what is important
would be equal access to the opportunity. If you broaden, it would necessarily mean that the
government would be mandated to create as many offices as are possible to accommodate as
many people as are also possible. That is the meaning of broadening opportunities to public
service. So, in order that we should not mandate the State to make the government the number
one employer and to limit offices only to what may be necessary and expedient yet offering equal
opportunities to access to it, I change the word "broaden."7 (emphasis supplied)
Obviously, the provision is not intended to compel the State to enact positive measures that would
accommodate as many people as possible into public office. The approval of the "Davide
amendment" indicates the design of the framers to cast the provision as simply enunciatory of a
desired policy objective and not reflective of the imposition of a clear State burden.
Moreover, the provision as written leaves much to be desired if it is to be regarded as the source
of positive rights. It is difficult to interpret the clause as operative in the absence of legislation
since its effective means and reach are not properly defined. Broadly written, the myriad of claims
that can be subsumed under this rubric appear to be entirely open-ended.8 Words and phrases
such as "equal access," "opportunities," and "public service" are susceptible to countless
interpretations owing to their inherent impreciseness. Certainly, it was not the intention of the
framers to inflict on the people an operative but amorphous foundation from which innately
unenforceable rights may be sourced.
As earlier noted, the privilege of equal access to opportunities to public office may be subjected to
limitations. Some valid limitations specifically on the privilege to seek elective office are found in
the provisions9 of the Omnibus Election Code on "Nuisance Candidates" and COMELEC
Resolution No. 645210 dated December 10, 2002 outlining the instances wherein the COMELEC
may motu proprio refuse to give due course to or cancel a Certificate of Candidacy.
As long as the limitations apply to everybody equally without discrimination, however, the equal
access clause is not violated. Equality is not sacrificed as long as the burdens engendered by the
limitations are meant to be borne by any one who is minded to file a certificate of candidacy. In the
case at bar, there is no showing that any person is exempt from the limitations or the burdens
which they create.
Significantly, petitioner does not challenge the constitutionality or validity of Section 69 of the
Omnibus Election Code and COMELEC Resolution No. 6452 dated 10 December 2003. Thus,
their presumed validity stands and has to be accorded due weight.
Clearly, therefore, petitioner’s reliance on the equal access clause in Section 26, Article II of the
Constitution is misplaced.
The rationale behind the prohibition against nuisance candidates and the disqualification of
candidates who have not evinced a bona fide intention to run for office is easy to divine. The State
has a compelling interest to ensure that its electoral exercises are rational, objective, and orderly.
Towards this end, the State takes into account the practical considerations in conducting
elections. Inevitably, the greater the number of candidates, the greater the opportunities for
logistical confusion, not to mention the increased allocation of time and resources in preparation
for the election. These practical difficulties should, of course, never exempt the State from the
202
conduct of a mandated electoral exercise. At the same time, remedial actions should be available
to alleviate these logistical hardships, whenever necessary and proper. Ultimately, a disorderly
election is not merely a textbook example of inefficiency, but a rot that erodes faith in our
democratic institutions. As the United States Supreme Court held:
[T]here is surely an important state interest in requiring some preliminary showing of a significant
modicum of support before printing the name of a political organization and its candidates on the
ballot – the interest, if no other, in avoiding confusion, deception and even frustration of the
democratic [process].11
The COMELEC itself recognized these practical considerations when it promulgated Resolution
No. 6558 on 17 January 2004, adopting the study Memorandum of its Law Department dated 11
January 2004. As observed in the COMELEC’s Comment:
There is a need to limit the number of candidates especially in the case of candidates for national
positions because the election process becomes a mockery even if those who cannot clearly
wage a national campaign are allowed to run. Their names would have to be printed in the
Certified List of Candidates, Voters Information Sheet and the Official Ballots. These would entail
additional costs to the government. For the official ballots in automated counting and canvassing
of votes, an additional page would amount to more or less FOUR HUNDRED FIFTY MILLION
PESOS (₱450,000,000.00).
xxx[I]t serves no practical purpose to allow those candidates to continue if they cannot wage a
decent campaign enough to project the prospect of winning, no matter how slim.12
The preparation of ballots is but one aspect that would be affected by allowance of "nuisance
candidates" to run in the elections. Our election laws provide various entitlements for candidates
for public office, such as watchers in every polling place,13 watchers in the board of
canvassers,14 or even the receipt of electoral contributions.15 Moreover, there are election rules
and regulations the formulations of which are dependent on the number of candidates in a given
election.
Given these considerations, the ignominious nature of a nuisance candidacy becomes even more
galling. The organization of an election with bona fide candidates standing is onerous enough. To
add into the mix candidates with no serious intentions or capabilities to run a viable campaign
would actually impair the electoral process. This is not to mention the candidacies which are
palpably ridiculous so as to constitute a one-note joke. The poll body would be bogged by
irrelevant minutiae covering every step of the electoral process, most probably posed at the
instance of these nuisance candidates. It would be a senseless sacrifice on the part of the State.
Owing to the superior interest in ensuring a credible and orderly election, the State could exclude
nuisance candidates and need not indulge in, as the song goes, "their trips to the moon on
gossamer wings."
The Omnibus Election Code and COMELEC Resolution No. 6452 are cognizant of the compelling
State interest to ensure orderly and credible elections by excising impediments thereto, such as
nuisance candidacies that distract and detract from the larger purpose. The COMELEC is
mandated by the Constitution with the administration of elections16 and endowed with
considerable latitude in adopting means and methods that will ensure the promotion of free,
orderly and honest elections.17 Moreover, the Constitution guarantees that only bona fide
candidates for public office shall be free from any form of harassment and discrimination.18 The
determination of bona fide candidates is governed by the statutes, and the concept, to our mind is,
satisfactorily defined in the Omnibus Election Code.
Now, the needed factual premises.
However valid the law and the COMELEC issuance involved are, their proper application in the
case of the petitioner cannot be tested and reviewed by this Court on the basis of what is now
before it. The assailed resolutions of the COMELEC do not direct the Court to the evidence which
it considered in determining that petitioner was a nuisance candidate. This precludes the Court
from reviewing at this instance whether the COMELEC committed grave abuse of discretion in
disqualifying petitioner, since such a review would necessarily take into account the matters which
the COMELEC considered in arriving at its decisions.
Petitioner has submitted to this Court mere photocopies of various documents purportedly
evincing his credentials as an eligible candidate for the presidency. Yet this Court, not being a trier
of facts, can not properly pass upon the reproductions as evidence at this level. Neither the
COMELEC nor the Solicitor General appended any document to their respective Comments.
The question of whether a candidate is a nuisance candidate or not is both legal and factual. The
basis of the factual determination is not before this Court. Thus, the remand of this case for the
reception of further evidence is in order.
A word of caution is in order. What is at stake is petitioner’s aspiration and offer to serve in the
government. It deserves not a cursory treatment but a hearing which conforms to the requirements
of due process.
As to petitioner’s attacks on the validity of the form for the certificate of candidacy, suffice it to say
that the form strictly complies with Section 74 of the Omnibus Election Code. This provision
specifically enumerates what a certificate of candidacy should contain, with the required
information tending to show that the candidate possesses the minimum qualifications for the
position aspired for as established by the Constitution and other election laws.
IN VIEW OF THE FOREGOING, COMELEC Case No. SPP (MP) No. 04-001 is hereby remanded
to the COMELEC for the reception of further evidence, to determine the question on whether
petitioner Elly Velez Lao Pamatong is a nuisance candidate as contemplated in Section 69 of the
Omnibus Election Code.
The COMELEC is directed to hold and complete the reception of evidence and report its findings
to this Court with deliberate dispatch.
SO ORDERED.
Davide, Jr., Puno, Vitug*, Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez,
Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., and Azcuna, JJ., concur.
Footnotes
* On Official Leave.
1 Sec. 26. The State shall guarantee equal access to opportunities for public service, and prohibit
political dynasties as may be defined by law.
2 See Basco v. PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 52, 68; Kilosbayan, Inc. v.
Morato, G.R. No. 118910, 246 SCRA 540, 564. "A provision which lays down a general principle,
such as those found in Art. II of the 1987 Constitution, is usually not self-executing." Manila Prince
Hotel v. GSIS, G.R. No. 122156, 3 February 1997, 267 SCRA 408, 431. "Accordingly, [the Court
has] held that the provisions in Article II of our Constitution entitled "Declaration of Principles and
State Policies" should generally be construed as mere statements of principles of the State."
Justice Puno, dissenting, Manila Prince Hotel v. GSIS, Id. at 474.
3 See Kilosbayan Inc. v. Morato, G.R. No. 118910, 16 November 1995, 250 SCRA 130, 138.
Manila Prince Hotel v. GSIS, supra note 2 at 436.
4 Kilosbayan, Inc. v. Morato, supra note 2.
5 "A searching inquiry should be made to find out if the provision is intended as a present
enactment, complete in itself as a definitive law, or if it needs future legislation for completion and
enforcement. The inquiry demands a micro-analysis and the context of the provision in question."
J. Puno, dissenting, Manila Prince Hotel v. GSIS, supra note 2.
6 J. Bernas, The Intent of the 1986 Constitution Writers (1995), p. 148.
7 IV Records of Proceedings and Debates, 1986 Constitutional Commission 945.
8 See J. Feliciano, concurring, Oposa v. Factoran, Jr., G.R. No. 101083, 30 July 1993, 224 SCRA
792, 815.
9 Section 69. Nuisance Candidates. — The Commission may, motu proprio or upon a verified
petition of an interested party, refuse to give due course or cancel a certificate of candidacy if it is
shown that said certificate has been filed to put the election process in mockery or disrepute or to
cause confusion among the voters by the similarity of the names of the registered candidates or
by other circumstances or acts which clearly demonstrate that the candidate has no bona fide
intention to run for the office for which the certificate of candidacy has been filed and thus prevent
a faithful determination of the true will of the electorate.
10 SEC. 6. Motu Proprio Cases. — The Commission may, at any time before the election, motu
proprio refuse to give due course to or cancel a certificate of candidacy of any candidate for the
positions of President, Vice-President, Senator and Party-list:
I. The grounds:
a. Candidates who, on the face of their certificate of candidacy, do not possess the constitutional
and legal qualifications of the office to which they aspire to be elected;
b. Candidate who, on the face of said certificate, filed their certificate of candidacy to put the
election process in mockery or disrepute;
203
c. Candidates whose certificate of candidacy could cause confusion among the voters by the
similarity of names and surnames with other candidates; and
d. Candidates who have no bona fide intention to run for the office for which the certificate of
candidacy had been filed or acts that clearly demonstrate the lack of such bona fide intention,
such as:
d.1 Candidates who do not belong to or are not nominated by any registered political party of
national constituency;
d.2 Presidential, Vice-Presidential [candi-dates] who do not present running mates for vice-
president, respectively, nor senatorial candidates;
d.3 Candidates who do not have a platform of government and are not capable of waging a
nationwide campaign.
11 Jenness v. Fortson, 403 U.S. 431 (1971).
12 Rollo, pp. 469.
13 See Section 178, Omnibus Election Code, as amended.
14 See Section 239, Omnibus Election Code, as amended.
15 See Article XI, Omnibus Election Code, as amended.
16 See Section 2(1), Article IX, Constitution.
17 Sanchez v. COMELEC, 199 Phil. 617 (1987), citing Cauton v. COMELEC, L-25467, 27 April
1967, 19 SCRA 911.
18 See Section 9, Article IX, Constitution.

204

17. EN BANC
G.R. No. 91649 May 14, 1991
ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN
AND LORENZO SANCHEZ, petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR),
respondent.
H.B. Basco & Associates for petitioners.
Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.
PARAS, J.:
A TV ad proudly announces:
"The new PAGCOR — responding through responsible gaming."
But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the
Philippine Amusement and Gaming Corporation (PAGCOR) Charter — PD 1869, because it is
allegedly contrary to morals, public policy and order, and because —
A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law. It
waived the Manila City government's right to impose taxes and license fees, which is recognized
by law;
B. For the same reason stated in the immediately preceding paragraph, the law has intruded into
the local government's right to impose local taxes and license fees. This, in contravention of the
constitutionally enshrined principle of local autonomy;
C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR —
conducted gambling, while most other forms of gambling are outlawed, together with prostitution,
drug trafficking and other vices;
D. It violates the avowed trend of the Cory government away from monopolistic and crony
economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p. 7, Rollo)
In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared
national policy of the "new restored democracy" and the people's will as expressed in the 1987
Constitution. The decree is said to have a "gambling objective" and therefore is contrary to
Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the
present Constitution (p. 3, Second Amended Petition; p. 21, Rollo).
The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco
being also the Chairman of the Committee on Laws of the City Council of Manila), can question
and seek the annulment of PD 1869 on the alleged grounds mentioned above.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D.
1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated
January 1, 1977 "to establish, operate and maintain gambling casinos on land or water within the
territorial jurisdiction of the Philippines." Its operation was originally conducted in the well known
floating casino "Philippine Tourist." The operation was considered a success for it proved to be a
potential source of revenue to fund infrastructure and socio-economic projects, thus, P.D. 1399
was passed on June 2, 1978 for PAGCOR to fully attain this objective.
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the
Government to regulate and centralize all games of chance authorized by existing franchise or
permitted by law, under the following declared policy —
Sec. 1. Declaration of Policy. — It is hereby declared to be the policy of the State to centralize and
integrate all games of chance not heretofore authorized by existing franchises or permitted by law
in order to attain the following objectives:
(a) To centralize and integrate the right and authority to operate and conduct games of chance
into one corporate entity to be controlled, administered and supervised by the Government.
(b) To establish and operate clubs and casinos, for amusement and recreation, including sports
gaming pools, (basketball, football, lotteries, etc.) and such other forms of amusement and
recreation including games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will: (1) generate sources of additional revenue to fund
infrastructure and socio-civic projects, such as flood control programs, beautification, sewerage
and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs, Population Control and
such other essential public services; (2) create recreation and integrated facilities which will
expand and improve the country's existing tourist attractions; and (3) minimize, if not totally
eradicate, all the evils, malpractices and corruptions that are normally prevalent on the conduct
and operation of gambling clubs and casinos without direct government involvement. (Section 1,
P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under
its Charter's repealing clause, all laws, decrees, executive orders, rules and regulations,
inconsistent therewith, are accordingly repealed, amended or modified.
It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau
of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion,
and directly remitted to the National Government a total of P2.5 Billion in form of franchise tax,
government's income share, the President's Social Fund and Host Cities' share. In addition,
PAGCOR sponsored other socio-cultural and charitable projects on its own or in cooperation with
various governmental agencies, and other private associations and organizations. In its 3 1/2
years of operation under the present administration, PAGCOR remitted to the government a total
of P6.2 Billion. As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine
(9) casinos nationwide, directly supporting the livelihood of Four Thousand Four Hundred Ninety-
Four (4,494) families.
But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null
and void" for being "contrary to morals, public policy and public order," monopolistic and tends
toward "crony economy", and is violative of the equal protection clause and local autonomy as well
as for running counter to the state policies enunciated in Sections 11 (Personal Dignity and
Human Rights), 12 (Family) and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article
XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution.
This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most
deliberate consideration by the Court, involving as it does the exercise of what has been described
as "the highest and most delicate function which belongs to the judicial department of the
government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).
As We enter upon the task of passing on the validity of an act of a co-equal and coordinate branch
of the government We need not be reminded of the time-honored principle, deeply ingrained in our
jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor
of its constitutionality. This is not to say that We approach Our task with diffidence or timidity.
Where it is clear that the legislature or the executive for that matter, has over-stepped the limits of
its authority under the constitution, We should not hesitate to wield the axe and let it fall heavily, as
fall it must, on the offending statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice
Zaldivar underscored the —
. . . thoroughly established principle which must be followed in all cases where questions of
constitutionality as obtain in the instant cases are involved. All presumptions are indulged in favor
of constitutionality; one who attacks a statute alleging unconstitutionality must prove its invalidity
beyond a reasonable doubt; that a law may work hardship does not render it unconstitutional; that
if any reasonable basis may be conceived which supports the statute, it will be upheld and the
205
challenger must negate all possible basis; that the courts are not concerned with the wisdom,
justice, policy or expediency of a statute and that a liberal interpretation of the constitution in favor
of the constitutionality of legislation should be adopted. (Danner v. Hass, 194 N.W. 2nd 534, 539;
Spurbeck v. Statton, 106 N.W. 2nd 660, 663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46
SCRA 734, 739 [1970]; Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of
Ordona v. Reyes, 125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer
Protection v. Energy Regulatory Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the legal
personality of petitioners to file the instant petition.
Considering however the importance to the public of the case at bar, and in keeping with the
Court's duty, under the 1987 Constitution, to determine whether or not the other branches of
government have kept themselves within the limits of the Constitution and the laws and that they
have not abused the discretion given to them, the Court has brushed aside technicalities of
procedure and has taken cognizance of this petition. (Kapatiran ng mga Naglilingkod sa
Pamahalaan ng Pilipinas Inc. v. Tan, 163 SCRA 371)
With particular regard to the requirement of proper party as applied in the cases before us, We
hold that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. And even if, strictly speaking they are not covered by the definition, it is still within
the wide discretion of the Court to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question
the constitutionality of several executive orders issued by President Quirino although they were
involving only an indirect and general interest shared in common with the public. The Court
dismissed the objection that they were not proper parties and ruled that "the transcendental
importance to the public of these cases demands that they be settled promptly and definitely,
brushing aside, if we must technicalities of procedure." We have since then applied the exception
in many other cases. (Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian
Reform, 175 SCRA 343).
Having disposed of the procedural issue, We will now discuss the substantive issues raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of
gambling does not mean that the Government cannot regulate it in the exercise of its police
power.
The concept of police power is well-established in this jurisdiction. It has been defined as the
"state authority to enact legislation that may interfere with personal liberty or property in order to
promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an
imposition or restraint upon liberty or property, (2) in order to foster the common good. It is not
capable of an exact definition but has been, purposely, veiled in general terms to underscore its
all-comprehensive embrace. (Philippine Association of Service Exporters, Inc. v. Drilon, 163
SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where
it could be done, provides enough room for an efficient and flexible response to conditions and
circumstances thus assuming the greatest benefits. (Edu v. Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
charter. Along with the taxing power and eminent domain, it is inborn in the very fact of statehood
and sovereignty. It is a fundamental attribute of government that has enabled it to perform the
most vital functions of governance. Marshall, to whom the expression has been credited, refers to
it succinctly as the plenary power of the state "to govern its citizens". (Tribe, American
Constitutional Law, 323, 1978). The police power of the State is a power co-extensive with self-
protection and is most aptly termed the "law of overwhelming necessity." (Rubi v. Provincial Board
of Mindoro, 39 Phil. 660, 708) It is "the most essential, insistent, and illimitable of powers." (Smith
Bell & Co. v. National, 40 Phil. 136) It is a dynamic force that enables the state to meet the
agencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru
an appropriate institution all games of chance authorized by existing franchise or permitted by law"
(1st whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling
operations in one corporate entity — the PAGCOR, was beneficial not just to the Government but
to society in general. It is a reliable source of much needed revenue for the cash strapped
Government. It provided funds for social impact projects and subjected gambling to "close
scrutiny, regulation, supervision and control of the Government" (4th Whereas Clause, PD 1869).
With the creation of PAGCOR and the direct intervention of the Government, the evil practices and
corruptions that go with gambling will be minimized if not totally eradicated. Public welfare, then,
lies at the bottom of the enactment of PD 1896.
Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose
taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local
autonomy. They must be referring to Section 13 par. (2) of P.D. 1869 which exempts PAGCOR,
as the franchise holder from paying any "tax of any kind or form, income or otherwise, as well as
fees, charges or levies of whatever nature, whether National or Local."
(2) Income and other taxes. — a) Franchise Holder: No tax of any kind or form, income or
otherwise as well as fees, charges or levies of whatever nature, whether National or Local, shall
be assessed and collected under this franchise from the Corporation; nor shall any form or tax or
charge attach in any way to the earnings of the Corporation, except a franchise tax of five (5%)
percent of the gross revenues or earnings derived by the Corporation from its operations under
this franchise. Such tax shall be due and payable quarterly to the National Government and shall
be in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or description,
levied, established or collected by any municipal, provincial or national government authority
(Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes
(Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v.
Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or statute must plainly show an intent
to confer that power or the municipality cannot assume it" (Medina v. City of Baguio, 12 SCRA 62).
Its "power to tax" therefore must always yield to a legislative act which is superior having been
passed upon by the state itself which has the "inherent power to tax" (Bernas, the Revised [1973]
Philippine Constitution, Vol. 1, 1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that
"municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909,
January 18, 1957) which has the power to "create and abolish municipal corporations" due to its
"general legislative powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA
541). Congress, therefore, has the power of control over Local governments (Hebron v. Reyes,
G.R. No. 9124, July 2, 1950). And if Congress can grant the City of Manila the power to tax certain
matters, it can also provide for exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As
early as 1975, the power of local governments to regulate gambling thru the grant of "franchise,
licenses or permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National
Government, thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered cities and
other local governments to issue license, permit or other form of franchise to operate, maintain
and establish horse and dog race tracks, jai-alai and other forms of gambling is hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and dog race
tracks, jai-alai and other forms of gambling shall be issued by the national government upon
proper application and verification of the qualification of the applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits" for the
operation of gambling. Necessarily, the power to demand or collect license fees which is a
consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National Government.
PAGCOR is a government owned or controlled corporation with an original charter, PD 1869. All
of its shares of stocks are owned by the National Government. In addition to its corporate powers
(Sec. 3, Title II, PD 1869) it also exercises regulatory powers thus:
Sec. 9. Regulatory Power. — The Corporation shall maintain a Registry of the affiliated entities,
and shall exercise all the powers, authority and the responsibilities vested in the Securities and
Exchange Commission over such affiliating entities mentioned under the preceding section,
including, but not limited to amendments of Articles of Incorporation and By-Laws, changes in
corporate term, structure, capitalization and other matters concerning the operation of the affiliated
206
entities, the provisions of the Corporation Code of the Philippines to the contrary notwithstanding,
except only with respect to original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the Government.
Being an instrumentality of the Government, PAGCOR should be and actually is exempt from local
taxes. Otherwise, its operation might be burdened, impeded or subjected to control by a mere
Local government.
The states have no power by taxation or otherwise, to retard, impede, burden or in any manner
control the operation of constitutional laws enacted by Congress to carry into execution the
powers vested in the federal government. (MC Culloch v. Marland, 4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local
governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of power
on the part of the States to touch, in that way (taxation) at least, the instrumentalities of the United
States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or political subdivision
can regulate a federal instrumentality in such a way as to prevent it from consummating its federal
responsibilities, or even to seriously burden it in the accomplishment of them. (Antieau, Modern
Constitutional Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination of what
local authorities may perceive to be undesirable activities or enterprise using the power to tax as
"a tool for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity
which has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by
P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy)
provides:
Sec. 5. Each local government unit shall have the power to create its own source of revenue and
to levy taxes, fees, and other charges subject to such guidelines and limitation as the congress
may provide, consistent with the basic policy on local autonomy. Such taxes, fees and charges
shall accrue exclusively to the local government. (emphasis supplied)
The power of local government to "impose taxes and fees" is always subject to "limitations" which
Congress may provide by law. Since PD 1869 remains an "operative" law until "amended,
repealed or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an
exception to the exercise of the power of local governments to impose taxes and fees. It cannot
therefore be violative but rather is consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as cited in
Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does
not make local governments sovereign within the state or an "imperium in imperio."
Local Government has been described as a political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs. In a unitary system of government,
such as the government under the Philippine Constitution, local governments can only be an intra
sovereign subdivision of one sovereign nation, it cannot be an imperium in imperio. Local
government in such a system can only mean a measure of decentralization of the function of
government. (emphasis supplied)
As to what state powers should be "decentralized" and what may be delegated to local
government units remains a matter of policy, which concerns wisdom. It is therefore a political
question. (Citizens Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State
concern and hence, it is the sole prerogative of the State to retain it or delegate it to local
governments.
As gambling is usually an offense against the State, legislative grant or express charter power is
generally necessary to empower the local corporation to deal with the subject. . . . In the absence
of express grant of power to enact, ordinance provisions on this subject which are inconsistent
with the state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals.
440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA
480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution,
because "it legalized PAGCOR — conducted gambling, while most gambling are outlawed
together with prostitution, drug trafficking and other vices" (p. 82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the
well-accepted meaning of the clause "equal protection of the laws." The clause does not preclude
classification of individuals who may be accorded different treatment under the law as long as the
classification is not unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does
not have to operate in equal force on all persons or things to be conformable to Article III, Section
1 of the Constitution (DECS v. San Diego, G.R. No. 89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing classes of
individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). The
Constitution does not require situations which are different in fact or opinion to be treated in law as
though they were the same (Gomez v. Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal
protection is not clearly explained in the petition. The mere fact that some gambling activities like
cockfighting (P.D 449) horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and
races (RA 1169 as amended by B.P. 42) are legalized under certain conditions, while others are
prohibited, does not render the applicable laws, P.D. 1869 for one, unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be overthrown because there are
other instances to which it might have been applied. (Gomez v. Palomar, 25 SCRA 827)
The equal protection clause of the 14th Amendment does not mean that all occupations called by
the same name must be treated the same way; the state may do what it can to prevent which is
deemed as evil and stop short of those cases in which harm to the few concerned is not less than
the harm to the public that would insure if the rule laid down were made mathematically exact.
(Dominican Hotel v. Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government
away from monopolies and crony economy and toward free enterprise and privatization" suffice it
to state that this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs
counter to the government's policies then it is for the Executive Department to recommend to
Congress its repeal or amendment.
The judiciary does not settle policy issues. The Court can only declare what the law is and not
what the law should be.1âwphi1 Under our system of government, policy issues are within the
domain of the political branches of government and of the people themselves as the repository of
all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed. (Art. XII, National
Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by
the Constitution. The state must still decide whether public interest demands that monopolies be
regulated or prohibited. Again, this is a matter of policy for the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and
13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2
(Educational Values) of Article XIV of the 1987 Constitution, suffice it to state also that these are
merely statements of principles and, policies. As such, they are basically not self-executing,
meaning a law should be passed by Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing principles ready
for enforcement through the courts. They were rather directives addressed to the executive and
the legislature. If the executive and the legislature failed to heed the directives of the articles the
available remedy was not judicial or political. The electorate could express their displeasure with
the failure of the executive and the legislature through the language of the ballot. (Bernas, Vol. II,
p. 2)
Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil.
387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179
SCRA 287). Therefore, for PD 1869 to be nullified, it must be shown that there is a clear and
unequivocal breach of the Constitution, not merely a doubtful and equivocal one. In other words,
the grounds for nullity must be clear and beyond reasonable doubt. (Peralta v. Comelec, supra)
Those who petition this Court to declare a law, or parts thereof, unconstitutional must clearly
207
establish the basis for such a declaration. Otherwise, their petition must fail. Based on the grounds authorized by law, franchised, and "regulated" by the government, in return for the substantial
raised by petitioners to challenge the constitutionality of P.D. 1869, the Court finds that petitioners revenues it would yield the government to carry out its laudable projects, such as infrastructure
have failed to overcome the presumption. The dismissal of this petition is therefore, inevitable. But and social amelioration? The question, I believe, answers itself. I submit that the sooner the
as to whether P.D. 1869 remains a wise legislation considering the issues of "morality, monopoly, legislative department outlaws all forms of gambling, as a fundamental state policy, and the
trend to free enterprise, privatization as well as the state principles on social justice, role of youth sooner the executive implements such policy, the better it will be for the nation.
and educational values" being raised, is up for Congress to determine. Melencio-Herrera, J., concur.
As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162
SCRA 521 —
Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in its
favor the presumption of validity and constitutionality which petitioners Valmonte and the KMU
have not overturned. Petitioners have not undertaken to identify the provisions in the Constitution
which they claim to have been violated by that statute. This Court, however, is not compelled to
speculate and to imagine how the assailed legislation may possibly offend some provision of the
Constitution. The Court notes, further, in this respect that petitioners have in the main put in
question the wisdom, justice and expediency of the establishment of the OPSF, issues which are
not properly addressed to this Court and which this Court may not constitutionally pass upon.
Those issues should be addressed rather to the political departments of government: the
President and the Congress.
Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when
the gambling resorted to is excessive. This excessiveness necessarily depends not only on the
financial resources of the gambler and his family but also on his mental, social, and spiritual
outlook on life. However, the mere fact that some persons may have lost their material fortunes,
mental control, physical health, or even their lives does not necessarily mean that the same are
directly attributable to gambling. Gambling may have been the antecedent, but certainly not
necessarily the cause. For the same consequences could have been preceded by an overdose of
food, drink, exercise, work, and even sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento, Griño-Aquino,
Medialdea, Regalado and Davide, Jr., JJ., concur.

Separate Opinions
PADILLA, J., concurring:
I concur in the result of the learned decision penned by my brother Mr. Justice Paras. This means
that I agree with the decision insofar as it holds that the prohibition, control, and regulation of the
entire activity known as gambling properly pertain to "state policy." It is, therefore, the political
departments of government, namely, the legislative and the executive that should decide on what
government should do in the entire area of gambling, and assume full responsibility to the people
for such policy.
The courts, as the decision states, cannot inquire into the wisdom, morality or expediency of
policies adopted by the political departments of government in areas which fall within their
authority, except only when such policies pose a clear and present danger to the life, liberty or
property of the individual. This case does not involve such a factual situation.
However, I hasten to make of record that I do not subscribe to gambling in any form. It demeans
the human personality, destroys self-confidence and eviscerates one's self-respect, which in the
long run will corrode whatever is left of the Filipino moral character. Gambling has wrecked and
will continue to wreck families and homes; it is an antithesis to individual reliance and reliability as
well as personal industry which are the touchstones of real economic progress and national
development.
Gambling is reprehensible whether maintained by government or privatized. The revenues
realized by the government out of "legalized" gambling will, in the long run, be more than offset
and negated by the irreparable damage to the people's moral values.
Also, the moral standing of the government in its repeated avowals against "illegal gambling" is
fatally flawed and becomes untenable when it itself engages in the very activity it seeks to
eradicate.
One can go through the Court's decision today and mentally replace the activity referred to therein
as gambling, which is legal only because it is authorized by law and run by the government, with
the activity known as prostitution. Would prostitution be any less reprehensible were it to be

208
 G.R. No. 209155
ATTY. JOSE MALV AR VILLEGAS, JR., Petitioner,
vs.
THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE
SECRETARY OF BUDGET AND MANAGEMENT FLORENCIO B. ABAD, Respondents.
x-----------------------x
G.R. No. 209164
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN
FROILAN M. BACUNGAN, BENJAMIN E. DIOKNO AND LEONOR M. BRIONES, Petitioners,
vs.
DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B. ABAD,
Respondents.
x-----------------------x
G.R. No. 209260
INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner,
vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT
(DBM), Respondent.
x-----------------------x
G.R. No. 209442
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN MABANTE AND REV. JOSE L.
18. Republic of the Philippines GONZALEZ, Petitioners,
SUPREME COURT vs.
Manila PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF THE PHILIPPINES,
EN BANC REPRESENTED BY SENATE PRESIDENT FRANKLIN M. DRILON; THE HOUSE OF
REPRESENTATIVES, REPRESENTED BY SPEAKER FELICIANO BELMONTE, JR.; THE
G.R. No. 209287 July 1, 2014 EXECUTIVE OFFICE, REPRESENTED BY EXECUTIVE SECRETARY PAQUITO N. OCHOA,
JR.; THE DEPARTMENT OF BUDGET AND MANAGEMENT, REPRESENTED BY SECRETARY
FLORENCIO ABAD; THE DEPARTMENT OF FINANCE, REPRESENTED BY SECRETARY
MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG CESAR V. PURISIMA; AND THE BUREAU OF TREASURY, REPRESENTED BY ROSALIA V.
MAKABAYAN; JUDY M. TAGUIWALO, PROFESSOR, UNIVERSITY OF THE PHILIPPINES DE LEON, Respondents.
DILIMAN, CO-CHAIRPERSON, PAGBABAGO; HENRI KAHN, CONCERNED CITIZENS x-----------------------x
MOVEMENT; REP. LUZ ILAGAN, GABRIELA WOMEN'S PARTY REPRESENTATIVE; REP. G.R. No. 209517
CARLOS ISAGANI ZARATE, BAY AN MUNA PARTY-LIST REPRESENTATIVE; RENATO M. CONFEDERATION FOR UNITY, RECOGNITION AND ADV AN CEMENT OF GOVERNMENT
REYES, JR., SECRETARY GENERAL OF BAYAN; MANUEL K. DAYRIT, CHAIRMAN, ANG EMPLOYEES (COURAGE), REPRESENTED BY ITS 1ST VICE PRESIDENT, SANTIAGO
KAPATIRAN PARTY; VENCER MARI E. CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; DASMARINAS, JR.; ROSALINDA NARTATES, FOR HERSELF AND AS NATIONAL PRESIDENT
VICTOR VILLANUEVA, CONVENOR, YOUTH ACT NOW, Petitioners, OF THE CONSOLIDATED UNION OF EMPLOYEES NATIONAL HOUSING AUTHORITY
(CUENHA); MANUEL BACLAGON, FOR HIMSELF AND AS PRESIDENT OF THE SOCIAL
vs. WELFARE EMPLOYEES ASSOCIATION OF THE PHILIPPINES, DEPARTMENT OF SOCIAL
WELFARE AND DEVELOPMENT CENTRAL OFFICE (SWEAP-DSWD CO); ANTONIA
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PASCUAL, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE DEPARTMENT OF
PHILIPPINES; PAQUITO N. OCHOA, JR., EXECUTIVE SECRETARY; AND FLORENCIO B. AGRARIAN REFORM EMPLOYEES ASSOCIATION (DAREA); ALBERT MAGALANG, FOR
ABAD, SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents. HIMSELF AND AS PRESIDENT OF THE ENVIRONMENT AND MANAGEMENT BUREAU
x-----------------------x EMPLOYEES UNION (EMBEU); AND MARCIAL ARABA, FOR HIMSELF AND AS PRESIDENT
G.R. No. 209135 OF THE KAPISANAN PARA SA KAGALINGAN NG MGA KAW ANI NG MMDA (KKKMMDA),
AUGUSTO L. SY JUCO JR., Ph.D., Petitioner, Petitioners,
vs. vs.
FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT OF BENIGNO SIMEON C. AQUINO Ill, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES;
BUDGET AND MANAGEMENT; AND HON. FRANKLIN MAGTUNAO DRILON, IN HIS CAP A PAQUITO OCHOA, JR., EXECUTIVE SECRETARY; AND HON. FLORENCIO B. ABAD,
CITY AS THE SENATE PRESIDENT OF THE PHILIPPINES, Respondents. SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
x-----------------------x x-----------------------x
G.R. No. 209136 G.R. No. 209569
MANUELITO R. LUNA, Petitioner, VOLUNTEERS AGAINST CRIME AND CORRUPTION (VACC), REPRESENTED BY DANTE L.
vs. JIMENEZ, Petitioner,
SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE vs.
DEPARTMENT OF BUDGET AND MANAGEMENT; AND EXECUTIVE SECRETARY PAQUITO PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY
OCHOA, IN HIS OFFICIAL CAPACITY AS ALTER EGO OF THE PRESIDENT, Respondents. OF THE DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
x-----------------------x DECISION

209
BERSAMIN, J.:
For resolution are the consolidated petitions assailing the constitutionality of the Disbursement
Acceleration Program(DAP), National Budget Circular (NBC) No. 541, and related issuances of
the Department of Budget and Management (DBM) implementing the DAP.
At the core of the controversy is Section 29(1) of Article VI of the 1987 Constitution, a provision of
the fundamental law that firmly ordains that "[n]o money shall be paid out of the Treasury except in
pursuance of an appropriation made by law." The tenor and context of the challenges posed by
the petitioners against the DAP indicate that the DAP contravened this provision by allowing the
Executive to allocate public money pooled from programmed and unprogrammed funds of its
various agencies in the guise of the President exercising his constitutional authority under Section
25(5) of the 1987 Constitution to transfer funds out of savings to augment the appropriations of
offices within the Executive Branch of the Government. But the challenges are further complicated
by the interjection of allegations of transfer of funds to agencies or offices outside of the Executive.
Antecedents
What has precipitated the controversy?
On September 25, 2013, Sen. Jinggoy Ejercito Estrada delivered a privilege speech in the Senate
of the Philippines to reveal that some Senators, including himself, had been allotted an additional
₱50 Million each as "incentive" for voting in favor of the impeachment of Chief Justice Renato C.
Corona.
Responding to Sen. Estrada’s revelation, Secretary Florencio Abad of the DBM issued a public
statement entitled Abad: Releases to Senators Part of Spending Acceleration Program,1
explaining that the funds released to the Senators had been part of the DAP, a program designed
by the DBM to ramp up spending to accelerate economic expansion. He clarified that the funds
had been released to the Senators based on their letters of request for funding; and that it was not
the first time that releases from the DAP had been made because the DAP had already been
instituted in 2011 to ramp up spending after sluggish disbursements had caused the growth of the
gross domestic product (GDP) to slow down. He explained that the funds under the DAP were
usually taken from (1) unreleased appropriations under Personnel Services;2 (2) unprogrammed
funds; (3) carry-over appropriations unreleased from the previous year; and (4) budgets for slow-
moving items or projects that had been realigned to support faster-disbursing projects.
The DBM soon came out to claim in its website3 that the DAP releases had been sourced from
savings generated by the Government, and from unprogrammed funds; and that the savings had
been derived from (1) the pooling of unreleased appropriations, like unreleased Personnel
Services4 appropriations that would lapse at the end of the year, unreleased appropriations of
slow-moving projects and discontinued projects per zero based budgeting findings;5 and (2) the
withdrawal of unobligated allotments also for slow-moving programs and projects that had been
earlier released to the agencies of the National Government.
The DBM listed the following as the legal bases for the DAP’s use of savings,6 namely: (1)
Section 25(5), Article VI of the 1987 Constitution, which granted to the President the authority to
augment an item for his office in the general appropriations law; (2) Section 49 (Authority to Use
Savings for Certain Purposes) and Section 38 (Suspension of Expenditure Appropriations),
Chapter 5, Book VI of Executive Order (EO) No. 292 (Administrative Code of 1987); and (3) the
General Appropriations Acts (GAAs) of 2011, 2012 and 2013, particularly their provisions on the
(a) use of savings; (b) meanings of savings and augmentation; and (c) priority in the use of
savings.
As for the use of unprogrammed funds under the DAP, the DBM cited as legal bases the special
provisions on unprogrammed fund contained in the GAAs of 2011, 2012 and 2013.
The revelation of Sen. Estrada and the reactions of Sec. Abad and the DBM brought the DAP to
the consciousness of the Nation for the first time, and made this present controversy inevitable.
That the issues against the DAP came at a time when the Nation was still seething in anger over
Congressional pork barrel – "an appropriation of government spending meant for localized
projects and secured solely or primarily to bring money to a representative’s district"7 – excited the
Nation as heatedly as the pork barrel controversy.
Nine petitions assailing the constitutionality of the DAP and the issuances relating to the DAP
were filed within days of each other, as follows: G.R. No. 209135 (Syjuco), on October 7, 2013;
G.R. No. 209136 (Luna), on October 7, 2013; G.R. No. 209155 (Villegas),8 on October 16, 2013;
G.R. No. 209164 (PHILCONSA), on October 8, 2013; G.R. No. 209260 (IBP), on October 16,
2013; G.R. No. 209287 (Araullo), on October 17, 2013; G.R. No. 209442 (Belgica), on October 29,
2013; G.R. No. 209517 (COURAGE), on November6, 2013; and G.R. No. 209569 (VACC), on
November 8, 2013.
In G.R. No. 209287 (Araullo), the petitioners brought to the Court’s attention NBC No. 541
(Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as
of June 30, 2012), alleging that NBC No. 541, which was issued to implement the DAP, directed
the withdrawal of unobligated allotments as of June 30, 2012 of government agencies and offices
with low levels of obligations, both for continuing and current allotments.
In due time, the respondents filed their Consolidated Comment through the Office of the Solicitor
General (OSG).
The Court directed the holding of oral arguments on the significant issues raised and joined.
Issues
Under the Advisory issued on November 14, 2013, the presentations of the parties during the oral
arguments were limited to the following, to wit:
Procedural Issue:
A. Whether or not certiorari, prohibition, and mandamus are proper remedies to assail the
constitutionality and validity of the Disbursement Acceleration Program (DAP), National Budget
Circular (NBC) No. 541, and all other executive issuances allegedly implementing the DAP.
Subsumed in this issue are whether there is a controversy ripe for judicial determination, and the
standing of petitioners.
Substantive Issues:
B. Whether or not the DAP violates Sec. 29, Art. VI of the 1987 Constitution, which provides: "No
money shall be paid out of the Treasury except in pursuance of an appropriation made by law."
C. Whether or not the DAP, NBC No. 541, and all other executive issuances allegedly
implementing the DAP violate Sec. 25(5), Art. VI of the 1987 Constitution insofar as:
(a)They treat the unreleased appropriations and unobligated allotments withdrawn from
government agencies as "savings" as the term is used in Sec. 25(5), in relation to the provisions of
the GAAs of 2011, 2012 and 2013;
(b)They authorize the disbursement of funds for projects or programs not provided in the GAAs for
the Executive Department; and
(c)They "augment" discretionary lump sum appropriations in the GAAs.
D. Whether or not the DAP violates: (1) the Equal Protection Clause, (2) the system of checks and
balances, and (3) the principle of public accountability enshrined in the 1987 Constitution
considering that it authorizes the release of funds upon the request of legislators.
E. Whether or not factual and legal justification exists to issue a temporary restraining order to
restrain the implementation of the DAP, NBC No. 541, and all other executive issuances allegedly
implementing the DAP.
In its Consolidated Comment, the OSG raised the matter of unprogrammed funds in order to
support its argument regarding the President’s power to spend. During the oral arguments, the
propriety of releasing unprogrammed funds to support projects under the DAP was considerably
discussed. The petitioners in G.R. No. 209287 (Araullo) and G.R. No. 209442 (Belgica) dwelled on
unprogrammed funds in their respective memoranda. Hence, an additional issue for the oral
arguments is stated as follows:
F. Whether or not the release of unprogrammed funds under the DAP was in accord with the
GAAs.
During the oral arguments held on November 19, 2013, the Court directed Sec. Abad to submit a
list of savings brought under the DAP that had been sourced from (a) completed programs; (b)
discontinued or abandoned programs; (c) unpaid appropriations for compensation; (d) a certified
copy of the President’s directive dated June 27, 2012 referred to in NBC No. 541; and (e) all
circulars or orders issued in relation to the DAP.9
In compliance, the OSG submitted several documents, as follows:
(1) A certified copy of the Memorandum for the President dated June 25, 2012 (Omnibus Authority
to Consolidate Savings/Unutilized Balances and their Realignment);10
(2) Circulars and orders, which the respondents identified as related to the DAP, namely:
a. NBC No. 528 dated January 3, 2011 (Guidelines on the Release of Funds for FY 2011);
b. NBC No. 535 dated December 29, 2011 (Guidelines on the Release of Funds for FY 2012);
c. NBC No. 541 dated July 18, 2012 (Adoption of Operational Efficiency Measure – Withdrawal of
Agencies’ Unobligated Allotments as of June 30, 2012);
d. NBC No. 545 dated January 2, 2013 (Guidelines on the Release of Funds for FY 2013);
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e. DBM Circular Letter No. 2004-2 dated January 26, 2004 (Budgetary Treatment of
Commitments/Obligations of the National Government);
f. COA-DBM Joint Circular No. 2013-1 dated March 15, 2013 (Revised Guidelines on the
Submission of Quarterly Accountability Reports on Appropriations, Allotments, Obligations and
Disbursements);
g. NBC No. 440 dated January 30, 1995 (Adoption of a Simplified Fund Release System in the
Government).
(3) A breakdown of the sources of savings, including savings from discontinued projects and
unpaid appropriations for compensation from 2011 to 2013
On January 28, 2014, the OSG, to comply with the Resolution issued on January 21, 2014
directing the respondents to submit the documents not yet submitted in compliance with the
directives of the Court or its Members, submitted several evidence packets to aid the Court in
understanding the factual bases of the DAP, to wit:
(1) First Evidence Packet11 – containing seven memoranda issued by the DBM through Sec.
Abad, inclusive of annexes, listing in detail the 116 DAP identified projects approved and duly
signed by the President, as follows:
a. Memorandum for the President dated October 12, 2011 (FY 2011 Proposed Disbursement
Acceleration Program (Projects and Sources of Funds);
b. Memorandum for the President dated December 12, 2011 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and its Realignment);
c. Memorandum for the President dated June 25, 2012 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and their Realignment);
d. Memorandum for the President dated September 4, 2012 (Release of funds for other priority
projects and expenditures of the Government);
e. Memorandum for the President dated December 19, 2012 (Proposed Priority Projects and
Expenditures of the Government);
f. Memorandum for the President dated May 20, 2013 (Omnibus Authority to Consolidate
Savings/Unutilized Balances and their Realignment to Fund the Quarterly Disbursement
Acceleration Program); and
g. Memorandum for the President dated September 25, 2013 (Funding for the Task Force Pablo
Rehabilitation Plan).
(2) Second Evidence Packet12 – consisting of 15 applications of the DAP, with their
corresponding Special Allotment Release Orders (SAROs) and appropriation covers;
(3) Third Evidence Packet13 – containing a list and descriptions of 12 projects under the DAP;
(4) Fourth Evidence Packet14 – identifying the DAP-related portions of the Annual Financial
Report (AFR) of the Commission on Audit for 2011 and 2012;
(5) Fifth Evidence Packet15 – containing a letter of Department of Transportation and
Communications(DOTC) Sec. Joseph Abaya addressed to Sec. Abad recommending the
withdrawal of funds from his agency, inclusive of annexes; and
(6) Sixth Evidence Packet16 – a print-out of the Solicitor General’s visual presentation for the
January 28, 2014 oral arguments.
On February 5, 2014,17 the OSG forwarded the Seventh Evidence Packet,18 which listed the
sources of funds brought under the DAP, the uses of such funds per project or activity pursuant to
DAP, and the legal bases thereof.
On February 14, 2014, the OSG submitted another set of documents in further compliance with
the Resolution dated January 28, 2014, viz:
(1) Certified copies of the certifications issued by the Bureau of Treasury to the effect that the
revenue collections exceeded the original revenue targets for the years 2011, 2012 and 2013,
including collections arising from sources not considered in the original revenue targets, which
certifications were required for the release of the unprogrammed funds as provided in Special
Provision No. 1 of Article XLV, Article XVI, and Article XLV of the 2011, 2012 and 2013 GAAs; and
(2) A report on releases of savings of the Executive Department for the use of the Constitutional
Commissions and other branches of the Government, as well as the fund releases to the Senate
and the Commission on Elections (COMELEC).
RULING
I.
Procedural Issue:
a) The petitions under Rule 65 are proper remedies
All the petitions are filed under Rule 65 of the Rules of Court, and include applications for the
issuance of writs of preliminary prohibitory injunction or temporary restraining orders. More
specifically, the nature of the petitions is individually set forth hereunder, to wit:
G.R. No. 209135 (Syjuco)
Certiorari, Prohibition and Mandamus
G.R. No. 209136 (Luna)
Certiorariand Prohibition
G.R. No. 209155 (Villegas)
Certiorariand Prohibition
G.R. No. 209164 (PHILCONSA)
Certiorariand Prohibition
G.R. No. 209260 (IBP)
Prohibition
G.R. No. 209287 (Araullo)
Certiorariand Prohibition
G.R. No. 209442 (Belgica)
Certiorari
G.R. No. 209517 (COURAGE)
Certiorari and Prohibition
G.R. No. 209569 (VACC)
Certiorari and Prohibition
The respondents submit that there is no actual controversy that is ripe for adjudication in the
absence of adverse claims between the parties;19 that the petitioners lacked legal standing to sue
because no allegations were made to the effect that they had suffered any injury as a result of the
adoption of the DAP and issuance of NBC No. 541; that their being taxpayers did not immediately
confer upon the petitioners the legal standing to sue considering that the adoption and
implementation of the DAP and the issuance of NBC No. 541 were not in the exercise of the
taxing or spending power of Congress;20 and that even if the petitioners had suffered injury, there
were plain, speedy and adequate remedies in the ordinary course of law available to them, like
assailing the regularity of the DAP and related issuances before the Commission on Audit (COA)
or in the trial courts.21
The respondents aver that the special civil actions of certiorari and prohibition are not proper
actions for directly assailing the constitutionality and validity of the DAP, NBC No. 541, and the
other executive issuances implementing the DAP.22
In their memorandum, the respondents further contend that there is no authorized proceeding
under the Constitution and the Rules of Court for questioning the validity of any law unless there is
an actual case or controversy the resolution of which requires the determination of the
constitutional question; that the jurisdiction of the Court is largely appellate; that for a court of law
to pass upon the constitutionality of a law or any act of the Government when there is no case or
controversy is for that court to set itself up as a reviewer of the acts of Congress and of the
President in violation of the principle of separation of powers; and that, in the absence of a
pending case or controversy involving the DAP and NBC No. 541, any decision herein could
amount to a mere advisory opinion that no court can validly render.23
The respondents argue that it is the application of the DAP to actual situations that the petitioners
can question either in the trial courts or in the COA; that if the petitioners are dissatisfied with the
ruling either of the trial courts or of the COA, they can appeal the decision of the trial courts by
petition for review on certiorari, or assail the decision or final order of the COA by special civil
action for certiorari under Rule 64 of the Rules of Court.24
The respondents’ arguments and submissions on the procedural issue are bereft of merit.
Section 1, Article VIII of the 1987 Constitution expressly provides:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as
may be established by law.
Judicial power 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 abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government.
Thus, the Constitution vests judicial power in the Court and in such lower courts as may be
established by law. In creating a lower court, Congress concomitantly determines the jurisdiction
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of that court, and that court, upon its creation, becomes by operation of the Constitution one of the
repositories of judicial power.25 However, only the Court is a constitutionally created court, the
rest being created by Congress in its exercise of the legislative power.
The Constitution states that judicial power includes the duty of the courts of justice not only "to
settle actual controversies involving rights which are legally demandable and enforceable" but also
"to determine whether or not there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the Government." It has
thereby expanded the concept of judicial power, which up to then was confined to its traditional
ambit of settling actual controversies involving rights that were legally demandable and
enforceable.
The background and rationale of the expansion of judicial power under the 1987 Constitution were
laid out during the deliberations of the 1986 Constitutional Commission by Commissioner Roberto
R. Concepcion (a former Chief Justice of the Philippines) in his sponsorship of the proposed
provisions on the Judiciary, where he said:–
The Supreme Court, like all other courts, has one main function: to settle actual controversies
involving conflicts of rights which are demandable and enforceable. There are rights which are
guaranteed by law but cannot be enforced by a judicial party. In a decided case, a husband
complained that his wife was unwilling to perform her duties as a wife. The Court said: "We can tell
your wife what her duties as such are and that she is bound to comply with them, but we cannot
force her physically to discharge her main marital duty to her husband. There are some rights
guaranteed by law, but they are so personal that to enforce them by actual compulsion would be
highly derogatory to human dignity." This is why the first part of the second paragraph of Section 1
provides that: Judicial power includes the duty of courts to settle actual controversies involving
rights which are legally demandable or enforceable…
The courts, therefore, cannot entertain, much less decide, hypothetical questions. In a presidential
system of government, the Supreme Court has, also, another important function. The powers of
government are generally considered divided into three branches: the Legislative, the Executive
and the Judiciary. Each one is supreme within its own sphere and independent of the others.
Because of that supremacy power to determine whether a given law is valid or not is vested in
courts of justice.
Briefly stated, courts of justice determine the limits of power of the agencies and offices of the
government as well as those of its officers. In other words, the judiciary is the final arbiter on the
question whether or not a branch of government or any of its officials has acted without jurisdiction
or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to
excess of jurisdiction or lack of jurisdiction. This is not only a judicial power but a duty to pass
judgmenton matters of this nature.
This is the background of paragraph 2 of Section 1, which means that the courts cannot hereafter
evade the duty to settle matters of this nature, by claiming that such matters constitute a political
question. (Bold emphasis supplied)26
Upon interpellation by Commissioner Nolledo, Commissioner Concepcion clarified the scope of
judicial power in the following manner:–
MR. NOLLEDO. x x x
The second paragraph of Section 1 states: "Judicial power includes the duty of courts of justice to
settle actual controversies…" The term "actual controversies" according to the Commissioner
should refer to questions which are political in nature and, therefore, the courts should not refuse
to decide those political questions. But do I understand it right that this is restrictive or only an
example? I know there are cases which are not actual yet the court can assume jurisdiction. An
example is the petition for declaratory relief.
May I ask the Commissioner’s opinion about that?
MR. CONCEPCION. The Supreme Court has no jurisdiction to grant declaratory judgments.
MR. NOLLEDO. The Gentleman used the term "judicial power" but judicial power is not vested in
the Supreme Court alone but also in other lower courts as may be created by law.
MR. CONCEPCION. Yes.
MR. NOLLEDO. And so, is this only an example?
MR. CONCEPCION. No, I know this is not. The Gentleman seems to identify political questions
with jurisdictional questions. But there is a difference.
MR. NOLLEDO. Because of the expression "judicial power"?
MR. CONCEPCION. No. Judicial power, as I said, refers to ordinary cases but where there is a
question as to whether the government had authority or had abused its authority to the extent of
lacking jurisdiction or excess of jurisdiction, that is not a political question. Therefore, the court has
the duty to decide.27
Our previous Constitutions equally recognized the extent of the power of judicial review and the
great responsibility of the Judiciary in maintaining the allocation of powers among the three great
branches of Government. Speaking for the Court in Angara v. Electoral Commission,28 Justice
Jose P. Laurel intoned:
x x x In times of social disquietude or political excitement, the great landmarks of the Constitution
are apt to be forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial
department is the only constitutional organ which can be called upon to determine the proper
allocation of powers between the several department and among the integral or constituent units
thereof.
xxxx
The Constitution is a definition of the powers of government. Who is to determine the nature,
scope and extent of such powers? The Constitution itself has provided for the instrumentality of
the judiciary as the rational way. And when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other department; 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. This is in truth all that is involved in what is termed "judicial supremacy"
which properly is the power of judicial review under the Constitution. x x x29
What are the remedies by which the grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government may be determined
under the Constitution?
The present Rules of Court uses two special civil actions for determining and correcting grave
abuse of discretion amounting to lack or excess of jurisdiction. These are the special civil actions
for certiorari and prohibition, and both are governed by Rule 65. A similar remedy of certiorari
exists under Rule 64, but the remedy is expressly applicable only to the judgments and final
orders or resolutions of the Commission on Elections and the Commission on Audit.
The ordinary nature and function of the writ of certiorari in our present system are aptly explained
in Delos Santos v. Metropolitan Bank and Trust Company:30
In the common law, from which the remedy of certiorari evolved, the writ of certiorari was issued
out of Chancery, or the King’s Bench, commanding agents or officers of the inferior courts to
return the record of a cause pending before them, so as to give the party more sure and speedy
justice, for the writ would enable the superior court to determine from an inspection of the record
whether the inferior court’s judgment was rendered without authority. The errors were of such a
nature that, if allowed to stand, they would result in a substantial injury to the petitioner to whom
no other remedy was available. If the inferior court acted without authority, the record was then
revised and corrected in matters of law. The writ of certiorari was limited to cases in which the
inferior court was said to be exceeding its jurisdiction or was not proceeding according to essential
requirements of law and would lie only to review judicial or quasi-judicial acts.
The concept of the remedy of certiorari in our judicial system remains much the same as it has
been in the common law. In this jurisdiction, however, the exercise of the power to issue the writ of
certiorari is largely regulated by laying down the instances or situations in the Rules of Court in
which a superior court may issue the writ of certiorari to an inferior court or officer. Section 1, Rule
65 of the Rules of Court compellingly provides the requirements for that purpose, viz:
xxxx
The sole office of the writ of certiorari is the correction of errors of jurisdiction, which includes the
commission of grave abuse of discretion amounting to lack of jurisdiction. In this regard, mere
abuse of discretion is not enough to warrant the issuance of the writ. The abuse of discretion must
be grave, which means either that the judicial or quasi-judicial power was exercised in an arbitrary
or despotic manner by reason of passion or personal hostility, or that the respondent judge,
tribunal or board evaded a positive duty, or virtually refused to perform the duty enjoined or to act
in contemplation of law, such as when such judge, tribunal or board exercising judicial or quasi-
judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of
jurisdiction.31
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Although similar to prohibition in that it will lie for want or excess of jurisdiction, certiorari is to be
distinguished from prohibition by the fact that it is a corrective remedy used for the re-examination
of some action of an inferior tribunal, and is directed to the cause or proceeding in the lower court
and not to the court itself, while prohibition is a preventative remedy issuing to restrain future
action, and is directed to the court itself.32 The Court expounded on the nature and function of the
writ of prohibition in Holy Spirit Homeowners Association, Inc. v. Defensor:33
A petition for prohibition is also not the proper remedy to assail an IRR issued in the exercise of a
quasi-legislative function. Prohibition is an extraordinary writ directed against any tribunal,
corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial
functions, ordering said entity or person to desist from further proceedings when said proceedings
are without or in excess of said entity’s or person’s jurisdiction, or are accompanied with grave
abuse of discretion, and there is no appeal or any other plain, speedy and adequate remedy in the
ordinary course of law. Prohibition lies against judicial or ministerial functions, but not against
legislative or quasi-legislative functions. Generally, the purpose of a writ of prohibition is to keep a
lower court within the limits of its jurisdiction in order to maintain the administration of justice in
orderly channels. Prohibition is the proper remedy to afford relief against usurpation of jurisdiction
or power by an inferior court, or when, in the exercise of jurisdiction in handling matters clearly
within its cognizance the inferior court transgresses the bounds prescribed to it by the law, or
where there is no adequate remedy available in the ordinary course of law by which such relief
can be obtained. Where the principal relief sought is to invalidate an IRR, petitioners’ remedy is an
ordinary action for its nullification, an action which properly falls under the jurisdiction of the
Regional Trial Court. In any case, petitioners’ allegation that "respondents are performing or
threatening to perform functions without or in excess of their jurisdiction" may appropriately be
enjoined by the trial court through a writ of injunction or a temporary restraining order.
With respect to the Court, however, the remedies of certiorari and prohibition are necessarily
broader in scope and reach, and the writ of certiorari or prohibition may be issued to correct errors
of jurisdiction committed not only by a tribunal, corporation, board or officer exercising judicial,
quasi-judicial or ministerial functions but also to set right, undo and restrain any act of grave abuse
of discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of the
Government, even if the latter does not exercise judicial, quasi-judicial or ministerial functions.
This application is expressly authorized by the text of the second paragraph of Section 1, supra.
Thus, petitions for certiorari and prohibition are appropriate remedies to raise constitutional issues
and to review and/or prohibit or nullify the acts of legislative and executive officials.34
Necessarily, in discharging its duty under Section 1, supra, to set right and undo any act of grave
abuse of discretion amounting to lack or excess of jurisdiction by any branch or instrumentality of
the Government, the Court is not at all precluded from making the inquiry provided the challenge
was properly brought by interested or affected parties. The Court has been thereby entrusted
expressly or by necessary implication with both the duty and the obligation of determining, in
appropriate cases, the validity of any assailed legislative or executive action. This entrustment is
consistent with the republican system of checks and balances.35
Following our recent dispositions concerning the congressional pork barrel, the Court has become
more alert to discharge its constitutional duty. We will not now refrain from exercising our
expanded judicial power in order to review and determine, with authority, the limitations on the
Chief Executive’s spending power.
b) Requisites for the exercise of the
power of judicial review were
complied with
The requisites for the exercise of the power of judicial review are the following, namely: (1) there
must bean actual case or justiciable controversy before the Court; (2) the question before the
Court must be ripe for adjudication; (3) the person challenging the act must be a proper party; and
(4) the issue of constitutionality must be raised at the earliest opportunity and must be the very litis
mota of the case.36
The first requisite demands that there be an actual case calling for the exercise of judicial power
by the Court.37 An actual case or controversy, in the words of Belgica v. Executive Secretary
Ochoa:38
x x x is one which involves a conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or
dispute. In other words, "[t]here must be a contrariety of legal rights that can be interpreted and
enforced on the basis of existing law and jurisprudence." Related to the requirement of an actual
case or controversy is the requirement of "ripeness," meaning that the questions raised for
constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when
the act being challenged has had a direct adverse effect on the individual challenging it. It is a
prerequisite that something had then been accomplished or performed by either branch before a
court may come into the picture, and the petitioner must allege the existence of an immediate or
threatened injury to itself as a result of the challenged action." "Withal, courts will decline to pass
upon constitutional issues through advisory opinions, bereft as they are of authority to resolve
hypothetical or moot questions."
An actual and justiciable controversy exists in these consolidated cases. The incompatibility of the
perspectives of the parties on the constitutionality of the DAP and its relevant issuances satisfy the
requirement for a conflict between legal rights. The issues being raised herein meet the requisite
ripeness considering that the challenged executive acts were already being implemented by the
DBM, and there are averments by the petitioners that such implementation was repugnant to the
letter and spirit of the Constitution. Moreover, the implementation of the DAP entailed the
allocation and expenditure of huge sums of public funds. The fact that public funds have been
allocated, disbursed or utilized by reason or on account of such challenged executive acts gave
rise, therefore, to an actual controversy that is ripe for adjudication by the Court.
It is true that Sec. Abad manifested during the January 28, 2014 oral arguments that the DAP as a
program had been meanwhile discontinued because it had fully served its purpose, saying: "In
conclusion, Your Honors, may I inform the Court that because the DAP has already fully served its
purpose, the Administration’s economic managers have recommended its termination to the
President. x x x."39
The Solicitor General then quickly confirmed the termination of the DAP as a program, and urged
that its termination had already mooted the challenges to the DAP’s constitutionality, viz:
DAP as a program, no longer exists, thereby mooting these present cases brought to challenge its
constitutionality. Any constitutional challenge should no longer be at the level of the program,
which is now extinct, but at the level of its prior applications or the specific disbursements under
the now defunct policy. We challenge the petitioners to pick and choose which among the 116
DAP projects they wish to nullify, the full details we will have provided by February 5. We urge this
Court to be cautious in limiting the constitutional authority of the President and the Legislature to
respond to the dynamic needs of the country and the evolving demands of governance, lest we
end up straight jacketing our elected representatives in ways not consistent with our constitutional
structure and democratic principles.40
A moot and academic case is one that ceases to present a justiciable controversy by virtue of
supervening events, so that a declaration thereon would be of no practical use or value.41
The Court cannot agree that the termination of the DAP as a program was a supervening event
that effectively mooted these consolidated cases. Verily, the Court had in the past exercised its
power of judicial review despite the cases being rendered moot and academic by supervening
events, like: (1) when there was a grave violation of the Constitution; (2) when the case involved a
situation of exceptional character and was of paramount public interest; (3) when the constitutional
issue raised required the formulation of controlling principles to guide the Bench, the Bar and the
public; and (4) when the case was capable of repetition yet evading review.42
Assuming that the petitioners’ several submissions against the DAP were ultimately sustained by
the Court here, these cases would definitely come under all the exceptions. Hence, the Court
should not abstain from exercising its power of judicial review.
Did the petitioners have the legal standing to sue?
Legal standing, as a requisite for the exercise of judicial review, refers to "a right of appearance in
a court of justice on a given question."43 The concept of legal standing, or locus standi, was
particularly discussed in De Castro v. Judicial and Bar Council,44 where the Court said:
In public or constitutional litigations, the Court is often burdened with the determination of the
locus standi of the petitioners due to the ever-present need to regulate the invocation of the
intervention of the Court to correct any official action or policy in order to avoid obstructing the
efficient functioning of public officials and offices involved in public service. It is required, therefore,
that the petitioner must have a personal stake in the outcome of the controversy, for, as indicated
in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:
The question on legal standing is whether such parties have "alleged such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the
213
presentation of issues upon which the court so largely depends for illumination of difficult
constitutional questions." Accordingly, it has been held that the interest of a person assailing the
constitutionality of a statute must be direct and personal. He must be able to show, not only that
the law or any government act is invalid, but also that he sustained or is in imminent danger of
sustaining some direct injury as a result of its enforcement, and not merely that he suffers thereby
in some indefinite way. It must appear that the person complaining has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to
some burdens or penalties by reason of the statute or act complained of.
It is true that as early as in 1937, in People v. Vera, the Court adopted the direct injury test for
determining whether a petitioner in a public action had locus standi. There, the Court held that the
person who would assail 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." Vera was followed in
Custodio v. President of the Senate, Manila Race Horse Trainers’ Association v. De la Fuente,
Anti-Chinese League of the Philippines v. Felix, and Pascual v. Secretary of Public Works.
Yet, the Court has also held that the requirement of locus standi, being a mere procedural
technicality, can be waived by the Court in the exercise of its discretion. For instance, in 1949, in
Araneta v. Dinglasan, the Court liberalized the approach when the cases had "transcendental
importance." Some notable controversies whose petitioners did not pass the direct injury test were
allowed to be treated in the same way as in Araneta v. Dinglasan.
In the 1975 decision in Aquino v. Commission on Elections, this Court decided to resolve the
issues raised by the petition due to their "far reaching implications," even if the petitioner had no
personality to file the suit. The liberal approach of Aquino v. Commission on Elections has been
adopted in several notable cases, permitting ordinary citizens, legislators, and civic organizations
to bring their suits involving the constitutionality or validity of laws, regulations, and rulings.
However, the assertion of a public right as a predicate for challenging a supposedly illegal or
unconstitutional executive or legislative action rests on the theory that the petitioner represents the
public in general. Although such petitioner may not be as adversely affected by the action
complained against as are others, it is enough that he sufficiently demonstrates in his petition that
he is entitled to protection or relief from the Court in the vindication of a public right.
Quite often, as here, the petitioner in a public action sues as a citizen or taxpayer to gain locus
standi. That is not surprising, for even if the issue may appear to concern only the public in
general, such capacities nonetheless equip the petitioner with adequate interest to sue. In David v.
Macapagal-Arroyo, the Court aptly explains why:
Case law in most jurisdiction snow 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
taxpayer’s suit is in a different category from the plaintiff in a citizen’s 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, however…the people are the real parties…It 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 taxpayer’s 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."45
The Court has cogently observed in Agan, Jr. v. Philippine International Air Terminals Co., Inc.46
that "[s]tanding is a peculiar concept in constitutional law because in some cases, suits are not
brought by parties who have been personally injured by the operation of a law or any other
government act but by concerned citizens, taxpayers or voters who actually sue in the public
interest."
Except for PHILCONSA, a petitioner in G.R. No. 209164, the petitioners have invoked their
capacities as taxpayers who, by averring that the issuance and implementation of the DAP and its
relevant issuances involved the illegal disbursements of public funds, have an interest in
preventing the further dissipation of public funds. The petitioners in G.R. No. 209287 (Araullo) and
G.R. No. 209442 (Belgica) also assert their right as citizens to sue for the enforcement and
observance of the constitutional limitations on the political branches of the Government.47
On its part, PHILCONSA simply reminds that the Court has long recognized its legal standing to
bring cases upon constitutional issues.48 Luna, the petitioner in G.R. No. 209136, cites his
additional capacity as a lawyer. The IBP, the petitioner in G.R. No. 209260, stands by "its avowed
duty to work for the rule of law and of paramount importance of the question in this action, not to
mention its civic duty as the official association of all lawyers in this country."49
Under their respective circumstances, each of the petitioners has established sufficient interest in
the outcome of the controversy as to confer locus standi on each of them.
In addition, considering that the issues center on the extent of the power of the Chief Executive to
disburse and allocate public funds, whether appropriated by Congress or not, these cases pose
issues that are of transcendental importance to the entire Nation, the petitioners included. As
such, the determination of such important issues call for the Court’s exercise of its broad and wise
discretion "to waive the requirement and so remove the impediment to its addressing and
resolving the serious constitutional questions raised."50
II.
Substantive Issues
1.
Overview of the Budget System
An understanding of the Budget System of the Philippines will aid the Court in properly
appreciating and justly resolving the substantive issues.
a) Origin of the Budget System
The term "budget" originated from the Middle English word bouget that had derived from the Latin
word bulga (which means bag or purse).51
In the Philippine setting, Commonwealth Act (CA) No. 246 (Budget Act) defined "budget" as the
financial program of the National Government for a designated fiscal year, consisting of the
statements of estimated receipts and expenditures for the fiscal year for which it was intended to
be effective based on the results of operations during the preceding fiscal years. The term was
given a different meaning under Republic Act No. 992 (Revised Budget Act) by describing the
budget as the delineation of the services and products, or benefits that would accrue to the public
together with the estimated unit cost of each type of service, product or benefit.52 For a forthright
definition, budget should simply be identified as the financial plan of the Government,53 or "the
master plan of government."54
The concept of budgeting has not been the product of recent economies. In reality, financing
public goals and activities was an idea that existed from the creation of the State.55 To protect the
people, the territory and sovereignty of the State, its government must perform vital functions that
required public expenditures. At the beginning, enormous public expenditures were spent for war
activities, preservation of peace and order, security, administration of justice, religion, and supply
of limited goods and services.56 In order to finance those expenditures, the State raised revenues
through taxes and impositions.57 Thus, budgeting became necessary to allocate public revenues
for specific government functions.58 The State’s budgeting mechanism eventually developed
through the years with the growing functions of its government and changes in its market
economy.
The Philippine Budget System has been greatly influenced by western public financial institutions.
This is because of the country’s past as a colony successively of Spain and the United States for a
long period of time. Many aspects of the country’s public fiscal administration, including its Budget
System, have been naturally patterned after the practices and experiences of the western public
financial institutions. At any rate, the Philippine Budget System is presently guided by two principal
objectives that are vital to the development of a progressive democratic government, namely: (1)
to carry on all government activities under a comprehensive fiscal plan developed, authorized and
executed in accordance with the Constitution, prevailing statutes and the principles of sound
public management; and (2) to provide for the periodic review and disclosure of the budgetary
status of the Government in such detail so that persons entrusted by law with the responsibility as
well as the enlightened citizenry can determine the adequacy of the budget actions taken,
authorized or proposed, as well as the true financial position of the Government.59
b) Evolution of the Philippine Budget System
The budget process in the Philippines evolved from the early years of the American Regime up to
the passage of the Jones Law in 1916. A Budget Office was created within the Department of
Finance by the Jones Law to discharge the budgeting function, and was given the responsibility to
assist in the preparation of an executive budget for submission to the Philippine Legislature.60
As early as under the 1935 Constitution, a budget policy and a budget procedure were
established, and subsequently strengthened through the enactment of laws and executive acts.61
EO No. 25, issued by President Manuel L. Quezon on April 25, 1936, created the Budget
214
Commission to serve as the agency that carried out the President’s responsibility of preparing the
budget.62 CA No. 246, the first budget law, went into effect on January 1, 1938 and established
the Philippine budget process. The law also provided a line-item budget as the framework of the
Government’s budgeting system,63 with emphasis on the observance of a "balanced budget" to
tie up proposed expenditures with existing revenues.
CA No. 246 governed the budget process until the passage on June 4, 1954 of Republic Act (RA)
No. 992,whereby Congress introduced performance-budgeting to give importance to functions,
projects and activities in terms of expected results.64 RA No. 992 also enhanced the role of the
Budget Commission as the fiscal arm of the Government.65
The 1973 Constitution and various presidential decrees directed a series of budgetary reforms that
culminated in the enactment of PD No. 1177 that President Marcos issued on July30, 1977, and of
PD No. 1405, issued on June 11, 1978. The latter decree converted the Budget Commission into
the Ministry of Budget, and gave its head the rank of a Cabinet member.
The Ministry of Budget was later renamed the Office of Budget and Management (OBM) under EO
No. 711. The OBM became the DBM pursuant to EO No. 292 effective on November 24, 1989.
c) The Philippine Budget Cycle66
Four phases comprise the Philippine budget process, specifically: (1) Budget Preparation; (2)
Budget Legislation; (3) Budget Execution; and (4) Accountability. Each phase is distinctly separate
from the others but they overlap in the implementation of the budget during the budget year.
c.1.Budget Preparation67
The budget preparation phase is commenced through the issuance of a Budget Call by the DBM.
The Budget Call contains budget parameters earlier set by the Development Budget Coordination
Committee (DBCC) as well as policy guidelines and procedures to aid government agencies in the
preparation and submission of their budget proposals. The Budget Call is of two kinds, namely: (1)
a National Budget Call, which is addressed to all agencies, including state universities and
colleges; and (2) a Corporate Budget Call, which is addressed to all government-owned and -
controlled corporations (GOCCs) and government financial institutions (GFIs).
Following the issuance of the Budget Call, the various departments and agencies submit their
respective Agency Budget Proposals to the DBM. To boost citizen participation, the current
administration has tasked the various departments and agencies to partner with civil society
organizations and other citizen-stakeholders in the preparation of the Agency Budget Proposals,
which proposals are then presented before a technical panel of the DBM in scheduled budget
hearings wherein the various departments and agencies are given the opportunity to defend their
budget proposals. DBM bureaus thereafter review the Agency Budget Proposals and come up
with recommendations for the Executive Review Board, comprised by the DBM Secretary and the
DBM’s senior officials. The discussions of the Executive Review Board cover the prioritization of
programs and their corresponding support vis-à-vis the priority agenda of the National
Government, and their implementation.
The DBM next consolidates the recommended agency budgets into the National Expenditure
Program (NEP)and a Budget of Expenditures and Sources of Financing (BESF). The NEP
provides the details of spending for each department and agency by program, activity or project
(PAP), and is submitted in the form of a proposed GAA. The Details of Selected Programs and
Projects is the more detailed disaggregation of key PAPs in the NEP, especially those in line with
the National Government’s development plan. The Staffing Summary provides the staffing
complement of each department and agency, including the number of positions and amounts
allocated.
The NEP and BESF are thereafter presented by the DBM and the DBCC to the President and the
Cabinet for further refinements or reprioritization. Once the NEP and the BESF are approved by
the President and the Cabinet, the DBM prepares the budget documents for submission to
Congress. The budget documents consist of: (1) the President’s Budget Message, through which
the President explains the policy framework and budget priorities; (2) the BESF, mandated by
Section 22, Article VII of the Constitution,68 which contains the macroeconomic assumptions,
public sector context, breakdown of the expenditures and funding sources for the fiscal year and
the two previous years; and (3) the NEP.
Public or government expenditures are generally classified into two categories, specifically: (1)
capital expenditures or outlays; and (2) current operating expenditures. Capital expenditures are
the expenses whose usefulness lasts for more than one year, and which add to the assets of the
Government, including investments in the capital of government-owned or controlled corporations
and their subsidiaries.69 Current operating expenditures are the purchases of goods and services
in current consumption the benefit of which does not extend beyond the fiscal year.70 The two
components of current expenditures are those for personal services (PS), and those for
maintenance and other operating expenses(MOOE).
Public expenditures are also broadly grouped according to their functions into: (1) economic
development expenditures (i.e., expenditures on agriculture and natural resources, transportation
and communications, commerce and industry, and other economic development efforts);71 (2)
social services or social development expenditures (i.e., government outlay on education, public
health and medicare, labor and welfare and others);72 (3) general government or general public
services expenditures (i.e., expenditures for the general government, legislative services, the
administration of justice, and for pensions and gratuities);73 (4) national defense expenditures
(i.e., sub-divided into national security expenditures and expenditures for the maintenance of
peace and order);74 and (5) public debt.75
Public expenditures may further be classified according to the nature of funds, i.e., general fund,
special fund or bond fund.76
On the other hand, public revenues complement public expenditures and cover all income or
receipts of the government treasury used to support government expenditures.77
Classical economist Adam Smith categorized public revenues based on two principal sources,
stating: "The revenue which must defray…the necessary expenses of government may be drawn
either, first from some fund which peculiarly belongs to the sovereign or commonwealth, and
which is independent of the revenue of the people, or, secondly, from the revenue of the
people."78 Adam Smith’s classification relied on the two aspects of the nature of the State: first,
the State as a juristic person with an artificial personality, and, second, the State as a sovereign or
entity possessing supreme power. Under the first aspect, the State could hold property and
engage in trade, thereby deriving what is called its quasi private income or revenues, and which
"peculiarly belonged to the sovereign." Under the second aspect, the State could collect by
imposing charges on the revenues of its subjects in the form of taxes.79
In the Philippines, public revenues are generally derived from the following sources, to wit: (1) tax
revenues(i.e., compulsory contributions to finance government activities); 80 (2) capital
revenues(i.e., proceeds from sales of fixed capital assets or scrap thereof and public domain, and
gains on such sales like sale of public lands, buildings and other structures, equipment, and other
properties recorded as fixed assets); 81 (3) grants(i.e., voluntary contributions and aids given to
the Government for its operation on specific purposes in the form of money and/or materials, and
do not require any monetary commitment on the part of the recipient);82 (4) extraordinary
income(i.e., repayment of loans and advances made by government corporations and local
governments and the receipts and shares in income of the Banko Sentral ng Pilipinas, and other
receipts);83 and (5) public borrowings(i.e., proceeds of repayable obligations generally with
interest from domestic and foreign creditors of the Government in general, including the National
Government and its political subdivisions).84
More specifically, public revenues are classified as follows:85
General Income
1.Subsidy Income from National Government
2.Subsidy from Central Office
3.
Subsidy from Regional
Office/Staff Bureaus
4.
Income from Government
Services
5.
Income from Government
Business Operations
6.
Sales Revenue
7.
Rent Income
8.
Insurance Income
215
9. If, by the end of any fiscal year, the Congress shall have failed to pass the GAB for the ensuing
Dividend Income fiscal year, the GAA for the preceding fiscal year shall be deemed re-enacted and shall remain in
10. force and effect until the GAB is passed by the Congress.92
Interest Income c.3. Budget Execution93
11. With the GAA now in full force and effect, the next step is the implementation of the budget. The
Sale of Confiscated Goods and Budget Execution Phase is primarily the function of the DBM, which is tasked to perform the
Properties following procedures, namely: (1) to issue the programs and guidelines for the release of funds;
12. (2) to prepare an Allotment and Cash Release Program; (3) to release allotments; and (4) to issue
Foreign Exchange (FOREX) disbursement authorities.
Gains The implementation of the GAA is directed by the guidelines issued by the DBM. Prior to this, the
13. various departments and agencies are required to submit Budget Execution Documents(BED) to
Miscellaneous Operating and outline their plans and performance targets by laying down the physical and financial plan, the
Service Income monthly cash program, the estimate of monthly income, and the list of obligations that are not yet
14. due and demandable.
Fines and Penalties-Government Thereafter, the DBM prepares an Allotment Release Program (ARP)and a Cash Release Program
Services and Business Operations (CRP).The ARP sets a limit for allotments issued in general and to a specific agency. The CRP
15. fixes the monthly, quarterly and annual disbursement levels.
Income from Grants and Allotments, which authorize an agency to enter into obligations, are issued by the DBM.
Donations Allotments are lesser in scope than appropriations, in that the latter embrace the general
Specific Income legislative authority to spend. Allotments may be released in two forms – through a
1. comprehensive Agency Budget Matrix (ABM),94 or, individually, by SARO.95
Income Taxes Armed with either the ABM or the SARO, agencies become authorized to incur obligations96 on
2. behalf of the Government in order to implement their PAPs. Obligations may be incurred in various
Property Taxes ways, like hiring of personnel, entering into contracts for the supply of goods and services, and
3. using utilities.
Taxes on Goods and Services In order to settle the obligations incurred by the agencies, the DBM issues a disbursement
4. authority so that cash may be allocated in payment of the obligations. A cash or disbursement
Taxes on International Trade and authority that is periodically issued is referred to as a Notice of Cash Allocation (NCA),97 which
Transactions issuance is based upon an agency’s submission of its Monthly Cash Program and other required
5. documents. The NCA specifies the maximum amount of cash that can be withdrawn from a
Other Taxes 6.Fines and Penalties-Tax Revenue government servicing bank for the period indicated. Apart from the NCA, the DBM may issue a
7. Non-Cash Availment Authority(NCAA) to authorize non-cash disbursements, or a Cash
Other Specific Income Disbursement Ceiling(CDC) for departments with overseas operations to allow the use of income
collected by their foreign posts for their operating requirements.
c.2. Budget Legislation86 Actual disbursement or spending of government funds terminates the Budget Execution Phase
The Budget Legislation Phase covers the period commencing from the time Congress receives and is usually accomplished through the Modified Disbursement Scheme under which
the President’s Budget, which is inclusive of the NEPand the BESF, up to the President’s approval disbursements chargeable against the National Treasury are coursed through the government
of the GAA. This phase is also known as the Budget Authorization Phase, and involves the servicing banks.
significant participation of the Legislative through its deliberations. c.4. Accountability98
Initially, the President’s Budget is assigned to the House of Representatives’ Appropriations Accountability is a significant phase of the budget cycle because it ensures that the government
Committee on First Reading. The Appropriations Committee and its various Sub-Committees funds have been effectively and efficiently utilized to achieve the State’s socio-economic goals. It
schedule and conduct budget hearings to examine the PAPs of the departments and agencies. also allows the DBM to assess the performance of agencies during the fiscal year for the purpose
Thereafter, the House of Representatives drafts the General Appropriations Bill (GAB).87 of implementing reforms and establishing new policies.
The GABis sponsored, presented and defended by the House of Representatives’ Appropriations An agency’s accountability may be examined and evaluated through (1) performance targets and
Committee and Sub-Committees in plenary session. As with other laws, the GAB is approved on outcomes; (2) budget accountability reports; (3) review of agency performance; and (4) audit
Third Reading before the House of Representatives’ version is transmitted to the Senate.88 conducted by the Commission on Audit(COA).
After transmission, the Senate conducts its own committee hearings on the GAB. To expedite 2.
proceedings, the Senate may conduct its committee hearings simultaneously with the House of Nature of the DAP as a fiscal plan
Representatives’ deliberations. The Senate’s Finance Committee and its Sub-Committees may a. DAP was a program designed to
submit the proposed amendments to the GAB to the plenary of the Senate only after the House of promote economic growth
Representatives has formally transmitted its version to the Senate. The Senate version of the GAB Policy is always a part of every budget and fiscal decision of any Administration.99 The national
is likewise approved on Third Reading.89 budget the Executive prepares and presents to Congress represents the Administration’s
The House of Representatives and the Senate then constitute a panel each to sit in the Bicameral "blueprint for public policy" and reflects the Government’s goals and strategies.100 As such, the
Conference Committee for the purpose of discussing and harmonizing the conflicting provisions of national budget becomes a tangible representation of the programs of the Government in
their versions of the GAB. The "harmonized" version of the GAB is next presented to the President monetary terms, specifying therein the PAPs and services for which specific amounts of public
for approval.90 The President reviews the GAB, and prepares the Veto Message where budget funds are proposed and allocated.101 Embodied in every national budget is government
items are subjected to direct veto,91 or are identified for conditional implementation. spending.102

216
When he assumed office in the middle of 2010, President Aquino made efficiency and
transparency in government spending a significant focus of his Administration. Yet, although such Unreleased Services (PS) savings and
focus resulted in an improved fiscal deficit of 0.5% in the gross domestic product (GDP) from Personal appropriations which approve/
January to July of 2011, it also unfortunately decelerated government project implementation and Services (PS) will lapse at the end of authorize its use
payment schedules.103 The World Bank observed that the Philippines’ economic growth could be Appropriations FY 2011 but may be for the 2011
reduced, and potential growth could be weakened should the Government continue with its pooled as savings and Disbursement
underspending and fail to address the large deficiencies in infrastructure.104 The economic realigned for priority Acceleration
situation prevailing in the middle of 2011 thus paved the way for the development and programs that require Program
implementation of the DAP as a stimulus package intended to fast-track public spending and to immediate funding
push economic growth by investing on high-impact budgetary PAPs to be funded from the
"savings" generated during the year as well as from unprogrammed funds.105 In that respect, the FY 2011 482 Unreleased
DAP was the product of "plain executive policy-making" to stimulate the economy by way of Unreleased appropriations (slow
accelerated spending.106 The Administration would thereby accelerate government spending by: Appropriations moving projects and
(1) streamlining the implementation process through the clustering of infrastructure projects of the programs for
Department of Public Works and Highways (DPWH) and the Department of Education discontinuance)
(DepEd),and (2) front loading PPP-related projects107 due for implementation in the following
year.108 FY 2010 12,336 Supported by the GFI Approve and
Did the stimulus package work? Unprogrammed Dividends authorize its use
The March 2012 report of the World Bank,109 released after the initial implementation of the DAP, Fund for the 2011
revealed that the DAP was partially successful. The disbursements under the DAP contributed 1.3 Disbursement
percentage points to GDP growth by the fourth quarter of 2011.110 The continued implementation Acceleration
of the DAP strengthened growth by 11.8% year on year while infrastructure spending rebounded Program
from a 29% contraction to a 34% growth as of September 2013.111
The DAP thus proved to be a demonstration that expenditure was a policy instrument that the
Government could use to direct the economies towards growth and development.112 The FY 2010 21,544 Unreleased With prior
Government, by spending on public infrastructure, would signify its commitment of ensuring Carryover appropriations (slow approval from
profitability for prospective investors.113 The PAPs funded under the DAP were chosen for this Appropriation moving projects and the President in
reason based on their: (1) multiplier impact on the economy and infrastructure development; (2) programs for November 2010
beneficial effect on the poor; and (3) translation into disbursements.114 discontinuance) and to declare as
b. History of the implementation of savings from Zero-based savings and with
the DAP, and sources of funds Budgeting authority to use
under the DAP Initiative for priority
How the Administration’s economic managers conceptualized and developed the DAP, and finally projects
presented it to the President remains unknown because the relevant documents appear to be
scarce. FY 2011 7,748 FY 2011 Agency For information
The earliest available document relating to the genesis of the DAP was the memorandum of Budget Budget items that can
October 12,2011 from Sec. Abad seeking the approval of the President to implement the proposed items for be realigned within the
DAP. The memorandum, which contained a list of the funding sources for ₱72.11 billion and of the realignment agency to fund new fast
proposed priority projects to be funded,115 reads: disbursing projects
DPWH-3.981 Billion
MEMORANDUM FOR THE PRESIDENT DA – 2.497 Billion
xxxx DOT – 1.000 Billion
DepEd – 270 Million
SUBJECT: FY 2011 PROPOSED DISBURSEMENT ACCELERATION PROGRAM (PROJECTS
AND SOURCES OF FUNDS) TOTAL 72.110
DATE: OCTOBER 12, 2011
Mr. President, this is to formally confirm your approval of the Disbursement Acceleration Program B. Projects in the Disbursement Acceleration Program
totaling ₱72.11 billion. We are already working with all the agencies concerned for the immediate (Descriptions of projects attached as Annex A)
execution of the projects therein.
A. Fund Sources for the Acceleration Program
GOCCs and GFIs

Amount Agency/Project Allotment

Action (SARO and NCA Release) (in Million Php)
Fund Sources (In million Description
Requested
Php)
1. LRTA: Rehabilitation of LRT 1 and 2 1,868
FY 2011 30,000 Unreleased Personnel Declare as
2. NHA: 11,050

217
 450 centralization of data
a. Resettlement of North Triangle residents to processing and others (To be
Camarin A7 500 synchronized with GFMIS
b. Housing for BFP/BJMP 10,000 activities) 758 758
c. On-site development for families living
along dangerous 100 14. COA: IT infrastructure
d. Relocation sites for informal settlers program and hiring of
along Iloilo River and its tributaries additional litigational experts 144 144

3. PHIL. HEART CENTER: Upgrading of 357 15. DND-PAF: On Base Housing

ageing physical plant and medical equipment Facilities and Communication
Equipment 30 30
4. CREDIT INFO CORP: Establishment of 75
centralized credit information system 16. DA: 2,959 2,223
a. Irrigation, FMRs and
5. PIDS: purchase of land to relocate the PIDS 100 Integrated Community Based Multi-Species
office and building construction Hatchery and Aquasilvi
Farming 1,629 1,629
6. HGC: Equity infusion for credit insurance 400 b. Mindanao Rural
and mortgage guaranty operations of HGC Development Project 919 183

7. PHIC: Obligations incurred (premium 1,496 c. NIA Agno River Integrated

subsidy for indigent families) in January-June Irrigation Project 411 411
2010, booked for payment in Jul[y] – Dec
2010. The delay in payment is due to the 17. DAR: 1,293 1,293
delay in the certification of the LGU a. Agrarian Reform
counterpart. Without it, the NG is obliged to Communities Project 2 1,293 132
pay the full amount. b. Landowners Compensation 5,432

8. Philpost: Purchase of foreclosed property. 644 18. DBM: Conduct of National

Payment of Mandatory Obligations, (GSIS, Survey of
PhilHealth, ECC), Franking Privilege Farmers/Fisherfolks/Ips 625 625

9. BSP: First equity infusion out of Php 40B 10,000 19. DOJ: Operating requirements
capitalization under the BSP Law of 50 investigation agents and
15 state attorneys 11 11
10. PCMC: Capital and Equipment Renovation 280
20. DOT: Preservation of the Cine
11. LCOP: 105 Corregidor Complex 25 25
a. Pediatric Pulmonary Program
b. Bio-regenerative Technology Program 35 21. OPAPP: Activities for Peace
(Stem-Cell Research – subject to legal Process (PAMANA- Project
review and presentation) 70 details: budget breakdown,
implementation plan, and
12. TIDCORP: NG Equity infusion 570 conditions on fund release
attached as Annex B) 1,819 1,819
TOTAL 26,945
22. DOST 425 425
a. Establishment of National
NGAs/LGUs Meterological and Climate
Center 275 275
Agency/Project Allotment b. Enhancement of Doppler
(SARO) Cash Radar Network for National
(In Million Requirement Weather Watch, Accurate
Php) (NCA) Forecasting and Flood Early
Warning 190 190
13. DOF-BIR: NPSTAR

218
 23. DOF-BOC: To settle the GOCCs 26,895 26,895
principal obligations with
PDIC consistent with the NGAs/LGUs 45,165 44,000
agreement with the CISS and
For His Excellency’s Consideration
SGS 2,800 2,800
(Sgd.) FLORENCIO B. ABAD
24. OEO-FDCP: Establishment of [/] APPROVED
the National Film Archive and [ ] DISAPPROVED
local cinematheques, and other (Sgd.) H.E. BENIGNO S. AQUINO, III
local activities 20 20 OCT 12, 2011

25. DPWH: Various infrastructure
projects
26. DepEd/ERDT/DOST: Thin
Client Cloud Computing
Project
27. DOH: Hiring of nurses and
midwives
28. TESDA: Training Program in
partnership with BPO industry
and other sectors
29. DILG: Performance Challenge
Fund (People Empowered
Community Driven
Development with DSWD and
NAPC)
30. ARMM: Comprehensive Peace
and Development Intervention
31. DOTC-MRT: Purchase of
additional MRT cars
32. LGU Support Fund
33. Various Other Local Projects
34. Development Assistance to the
Province of Quezon
TOTAL
C. Summary
Fund Sources
Identified for Allotments
Approval for Release
(In Million
Php)
Total 72,110
The memorandum of October 12, 2011 was followed by another memorandum for the President
5,500 5,500 dated December 12, 2011116 requesting omnibus authority to consolidate the savings and
unutilized balances for fiscal year 2011. Pertinent portions of the memorandum of December 12,
2011 read:
MEMORANDUM FOR THE PRESIDENT
270 270 xxxx
SUBJECT: Omnibus Authority to Consolidate Savings/Unutilized Balances and its Realignment
DATE: December 12, 2011
294 294 This is to respectfully request for the grant of Omnibus Authority to consolidate savings/unutilized
balances in FY 2011 corresponding to completed or discontinued projects which may be pooled to
fund additional projects or expenditures.
In addition, Mr. President, this measure will allow us to undertake projects even if their
1,100 1,100 implementation carries over to 2012 without necessarily impacting on our budget deficit cap next
year.
BACKGROUND
1.0 The DBM, during the course of performance reviews conducted on the agencies’ operations,
particularly on the implementation of their projects/activities, including expenses incurred in
undertaking the same, have identified savings out of the 2011 General Appropriations Act. Said
250 50 savings correspond to completed or discontinued projects under certain departments/agencies
which may be pooled, for the following:
1.1 to provide for new activities which have not been anticipated during preparation of the budget;
8,592 8,592 1.2 to augment additional requirements of on-going priority projects; and
1.3 to provide for deficiencies under the Special Purpose Funds, e.g., PDAF, Calamity Fund,
Contingent Fund
4,500 - 1.4 to cover for the modifications of the original allotment class allocation as a result of on-going
priority projects and implementation of new activities
6,500 6,500 2.0 x x x x
2.1 x x x
6,500 6,500 2.2 x x x
ON THE UTILIZATION OF POOLED SAVINGS
3.0 It may be recalled that the President approved our request for omnibus authority to pool
750 750 savings/unutilized balances in FY 2010 last November 25, 2010.
4.0 It is understood that in the utilization of the pooled savings, the DBM shall secure the
45,165 44,000 corresponding approval/confirmation of the President. Furthermore, it is assured that the proposed
realignments shall be within the authorized Expenditure level.
5.0 Relative thereto, we have identified some expenditure items that may be sourced from the said
pooled appropriations in FY 2010 that will expire on December 31, 2011 and appropriations in FY
2011 that may be declared as savings to fund additional expenditures.
5.1 The 2010 Continuing Appropriations (pooled savings) is proposed to be spent for the projects
Cash that we have identified to be immediate actual disbursements considering that this same fund
Requirements for source will expire on December 31, 2011.
Release in FY 5.2 With respect to the proposed expenditure items to be funded from the FY 2011 Unreleased
2011 Appropriations, most of these are the same projects for which the DBM is directed by the Office of
the President, thru the Executive Secretary, to source funds.
72,110 70,895 6.0 Among others, the following are such proposed additional projects that have been chosen
given their multiplier impact on economy and infrastructure development, their beneficial effect on

219
the poor, and their translation into disbursements. Please note that we have classified the list of
proposed projects as follows:
7.0 x x x
FOR THE PRESIDENT’S APPROVAL
8.0 Foregoing considered, may we respectfully request for the President’s approval for the
following:
8.1 Grant of omnibus authority to consolidate FY 2011 savings/unutilized balances and its
realignment; and
8.2 The proposed additional projects identified for funding.
For His Excellency’s consideration and approval.
(Sgd.)
[/] APPROVED
[ ] DISAPPROVED
(Sgd.) H.E. BENIGNO S. AQUINO, III
DEC 21, 2011
Substantially identical requests for authority to pool savings and to fund proposed projects were
contained in various other memoranda from Sec. Abad dated June 25, 2012,117 September 4,
2012,118 December 19, 2012,119 May 20, 2013,120 and September 25, 2013.121 The President
apparently approved all the requests, withholding approval only of the proposed projects
contained in the June 25, 2012 memorandum, as borne out by his marginal note therein to the
effect that the proposed projects should still be "subject to further discussions."122
In order to implement the June25, 2012 memorandum, Sec. Abad issued NBC No. 541 (Adoption
of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated Allotments as of June
30, 2012),123 reproduced herein as follows:
NATIONAL BUDGET CIRCULAR No. 541
July 18, 2012
TO: All Heads of Departments/Agencies/State Universities and Colleges and other Offices of the
National Government, Budget and Planning Officers; Heads of Accounting Units and All Others
Concerned
SUBJECT : Adoption of Operational Efficiency Measure – Withdrawal of Agencies’ Unobligated
Allotments as of June 30, 2012
1.0 Rationale
The DBM, as mandated by Executive Order (EO) No. 292 (Administrative Code of 1987),
periodically reviews and evaluates the departments/agencies’ efficiency and effectiveness in
utilizing budgeted funds for the delivery of services and production of goods, consistent with the
government priorities.
In the event that a measure is necessary to further improve the operational efficiency of the
government, the President is authorized to suspend or stop further use of funds allotted for any
agency or expenditure authorized in the General Appropriations Act. Withdrawal and pooling of
unutilized allotment releases can be effected by DBM based on authority of the President, as
mandated under Sections 38 and 39, Chapter 5, Book VI of EO 292.
For the first five months of 2012, the National Government has not met its spending targets. In
order to accelerate spending and sustain the fiscal targets during the year, expenditure measures
have to be implemented to optimize the utilization of available resources.
Departments/agencies have registered low spending levels, in terms of obligations and
disbursements per initial review of their 2012 performance. To enhance agencies’ performance,
the DBM conducts continuous consultation meetings and/or send call-up letters, requesting them
to identify slow-moving programs/projects and the factors/issues affecting their performance (both
pertaining to internal systems and those which are outside the agencies’ spheres of control). Also,
they are asked to formulate strategies and improvement plans for the rest of 2012.
Notwithstanding these initiatives, some departments/agencies have continued to post low
obligation levels as of end of first semester, thus resulting to substantial unobligated allotments.
In line with this, the President, per directive dated June 27, 2012 authorized the withdrawal of
unobligated allotments of agencies with low levels of obligations as of June 30, 2012, both for
continuing and current allotments. This measure will allow the maximum utilization of available
allotments to fund and undertake other priority expenditures of the national government.
2.0 Purpose
2.1 To provide the conditions and parameters on the withdrawal of unobligated allotments of
agencies as of June 30, 2012 to fund priority and/or fast-moving programs/projects of the national
government;
2.2 To prescribe the reports and documents to be used as bases on the withdrawal of said
unobligated allotments; and
2.3 To provide guidelines in the utilization or reallocation of the withdrawn allotments.
3.0 Coverage
3.1 These guidelines shall cover the withdrawal of unobligated allotments as of June 30, 2012 of
all national government agencies (NGAs) charged against FY 2011 Continuing Appropriation (R.A.
No.10147) and FY 2012 Current Appropriation (R.A. No. 10155), pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the implementation of
programs and projects, as well as capitalized MOOE; and
3.1.3 Personal Services corresponding to unutilized pension benefits declared as savings by the
agencies concerned based on their updated/validated list of pensioners.
3.2 The withdrawal of unobligated allotments may cover the identified programs, projects and
activities of the departments/agencies reflected in the DBM list shown as Annex A or specific
programs and projects as may be identified by the agencies.
4.0 Exemption
These guidelines shall not apply to the following:
4.1 NGAs
4.1.1 Constitutional Offices/Fiscal Autonomy Group, granted fiscal autonomy under the Philippine
Constitution; and
4.1.2 State Universities and Colleges, adopting the Normative Funding allocation scheme i.e.,
distribution of a predetermined budget ceiling.
4.2 Fund Sources
4.2.1 Personal Services other than pension benefits;
4.2.2 MOOE items earmarked for specific purposes or subject to realignment conditions per
General Provisions of the GAA:
• Confidential and Intelligence Fund;
• Savings from Traveling, Communication, Transportation and Delivery, Repair and Maintenance,
Supplies and Materials and Utility which shall be used for the grant of Collective Negotiation
Agreement incentive benefit;
• Savings from mandatory expenditures which can be realigned only in the last quarter after taking
into consideration the agency’s full year requirements, i.e., Petroleum, Oil and Lubricants, Water,
Illumination, Power Services, Telephone, other Communication Services and Rent.
4.2.3 Foreign-Assisted Projects (loan proceeds and peso counterpart);
4.2.4 Special Purpose Funds such as: E-Government Fund, International Commitments Fund,
PAMANA, Priority Development Assistance Fund, Calamity Fund, Budgetary Support to GOCCs
and Allocation to LGUs, among others;
4.2.5 Quick Response Funds; and
4.2.6 Automatic Appropriations i.e., Retirement Life Insurance Premium and Special Accounts in
the General Fund.
5.0 Guidelines
5.1 National government agencies shall continue to undertake procurement activities
notwithstanding the implementation of the policy of withdrawal of unobligated allotments until the
end of the third quarter, FY 2012. Even without the allotments, the agency shall proceed in
undertaking the procurement processes (i.e., procurement planning up to the conduct of bidding
but short of awarding of contract) pursuant to GPPB Circular Nos. 02-2008 and 01-2009 and DBM
Circular Letter No. 2010-9.
5.2 For the purpose of determining the amount of unobligated allotments that shall be withdrawn,
all departments/agencies/operating units (OUs) shall submit to DBM not later than July 30, 2012,
the following budget accountability reports as of June 30, 2012;
• Statement of Allotments, Obligations and Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the agency’s
latest report available shall be used by DBM as basis for withdrawal of allotment. The DBM shall
220
compute/approximate the agency’s obligation level as of June 30 to derive its unobligated
allotments as of same period. Example: If the March 31 SAOB or FRO reflects actual obligations
of P 800M then the June 30 obligation level shall approximate to ₱1,600 M (i.e., ₱800 M x 2
quarters).
5.4 All released allotments in FY 2011 charged against R.A. No. 10147 which remained
unobligated as of June 30, 2012 shall be immediately considered for withdrawal. This policy is
based on the following considerations:
5.4.1 The departments/agencies’ approved priority programs and projects are assumed to be
implementation-ready and doable during the given fiscal year; and
5.4.2 The practice of having substantial carryover appropriations may imply that the agency has a
slower-than-programmed implementation capacity or agency tends to implement projects within a
two-year timeframe.
5.5. Consistent with the President’s directive, the DBM shall, based on evaluation of the reports
cited above and results of consultations with the departments/agencies, withdraw the unobligated
allotments as of June 30, 2012 through issuance of negative Special Allotment Release Orders
(SAROs).
5.6 DBM shall prepare and submit to the President, a report on the magnitude of withdrawn
allotments. The report shall highlight the agencies which failed to submit the June 30 reports
required under this Circular.
5.7 The withdrawn allotments may be:
5.7.1 Reissued for the original programs and projects of the agencies/OUs concerned, from which
the allotments were withdrawn;
5.7.2 Realigned to cover additional funding for other existing programs and projects of the
agency/OU; or
5.7.3 Used to augment existing programs and projects of any agency and to fund priority
programs and projects not considered in the 2012 budget but expected to be started or
implemented during the current year.
5.8 For items 5.7.1 and 5.7.2 above, agencies/OUs concerned may submit to DBM a Special
Budget Request (SBR), supported with the following:
5.8.1 Physical and Financial Plan (PFP);
5.8.2 Monthly Cash Program (MCP); and
5.8.3 Proof that the project/activity has started the procurement processes i.e., Proof of Posting
and/or Advertisement of the Invitation to Bid.
5.9 The deadline for submission of request/s pertaining to these categories shall be until the end
of the third quarter i.e., September 30, 2012. After said cut-off date, the withdrawn allotments shall
be pooled and form part of the overall savings of the national government.
5.10 Utilization of the consolidated withdrawn allotments for other priority programs and projects
as cited under item 5.7.3 of this Circular, shall be subject to approval of the President. Based on
the approval of the President, DBM shall issue the SARO to cover the approved priority
expenditures subject to submission by the agency/OU concerned of the SBR and supported with
PFP and MCP.
5.11 It is understood that all releases to be made out of the withdrawn allotments (both 2011 and
2012 unobligated allotments) shall be within the approved Expenditure Program level of the
national government for the current year. The SAROs to be issued shall properly disclose the
appropriation source of the release to determine the extent of allotment validity, as follows:
• For charges under R.A. 10147 – allotments shall be valid up to December 31, 2012; and
• For charges under R.A. 10155 – allotments shall be valid up to December 31, 2013.
5.12 Timely compliance with the submission of existing BARs and other reportorial requirements is
reiterated for monitoring purposes.
6.0 Effectivity
This circular shall take effect immediately.
(Sgd.) FLORENCIO B. ABAD
Secretary
As can be seen, NBC No. 541 specified that the unobligated allotments of all agencies and
departments as of June 30, 2012 that were charged against the continuing appropriations for fiscal
year 2011 and the 2012 GAA (R.A. No. 10155) were subject to withdrawal through the issuance of
negative SAROs, but such allotments could be either: (1) reissued for the original PAPs of the
concerned agencies from which they were withdrawn; or (2) realigned to cover additional funding
for other existing PAPs of the concerned agencies; or (3) used to augment existing PAPs of any
agency and to fund priority PAPs not considered in the 2012 budget but expected to be started or
implemented in 2012. Financing the other priority PAPs was made subject to the approval of the
President. Note here that NBC No. 541 used terminologies like "realignment" and "augmentation"
in the application of the withdrawn unobligated allotments.
Taken together, all the issuances showed how the DAP was to be implemented and funded, that
is — (1) by declaring "savings" coming from the various departments and agencies derived from
pooling unobligated allotments and withdrawing unreleased appropriations; (2) releasing
unprogrammed funds; and (3) applying the "savings" and unprogrammed funds to augment
existing PAPs or to support other priority PAPs.
c. DAP was not an appropriation
measure; hence, no appropriation
law was required to adopt or to
implement it
Petitioners Syjuco, Luna, Villegas and PHILCONSA state that Congress did not enact a law to
establish the DAP, or to authorize the disbursement and release of public funds to implement the
DAP. Villegas, PHILCONSA, IBP, Araullo, and COURAGE observe that the appropriations funded
under the DAP were not included in the 2011, 2012 and 2013 GAAs. To petitioners IBP, Araullo,
and COURAGE, the DAP, being actually an appropriation that set aside public funds for public
use, should require an enabling law for its validity. VACC maintains that the DAP, because it
involved huge allocations that were separate and distinct from the GAAs, circumvented and
duplicated the GAAs without congressional authorization and control.
The petitioners contend in unison that based on how it was developed and implemented the DAP
violated the mandate of Section 29(1), Article VI of the 1987 Constitution that "[n]o money shall be
paid out of the Treasury except in pursuance of an appropriation made by law."
The OSG posits, however, that no law was necessary for the adoption and implementation of the
DAP because of its being neither a fund nor an appropriation, but a program or an administrative
system of prioritizing spending; and that the adoption of the DAP was by virtue of the authority of
the President as the Chief Executive to ensure that laws were faithfully executed.
We agree with the OSG’s position.
The DAP was a government policy or strategy designed to stimulate the economy through
accelerated spending. In the context of the DAP’s adoption and implementation being a function
pertaining to the Executive as the main actor during the Budget Execution Stage under its
constitutional mandate to faithfully execute the laws, including the GAAs, Congress did not need
to legislate to adopt or to implement the DAP. Congress could appropriate but would have nothing
more to do during the Budget Execution Stage. Indeed, appropriation was the act by which
Congress "designates a particular fund, or sets apart a specified portion of the public revenue or of
the money in the public treasury, to be applied to some general object of governmental
expenditure, or to some individual purchase or expense."124 As pointed out in Gonzales v.
Raquiza:125 ‘"In a strict sense, appropriation has been defined ‘as nothing more than the
legislative authorization prescribed by the Constitution that money may be paid out of the
Treasury,’ while appropriation made by law refers to ‘the act of the legislature setting apart or
assigning to a particular use a certain sum to be used in the payment of debt or dues from the
State to its creditors.’"126
On the other hand, the President, in keeping with his duty to faithfully execute the laws, had
sufficient discretion during the execution of the budget to adapt the budget to changes in the
country’s economic situation.127 He could adopt a plan like the DAP for the purpose. He could
pool the savings and identify the PAPs to be funded under the DAP. The pooling of savings
pursuant to the DAP, and the identification of the PAPs to be funded under the DAP did not
involve appropriation in the strict sense because the money had been already set apart from the
public treasury by Congress through the GAAs. In such actions, the Executive did not usurp the
power vested in Congress under Section 29(1), Article VI of the Constitution.
3.
Unreleased appropriations and withdrawn
unobligated allotments under the DAP
were not savings, and the use of such
appropriations contravened Section 25(5),
Article VI of the 1987 Constitution.
221
Notwithstanding our appreciation of the DAP as a plan or strategy validly adopted by the
Executive to ramp up spending to accelerate economic growth, the challenges posed by the
petitioners constrain us to dissect the mechanics of the actual execution of the DAP. The
management and utilization of the public wealth inevitably demands a most careful scrutiny of
whether the Executive’s implementation of the DAP was consistent with the Constitution, the
relevant GAAs and other existing laws.
a. Although executive discretion
and flexibility are necessary in
the execution of the budget, any
transfer of appropriated funds
should conform to Section 25(5),
Article VI of the Constitution
We begin this dissection by reiterating that Congress cannot anticipate all issues and needs that
may come into play once the budget reaches its execution stage. Executive discretion is
necessary at that stage to achieve a sound fiscal administration and assure effective budget
implementation. The heads of offices, particularly the President, require flexibility in their
operations under performance budgeting to enable them to make whatever adjustments are
needed to meet established work goals under changing conditions.128 In particular, the power to
transfer funds can give the President the flexibility to meet unforeseen events that may otherwise
impede the efficient implementation of the PAPs set by Congress in the GAA.
Congress has traditionally allowed much flexibility to the President in allocating funds pursuant to
the GAAs,129 particularly when the funds are grouped to form lump sum accounts.130 It is
assumed that the agencies of the Government enjoy more flexibility when the GAAs provide
broader appropriation items.131 This flexibility comes in the form of policies that the Executive
may adopt during the budget execution phase. The DAP – as a strategy to improve the country’s
economic position – was one policy that the President decided to carry out in order to fulfill his
mandate under the GAAs.
Denying to the Executive flexibility in the expenditure process would be counterproductive. In
Presidential Spending Power,132 Prof. Louis Fisher, an American constitutional scholar whose
specialties have included budget policy, has justified extending discretionary authority to the
Executive thusly:
[T]he impulse to deny discretionary authority altogether should be resisted. There are many
number of reasons why obligations and outlays by administrators may have to differ from
appropriations by legislators. Appropriations are made many months, and sometimes years, in
advance of expenditures. Congress acts with imperfect knowledge in trying to legislate in fields
that are highly technical and constantly undergoing change. New circumstances will develop to
make obsolete and mistaken the decisions reached by Congress at the appropriation stage. It is
not practicable for Congress to adjust to each new development by passing separate
supplemental appropriation bills. Were Congress to control expenditures by confining
administrators to narrow statutory details, it would perhaps protect its power of the purse but it
would not protect the purse itself. The realities and complexities of public policy require executive
discretion for the sound management of public funds.
xxxx
x x x The expenditure process, by its very nature, requires substantial discretion for
administrators. They need to exercise judgment and take responsibility for their actions, but those
actions ought to be directed toward executing congressional, not administrative policy. Let there
be discretion, but channel it and use it to satisfy the programs and priorities established by
Congress.
In contrast, by allowing to the heads of offices some power to transfer funds within their respective
offices, the Constitution itself ensures the fiscal autonomy of their offices, and at the same time
maintains the separation of powers among the three main branches of the Government. The Court
has recognized this, and emphasized so in Bengzon v. Drilon,133 viz:
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence
and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions
and constraints on the manner the independent constitutional offices allocate and utilize the funds
appropriated for their operations is anathema to fiscal autonomy and violative not only of the
express mandate of the Constitution but especially as regards the Supreme Court, of the
independence and separation of powers upon which the entire fabric of our constitutional system
is based.
In the case of the President, the power to transfer funds from one item to another within the
Executive has not been the mere offshoot of established usage, but has emanated from law itself.
It has existed since the time of the American Governors-General.134 Act No. 1902 (An Act
authorizing the Governor-General to direct any unexpended balances of appropriations be
returned to the general fund of the Insular Treasury and to transfer from the general fund moneys
which have been returned thereto), passed on May 18, 1909 by the First Philippine
Legislature,135 was the first enabling law that granted statutory authority to the President to
transfer funds. The authority was without any limitation, for the Act explicitly empowered the
Governor-General to transfer any unexpended balance of appropriations for any bureau or office
to another, and to spend such balance as if it had originally been appropriated for that bureau or
office.
From 1916 until 1920, the appropriations laws set a cap on the amounts of funds that could be
transferred, thereby limiting the power to transfer funds. Only 10% of the amounts appropriated for
contingent or miscellaneous expenses could be transferred to a bureau or office, and the
transferred funds were to be used to cover deficiencies in the appropriations also for
miscellaneous expenses of said bureau or office.
In 1921, the ceiling on the amounts of funds to be transferred from items under miscellaneous
expenses to any other item of a certain bureau or office was removed.
During the Commonwealth period, the power of the President to transfer funds continued to be
governed by the GAAs despite the enactment of the Constitution in 1935. It is notable that the
1935 Constitution did not include a provision on the power to transfer funds. At any rate, a shift in
the extent of the President’s power to transfer funds was again experienced during this era, with
the President being given more flexibility in implementing the budget. The GAAs provided that the
power to transfer all or portions of the appropriations in the Executive Department could be made
in the "interest of the public, as the President may determine."136
In its time, the 1971 Constitutional Convention wanted to curtail the President’s seemingly
unbounded discretion in transferring funds.137 Its Committee on the Budget and Appropriation
proposed to prohibit the transfer of funds among the separate branches of the Government and
the independent constitutional bodies, but to allow instead their respective heads to augment
items of appropriations from savings in their respective budgets under certain limitations.138 The
clear intention of the Convention was to further restrict, not to liberalize, the power to transfer
appropriations.139 Thus, the Committee on the Budget and Appropriation initially considered
setting stringent limitations on the power to augment, and suggested that the augmentation of an
item of appropriation could be made "by not more than ten percent if the original item of
appropriation to be augmented does not exceed one million pesos, or by not more than five
percent if the original item of appropriation to be augmented exceeds one million pesos."140 But
two members of the Committee objected to the ₱1,000,000.00 threshold, saying that the amount
was arbitrary and might not be reasonable in the future. The Committee agreed to eliminate the
₱1,000,000.00 threshold, and settled on the ten percent limitation.141
In the end, the ten percent limitation was discarded during the plenary of the Convention, which
adopted the following final version under Section 16, Article VIII of the 1973 Constitution, to wit:
(5) No law shall be passed authorizing any transfer of appropriations; however, the President, the
Prime Minister, the Speaker, the Chief Justice of the Supreme Court, and the heads of
Constitutional Commissions may by law be authorized to augment any item in the general
appropriations law for their respective offices from savings in other items of their respective
appropriations.
The 1973 Constitution explicitly and categorically prohibited the transfer of funds from one item to
another, unless Congress enacted a law authorizing the President, the Prime Minister, the
Speaker, the Chief Justice of the Supreme Court, and the heads of the Constitutional omissions to
transfer funds for the purpose of augmenting any item from savings in another item in the GAA of
their respective offices. The leeway was limited to augmentation only, and was further constricted
by the condition that the funds to be transferred should come from savings from another item in
the appropriation of the office.142
On July 30, 1977, President Marcos issued PD No. 1177, providing in its Section 44 that:
Section 44. Authority to Approve Fund Transfers. The President shall have the authority to transfer
any fund appropriated for the different departments, bureaus, offices and agencies of the
222
Executive Department which are included in the General Appropriations Act, to any program,
project, or activity of any department, bureau or office included in the General Appropriations Act
or approved after its enactment.
The President shall, likewise, have the authority to augment any appropriation of the Executive
Department in the General Appropriations Act, from savings in the appropriations of another
department, bureau, office or agency within the Executive Branch, pursuant to the provisions of
Article VIII, Section 16 (5) of the Constitution.
In Demetria v. Alba, however, the Court struck down the first paragraph of Section 44 for
contravening Section 16(5)of the 1973 Constitution, ruling:
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over-extends the privilege granted under said
Section 16. It empowers the President to indiscriminately transfer funds from one department,
bureau, office or agency of the Executive Department to any program, project or activity of any
department, bureau or office included in the General Appropriations Act or approved after its
enactment, without regard as to whether or not the funds to be transferred are actually savings in
the item from which the same are to be taken, or whether or not the transfer is for the purpose of
augmenting the item to which said transfer is to be made. It does not only completely disregard
the standards set in the fundamental law, thereby amounting to an undue delegation of legislative
powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities render
the provision in question null and void.143
It is significant that Demetria was promulgated 25 days after the ratification by the people of the
1987 Constitution, whose Section 25(5) of Article VI is identical to Section 16(5), Article VIII of the
1973 Constitution, to wit:
Section 25. x x x
xxxx
5) No law shall be passed authorizing any transfer of appropriations; however, the President, the
President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the
Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to
augment any item in the general appropriations law for their respective offices from savings in
other items of their respective appropriations.
xxxx
The foregoing history makes it evident that the Constitutional Commission included Section 25(5),
supra, to keep a tight rein on the exercise of the power to transfer funds appropriated by Congress
by the President and the other high officials of the Government named therein. The Court stated in
Nazareth v. Villar:144
In the funding of current activities, projects, and programs, the general rule should still be that the
budgetary amount contained in the appropriations bill is the extent Congress will determine as
sufficient for the budgetary allocation for the proponent agency. The only exception is found in
Section 25 (5), Article VI of the Constitution, by which the President, the President of the Senate,
the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the
heads of Constitutional Commissions are authorized to transfer appropriations to augmentany
item in the GAA for their respective offices from the savings in other items of their respective
appropriations. The plain language of the constitutional restriction leaves no room for the
petitioner’s posture, which we should now dispose of as untenable.
It bears emphasizing that the exception in favor of the high officials named in Section 25(5), Article
VI of the Constitution limiting the authority to transfer savings only to augment another item in the
GAA is strictly but reasonably construed as exclusive. As the Court has expounded in Lokin, Jr. v.
Commission on Elections:
When the statute itself enumerates the exceptions to the application of the general rule, the
exceptions are strictly but reasonably construed. The exceptions extend only as far as their
language fairly warrants, and all doubts should be resolved in favor of the general provision rather
than the exceptions. Where the general rule is established by a statute with exceptions, none but
the enacting authority can curtail the former. Not even the courts may add to the latter by
implication, and it is a rule that an express exception excludes all others, although it is always
proper in determining the applicability of the rule to inquire whether, in a particular case, it accords
with reason and justice.
The appropriate and natural office of the exception is to exempt something from the scope of the
general words of a statute, which is otherwise within the scope and meaning of such general
words. Consequently, the existence of an exception in a statute clarifies the intent that the statute
shall apply to all cases not excepted. Exceptions are subject to the rule of strict construction;
hence, any doubt will be resolved in favor of the general provision and against the exception.
Indeed, the liberal construction of a statute will seem to require in many circumstances that the
exception, by which the operation of the statute is limited or abridged, should receive a restricted
construction.
Accordingly, we should interpret Section 25(5), supra, in the context of a limitation on the
President’s discretion over the appropriations during the Budget Execution Phase.
b. Requisites for the valid transfer of
appropriated funds under Section
25(5), Article VI of the 1987
Constitution
The transfer of appropriated funds, to be valid under Section 25(5), supra, must be made upon a
concurrence of the following requisites, namely:
(1) There is a law authorizing the President, the President of the Senate, the Speaker of the
House of Representatives, the Chief Justice of the Supreme Court, and the heads of the
Constitutional Commissions to transfer funds within their respective offices;
(2) The funds to be transferred are savings generated from the appropriations for their respective
offices; and (3) The purpose of the transfer is to augment an item in the general appropriations law
for their respective offices.
b.1. First Requisite–GAAs of 2011 and
2012 lacked valid provisions to
authorize transfers of funds under
the DAP; hence, transfers under the
DAP were unconstitutional
Section 25(5), supra, not being a self-executing provision of the Constitution, must have an
implementing law for it to be operative. That law, generally, is the GAA of a given fiscal year. To
comply with the first requisite, the GAAs should expressly authorize the transfer of funds.
Did the GAAs expressly authorize the transfer of funds?
In the 2011 GAA, the provision that gave the President and the other high officials the authority to
transfer funds was Section 59, as follows:
Section 59. Use of Savings. The President of the Philippines, the Senate President, the Speaker
of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of
Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized
to augment any item in this Act from savings in other items of their respective appropriations.
In the 2012 GAA, the empowering provision was Section 53, to wit:
Section 53. Use of Savings. The President of the Philippines, the Senate President, the Speaker
of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of
Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized
to augment any item in this Act from savings in other items of their respective appropriations.
In fact, the foregoing provisions of the 2011 and 2012 GAAs were cited by the DBM as justification
for the use of savings under the DAP.145
A reading shows, however, that the aforequoted provisions of the GAAs of 2011 and 2012 were
textually unfaithful to the Constitution for not carrying the phrase "for their respective offices"
contained in Section 25(5), supra. The impact of the phrase "for their respective offices" was to
authorize only transfers of funds within their offices (i.e., in the case of the President, the transfer
was to an item of appropriation within the Executive). The provisions carried a different phrase ("to
augment any item in this Act"), and the effect was that the 2011 and 2012 GAAs thereby literally
allowed the transfer of funds from savings to augment any item in the GAAs even if the item
belonged to an office outside the Executive. To that extent did the 2011 and 2012 GAAs
contravene the Constitution. At the very least, the aforequoted provisions cannot be used to claim
authority to transfer appropriations from the Executive to another branch, or to a constitutional
commission.
Apparently realizing the problem, Congress inserted the omitted phrase in the counterpart
provision in the 2013 GAA, to wit:
Section 52. Use of Savings. The President of the Philippines, the Senate President, the Speaker
of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of
Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized
223
to use savings in their respective appropriations to augment actual deficiencies incurred for the
current year in any item of their respective appropriations.
Even had a valid law authorizing the transfer of funds pursuant to Section 25(5), supra, existed,
there still remained two other requisites to be met, namely: that the source of funds to be
transferred were savings from appropriations within the respective offices; and that the transfer
must be for the purpose of augmenting an item of appropriation within the respective offices.
b.2. Second Requisite – There were
no savings from which funds
could be sourced for the DAP
Were the funds used in the DAP actually savings?
The petitioners claim that the funds used in the DAP — the unreleased appropriations and
withdrawn unobligated allotments — were not actual savings within the context of Section 25(5),
supra, and the relevant provisions of the GAAs. Belgica argues that "savings" should be
understood to refer to the excess money after the items that needed to be funded have been
funded, or those that needed to be paid have been paid pursuant to the budget.146 The
petitioners posit that there could be savings only when the PAPs for which the funds had been
appropriated were actually implemented and completed, or finally discontinued or abandoned.
They insist that savings could not be realized with certainty in the middle of the fiscal year; and
that the funds for "slow-moving" PAPs could not be considered as savings because such PAPs
had not actually been abandoned or discontinued yet.147 They stress that NBC No. 541, by
allowing the withdrawn funds to be reissued to the "original program or project from which it was
withdrawn," conceded that the PAPs from which the supposed savings were taken had not been
completed, abandoned or discontinued.148
The OSG represents that "savings" were "appropriations balances," being the difference between
the appropriation authorized by Congress and the actual amount allotted for the appropriation; that
the definition of "savings" in the GAAs set only the parameters for determining when savings
occurred; that it was still the President (as well as the other officers vested by the Constitution with
the authority to augment) who ultimately determined when savings actually existed because
savings could be determined only during the stage of budget execution; that the President must be
given a wide discretion to accomplish his tasks; and that the withdrawn unobligated allotments
were savings inasmuch as they were clearly "portions or balances of any programmed
appropriation…free from any obligation or encumbrances which are (i) still available after the
completion or final discontinuance or abandonment of the work, activity or purpose for which the
appropriation is authorized…"
We partially find for the petitioners.
In ascertaining the meaning of savings, certain principles should be borne in mind. The first
principle is that Congress wields the power of the purse. Congress decides how the budget will be
spent; what PAPs to fund; and the amounts of money to be spent for each PAP. The second
principle is that the Executive, as the department of the Government tasked to enforce the laws, is
expected to faithfully execute the GAA and to spend the budget in accordance with the provisions
of the GAA.149 The Executive is expected to faithfully implement the PAPs for which Congress
allocated funds, and to limit the expenditures within the allocations, unless exigencies result to
deficiencies for which augmentation is authorized, subject to the conditions provided by law. The
third principle is that in making the President’s power to augment operative under the GAA,
Congress recognizes the need for flexibility in budget execution. In so doing, Congress diminishes
its own power of the purse, for it delegates a fraction of its power to the Executive. But Congress
does not thereby allow the Executive to override its authority over the purse as to let the Executive
exceed its delegated authority. And the fourth principle is that savings should be actual. "Actual"
denotes something that is real or substantial, or something that exists presently in fact, as
opposed to something that is merely theoretical, possible, potential or hypothetical.150
The foregoing principles caution us to construe savings strictly against expanding the scope of the
power to augment. It is then indubitable that the power to augment was to be used only when the
purpose for which the funds had been allocated were already satisfied, or the need for such funds
had ceased to exist, for only then could savings be properly realized. This interpretation prevents
the Executive from unduly transgressing Congress’ power of the purse.
The definition of "savings" in the GAAs, particularly for 2011, 2012 and 2013, reflected this
interpretation and made it operational, viz:
Savings refer to portions or balances of any programmed appropriation in this Act free from any
obligation or encumbrance which are: (i) still available after the completion or final discontinuance
or abandonment of the work, activity or purpose for which the appropriation is authorized; (ii) from
appropriations balances arising from unpaid compensation and related costs pertaining to vacant
positions and leaves of absence without pay; and (iii) from appropriations balances realized from
the implementation of measures resulting in improved systems and efficiencies and thus enabled
agencies to meet and deliver the required or planned targets, programs and services approved in
this Act at a lesser cost.
The three instances listed in the GAAs’ aforequoted definition were a sure indication that savings
could be generated only upon the purpose of the appropriation being fulfilled, or upon the need for
the appropriation being no longer existent.
The phrase "free from any obligation or encumbrance" in the definition of savings in the GAAs
conveyed the notion that the appropriation was at that stage when the appropriation was already
obligated and the appropriation was already released. This interpretation was reinforced by the
enumeration of the three instances for savings to arise, which showed that the appropriation
referred to had reached the agency level. It could not be otherwise, considering that only when the
appropriation had reached the agency level could it be determined whether (a) the PAP for which
the appropriation had been authorized was completed, finally discontinued, or abandoned; or (b)
there were vacant positions and leaves of absence without pay; or (c) the required or planned
targets, programs and services were realized at a lesser cost because of the implementation of
measures resulting in improved systems and efficiencies.
The DBM declares that part of the savings brought under the DAP came from "pooling of
unreleased appropriations such as unreleased Personnel Services appropriations which will lapse
at the end of the year, unreleased appropriations of slow moving projects and discontinued
projects per Zero-Based Budgeting findings."
The declaration of the DBM by itself does not state the clear legal basis for the treatment of
unreleased or unalloted appropriations as savings.
The fact alone that the appropriations are unreleased or unalloted is a mere description of the
status of the items as unalloted or unreleased. They have not yet ripened into categories of items
from which savings can be generated. Appropriations have been considered "released" if there
has already been an allotment or authorization to incur obligations and disbursement authority.
This means that the DBM has issued either an ABM (for those not needing clearance), or a SARO
(for those needing clearance), and consequently an NCA, NCAA or CDC, as the case may be.
Appropriations remain unreleased, for instance, because of noncompliance with documentary
requirements (like the Special Budget Request), or simply because of the unavailability of funds.
But the appropriations do not actually reach the agencies to which they were allocated under the
GAAs, and have remained with the DBM technically speaking. Ergo, unreleased appropriations
refer to appropriations with allotments but without disbursement authority.
For us to consider unreleased appropriations as savings, unless these met the statutory definition
of savings, would seriously undercut the congressional power of the purse, because such
appropriations had not even reached and been used by the agency concerned vis-à-vis the PAPs
for which Congress had allocated them. However, if an agency has unfilled positions in its plantilla
and did not receive an allotment and NCA for such vacancies, appropriations for such positions,
although unreleased, may already constitute savings for that agency under the second instance.
Unobligated allotments, on the other hand, were encompassed by the first part of the definition of
"savings" in the GAA, that is, as "portions or balances of any programmed appropriation in this Act
free from any obligation or encumbrance." But the first part of the definition was further qualified by
the three enumerated instances of when savings would be realized. As such, unobligated
allotments could not be indiscriminately declared as savings without first determining whether any
of the three instances existed. This signified that the DBM’s withdrawal of unobligated allotments
had disregarded the definition of savings under the GAAs.
Justice Carpio has validly observed in his Separate Concurring Opinion that MOOE appropriations
are deemed divided into twelve monthly allocations within the fiscal year; hence, savings could be
generated monthly from the excess or unused MOOE appropriations other than the Mandatory
Expenditures and Expenditures for Business-type Activities because of the physical impossibility
to obligate and spend such funds as MOOE for a period that already lapsed. Following this
observation, MOOE for future months are not savings and cannot be transferred.
224
The DBM’s Memorandum for the President dated June 25, 2012 (which became the basis of NBC
No. 541) stated:
ON THE AUTHORITY TO WITHDRAW UNOBLIGATED ALLOTMENTS
5.0 The DBM, during the course of performance reviews conducted on the agencies’ operations,
particularly on the implementation of their projects/activities, including expenses incurred in
undertaking the same, have been continuously calling the attention of all National Government
agencies (NGAs) with low levels of obligations as of end of the first quarter to speedup the
implementation of their programs and projects in the second quarter.
6.0 Said reminders were made in a series of consultation meetings with the concerned agencies
and with call-up letters sent.
7.0 Despite said reminders and the availability of funds at the department’s disposal, the level of
financial performance of some departments registered below program, with the targeted
obligations/disbursements for the first semester still not being met.
8.0 In order to maximize the use of the available allotment, all unobligated balances as of June 30,
2012, both for continuing and current allotments shall be withdrawn and pooled to fund fast
moving programs/projects.
9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of slow
moving projects to be identified by the agencies and their catch up plans to be evaluated by the
DBM.
It is apparent from the foregoing text that the withdrawal of unobligated allotments would be based
on whether the allotments pertained to slow-moving projects, or not. However, NBC No. 541 did
not set in clear terms the criteria for the withdrawal of unobligated allotments, viz:
3.1. These guidelines shall cover the withdrawal of unobligated allotments as of June 30, 2012
ofall national government agencies (NGAs) charged against FY 2011 Continuing Appropriation
(R.A. No. 10147) and FY 2012 Current Appropriation (R.A. No. 10155), pertaining to:
3.1.1 Capital Outlays (CO);
3.1.2 Maintenance and Other Operating Expenses (MOOE) related to the implementation of
programs and projects, as well as capitalized MOOE; and
3.1.3 Personal Services corresponding to unutilized pension benefits declared as savings by the
agencies concerned based on their undated/validated list of pensioners.
A perusal of its various provisions reveals that NBC No. 541 targeted the "withdrawal of
unobligated allotments of agencies with low levels of obligations"151 "to fund priority and/or fast-
moving programs/projects."152 But the fact that the withdrawn allotments could be "[r]eissued for
the original programs and projects of the agencies/OUs concerned, from which the allotments
were withdrawn"153 supported the conclusion that the PAPs had not yet been finally discontinued
or abandoned. Thus, the purpose for which the withdrawn funds had been appropriated was not
yet fulfilled, or did not yet cease to exist, rendering the declaration of the funds as savings
impossible.
Worse, NBC No. 541 immediately considered for withdrawal all released allotments in 2011
charged against the 2011 GAA that had remained unobligated based on the following
considerations, to wit:
5.4.1 The departments/agencies’ approved priority programs and projects are assumed to be
implementation-ready and doable during the given fiscal year; and
5.4.2 The practice of having substantial carryover appropriations may imply that the agency has a
slower-than-programmed implementation capacity or agency tends to implement projects within a
two-year timeframe.
Such withdrawals pursuant to NBC No. 541, the circular that affected the unobligated allotments
for continuing and current appropriations as of June 30, 2012, disregarded the 2-year period of
availability of the appropriations for MOOE and capital outlay extended under Section 65, General
Provisions of the 2011 GAA, viz:
Section 65. Availability of Appropriations. — Appropriations for MOOE and capital outlays
authorized in this Act shall be available for release and obligation for the purpose specified, and
under the same special provisions applicable thereto, for a period extending to one fiscal year
after the end of the year in which such items were appropriated: PROVIDED, That appropriations
for MOOE and capital outlays under R.A. No. 9970 shall be made available up to the end of FY
2011: PROVIDED, FURTHER, That a report on these releases and obligations shall be submitted
to the Senate Committee on Finance and the House Committee on Appropriations.
and Section 63 General Provisions of the 2012 GAA, viz:
Section 63. Availability of Appropriations. — Appropriations for MOOE and capital outlays
authorized in this Act shall be available for release and obligation for the purpose specified, and
under the same special provisions applicable thereto, for a period extending to one fiscal year
after the end of the year in which such items were appropriated: PROVIDED, That a report on
these releases and obligations shall be submitted to the Senate Committee on Finance and the
House Committee on Appropriations, either in printed form or by way of electronic document.154
Thus, another alleged area of constitutional infirmity was that the DAP and its relevant issuances
shortened the period of availability of the appropriations for MOOE and capital outlays.
Congress provided a one-year period of availability of the funds for all allotment classes in the
2013 GAA (R.A. No. 10352), to wit:
Section 63. Availability of Appropriations.— All appropriations authorized in this Act shall be
available for release and obligation for the purposes specified, and under the same special
provisions applicable thereto, until the end of FY 2013: PROVIDED, That a report on these
releases and obligations shall be submitted to the Senate Committee on Finance and House
Committee on Appropriations, either in printed form or by way of electronic document.
Yet, in his memorandum for the President dated May 20, 2013, Sec. Abad sought omnibus
authority to consolidate savings and unutilized balances to fund the DAP on a quarterly basis, viz:
7.0 If the level of financial performance of some department will register below program, even with
the availability of funds at their disposal, the targeted obligations/disbursements for each quarter
will not be met. It is important to note that these funds will lapse at the end of the fiscal year if
these remain unobligated.
8.0 To maximize the use of the available allotment, all unobligated balances at the end of every
quarter, both for continuing and current allotments shall be withdrawn and pooled to fund fast
moving programs/projects.
9.0 It may be emphasized that the allotments to be withdrawn will be based on the list of slow
moving projects to be identified by the agencies and their catch up plans to be evaluated by the
DBM.
The validity period of the affected appropriations, already given the brief Lifes pan of one year,
was further shortened to only a quarter of a year under the DBM’s memorandum dated May 20,
2013.
The petitioners accuse the respondents of forcing the generation of savings in order to have a
larger fund available for discretionary spending. They aver that the respondents, by withdrawing
unobligated allotments in the middle of the fiscal year, in effect deprived funding for PAPs with
existing appropriations under the GAAs.155
The respondents belie the accusation, insisting that the unobligated allotments were being
withdrawn upon the instance of the implementing agencies based on their own assessment that
they could not obligate those allotments pursuant to the President’s directive for them to spend
their appropriations as quickly as they could in order to ramp up the economy.156
We agree with the petitioners.
Contrary to the respondents’ insistence, the withdrawals were upon the initiative of the DBM itself.
The text of NBC No. 541 bears this out, to wit:
5.2 For the purpose of determining the amount of unobligated allotments that shall be withdrawn,
all departments/agencies/operating units (OUs) shall submit to DBM not later than July 30, 2012,
the following budget accountability reports as of June 30, 2012;
• Statement of Allotments, Obligation and Balances (SAOB);
• Financial Report of Operations (FRO); and
• Physical Report of Operations.
5.3 In the absence of the June 30, 2012 reports cited under item 5.2 of this Circular, the agency’s
latest report available shall be used by DBM as basis for withdrawal of allotment. The DBM shall
compute/approximate the agency’s obligation level as of June 30 to derive its unobligated
allotments as of same period. Example: If the March 31 SAOB or FRO reflects actual obligations
of P 800M then the June 30 obligation level shall approximate to ₱1,600 M (i.e., ₱800 M x 2
quarters).
The petitioners assert that no law had authorized the withdrawal and transfer of unobligated
allotments and the pooling of unreleased appropriations; and that the unbridled withdrawal of
unobligated allotments and the retention of appropriated funds were akin to the impoundment of
appropriations that could be allowed only in case of "unmanageable national government budget
225
deficit" under the GAAs,157 thus violating the provisions of the GAAs of 2011, 2012 and 2013
prohibiting the retention or deduction of allotments.158
In contrast, the respondents emphasize that NBC No. 541 adopted a spending, not saving, policy
as a last-ditch effort of the Executive to push agencies into actually spending their appropriations;
that such policy did not amount to an impoundment scheme, because impoundment referred to
the decision of the Executive to refuse to spend funds for political or ideological reasons; and that
the withdrawal of allotments under NBC No. 541 was made pursuant to Section 38, Chapter 5,
Book VI of the Administrative Code, by which the President was granted the authority to suspend
or otherwise stop further expenditure of funds allotted to any agency whenever in his judgment the
public interest so required.
The assertions of the petitioners are upheld. The withdrawal and transfer of unobligated allotments
and the pooling of unreleased appropriations were invalid for being bereft of legal support.
Nonetheless, such withdrawal of unobligated allotments and the retention of appropriated funds
cannot be considered as impoundment.
According to Philippine Constitution Association v. Enriquez:159 "Impoundment refers to a refusal
by the President, for whatever reason, to spend funds made available by Congress. It is the failure
to spend or obligate budget authority of any type." Impoundment under the GAA is understood to
mean the retention or deduction of appropriations. The 2011 GAA authorized impoundment only in
case of unmanageable National Government budget deficit, to wit:
Section 66. Prohibition Against Impoundment of Appropriations. No appropriations authorized
under this Act shall be impounded through retention or deduction, unless in accordance with the
rules and regulations to be issued by the DBM: PROVIDED, That all the funds appropriated for the
purposes, programs, projects and activities authorized under this Act, except those covered under
the Unprogrammed Fund, shall be released pursuant to Section 33 (3), Chapter 5, Book VI of E.O.
No. 292.
Section 67. Unmanageable National Government Budget Deficit. Retention or deduction of
appropriations authorized in this Act shall be effected only in cases where there is an
unmanageable national government budget deficit.
Unmanageable national government budget deficit as used in this section shall be construed to
mean that (i) the actual national government budget deficit has exceeded the quarterly budget
deficit targets consistent with the full-year target deficit as indicated in the FY 2011 Budget of
Expenditures and Sources of Financing submitted by the President and approved by Congress
pursuant to Section 22, Article VII of the Constitution, or (ii) there are clear economic indications of
an impending occurrence of such condition, as determined by the Development Budget
Coordinating Committee and approved by the President.
The 2012 and 2013 GAAs contained similar provisions.
The withdrawal of unobligated allotments under the DAP should not be regarded as impoundment
because it entailed only the transfer of funds, not the retention or deduction of appropriations.
Nor could Section 68 of the 2011 GAA (and the similar provisions of the 2012 and 2013 GAAs) be
applicable. They uniformly stated:
Section 68. Prohibition Against Retention/Deduction of Allotment. Fund releases from
appropriations provided in this Act shall be transmitted intact or in full to the office or agency
concerned. No retention or deduction as reserves or overhead shall be made, except as
authorized by law, or upon direction of the President of the Philippines. The COA shall ensure
compliance with this provision to the extent that sub-allotments by agencies to their subordinate
offices are in conformity with the release documents issued by the DBM.
The provision obviously pertained to the retention or deduction of allotments upon their release
from the DBM, which was a different matter altogether. The Court should not expand the meaning
of the provision by applying it to the withdrawal of allotments.
The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to
justify the withdrawal of unobligated allotments. But the provision authorized only the suspension
or stoppage of further expenditures, not the withdrawal of unobligated allotments, to wit:
Section 38. Suspension of Expenditure of Appropriations.- Except as otherwise provided in the
General Appropriations Act and whenever in his judgment the public interest so requires, the
President, upon notice to the head of office concerned, is authorized to suspend or otherwise stop
further expenditure of funds allotted for any agency, or any other expenditure authorized in the
General Appropriations Act, except for personal services appropriations used for permanent
officials and employees.
Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38,
supra, but instead transferred the funds to other PAPs.
It is relevant to remind at this juncture that the balances of appropriations that remained
unexpended at the end of the fiscal year were to be reverted to the General Fund.1âwphi1 This
was the mandate of Section 28, Chapter IV, Book VI of the Administrative Code, to wit:
Section 28. Reversion of Unexpended Balances of Appropriations, Continuing Appropriations.-
Unexpended balances of appropriations authorized in the General Appropriation Act shall revert to
the unappropriated surplus of the General Fund at the end of the fiscal year and shall not
thereafter be available for expenditure except by subsequent legislative enactment: Provided, that
appropriations for capital outlays shall remain valid until fully spent or reverted: provided, further,
that continuing appropriations for current operating expenditures may be specifically
recommended and approved as such in support of projects whose effective implementation calls
for multi-year expenditure commitments: provided, finally, that the President may authorize the
use of savings realized by an agency during given year to meet non-recurring expenditures in a
subsequent year.
The balances of continuing appropriations shall be reviewed as part of the annual budget
preparation process and the preparation process and the President may approve upon
recommendation of the Secretary, the reversion of funds no longer needed in connection with the
activities funded by said continuing appropriations.
The Executive could not circumvent this provision by declaring unreleased appropriations and
unobligated allotments as savings prior to the end of the fiscal year.
b.3. Third Requisite – No funds from
savings could be transferred under
the DAP to augment deficient items
not provided in the GAA
The third requisite for a valid transfer of funds is that the purpose of the transfer should be "to
augment an item in the general appropriations law for the respective offices." The term "augment"
means to enlarge or increase in size, amount, or degree.160
The GAAs for 2011, 2012 and 2013 set as a condition for augmentation that the appropriation for
the PAP item to be augmented must be deficient, to wit: –
x x x Augmentation implies the existence in this Act of a program, activity, or project with an
appropriation, which upon implementation, or subsequent evaluation of needed resources, is
determined to be deficient. In no case shall a non-existent program, activity, or project, be funded
by augmentation from savings or by the use of appropriations otherwise authorized in this Act.
In other words, an appropriation for any PAP must first be determined to be deficient before it
could be augmented from savings. Note is taken of the fact that the 2013 GAA already made this
quite clear, thus:
Section 52. Use of Savings. The President of the Philippines, the Senate President, the Speaker
of the House of Representatives, the Chief Justice of the Supreme Court, the Heads of
Constitutional Commissions enjoying fiscal autonomy, and the Ombudsman are hereby authorized
to use savings in their respective appropriations to augment actual deficiencies incurred for the
current year in any item of their respective appropriations.
As of 2013, a total of ₱144.4 billion worth of PAPs were implemented through the DAP.161
Of this amount ₱82.5 billion were released in 2011 and ₱54.8 billion in 2012.162 Sec. Abad has
reported that 9% of the total DAP releases were applied to the PAPs identified by the
legislators.163
The petitioners disagree, however, and insist that the DAP supported the following PAPs that had
not been covered with appropriations in the respective GAAs, namely:
(i) ₱1.5 billion for the Cordillera People’s Liberation Army;
(ii) ₱1.8 billion for the Moro National Liberation Front;
(iii) ₱700 million for assistance to Quezon Province;164
(iv) ₱50 million to ₱100 (million) each to certain senators;165
(v) ₱10 billion for the relocation of families living along dangerous zones under the National
Housing Authority;
(vi) ₱10 billion and ₱20 billion equity infusion under the Bangko Sentral;
(vii) ₱5.4 billion landowners’ compensation under the Department of Agrarian Reform;
(viii) ₱8.6 billion for the ARMM comprehensive peace and development program;
(ix) ₱6.5 billion augmentation of LGU internal revenue allotments
226
(x) ₱5 billion for crucial projects like tourism road construction under the Department of Tourism
and the Department of Public Works and Highways; research
(xi) ₱1.8 billion for the DAR-DPWH Tulay ng Pangulo; capability
(xii) ₱1.96 billion for the DOH-DPWH rehabilitation of regional health units; and building in
(xiii) ₱4 billion for the DepEd-PPP school infrastructure projects.166 priority
In refutation, the OSG argues that a total of 116 DAP-financed PAPs were implemented, had areas
appropriation covers, and could properly be accounted for because the funds were released identified
following and pursuant to the standard practices adopted by the DBM.167 In support of its as
argument, the OSG has submitted seven evidence packets containing memoranda, SAROs, and strategic
other pertinent documents relative to the implementation and fund transfers under the DAP.168 to
Upon careful review of the documents contained in the seven evidence packets, we conclude that National
the "savings" pooled under the DAP were allocated to PAPs that were not covered by any Developm
appropriations in the pertinent GAAs. ent
For example, the SARO issued on December 22, 2011 for the highly vaunted Disaster Risk, Aside from this transfer under the DAP to the DREAM project exceeding by almost 300% the
Exposure, Assessment and Mitigation (DREAM) project under the Department of Science and appropriation by Congress for the program Generation of new knowledge and technologies and
Technology (DOST) covered the amount of ₱1.6 Billion,169 broken down as follows: research capability building in priority areas identified as strategic to National Development, the
APPROPRIATION PARTICULARS AMOUNT Executive allotted funds for personnel services and capital outlays. The Executive thereby
CODE AUTHORIZED substituted its will to that of Congress. Worse, the Executive had not earlier proposed any amount
for personnel services and capital outlays in the NEP that became the basis of the 2011 GAA.170
A.03.a.01.a Generation of new knowledge and technologies It is worth stressing in this connection that the failure of the GAAs to set aside any amounts for an
and research capability building in priority areas expense category sufficiently indicated that Congress purposely did not see fit to fund, much less
identified as strategic to National Development implement, the PAP concerned. This indication becomes clearer when even the President himself
Personnel Services did not recommend in the NEP to fund the PAP. The consequence was that any PAP requiring
Maintenance and Other Operating Expenses P 43,504,024 expenditure that did not receive any appropriation under the GAAs could only be a new PAP, any
Capital Outlays 1,164,517,589 funding for which would go beyond the authority laid down by Congress in enacting the GAAs.
391,978,387 That happened in some instances under the DAP.
P 1,600,000,000 In relation to the December 22, 2011 SARO issued to the Philippine Council for Industry, Energy
and Emerging Technology Research and Development (DOST-PCIEETRD)171 for Establishment
of the Advanced Failure Analysis Laboratory, which reads:
the pertinent provision of the 2011 GAA (R.A. No. 10147) showed that Congress had appropriated
only ₱537,910,000 for MOOE, but nothing for personnel services and capital outlays, to wit:
APPROPRIATION PARTICULARS AMOUNT
CODE AUTHORIZED
Person Maintena Capit TOTAL
nel nce al Development, integration and coordination of the
Service and Other Outla National Research System for Industry, Energy and
A.02.a
s Operating ys Emerging Technology and Related Fields
Expenditu Capital Outlays P 300,000,000
res
the appropriation code and the particulars appearing in the SARO did not correspond to the
III. Operations
program specified in the GAA, whose particulars were Research and Management
Services(inclusive of the following activities: (1) Technological and Economic Assessment for
a. Funding Assistance 177,406,0 1,887,365, 49,090,0 2,113,861, Industry, Energy and Utilities; (2) Dissemination of Science and Technology Information; and (3)
to Science 00 000 00 000 Management of PCIERD Information System for Industry, Energy and Utilities. Even assuming
and Technology that Development, integration and coordination of the National Research System for Industry,
Activities Energy and Emerging Technology and Related Fields– the particulars stated in the SARO – could
fall under the broad program description of Research and Management Services– as appearing in
1. Central Office 1,554,238, 1,554,238, the SARO, it would nonetheless remain a new activity by reason of its not being specifically stated
000 000 in the GAA. As such, the DBM, sans legislative authorization, could not validly fund and implement
such PAP under the DAP.
a. In defending the disbursements, however, the OSG contends that the Executive enjoyed sound
Generatio discretion in implementing the budget given the generality in the language and the broad policy
n of new objectives identified under the GAAs;172 and that the President enjoyed unlimited authority to
knowledg spend the initial appropriations under his authority to declare and utilize savings,173 and in
e and keeping with his duty to faithfully execute the laws.
technologi 537,910,00 537,910,00 Although the OSG rightly contends that the Executive was authorized to spend in line with its
es and 0 0 mandate to faithfully execute the laws (which included the GAAs), such authority did not translate
to unfettered discretion that allowed the President to substitute his own will for that of Congress.

227
He was still required to remain faithful to the provisions of the GAAs, given that his power to spend many agencies. And in the performance of that function, the Commission on Audit needed
pursuant to the GAAs was but a delegation to him from Congress. Verily, the power to spend the information technology equipment as well as hire consultants and litigators to help them with their
public wealth resided in Congress, not in the Executive.174 Moreover, leaving the spending power audit work and for that they requested funds from the Executive and the President saw that it was
of the Executive unrestricted would threaten to undo the principle of separation of powers.175 important for the Commission to be provided with those IT equipments and litigators and
Congress acts as the guardian of the public treasury in faithful discharge of its power of the purse consultants and the request was granted, Your Honor.
whenever it deliberates and acts on the budget proposal submitted by the Executive.176 Its power JUSTICE BERSAMIN:
of the purse is touted as the very foundation of its institutional strength,177 and underpins "all These cross border examples, cross border augmentations were not supported by
other legislative decisions and regulating the balance of influence between the legislative and appropriations…
executive branches of government."178 Such enormous power encompasses the capacity to SECRETARY ABAD:
generate money for the Government, to appropriate public funds, and to spend the money.179 They were, we were augmenting existing items within their… (interrupted)
Pertinently, when it exercises its power of the purse, Congress wields control by specifying the JUSTICE BERSAMIN:
PAPs for which public money should be spent. No, appropriations before you augmented because this is a cross border and the tenor or text of
It is the President who proposes the budget but it is Congress that has the final say on matters of the Constitution is quite clear as far as I am concerned. It says here, "The power to augment may
appropriations.180 For this purpose, appropriation involves two governing principles, namely: (1) only be made to increase any item in the General Appropriations Law for their respective offices."
"a Principle of the Public Fisc, asserting that all monies received from whatever source by any part Did you not feel constricted by this provision?
of the government are public funds;" and (2) "a Principle of Appropriations Control, prohibiting SECRETARY ABAD:
expenditure of any public money without legislative authorization."181 To conform with the Well, as the Constitution provides, the prohibition we felt was on the transfer of appropriations,
governing principles, the Executive cannot circumvent the prohibition by Congress of an Your Honor. What we thought we did was to transfer savings which was needed by the
expenditure for a PAP by resorting to either public or private funds.182 Nor could the Executive Commission to address deficiency in an existing item in both the Commission as well as in the
transfer appropriated funds resulting in an increase in the budget for one PAP, for by so doing the House of Representatives; that’s how we saw…(interrupted)
appropriation for another PAP is necessarily decreased. The terms of both appropriations will JUSTICE BERSAMIN:
thereby be violated. So your position as Secretary of Budget is that you could do that?
b.4 Third Requisite – Cross-border SECRETARY ABAD:
augmentations from savings were In an extreme instances because…(interrupted)
prohibited by the Constitution JUSTICE BERSAMIN:
By providing that the President, the President of the Senate, the Speaker of the House of No, no, in all instances, extreme or not extreme, you could do that, that’s your feeling.
Representatives, the Chief Justice of the Supreme Court, and the Heads of the Constitutional SECRETARY ABAD:
Commissions may be authorized to augment any item in the GAA "for their respective offices," Well, in that particular situation when the request was made by the Commission and the House of
Section 25(5), supra, has delineated borders between their offices, such that funds appropriated Representatives, we felt that we needed to respond because we felt…(interrupted).183
for one office are prohibited from crossing over to another office even in the guise of augmentation
of a deficient item or items. Thus, we call such transfers of funds cross-border transfers or cross- The records show, indeed, that funds amounting to ₱143,700,000.00 and ₱250,000,000.00 were
border augmentations. transferred under the DAP respectively to the COA184 and the House of Representatives.185
To be sure, the phrase "respective offices" used in Section 25(5), supra, refers to the entire Those transfers of funds, which constituted cross-border augmentations for being from the
Executive, with respect to the President; the Senate, with respect to the Senate President; the Executive to the COA and the House of Representatives, are graphed as follows:186
House of Representatives, with respect to the Speaker; the Judiciary, with respect to the Chief
Justice; the Constitutional Commissions, with respect to their respective Chairpersons.
Did any cross-border transfers or augmentations transpire? AMOUNT
During the oral arguments on January 28, 2014, Sec. Abad admitted making some cross-border (In thousand pesos)
DATE
OFFICE PURPOSE
augmentations, to wit: RELEASED
Reserve Releases
JUSTICE BERSAMIN:
Imposed
Alright, the whole time that you have been Secretary of Department of Budget and Management,
did the Executive Department ever redirect any part of savings of the National Government under
Commission on IT Infrastructure 11/11/11 143,700
your control cross border to another department?
Audit Program and hiring of
SECRETARY ABAD:
additional litigation
Well, in the Memos that we submitted to you, such an instance, Your Honor
experts
JUSTICE BERSAMIN:
Can you tell me two instances? I don’t recall having read your material.
Congress – Completion of the 07/23/12 207,034 250,000
SECRETARY ABAD:
House of construction of the (Savings of HOR)
Well, the first instance had to do with a request from the House of Representatives. They started
Representatives Legislative Library and
building their e-library in 2010 and they had a budget for about 207 Million but they lack about 43
Archives
Million to complete its 250 Million requirements. Prior to that, the COA, in an audit observation
Building/Congressional
informed the Speaker that they had to continue with that construction otherwise the whole
e-library
building, as well as the equipments therein may suffer from serious deterioration. And at that time,
since the budget of the House of Representatives was not enough to complete 250 Million, they
wrote to the President requesting for an augmentation of that particular item, which was granted,
Your Honor. The second instance in the Memos is a request from the Commission on Audit. At the The respondents further stated in their memorandum that the President "made available" to the
time they were pushing very strongly the good governance programs of the government and "Commission on Elections the savings of his department upon [its] request for funds…"187 This
therefore, part of that is a requirement to conduct audits as well as review financial reports of was another instance of a cross-border augmentation.

228
The respondents justified all the cross-border transfers thusly:
99. The Constitution does not prevent the President from transferring savings of his department to
another department upon the latter’s request, provided it is the recipient department that uses
such funds to augment its own appropriation. In such a case, the President merely gives the other
department access to public funds but he cannot dictate how they shall be applied by that
department whose fiscal autonomy is guaranteed by the Constitution.188
In the oral arguments held on February 18, 2014, Justice Vicente V. Mendoza, representing
Congress, announced a different characterization of the cross-border transfers of funds as in the
nature of "aid" instead of "augmentation," viz:
HONORABLE MENDOZA:
The cross-border transfers, if Your Honors please, is not an application of the DAP. What were
these cross-border transfers? They are transfers of savings as defined in the various General
Appropriations Act. So, that makes it similar to the DAP, the use of savings. There was a cross-
border which appears to be in violation of Section 25, paragraph 5 of Article VI, in the sense that
the border was crossed. But never has it been claimed that the purpose was to augment a
deficient item in another department of the government or agency of the government. The cross-
border transfers, if Your Honors please, were in the nature of [aid] rather than augmentations.
Here is a government entity separate and independent from the Executive Department solely in
need of public funds. The President is there 24 hours a day, 7 days a week. He’s in charge of the
whole operation although six or seven heads of government offices are given the power to
augment. Only the President stationed there and in effect in-charge and has the responsibility for
the failure of any part of the government. You have election, for one reason or another, the money
is not enough to hold election. There would be chaos if no money is given as an aid, not to
augment, but as an aid to a department like COA. The President is responsible in a way that the
other heads, given the power to augment, are not. So, he cannot very well allow this, if Your
Honor please.189
JUSTICE LEONEN:
May I move to another point, maybe just briefly. I am curious that the position now, I think, of
government is that some transfers of savings is now considered to be, if I’m not mistaken, aid not
augmentation. Am I correct in my hearing of your argument?
HONORABLE MENDOZA:
That’s our submission, if Your Honor, please.
JUSTICE LEONEN:
May I know, Justice, where can we situate this in the text of the Constitution? Where do we
actually derive the concepts that transfers of appropriation from one branch to the other or what
happened in DAP can be considered a said? What particular text in the Constitution can we
situate this?
HONORABLE MENDOZA:
There is no particular provision or statutory provision for that matter, if Your Honor please. It is
drawn from the fact that the Executive is the executive in-charge of the success of the
government.
JUSTICE LEONEN:
So, the residual powers labelled in Marcos v. Manglapus would be the basis for this theory of the
government?
HONORABLE MENDOZA:
Yes, if Your Honor, please.
JUSTICE LEONEN:
A while ago, Justice Carpio mentioned that the remedy is might be to go to Congress. That there
are opportunities and there have been opportunities of the President to actually go to Congress
and ask for supplemental budgets?
HONORABLE MENDOZA:
If there is time to do that, I would say yes.
JUSTICE LEONEN:
So, the theory of aid rather than augmentation applies in extra-ordinary situation?
HONORABLE MENDOZA:
Very extra-ordinary situations.
JUSTICE LEONEN:
But Counsel, this would be new doctrine, in case?
HONORABLE MENDOZA:
Yes, if Your Honor please.190
Regardless of the variant characterizations of the cross-border transfers of funds, the plain text of
Section 25(5), supra, disallowing cross border transfers was disobeyed. Cross-border transfers,
whether as augmentation, or as aid, were prohibited under Section 25(5), supra.
4.
Sourcing the DAP from unprogrammed
funds despite the original revenue targets
not having been exceeded was invalid
Funding under the DAP were also sourced from unprogrammed funds provided in the GAAs for
2011, 2012,and 2013. The respondents stress, however, that the unprogrammed funds were not
brought under the DAP as savings, but as separate sources of funds; and that, consequently, the
release and use of unprogrammed funds were not subject to the restrictions under Section 25(5),
supra.
The documents contained in the Evidence Packets by the OSG have confirmed that the
unprogrammed funds were treated as separate sources of funds. Even so, the release and use of
the unprogrammed funds were still subject to restrictions, for, to start with, the GAAs precisely
specified the instances when the unprogrammed funds could be released and the purposes for
which they could be used.
The petitioners point out that a condition for the release of the unprogrammed funds was that the
revenue collections must exceed revenue targets; and that the release of the unprogrammed
funds was illegal because such condition was not met.191
The respondents disagree, holding that the release and use of the unprogrammed funds under the
DAP were in accordance with the pertinent provisions of the GAAs. In particular, the DBM avers
that the unprogrammed funds could be availed of when any of the following three instances occur,
to wit: (1) the revenue collections exceeded the original revenue targets proposed in the BESFs
submitted by the President to Congress; (2) new revenues were collected or realized from sources
not originally considered in the BESFs; or(3) newly-approved loans for foreign assisted projects
were secured, or when conditions were triggered for other sources of funds, such as perfected
loan agreements for foreign-assisted projects.192 This view of the DBM was adopted by all the
respondents in their Consolidated Comment.193
The BESFs for 2011, 2012 and 2013 uniformly defined "unprogrammed appropriations" as
appropriations that provided standby authority to incur additional agency obligations for priority
PAPs when revenue collections exceeded targets, and when additional foreign funds are
generated.194 Contrary to the DBM’s averment that there were three instances when
unprogrammed funds could be released, the BESFs envisioned only two instances. The third
mentioned by the DBM – the collection of new revenues from sources not originally considered in
the BESFs – was not included. This meant that the collection of additional revenues from new
sources did not warrant the release of the unprogrammed funds. Hence, even if the revenues not
considered in the BESFs were collected or generated, the basic condition that the revenue
collections should exceed the revenue targets must still be complied with in order to justify the
release of the unprogrammed funds.
The view that there were only two instances when the unprogrammed funds could be released
was bolstered by the following texts of the Special Provisions of the 2011 and 2012 GAAs, to wit:
2011 GAA
1. Release of Fund. The amounts authorized herein shall be released only when the revenue
collections exceed the original revenue targets submitted by the President of the Philippines to
Congress pursuant to Section 22, Article VII of the Constitution, including savings generated from
programmed appropriations for the year: PROVIDED, That collections arising from sources not
considered in the aforesaid original revenue targets may be used to cover releases from
appropriations in this Fund: PROVIDED, FURTHER, That in case of newly approved loans for
foreign-assisted projects, the existence of a perfected loan agreement for the purpose shall be
sufficient basis for the issuance of a SARO covering the loan proceeds: PROVIDED,
FURTHERMORE, That if there are savings generated from the programmed appropriations for the
first two quarters of the year, the DBM may, subject to the approval of the President, release the
pertinent appropriations under the Unprogrammed Fund corresponding to only fifty percent (50%)
of the said savings net of revenue shortfall: PROVIDED, FINALLY, That the release of the balance
229
of the total savings from programmed appropriations for the year shall be subject to fiscal
programming and approval of the President.
2012 GAA
1. Release of the Fund. The amounts authorized herein shall be released only when the revenue
collections exceed the original revenue targets submitted by the President of the Philippines to
Congress pursuant to Section 22, Article VII of the Constitution: PROVIDED, That collections
arising from sources not considered in the aforesaid original revenue targets may be used to cover
releases from appropriations in this Fund: PROVIDED, FURTHER, That in case of newly
approved loans for foreign-assisted projects, the existence of a perfected loan agreement for the
purpose shall be sufficient basis for the issuance of a SARO covering the loan proceeds.
As can be noted, the provisos in both provisions to the effect that "collections arising from sources
not considered in the aforesaid original revenue targets may be used to cover releases from
appropriations in this Fund" gave the authority to use such additional revenues for appropriations
funded from the unprogrammed funds. They did not at all waive compliance with the basic
requirement that revenue collections must still exceed the original revenue targets.
In contrast, the texts of the provisos with regard to additional revenues generated from newly-
approved foreign loans were clear to the effect that the perfected loan agreement would be in itself
"sufficient basis" for the issuance of a SARO to release the funds but only to the extent of the
amount of the loan. In such instance, the revenue collections need not exceed the revenue targets
to warrant the release of the loan proceeds, and the mere perfection of the loan agreement would
suffice.
It can be inferred from the foregoing that under these provisions of the GAAs the additional
revenues from sources not considered in the BESFs must be taken into account in determining if
the revenue collections exceeded the revenue targets. The text of the relevant provision of the
2013 GAA, which was substantially similar to those of the GAAs for 2011 and 2012, already made
this explicit, thus:
1. Release of the Fund. The amounts authorized herein shall be released only when the revenue
collections exceed the original revenue targets submitted by the President of the Philippines to
Congress pursuant to Section 22, Article VII of the Constitution, including collections arising from
sources not considered in the aforesaid original revenue target, as certified by the BTr:
PROVIDED, That in case of newly approved loans for foreign-assisted projects, the existence of a
perfected loan agreement for the purpose shall be sufficient basis for the issuance of a SARO
covering the loan proceeds.
Consequently, that there were additional revenues from sources not considered in the revenue
target would not be enough. The total revenue collections must still exceed the original revenue
targets to justify the release of the unprogrammed funds (other than those from newly-approved
foreign loans).
The present controversy on the unprogrammed funds was rooted in the correct interpretation of
the phrase "revenue collections should exceed the original revenue targets." The petitioners take
the phrase to mean that the total revenue collections must exceed the total revenue target stated
in the BESF, but the respondents understand the phrase to refer only to the collections for each
source of revenue as enumerated in the BESF, with the condition being deemed complied with
once the revenue collections from a particular source already exceeded the stated target.
The BESF provided for the following sources of revenue, with the corresponding revenue target
stated for each source of revenue, to wit:
TAX REVENUES
Taxes on Net Income and Profits
Taxes on Property
Taxes on Domestic Goods and Services
General Sales, Turnover or VAT
Selected Excises on Goods
Selected Taxes on Services
Taxes on the Use of Goods or Property or Permission to Perform Activities
Other Taxes
Taxes on International Trade and Transactions
NON-TAX REVENUES
Fees and Charges
BTR Income
Government Services
Interest on NG Deposits
Interest on Advances to Government Corporations
Income from Investments
Interest on Bond Holdings
Guarantee Fee
Gain on Foreign Exchange
NG Income Collected by BTr
Dividends on Stocks
NG Share from Airport Terminal Fee
NG Share from PAGCOR Income
NG Share from MIAA Profit
Privatization
Foreign Grants
Thus, when the Court required the respondents to submit a certification from the Bureau of
Treasury (BTr) to the effect that the revenue collections had exceeded the original revenue
targets,195 they complied by submitting certifications from the BTr and Department of Finance
(DOF) pertaining to only one identified source of revenue – the dividends from the shares of stock
held by the Government in government-owned and controlled corporations.
To justify the release of the unprogrammed funds for 2011, the OSG presented the certification
dated March 4, 2011 issued by DOF Undersecretary Gil S. Beltran, as follows:
This is to certify that under the Budget for Expenditures and Sources of Financing for 2011, the
programmed income from dividends from shares of stock in government-owned and controlled
corporations is 5.5 billion.
This is to certify further that based on the records of the Bureau of Treasury, the National
Government has recorded dividend income amounting to ₱23.8 billion as of 31 January 2011.196
For 2012, the OSG submitted the certification dated April 26, 2012 issued by National Treasurer
Roberto B. Tan, viz:
This is to certify that the actual dividend collections remitted to the National Government for the
period January to March 2012 amounted to ₱19.419 billion compared to the full year program of
₱5.5 billion for 2012.197
And, finally, for 2013, the OSG presented the certification dated July 3, 2013 issued by National
Treasurer Rosalia V. De Leon, to wit:
This is to certify that the actual dividend collections remitted to the National Government for the
period January to May 2013 amounted to ₱12.438 billion compared to the full year program of
₱10.0198 billion for 2013.
Moreover, the National Government accounted for the sale of the right to build and operate the
NAIA expressway amounting to ₱11.0 billion in June 2013.199
The certifications reflected that by collecting dividends amounting to ₱23.8 billion in 2011, ₱19.419
billion in 2012, and ₱12.438 billion in 2013 the BTr had exceeded only the ₱5.5 billion in target
revenues in the form of dividends from stocks in each of 2011 and 2012, and only the ₱10 billion
in target revenues in the form of dividends from stocks in 2013.
However, the requirement that revenue collections exceed the original revenue targets was to be
construed in light of the purpose for which the unprogrammed funds were incorporated in the
GAAs as standby appropriations to support additional expenditures for certain priority PAPs
should the revenue collections exceed the resource targets assumed in the budget or when
additional foreign project loan proceeds were realized. The unprogrammed funds were included in
the GAAs to provide ready cover so as not to delay the implementation of the PAPs should new or
additional revenue sources be realized during the year.200 Given the tenor of the certifications,
the unprogrammed funds were thus not yet supported by the corresponding resources.201
The revenue targets stated in the BESF were intended to address the funding requirements of the
proposed programmed appropriations. In contrast, the unprogrammed funds, as standby
appropriations, were to be released only when there were revenues in excess of what the
programmed appropriations required. As such, the revenue targets should be considered as a
whole, not individually; otherwise, we would be dealing with artificial revenue surpluses. The
requirement that revenue collections must exceed revenue target should be understood to mean
that the revenue collections must exceed the total of the revenue targets stated in the BESF.
Moreover, to release the unprogrammed funds simply because there was an excess revenue as to
230
one source of revenue would be an unsound fiscal management measure because it would
disregard the budget plan and foster budget deficits, in contravention of the Government’s surplus
budget policy.202
We cannot, therefore, subscribe to the respondents’ view.
5.
Equal protection, checks and balances,
and public accountability challenges
The DAP is further challenged as violative of the Equal Protection Clause, the system of checks
and balances, and the principle of public accountability.
With respect to the challenge against the DAP under the Equal Protection Clause,203 Luna
argues that the implementation of the DAP was "unfair as it [was] selective" because the funds
released under the DAP was not made available to all the legislators, with some of them refusing
to avail themselves of the DAP funds, and others being unaware of the availability of such funds.
Thus, the DAP practised "undue favoritism" in favor of select legislators in contravention of the
Equal Protection Clause.
Similarly, COURAGE contends that the DAP violated the Equal Protection Clause because no
reasonable classification was used in distributing the funds under the DAP; and that the Senators
who supposedly availed themselves of said funds were differently treated as to the amounts they
respectively received.
Anent the petitioners’ theory that the DAP violated the system of checks and balances, Luna
submits that the grant of the funds under the DAP to some legislators forced their silence about
the issues and anomalies surrounding the DAP. Meanwhile, Belgica stresses that the DAP, by
allowing the legislators to identify PAPs, authorized them to take part in the implementation and
execution of the GAAs, a function that exclusively belonged to the Executive; that such situation
constituted undue and unjustified legislative encroachment in the functions of the Executive; and
that the President arrogated unto himself the power of appropriation vested in Congress because
NBC No. 541 authorized the use of the funds under the DAP for PAPs not considered in the 2012
budget.
Finally, the petitioners insist that the DAP was repugnant to the principle of public accountability
enshrined in the Constitution,204 because the legislators relinquished the power of appropriation
to the Executive, and exhibited a reluctance to inquire into the legality of the DAP.
The OSG counters the challenges, stating that the supposed discrimination in the release of funds
under the DAP could be raised only by the affected Members of Congress themselves, and if the
challenge based on the violation of the Equal Protection Clause was really against the
constitutionality of the DAP, the arguments of the petitioners should be directed to the entitlement
of the legislators to the funds, not to the proposition that all of the legislators should have been
given such entitlement.
The challenge based on the contravention of the Equal Protection Clause, which focuses on the
release of funds under the DAP to legislators, lacks factual and legal basis. The allegations about
Senators and Congressmen being unaware of the existence and implementation of the DAP, and
about some of them having refused to accept such funds were unsupported with relevant data.
Also, the claim that the Executive discriminated against some legislators on the ground alone of
their receiving less than the others could not of itself warrant a finding of contravention of the
Equal Protection Clause. The denial of equal protection of any law should be an issue to be raised
only by parties who supposedly suffer it, and, in these cases, such parties would be the few
legislators claimed to have been discriminated against in the releases of funds under the DAP.
The reason for the requirement is that only such affected legislators could properly and fully bring
to the fore when and how the denial of equal protection occurred, and explain why there was a
denial in their situation. The requirement was not met here. Consequently, the Court was not put
in the position to determine if there was a denial of equal protection. To have the Court do so
despite the inadequacy of the showing of factual and legal support would be to compel it to
speculate, and the outcome would not do justice to those for whose supposed benefit the claim of
denial of equal protection has been made.
The argument that the release of funds under the DAP effectively stayed the hands of the
legislators from conducting congressional inquiries into the legality and propriety of the DAP is
speculative. That deficiency eliminated any need to consider and resolve the argument, for it is
fundamental that speculation would not support any proper judicial determination of an issue
simply because nothing concrete can thereby be gained. In order to sustain their constitutional
challenges against official acts of the Government, the petitioners must discharge the basic
burden of proving that the constitutional infirmities actually existed.205 Simply put, guesswork and
speculation cannot overcome the presumption of the constitutionality of the assailed executive act.
We do not need to discuss whether or not the DAP and its implementation through the various
circulars and memoranda of the DBM transgressed the system of checks and balances in place in
our constitutional system. Our earlier expositions on the DAP and its implementing issuances
infringing the doctrine of separation of powers effectively addressed this particular concern.
Anent the principle of public accountability being transgressed because the adoption and
implementation of the DAP constituted an assumption by the Executive of Congress’ power of
appropriation, we have already held that the DAP and its implementing issuances were policies
and acts that the Executive could properly adopt and do in the execution of the GAAs to the extent
that they sought to implement strategies to ramp up or accelerate the economy of the country.
6.
Doctrine of operative fact was applicable
After declaring the DAP and its implementing issuances constitutionally infirm, we must now deal
with the consequences of the declaration.
Article 7 of the Civil Code provides:
Article 7. Laws are repealed only by subsequent ones, and their violation or non-observance shall
not be excused by disuse, or custom or practice to the contrary.
When the courts declared a law to be inconsistent with the Constitution, the former shall be void
and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws or the Constitution.
A legislative or executive act that is declared void for being unconstitutional cannot give rise to any
right or obligation.206 However, the generality of the rule makes us ponder whether rigidly
applying the rule may at times be impracticable or wasteful. Should we not recognize the need to
except from the rigid application of the rule the instances in which the void law or executive act
produced an almost irreversible result?
The need is answered by the doctrine of operative fact. The doctrine, definitely not a novel one,
has been exhaustively explained in De Agbayani v. Philippine National Bank:207
The decision now on appeal reflects the orthodox view that an unconstitutional act, for that matter
an executive order or a municipal ordinance likewise suffering from that infirmity, cannot be the
source of any legal rights or duties. Nor can it justify any official act taken under it. Its repugnancy
to the fundamental law once judicially declared results in its being to all intents and purposes a
mere scrap of paper. As the new Civil Code puts it: ‘When the courts declare a law to be
inconsistent with the Constitution, the former shall be void and the latter shall govern.’
Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws of the Constitution. It is understandable why it should be so, the Constitution
being supreme and paramount. Any legislative or executive act contrary to its terms cannot
survive.
Such a view has support in logic and possesses the merit of simplicity. It may not however be
sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force and had to be complied with. This
is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to
obedience and respect. Parties may have acted under it and may have changed their positions.
What could be more fitting than that in a subsequent litigation regard be had to what has been
done while such legislative or executive act was in operation and presumed to be valid in all
respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact
must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is
the governmental organ which has the final say on whether or not a legislative or executive
measure is valid, a period of time may have elapsed before it can exercise the power of judicial
review that may lead to a declaration of nullity. It would be to deprive the law of its quality of
fairness and justice then, if there be no recognition of what had transpired prior to such
adjudication.
In the language of an American Supreme Court decision: ‘The actual existence of a statute, prior
to such a determination [of unconstitutionality], is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always be erased by a new judicial declaration.
The effect of the subsequent ruling as to invalidity may have to be considered in various aspects,
231
with respect to particular relations, individual and corporate, and particular conduct, private and
official.’"
The doctrine of operative fact recognizes the existence of the law or executive act prior to the
determination of its unconstitutionality as an operative fact that produced consequences that
cannot always be erased, ignored or disregarded. In short, it nullifies the void law or executive act
but sustains its effects. It provides an exception to the general rule that a void or unconstitutional
law produces no effect.208 But its use must be subjected to great scrutiny and circumspection,
and it cannot be invoked to validate an unconstitutional law or executive act, but is resorted to only
as a matter of equity and fair play.209 It applies only to cases where extraordinary circumstances
exist, and only when the extraordinary circumstances have met the stringent conditions that will
permit its application.
We find the doctrine of operative fact applicable to the adoption and implementation of the DAP.
Its application to the DAP proceeds from equity and fair play. The consequences resulting from
the DAP and its related issuances could not be ignored or could no longer be undone.
To be clear, the doctrine of operative fact extends to a void or unconstitutional executive act. The
term executive act is broad enough to include any and all acts of the Executive, including those
that are quasi legislative and quasi-judicial in nature. The Court held so in Hacienda Luisita, Inc. v.
Presidential Agrarian Reform Council:210
Nonetheless, the minority is of the persistent view that the applicability of the operative fact
doctrine should be limited to statutes and rules and regulations issued by the executive
department that are accorded the same status as that of a statute or those which are quasi-
legislative in nature. Thus, the minority concludes that the phrase ‘executive act’ used in the case
of De Agbayani v. Philippine National Bank refers only to acts, orders, and rules and regulations
that have the force and effect of law. The minority also made mention of the Concurring Opinion of
Justice Enrique Fernando in Municipality of Malabang v. Benito, where it was supposedly made
explicit that the operative fact doctrine applies to executive acts, which are ultimately quasi-
legislative in nature.
We disagree. For one, neither the De Agbayani case nor the Municipality of Malabang case
elaborates what ‘executive act’ mean. Moreover, while orders, rules and regulations issued by the
President or the executive branch have fixed definitions and meaning in the Administrative Code
and jurisprudence, the phrase ‘executive act’ does not have such specific definition under existing
laws. It should be noted that in the cases cited by the minority, nowhere can it be found that the
term ‘executive act’ is confined to the foregoing. Contrarily, the term ‘executive act’ is broad
enough to encompass decisions of administrative bodies and agencies under the executive
department which are subsequently revoked by the agency in question or nullified by the Court.
A case in point is the concurrent appointment of Magdangal B. Elma (Elma) as Chairman of the
Presidential Commission on Good Government (PCGG) and as Chief Presidential Legal Counsel
(CPLC) which was declared unconstitutional by this Court in Public Interest Center, Inc. v. Elma.
In said case, this Court ruled that the concurrent appointment of Elma to these offices is in
violation of Section 7, par. 2, Article IX-B of the 1987 Constitution, since these are incompatible
offices. Notably, the appointment of Elma as Chairman of the PCGG and as CPLC is, without a
question, an executive act. Prior to the declaration of unconstitutionality of the said executive act,
certain acts or transactions were made in good faith and in reliance of the appointment of Elma
which cannot just be set aside or invalidated by its subsequent invalidation.
In Tan v. Barrios, this Court, in applying the operative fact doctrine, held that despite the invalidity
of the jurisdiction of the military courts over civilians, certain operative facts must be
acknowledged to have existed so as not to trample upon the rights of the accused therein.
Relevant thereto, in Olaguer v. Military Commission No. 34, it was ruled that ‘military tribunals
pertain to the Executive Department of the Government and are simply instrumentalities of the
executive power, provided by the legislature for the President as Commander-in-Chief to aid him
in properly commanding the army and navy and enforcing discipline therein, and utilized under his
orders or those of his authorized military representatives.’
Evidently, the operative fact doctrine is not confined to statutes and rules and regulations issued
by the executive department that are accorded the same status as that of a statute or those which
are quasi-legislative in nature.
Even assuming that De Agbayani initially applied the operative fact doctrine only to executive
issuances like orders and rules and regulations, said principle can nonetheless be applied, by
analogy, to decisions made by the President or the agencies under the executive department. This
doctrine, in the interest of justice and equity, can be applied liberally and in a broad sense to
encompass said decisions of the executive branch. In keeping with the demands of equity, the
Court can apply the operative fact doctrine to acts and consequences that resulted from the
reliance not only on a law or executive act which is quasi-legislative in nature but also on
decisions or orders of the executive branch which were later nullified. This Court is not unmindful
that such acts and consequences must be recognized in the higher interest of justice, equity and
fairness.
Significantly, a decision made by the President or the administrative agencies has to be complied
with because it has the force and effect of law, springing from the powers of the President under
the Constitution and existing laws. Prior to the nullification or recall of said decision, it may have
produced acts and consequences in conformity to and in reliance of said decision, which must be
respected. It is on this score that the operative fact doctrine should be applied to acts and
consequences that resulted from the implementation of the PARC Resolution approving the SDP
of HLI. (Bold underscoring supplied for emphasis)
In Commissioner of Internal Revenue v. San Roque Power Corporation,211 the Court likewise
declared that "for the operative fact doctrine to apply, there must be a ‘legislative or executive
measure,’ meaning a law or executive issuance." Thus, the Court opined there that the operative
fact doctrine did not apply to a mere administrative practice of the Bureau of Internal Revenue, viz:
Under Section 246, taxpayers may rely upon a rule or ruling issued by the Commissioner from the
time the rule or ruling is issued up to its reversal by the Commissioner or this Court. The reversal
is not given retroactive effect. This, in essence, is the doctrine of operative fact. There must,
however, be a rule or ruling issued by the Commissioner that is relied upon by the taxpayer in
good faith. A mere administrative practice, not formalized into a rule or ruling, will not suffice
because such a mere administrative practice may not be uniformly and consistently applied. An
administrative practice, if not formalized as a rule or ruling, will not be known to the general public
and can be availed of only by those with informal contacts with the government agency.
It is clear from the foregoing that the adoption and the implementation of the DAP and its related
issuances were executive acts.1avvphi1 The DAP itself, as a policy, transcended a merely
administrative practice especially after the Executive, through the DBM, implemented it by issuing
various memoranda and circulars. The pooling of savings pursuant to the DAP from the allotments
made available to the different agencies and departments was consistently applied throughout the
entire Executive. With the Executive, through the DBM, being in charge of the third phase of the
budget cycle – the budget execution phase, the President could legitimately adopt a policy like the
DAP by virtue of his primary responsibility as the Chief Executive of directing the national
economy towards growth and development. This is simply because savings could and should be
determined only during the budget execution phase.
As already mentioned, the implementation of the DAP resulted into the use of savings pooled by
the Executive to finance the PAPs that were not covered in the GAA, or that did not have proper
appropriation covers, as well as to augment items pertaining to other departments of the
Government in clear violation of the Constitution. To declare the implementation of the DAP
unconstitutional without recognizing that its prior implementation constituted an operative fact that
produced consequences in the real as well as juristic worlds of the Government and the Nation is
to be impractical and unfair. Unless the doctrine is held to apply, the Executive as the disburser
and the offices under it and elsewhere as the recipients could be required to undo everything that
they had implemented in good faith under the DAP. That scenario would be enormously
burdensome for the Government. Equity alleviates such burden.
The other side of the coin is that it has been adequately shown as to be beyond debate that the
implementation of the DAP yielded undeniably positive results that enhanced the economic
welfare of the country. To count the positive results may be impossible, but the visible ones, like
public infrastructure, could easily include roads, bridges, homes for the homeless, hospitals,
classrooms and the like. Not to apply the doctrine of operative fact to the DAP could literally cause
the physical undoing of such worthy results by destruction, and would result in most undesirable
wastefulness.
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative
fact does not always apply, and is not always the consequence of every declaration of
constitutional invalidity. It can be invoked only in situations where the nullification of the effects of
what used to be a valid law would result in inequity and injustice;212 but where no such result
would ensue, the general rule that an unconstitutional law is totally ineffective should apply.
232
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the CERTIFICATION
PAPs that can no longer be undone, and whose beneficiaries relied in good faith on the validity of I certify that the conclusions in the above Decision had been reached in consultation before the
the DAP, but cannot apply to the authors, proponents and implementors of the DAP, unless there cases were assigned to the writer of the opinion of the court.
are concrete findings of good faith in their favor by the proper tribunals determining their criminal, MARIA LOURDES P. A. SERENO
civil, administrative and other liabilities. Chief Justice
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and
DECLARES the following acts and practices under the Disbursement Acceleration Program, Footnotes
National Budget Circular No. 541 and related executive issuances UNCONSTITUTIONAL for 1 <http://www.dbm.gov.ph/?p=7302> (visited May 27, 2014).
being in violation of Section 25(5), Article VI of the 1987 Constitution and the doctrine of 2 Labeled as "Personal Services" under the GAAs.
separation of powers, namely: 3 Frequently Asked Questions about the Disbursement Acceleration Program (DAP)
(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration <http://www.dbm.gov.ph/?page_id=7362> (visited May 27, 2014).
of the withdrawn unobligated allotments and unreleased appropriations as savings prior to the end 4 See note 2.
of the fiscal year and without complying with the statutory definition of savings contained in the 5 Zero-based budgeting is a budgeting approach that involves the review/evaluation of on-going
General Appropriations Acts; programs and projects implemented by different departments/agencies in order to: (a) establish
(b) The cross-border transfers of the savings of the Executive to augment the appropriations of the continued relevance of programs/projects given the current developments/directions; (b)
other offices outside the Executive; and assess whether the program objectives/outcomes are being achieved; (c) ascertain alternative or
(c) The funding of projects, activities and programs that were not covered by any appropriation in more efficient or effective ways of achieving the objectives; and (d) guide decision makers on
the General Appropriations Act. whether or not the resources for the program/project should continue at the present level or be
The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a increased, reduced or discontinued. (see NBC Circular No. 539, March 21, 2012).
certification by the National Treasurer that the revenue collections exceeded the revenue targets 6 Constitutional and Legal Bases < http://www.dbm.gov.ph/?page_id=7364> (visited May 27,
for non-compliance with the conditions provided in the relevant General Appropriations Acts. 2014).
SO ORDERED. 7 Belgica v. Executive Secretary Ochoa, G.R. No. 208566, November 19, 2013.
LUCAS P. BERSAMIN 8 The Villegas petition was originally undocketed due to lack of docket fees being paid;
Associate Justice subsequently, the docket fees were paid.
WE CONCUR: 9 Rollo (G.R. No. 209287), p. 119.
MARIA LOURDES P. A. SERENO 10 Id. at 190-196. Sec. Abad manifested that the Memorandum for the President dated June 25,
Chief Justice 2012 was the directive referred to in NBC No. 541; and that although the date appearing on the
See Dissenting Opinion Memorandum was June 25, 2012, the actual date of its approval was June 27, 2012.
ANTONIO T. CARPIO 11 Id. at 523-625.
Associate Justice 12 Id. at 627-692.
I join the Concurring and Dissenting Opinion of J. Del Castillo 13 Id. at 693-698.
PRESBITERO J. VELASCO, JR. 14 Id. at 699-746.
Associate Justice 15 Id. at 748-764.
No part: 16 Id. at 766-784.
TERSITA J. LEONARDO-DE CASTRO 17 Id. at 925.
Associate Justice 18 Id. at 786-922.
See: Separate Opinion 19 Rollo (G.R. No. 209287), pp. 1050-1051 (Respondents’ Memorandum).
ARTURO D. BRION 20 Id. at 1044.
Associate Justice 21 Id. at 1048.
DIOSDADO M. PERALTA 22 Id. at 1053.
Associate Justice 23 Id. at 1053-1056.
Pls. see separate concurring and dissenting opinion 24 Id. at 1056.
MARIANO C. DEL CASTILLO 25 Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary, 2009 Edition,
Associate Justice p. 959.
MARTIN S. VILLARAMA, JR. 26 I RECORD of the 1986 Constitutional Commission 436 (July 10, 1986).
Associate Justice 27 I RECORD of the 1986 Constitutional Commission, 439 (July 10, 1986).
JOSE PORTUGAL PEREZ 28 63 Phil. 139 (1936).
Associate Justice 29 Id. at 157-158.
JOSE CATRAL MENDOZA 30 G.R. No. 153852, October 24, 2012, 684 SCRA 410.
Associate Justice 31 Id. at 420-423.
BIENVENIDO L. REYES 32 Municipal Council of Lemery v. Provincial Board of Batangas, No. 36201, October 29, 1931, 56
Associate Justice Phil. 260, 266-267.
Pls. see Separate Concurring Opinion 33 G.R. No. 163980, August 3, 2006, 497 SCRA 581, 595-596.
ESTELA M. PERLAS-BERNABE 34 Francisco, Jr. v. Toll Regulatory Board, G.R. No. 166910, October 19, 2010, 633 SCRA 470,
Associate Justice 494.
See separate concurring opinion 35 Planas v. Gil, 67 Phil. 62, 73-74 (1939), with the Court saying:
MARVIC MARIO VICTOR F. LEONEN It must be conceded that the acts of the Chief Executive performed within the limits of his
Associate Justice jurisdiction are his official acts and courts will neither direct nor restrain executive action in such

233
cases. The rule is non-interference. But from this legal premise, it does not necessarily follow that
we are precluded from making an inquiry into the validity or constitutionality of his acts when these
are properly challenged in an appropriate proceeding. xxx As far as the judiciary is concerned,
while it holds "neither the sword nor the purse" it is by constitutional placement the organ called
upon to allocate constitutional boundaries, and to the Supreme Court is entrusted expressly or by
necessary implication the obligation of determining in appropriate cases the constitutionality or
validity of any treaty, law, ordinance, or executive order or regulation. (Sec.2 [1], Art. VIII,
Constitution of the Philippines.) In this sense and to this extent, the judiciary restrains the other
departments of the government and this result is one of the necessary corollaries of the "system of
checks and balances" of the government established.
36 Funa v. Villar, G.R. No. 192791, April 24, 2012, 670 SCRA 579, 593. According to Black’s Law
Dictionary (Ninth Edition), lis motais "[a] dispute that has begun and later forms the basis of a
lawsuit."
37 Bernas, op. cit., at 970.
38 Supra note 7.
39 Oral Arguments, TSN of January 28, 2014, p. 14.
40 Id. at 23.
41 Funa v. Ermita, G.R. No. 184740, February 11, 2010, 612 SCRA 308, 319.
42 Funa v. Villar, supra note 36, at 592; citing David v. Macapagal-Arroyo, G.R. Nos. 171396,
171409, 171485, 171483, 171400, 171489 & 171424, May 3, 2006, 489 SCRA 160, 214-215.
43 Black’s Law Dictionary, 941 (6th Ed. 1991).
44 G.R. No. 191002, March 17, 2010, 615 SCRA 666.
45 Id. at 722-726.
46 G.R. No. 155001, May 5, 2003, 402 SCRA 612, 645.
47 Rollo (G.R. No. 209412), Petition, pp. 3-4.
48 Rollo (G.R. No. 209164), p. 5.
49 Rollo (G.R. No. 209260), p. 6.
50 Agan, Jr. v. Philippine International Air Terminals Co., Inc., note 46 at 645.
51 Magtolis-Briones, Leonor, Philippine Public Fiscal Administration, National Research Council of
the Philippines and Commission on Audit, 1983, p. 243.
52 Manasan, Rosario G., Public Finance in the Philippines: A Review of the Literature, Philippine
Institute for Development Studies Working Paper 81-03, March 1981, p. 37.
53 Magtolis-Briones, op. cit., p. 79.
54 American economist Prof. Philip E. Taylor has tendered the following understanding of the term
budget (as quoted in Magtolis-Briones, op. cit., p. 243), to wit:
The budget is the master plan of government. It brings together estimates of anticipated revenues
and proposed expenditures, implying the schedule of activities to be undertaken and the means of
financing those activities. In the budget, fiscal policies are coordinated, and only in the budget can
a more unified view of the financial direction which the government is going to be observed.
55 Id. at 10.
56 Id. at 10-11.
57 Id. at 11.
58 Id. at 12.
59 Manasan, op cit., at. 39; Manasan, Budget Operations Manual Revised Edition, Operations
Budget Commission (1968), p. 3.
60 Magtolis-Briones, op cit., at 80.
61 Id.
62 http://www.dbm.gov.ph/?page_id=352. Visited on May 27, 2014.
63 Id.
64 Magtolis-Briones, op cit., p. 269.
65 http://www.dbm.gov.ph/?page_id=352. Visited on March 27, 2014.
66 http://budgetngbayan.com/the-budget-cycle/. Visited on March 27, 2014.
67 http://budgetngbayan.com/budget-101/budget.preparation.
68 Section 22. The President shall submit to the Congress, within thirty days from the opening of
every regular session as the basis of the general appropriations bill, a budget of expenditures and
sources of financing, including receipts from existing and proposed revenue measures.
69 Section 2(e), P.D. No. 1177 states that capital expenditures « refer to appropriations for the
purchase of goods and services, the benefits of which extend beyond the fiscal year and which
add to the assets of Government, including investments in the capital of government-owned or
controlled corporations and their subsidiaries. »
70 Section 2(d), PD 1177 defines current oprating expenditures as « appropriations for the
purchase of goods and services for current consumption or within the fiscal year, including the
acquisition of furniture and equipment normally used in the conduct of government operations, and
for temporary construction of promotional, research and similar purposes. »
71 Manasan, op.cit.,at 32.
72 Id.
73 Id.
74 Id.
75 Id.; see also Banzon Abello, Amelia, Pattern of Philippine Public Expenditures and Revenue,
UP Institute of Economic Development and Research, p. 2 (1962).
76 Magtolis-Briones, op.cit.,at 383.
77 Id. at 139.
78 Quoted in Banzon Abello, op.cit., at 32-33.
79 Prof. Charles Bastable, a political economist, proposed a similar classification of public
revenues in Public Finance (3rd Edition (1917), Book II, Chapter I(2), London: McMillan and Co.,
Ltd.), to wit:
The widest division of public revenue is into (1) that obtained by the State in its various functions
as a great corporation or "juristic person," operating under the ordinary conditions that govern
individuals or private companies, and (2) that taken from the revenues of the society by the power
of the sovereign. To the former class belong the rents received by the State as landlord, rent
charges due to it, interest on capital lent by it, the earnings of its various employments, whether
these cover the expenses of the particular function or not, and finally the accrual of property by
escheat or absence of a visible owner. Under the second class have to be placed taxes, either
general or special, and finally all extra returns obtained by state industrial agencies through the
privileges granted by them.
80 Magtolis-Briones, supra at 140.
81 Id. at 141.
82 Id.
83 Id. at 142.
84 Id.
85 Manual on the New Government Accounting System, Accounting Policies, Volume I, Chapter
1, Section 17 (For National Government Agencies).
86 http://budgetngbayan.com/budget-101/budget-legislation.
87 Article VI of the 1987 Constitution provides:
Section 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt,
bills of local application, and private bills shall originate exclusively in the House of
Representatives, but the Senate may propose or concur with amendments.
88 Section 26, Article VI of the 1987 Constitution, to wit:
Section 26.
1. Every bill passed by the Congress shall embrace only one subject which shall be expressed in
the title thereof.
2. No bill passed by either House shall become a law unless it has passed three readings on
separate days, and printed copies thereof in its final form have been distributed to its Members
three days before its passage, except when the President certifies to the necessity of its
immediate enactment to meet a public calamity or emergency. Upon the last reading of a bill, no
amendment thereto shall be allowed, and the vote thereon shall be taken immediately thereafter,
and the yeas and nays entered in the Journal.
89 Id.
90 Section 27,1, Article VI of the 1987 Constitution, viz:
Section 27.
1. Every bill passed by the Congress shall, before it becomes a law, be presented to the
President. If he approves the same he shall sign it; otherwise, he shall veto it and return the same
with his objections to the House where it originated, which shall enter the objections at large in its
Journal and proceed to reconsider it. If, after such reconsideration, two-thirds of all the Members
of such House shall agree to pass the bill, it shall be sent, together with the objections, to the other
House by which it shall likewise be reconsidered, and if approved by two-thirds of all the Members
234
of that House, it shall become a law. In all such cases, the votes of each House shall be
determined by yeas or nays, and the names of the Members voting for or against shall be entered
in its Journal. The President shall communicate his veto of any bill to the House where it
originated within thirty days after the date of receipt thereof, otherwise, it shall become a law as if
he had signed it.
2. The President shall have the power to veto any particular item or items in an appropriation,
revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.
91 Id.
92 Section 25, 7, Article VI of the 1987 Constitution, thus :
xxxx.
7. If, by the end of any fiscal year, the Congress shall have failed to pass the general
appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding
fiscal year shall be deemed re-enacted and shall remain in force and effect until the general
appropriations bill is passed by the Congress.
xxxx.
93 http://budgetngbayan.com/budget-101/budget-execution.
94 The ABM disaggregates all programmed appropriations for each agency into two main
expenditure categories: "not needing clearance" and "needing clearance"; it is a comprehensive
allotment release document for all appropriations that do not need clearance, or those that have
already been itemized and fleshed out in the GAA.
95 Items identified as "needing clearance" are those that require the approval of the DBM or the
President, as the case may be (for instance, lump sum funds and confidential and intelligence
funds). For such items, an agency needs to submit a Special Budget Request to the DBM with
supporting documents. Once approved, a SARO is issued.
96 Liabilities legally incurred that the Government will pay for.
97 Belgica v. Executive Secretary, supra note 7 clarifies the distinction between an NCA and
SARO, viz:
A SARO, as defined by the DBM itself in its website, is "[a] specific authority issued to identified
agencies to incur obligations not exceeding a given amount during a specified period for the
purpose indicated. It shall cover expenditures the release of which is subject to compliance with
specific laws or regulations, or is subject to separate approval or clearance by competent
authority." Based on this definition, it may be gleaned that a SARO only evinces the existence of
an obligation and not the directive to pay. Practically speaking, the SARO does not have the direct
and immediate effect of placing public funds beyond the control of the disbursing authority. In fact,
a SARO may even be withdrawn under certain circumstances which will prevent the actual release
of funds. On the other hand, the actual release of funds is brought about by the issuance of the
NCA, which is subsequent to the issuance of a SARO.
xxxx
98 http://budgetngbayan.com/budget-101/budget-accountability.
99 Fisher, Presidential Spending Power, 1975, p. 165.
100 Keefe and Ogul, The American Legislative Process: Congress and the States, 1993, p. 359.
101 Magtolis-Briones, op. cit., p. 79.
102 Diokno, Philippine Fiscal Behavior in Recent History, The Philippine Review of Economics,
Vol. XLVII, No. 1, June 1, 2010, p. 53.
103 World Bank, Philippines Quarterly Update: Solid Economic Fundamentals Cushion External
Turmoil, available at http://www.investphilippines.info/arangkada/wp-content/uploads/2011/10/WB-
PhilippinesQuarterly-Update-Sept2011.pdf (last accessed March 31, 2014).
104 Id.
105 Department of Budget and Management, Frequently Asked Questions About the
Disbursement Acceleration Program (DAP), available at http://www.dbm.gov.ph/?page_id=7362
(last accessed, December 3, 2013).
106 Respondent’s Consolidated Comment, p.8.
107 Public-Private Partnership.
108 Philippines Quarterly Update: Solid Economic Fundamentals Cushion External Turmoil,
available at http://www.investphilippines.info/arangkada/wp-content/uploads/2011/10/WB-
Philippines-QuarterlyUpdate-Sept2011.pdf (last accessed March 31, 2014).
109 Respondent’s Memorandum, p. 2, citing the Philippines Quarterly Update: From Stability to
Prosperity for All, available at http://www-
wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/
2012/06/12/000333037_20120612011744/Rendered/PDF/698330WP0₱12740ch020120FINAL00
51012.pdf (last accessed March 31, 2014).
110 The research group IBON International contests this finding, saying that the contribution of the
DAP spending was only one-fourth of a percentage point at most during the last quarter of 2011,
and a "negligible fraction" for the entire year of 2011. See "DAP did not contribute 1.3 percentage
points to growth—IBON," available at http://ibon.org/ibon_articles.php?id=344 (last accessed April
5, 2014).
111 TSN, Oral Arguments, January 28, 2014, p. 12.
112 Diokno, Philippine Fiscal Behavior in Recent History, The Philippine Review of Economics,
Vol. XLVII, No. 1, June 1, 2010, p. 51.
113 Id. at 52.
114 Rollo (G.R. No. 209287), p. 539, (Respondent’s 1st Evidence Packet).
115 Id. at 526-529, (Respondent’s 1st Evidence Packet).
116 Id. at 537-540.
117 Id. at 549-555.
118 Id. at 563-568.
119 Id. at 579-587.
120 Id. at 601-608.
121 This memorandum was a request to fund the rehabilitation plan for the Typhoon Pablo-
stricken areas in Mindanao amounting to ₱10.534 billion to be sourced from the (i) 2012 and 2013
pooled savings from programmed appropriations, and (ii) revenue windfall collections during the
first semester comprising the 2013 Unprogrammed Fund, Respondent’s 1st Evidence Packet, p.
609-B.
122 Rollo (G.R. No. 209287), p. 555, (Respondent’s 1st Evidence Packet).
123 Id. at 185-189, (Respondent’s Manifestation dated December 6, 2013).
124 Blacks’ Law Dictionary (6th Ed.) p. 102.
125 ] G.R. No. 29627, December 19, 1989, 180SCRA 254.
126 Id. at 160.
127 Daniel Tomassi, "Budget Execution," in Budgeting and Budgetary Institutions, ed. Anwar
Shah (Washington: The International Bank for Reconstruction and Development/World Bank,
2007), p. 279, available at
http://siteresources.worldbank.org/PSGLP/Resources/BudgetingandBudgetaryInstitutions.pdf (last
accessed April 9, 2014).
128 Budget Operations Manual (Revised Edition) 1968, Office of the President, Budget
Commission.
129 Fujitani and Shirck, Executive Spending Powers: The Capacity to Reprogram, Rescind, and
Impound. Harvard Law School, Federal Budget Policy Seminar, Briefing Paper No. 8, p. 1,
available at http://www.law.harvard.edu/faculty/hjackson/ExecutiveSpendingPowers_8.pdf (last
accessed December 3, 2013).
130 Id. at 8.
131 Id.
132 Princeton University Press, 1975, pp. 261-262.
133 G.R. No. 103524, April 15, 1992, 208 SCRA 133, 150.
134 Waldby, Odell, Philippine Public Fiscal Administration, Institute of Public Administration,
University of the Philippines, 1954, p. 319.
135 The Philippine Commission, which lasted from 1900 to 1916, comprised the Upper House of
the Philippines Legislature. The Philippine Assembly, which existed from 1907 to 1916, served in
its time as the Lower House of the Philippine Legislature.
136 Waldby, op. cit., pp. 321-322.
137 In his Sponsorship Speech, Delegate Honesto Mendoza, the Chairman of the Committee on
Budget and Appropriations of the 1971 Constitutional Convention, stated that it was deemed
"absolutely necessary to remove the anomaly of illegal fund transfers of public funds to projects or
purposes not contemplated by law."
138 Minutes of the Meeting, Commission on Budget and Appropriations, 1971 Constitutional
Convention, November 4, 1971, p. 18.
139 Minutes of the Meeting, Commission on Budget and Appropriations, 1971 Constitutional
Convention, January 13, 1972, p. 10.
235
140 Id. at 9.
141 Id. at 10-11.
142 Demetria v. Alba, No. L-71977, February 27, 1987, 148 SCRA 208.
143 Id. at 214-215.
144 G.R. No. 188635, January 29, 2013, 689 SCRA 385, 402-404.
145 Constitutional and Legal Bases < http://www.dbm.gov.ph/?page_id=7364> (visited March 27,
2014)
146 Rollo (G.R. No. 209442), p. 7.
147 Rollo (G.R. No. 209260), p. 17; (G.R. No. 209517), p. 19; (G.R. No. 209155), p. 11; (G.R. No.
209135), p. 13.
148 Rollo (G.R. No. 209287), p. 6; (G.R. No. 209517), p. 19; (G.R. No. 209442), p. 23.
149 Section 17, Article VII of the 1987 Constitution provides:
Section 17. The President shall have control of all the executive departments, bureaus, and
offices. He shall ensure that the laws be faithfully executed.
150 Sanchez v. Commission on Audit, G.R. No. 127545, April 23, 2008, 552 SCRA 471, 497.
151 NBC No. 541 (Rationale); see also NBC No. 541 (5.3), which stated that, in case of failure to
submit budget accountability reports, the DBM would compute/approximate the agency’s
obligation level as of June 30 to derive its unobligated allotments as of the same period.
152 NBC No. 541 (2.1).
153 NBC No. 541 (5.7.1).
154 These GAA provisions are reflected, respectively, in NBC No. 528 (Guidelines on the Release
of funds for FY 2011), thus:
3.9.1.2 Appropriations under FY 2011 GAA, R.A. 10147 shall be available for release and
obligations up to December 31, 2012 with the exception of PS which shall lapse at the end of
2011.
and NBC No. 535 (Guidelines on the Release of funds for FY 2012), thus:
3.9.1.2 Appropriations under CY 2012 GAA, R.A. 10155 shall be available for release and
obligations up to December 31, 2013 with the exception of PS which shall lapse at the end of
2012.
155 Rollo (G.R. No. 209442), p. 23.
156 Rollo (G.R. No. 209287), p. 1060, (Memorandum for the Respondents).
157 Rollo (209287), pp. 18-19.
158 Rollo (209442), pp. 21-22.
159 G.R. No. 113105, August 19, 1994, 235 SCRA 506, 545.
160 Webster’s Third New International Dictionary.
161 TSN, January 28, 2014, p. 12.
162 DBM, "Sec. Abad: DAP used to buoy spending, not to buy votes," available at
http://www.dbm.gov.ph/?p=7328 (last accessed March 28, 2014).
163 DBM, "Sec. Abad: DAP used to buoy spending, not to buy votes," available at
http://www.dbm.gov.ph/?p=7328 (last accessed March 28, 2014).
164 Rollo (G.R. No. 209136), p. 18.
165 Rollo (G.R. No. 209136), p. 18; (G.R. No. 209442), p. 13.
166 Rollo (G.R. No. 209155), p. 9.
167 Rollo (G.R. No. 209287), pp. 68-104; (Respondents’ Consolidated Comment).
168 Rollo (G.R. No. 209287), pp. 524-922.
169 SARO No. E-11-02253; Rollo (G.R. No. 209287), p. 628, (Respondents’ 2nd Evidence
Packet).
170 See FY2011 National Expenditure Program, p. 1186, available at
http://www.dbm.gov.ph/wpcontent/uploads/NE₱2011/DOSTG-GAA.pdf.
171 SARO No. E-14-02254; Rollo (G.R. No. 209287), p. 630, (Respondents’ 2nd Evidence
Packet).
172 Rollo (G.R. No. 209287), p. 27, (Respondents’ Memorandum).
173 TSN, January 28, 2014, p. 26.
174 Section 29(1), Article VI of the 1987 Constitution provides that no money shall be paid out of
the Treasury except in pursuance of an appropriation made by law.
175 According to Allen and Miller. The Constitutionality of Executive Spending Powers, Harvard
Law School, Federal Budget Policy Seminar, Briefing Paper No. 38, p. 16, available at
http://www.law.harvard.edu/faculty/hjackson/ConstitutionalityOfExecutive_38.pdf (December 3,
2013):
If the executive could spend under its own authority, "then the constitutional grants of power to the
legislature to raise taxes and to borrow money would be for naught because the Executive could
effectively compel such legislation by spending at will. The ‘[L]egislative Powers’ referred to in
section 8 of Article I would then be shared by the President in his executive as well as in his
legislative capacity" The framers intended the powers to spend and the powers to tax to be "two
sides of the same coin," and for good reason. Separating the two powers — or giving the
President one without the other — might reduce accountability and result in excessive spending:
the President would be able to spend and leave Congress to deal with the political repercussions
of financing such spending through heightened tax rates.
176 Bernas, op. cit., at 811.
177 Wander and Herbert (Ed.), Congressional Budgeting: Politics, Process and Power (1984), p.
3.
178 Wander and Herbert (Ed.), Congressional Budgeting: Politics, Process and Power (1984), at
133.
179 Bernas, op. cit., at 812.
180 Philippine Constitution Association v. Enriquez, supra, note 159, at 522.
181 Stith, Kate, "Congress’ Power of the Purse" (1988), Faculty Scholarship Series, Paper No.
1267, p. 1345, available at
http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=2282&context=fss_papers (last
accessed March 29, 2014).
182 Id. at 1377.
183 TSN of January 28, 2014, pp. 42-45.
184 Rollo (G.R. No. 209287), p. 883, (Respondents’ 7th Evidence Packet).
185 Id. at 562, (Respondents’ 1st Evidence Packet).
186 See the OSG’s Compliance dated February 14, 2014, Annex B, p. 2.
187 Rollo (G.R. No. 209287), p. 35, (Memorandum for the Respondents).
188 Id.
189 TSN of February 18, 2014, p. 32.
190 TSN of February 18, 2014, pp. 45-46.
191 Rollo (G.R. No. 209287), p. 1027; (G.R. No. 209442), p. 8.
192 Other References: A Brief on the Special Purpose Funds in the National Budget
<http://www.dbm.gov.ph/?page_id=7366> (visited May 2, 2014).
193 Rollo (G.R. No. 209287), p. 95.
194 Glossary of Terms, BESF.
195 TSN, January 28, 2014, p. 106.
196 Rollo (G.R. No. 209155), pp. 327 & 337.
197 Id. at 337 & 338.
198 The target revenue for dividends on stocks of ₱5.5 billion was according to the BESF (2013),
Table C.1 Revenue Program, by Source 2011-2013.
199 Rollo (G.R. No. 209155), pp. 337 & 339.
200 Other References: A Brief on the Special Purpose Funds in the National Budget
<http://www.dbm.gov.ph/?page_id=7366> (visited May 2, 2014).
201 Basic Concepts in Budgeting <http://www.dbm.gov.ph/wp-content/uploads/2012/03/PGB-
B1.pdf> (visited May 2, 2014).
202 Id.
203 The Equal Protection Clause is found in Section 1, Article III of the 1987 Constitution, to wit:
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.
204 Article XI of the 1987 Constitution states:
Section 1. Public office is a public trust. Public officers and employees must, at all times, be
accountable to the people, serve them with utmost responsibility, integrity, loyalty, and efficiency;
act with patriotism and justice, and lead modest lives.
205 See Fariñas v. Executive Secretary, G.R. No. 147387, December 10, 2003, 417 SCRA 503.
206 Commissioner of Internal Revenue v. San Roque Power Corporation, G.R. No. 187485,
October 8, 2013.
207 G.R. No. L-23127, April 29, 1971, 38 SCRA 429, 434-435.
236
208 Yap v. Thenamaris Ship’s Management, G.R. No. 179532, May 30 2011, 649 SCRA 369,
381.
209 League of Cities Philippines v. COMELEC, G.R. No. 176951, August 24, 2010, 628 SCRA
819, 833.
210 G.R. No. 171101, November 22, 2011, 660 SCRA 525, 545-548.
211 Commissioner of Internal Revenue v. San Roque Power Corporation, G.R. No. 187485,
October 8, 2013.
212 This view is similarly held by Justice Leonen, who asserts in his separate opinion that the
application of the doctrine of operative fact should be limited to situations (a) where there has
been a reliance in good faith in the acts involved, or (b) where in equity the difficulties that will be
borne by the public far outweigh the rigid application of the legal nullity of an act.a

6. Republic of the Philippines

SUPREME COURT
Manila
EN BANC

G.R. No. 113105 August 19, 1994

PHILIPPINE CONSTITUTION ASSOCIATION, EXEQUIEL B. GARCIA and A.

GONZALES, petitioners,

vs.

HON. SALVADOR ENRIQUEZ, as Secretary of Budget and Management; HON.

VICENTE T. TAN, as National Treasurer and COMMISSION ON AUDIT, respondents.

G.R. No. 113174 August 19, 1994

RAUL S. ROCO, as Member of the Philippine Senate, NEPTALI A. GONZALES, Chairman of the
Committee on Finance of the Philippine Senate, and EDGARDO J. ANGARA, as President and
Chief Executive of the Philippine Senate, all of whom also sue as taxpayers, in their own behalf
and in representation of Senators HEHERSON ALVAREZ, AGAPITO A. AQUINO, RODOLFO G.
BIAZON, JOSE D. LINA, JR., ERNESTO F. HERRERA, BLAS F. OPLE, JOHN H. OSMENA,
GLORIA MACAPAGAL- ARROYO, VICENTE C. SOTTO III, ARTURO M. TOLENTINO,
FRANCISCO S. TATAD, WIGBERTO E. TAÑADA and FREDDIE N. WEBB, petitioners,

vs.

THE EXECUTIVE SECRETARY, THE DEPARTMENT OF BUDGET AND MANAGEMENT, and

THE NATIONAL TREASURER, THE COMMISSION ON AUDIT, impleaded herein as an unwilling
co-petitioner, respondents.

G.R. No. 113766 August 19, 1994

WIGBERTO E. TAÑADA and ALBERTO G. ROMULO, as Members of the Senate and as

taxpayers, and FREEDOM FROM DEBT COALITION, petitioners,

vs.

HON. TEOFISTO T. GUINGONA, JR. in his capacity as Executive Secretary, HON. SALVADOR
ENRIQUEZ, JR., in his capacity as Secretary of the Department of Budget and Management,
HON. CARIDAD VALDEHUESA, in her capacity as National Treasurer, and THE COMMISSION
ON AUDIT, respondents.

237

G.R. No. 113888 August 19, 1994
WIGBERTO E. TAÑADA and ALBERTO G. ROMULO, as Members of the Senate and as
taxpayers, petitioners,
vs.
HON. TEOFISTO T. GUINGONA, JR., in his capacity as Executive Secretary, HON. SALVADOR
ENRIQUEZ, JR., in his capacity as Secretary of the Department of Budget and Management,
HON. CARIDAD VALDEHUESA, in her capacity as National Treasurer, and THE COMMISSION
ON AUDIT, respondents.
Ramon R. Gonzales for petitioners in G.R. No. 113105.
Eddie Tamondong for petitioners in G.R. Nos. 113766 & 113888.
Roco, Buñag, Kapunan, Migallos & Jardeleza for petitioners Raul S. Roco, Neptali A. Gonzales
and Edgardo Angara.
Ceferino Padua Law Office fro intervenor Lawyers Against Monopoly and Poverty (Lamp).
QUIASON, J.:
Once again this Court is called upon to rule on the conflicting claims of authority between the
Legislative and the Executive in the clash of the powers of the purse and the sword. Providing the
focus for the contest between the President and the Congress over control of the national budget
are the four cases at bench. Judicial intervention is being sought by a group of concerned
taxpayers on the claim that Congress and the President have impermissibly exceeded their
respective authorities, and by several Senators on the claim that the President has committed
grave abuse of discretion or acted without jurisdiction in the exercise of his veto power.
I Locus Standi
House Bill No. 10900, the General Appropriation Bill of 1994 (GAB of 1994), was passed and
approved by both houses of Congress on December 17, 1993. As passed, it imposed conditions
and limitations on certain items of appropriations in the proposed budget previously submitted by
the President. It also authorized members of Congress to propose and identify projects in the
"pork barrels" allotted to them and to realign their respective operating budgets.
Pursuant to the procedure on the passage and enactment of bills as prescribed by the
Constitution, Congress presented the said bill to the President for consideration and approval.
On December 30, 1993, the President signed the bill into law, and declared the same to have
become Republic Act No. 7663, entitled "AN ACT APPROPRIATING FUNDS FOR THE
OPERATION OF THE GOVERNMENT OF THE PHILIPPINES FROM JANUARY ONE TO
DECEMBER THIRTY ONE, NINETEEN HUNDRED AND NINETY-FOUR, AND FOR OTHER
PURPOSES" (GAA of 1994). On the same day, the President delivered his Presidential Veto
Message, specifying the provisions of the bill he vetoed and on which he imposed certain
conditions.
No step was taken in either House of Congress to override the vetoes.
In G.R. No. 113105, the Philippine Constitution Association, Exequiel B. Garcia and Ramon A.
Gonzales as taxpayers, prayed for a writ of prohibition to declare as unconstitutional and void: (a)
Article XLI on the Countrywide Development Fund, the special provision in Article I entitled
Realignment of Allocation for Operational Expenses, and Article XLVIII on the Appropriation for
Debt Service or the amount appropriated under said Article XLVIII in excess of the P37.9 Billion
allocated for the Department of Education, Culture and Sports; and (b) the veto of the President of
the Special Provision of
Article XLVIII of the GAA of 1994 (Rollo, pp. 88-90, 104-105)
In G.R. No. 113174, sixteen members of the Senate led by Senate President Edgardo J. Angara,
Senator Neptali A. Gonzales, the Chairman of the Committee on Finance, and Senator Raul S.
Roco, sought the issuance of the writs of certiorari, prohibition and mandamus against the
Executive Secretary, the Secretary of the Department of Budget and Management, and the
National Treasurer.
Suing as members of the Senate and taxpayers, petitioners question: (1) the constitutionality of
the conditions imposed by the President in the items of the GAA of 1994: (a) for the Supreme
Court, (b) Commission on Audit (COA), (c) Ombudsman, (d) Commission on Human Rights
(CHR), (e) Citizen Armed Forces Geographical Units (CAFGU'S) and (f) State Universities and
Colleges (SUC's); and (2) the constitutionality of the veto of the special provision in the
appropriation for debt service.
In G.R. No. 113766, Senators Alberto G. Romulo and Wigberto Tañada (a co-petitioner in G.R.
No. 113174), together with the Freedom from Debt Coalition, a non-stock domestic corporation,
sought the issuance of the writs of prohibition and mandamus against the Executive Secretary, the
Secretary of the Department of Budget and Management, the National Treasurer, and the COA.
Petitioners Tañada and Romulo sued as members of the Philippine Senate and taxpayers, while
petitioner Freedom from Debt Coalition sued as a taxpayer. They challenge the constitutionality of
the Presidential veto of the special provision in the appropriations for debt service and the
automatic appropriation of funds therefor.
In G.R. No. 11388, Senators Tañada and Romulo sought the issuance of the writs of prohibition
and mandamus against the same respondents in G.R. No. 113766. In this petition, petitioners
contest the constitutionality of: (1) the veto on four special provision added to items in the GAA of
1994 for the Armed Forces of the Philippines (AFP) and the Department of Public Works and
Highways (DPWH); and (2) the conditions imposed by the President in the implementation of
certain appropriations for the CAFGU's, the DPWH, and the National Housing Authority (NHA).
Petitioners also sought the issuance of temporary restraining orders to enjoin respondents
Secretary of Budget and Management, National Treasurer and COA from enforcing the
questioned provisions of the GAA of 1994, but the Court declined to grant said provisional reliefs
on the time- honored principle of according the presumption of validity to statutes and the
presumption of regularity to official acts.
In view of the importance and novelty of most of the issues raised in the four petitions, the Court
invited former Chief Justice Enrique M. Fernando and former Associate Justice Irene Cortes to
submit their respective memoranda as Amicus curiae, which they graciously did.
II
When issues of constitutionality are raised, the Court can exercise its power of judicial review only
if the following requisites are compresent: (1) the existence of an actual and appropriate case; (2)
a personal and substantial interest of the party raising the constitutional question; (3) the exercise
of judicial review is pleaded at the earliest opportunity; and (4) the constitutional question is the lis
mota of the case (Luz Farms v. Secretary of the Department of Agrarian Reform, 192 SCRA 51
[1990]; Dumlao v. Commission on Elections, 95 SCRA 392 [1980]; People v. Vera, 65 Phil. 56
[1937]).
While the Solicitor General did not question the locus standi of petitioners in G.R. No. 113105, he
claimed that the remedy of the Senators in the other petitions is political (i.e., to override the
vetoes) in effect saying that they do not have the requisite legal standing to bring the suits.
The legal standing of the Senate, as an institution, was recognized in Gonzales v. Macaraig, Jr.,
191 SCRA 452 (1990). In said case, 23 Senators, comprising the entire membership of the Upper
House of Congress, filed a petition to nullify the presidential veto of Section 55 of the GAA of
1989. The filing of the suit was authorized by Senate Resolution No. 381, adopted on February 2,
1989, and which reads as follows:
Authorizing and Directing the Committee on Finance to Bring in the Name of the Senate of the
Philippines the Proper Suit with the Supreme Court of the Philippines contesting the
Constitutionality of the Veto by the President of Special and General Provisions, particularly
Section 55, of the General Appropriation Bill of 1989 (H.B. No. 19186) and For Other Purposes.
In the United States, the legal standing of a House of Congress to sue has been recognized
(United States v. American Tel. & Tel. Co., 551 F. 2d 384, 391 [1976]; Notes: Congressional
Access To The Federal Courts, 90 Harvard Law Review 1632 [1977]).
While the petition in G.R. No. 113174 was filed by 16 Senators, including the Senate President
and the Chairman of the Committee on Finance, the suit was not authorized by the Senate itself.
Likewise, the petitions in
G.R. Nos. 113766 and 113888 were filed without an enabling resolution for the purpose.
Therefore, the question of the legal standing of petitioners in the three cases becomes a
preliminary issue before this Court can inquire into the validity of the presidential veto and the
conditions for the implementation of some items in the GAA of 1994.
238
We rule that a member of the Senate, and of the House of Representatives for that matter, has the
legal standing to question the validity of a presidential veto or a condition imposed on an item in
an appropriation bill.
Where the veto is claimed to have been made without or in excess of the authority vested on the
President by the Constitution, the issue of an impermissible intrusion of the Executive into the
domain of the Legislature arises (Notes: Congressional Standing To Challenge Executive Action,
122 University of Pennsylvania Law Review 1366 [1974]).
To the extent the power 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 (Coleman v.
Miller, 307 U.S. 433 [1939]; Holtzman v. Schlesinger, 484 F. 2d 1307 [1973]).
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 (Kennedy v.
Jones, 412 F. Supp. 353 [1976]). In such a case, any member of Congress can have a resort to
the courts.
Former Chief Justice Enrique M. Fernando, as Amicus Curiae, noted:
This is, then, the clearest case of the Senate as a whole or individual Senators as such having a
substantial interest in the question at issue. It could likewise be said that there was the requisite
injury to their rights as Senators. It would then be futile to raise any locus standi issue. Any
intrusion into the domain appertaining to the Senate is to be resisted. Similarly, if the situation
were reversed, and it is the Executive Branch that could allege a transgression, its officials could
likewise file the corresponding action. What cannot be denied is that a Senator has standing to
maintain inviolate the prerogatives, powers and privileges vested by the Constitution in his office
(Memorandum, p. 14).
It is true that the Constitution provides a mechanism for overriding a veto (Art. VI, Sec. 27 [1]).
Said remedy, however, is available only when the presidential veto is based on policy or political
considerations but not when the veto is claimed to be ultra vires. In the latter case, it becomes the
duty of the Court to draw the dividing line where the exercise of executive power ends and the
bounds of legislative jurisdiction begin.
III
G.R. No. 113105
1. Countrywide Development Fund
Article XLI of the GAA of 1994 sets up a Countrywide Development Fund of P2,977,000,000.00 to
"be used for infrastructure, purchase of ambulances and computers and other priority projects and
activities and credit facilities to qualified beneficiaries." Said Article provides:
COUNTRYWIDE DEVELOPMENT FUND
For Fund requirements of countrywide
development projects P 2,977,000,000
———————
New Appropriations, by Purpose
Current Operating Expenditures
A. PURPOSE
Personal Maintenance Capital Total
Services and Other Outlays
Operating
Expenses
1. For Countrywide
Developments Projects P250,000,000 P2,727,000,000 P2,977,000,000
TOTAL NEW
APPROPRIATIONS P250,000,000 P2,727,000,000 P2,977,000,000
Special Provisions
1. Use and Release of Funds. The amount herein appropriated shall be used for infrastructure,
purchase of ambulances and computers and other priority projects and activities, and credit
facilities to qualified beneficiaries as proposed and identified by officials concerned according to
the following allocations: Representatives, P12,500,000 each; Senators, P18,000,000 each; Vice-
President, P20,000,000; PROVIDED, That, the said credit facilities shall be constituted as a
revolving fund to be administered by a government financial institution (GFI) as a trust fund for
lending operations. Prior years releases to local government units and national government
agencies for this purpose shall be turned over to the government financial institution which shall
be the sole administrator of credit facilities released from this fund.
The fund shall be automatically released quarterly by way of Advice of Allotments and Notice of
Cash Allocation directly to the assigned implementing agency not later than five (5) days after the
beginning of each quarter upon submission of the list of projects and activities by the officials
concerned.
2. Submission of Quarterly Reports. The Department of Budget and Management shall submit
within thirty (30) days after the end of each quarter a report to the Senate Committee on Finance
and the House Committee on Appropriations on the releases made from this Fund. The report
shall include the listing of the projects, locations, implementing agencies and the endorsing
officials (GAA of 1994, p. 1245).
Petitioners claim that the power given to the members of Congress to propose and identify the
projects and activities to be funded by the Countrywide Development Fund is an encroachment by
the legislature on executive power, since said power in an appropriation act in implementation of a
law. They argue that the proposal and identification of the projects do not involve the making of
laws or the repeal and amendment thereof, the only function given to the Congress by the
Constitution (Rollo, pp. 78- 86).
Under the Constitution, the spending power called by James Madison as "the power of the purse,"
belongs to Congress, subject only to the veto power of the President. The President may propose
the budget, but still the final say on the matter of appropriations is lodged in the Congress.
The power of appropriation carries with it the power to specify the project or activity to be funded
under the appropriation law. It can be as detailed and as broad as Congress wants it to be.
The Countrywide Development Fund is explicit that it shall be used "for infrastructure, purchase of
ambulances and computers and other priority projects and activities and credit facilities to qualified
beneficiaries . . ." It was Congress itself that determined the purposes for the appropriation.
Executive function under the Countrywide Development Fund involves implementation of the
priority projects specified in the law.
The authority given to the members of Congress is only to propose and identify projects to be
implemented by the President. Under Article XLI of the GAA of 1994, the President must perforce
examine whether the proposals submitted by the members of Congress fall within the specific
items of expenditures for which the Fund was set up, and if qualified, he next determines whether
they are in line with other projects planned for the locality. Thereafter, if the proposed projects
qualify for funding under the Funds, it is the President who shall implement them. In short, the
proposals and identifications made by the members of Congress are merely recommendatory.
The procedure of proposing and identifying by members of Congress of particular projects or
activities under Article XLI of the GAA of 1994 is imaginative as it is innovative.
The Constitution is a framework of a workable government and its interpretation must take into
account the complexities, realities and politics attendant to the operation of the political branches
of government. Prior to the GAA of 1991, there was an uneven allocation of appropriations for the
constituents of the members of Congress, with the members close to the Congressional
leadership or who hold cards for "horse-trading," getting more than their less favored colleagues.
The members of Congress also had to reckon with an unsympathetic President, who could
exercise his veto power to cancel from the appropriation bill a pet project of a Representative or
Senator.
The Countrywide Development Fund attempts to make equal the unequal. It is also a recognition
that individual members of Congress, far more than the President and their congressional
colleagues are likely to be knowledgeable about the needs of their respective constituents and the
priority to be given each project.
2. Realignment of Operating Expenses
Under the GAA of 1994, the appropriation for the Senate is P472,000,000.00 of which
P464,447,000.00 is appropriated for current operating expenditures, while the appropriation for the
House of Representatives is P1,171,924,000.00 of which P1,165,297,000.00 is appropriated for
current operating expenditures (GAA of 1994, pp. 2, 4, 9, 12).
The 1994 operating expenditures for the Senate are as follows:
Personal Services
Salaries, Permanent 153,347
Salaries/Wage, Contractual/Emergency 6,870
————
239
Total Salaries and Wages 160,217 Personnel Economic Relief
======= Allowance 21,150
Other Compensation Additional Compensation of P500 under A.O. 53
Others 106,140
Step Increments 1,073 ————
Honoraria and Commutable Allowances 3,731 Total Other Compensation 202,863
Compensation Insurance Premiums 1,579 ————
Pag-I.B.I.G. Contributions 1,184 01 Total Personal Services 608,063
Medicare Premiums 888 =======
Bonus and Cash Gift 14,791 Maintenance and Other Operating Expenses
Terminal Leave Benefits 2,000 02 Traveling Expenses 139,611
Personnel Economic Relief Allowance 10,266 03 Communication Services 22,514
Additional Compensation of P500 under A.O. 53 11,130 04 Repair and Maintenance of Government Facilities 5,116
Others 57,173 05 Repair and Maintenance of Government Vehicles 1,863
———— 06 Transportation Services 178
Total Other Compensation 103,815 07 Supplies and Materials 55,248
———— 10 Grants/Subsidies/Contributions 940
01 Total Personal Services 264,032 14 Water/Illumination and Power 14,458
======= 15 Social Security Benefits and Other Claims 325
Maintenance and Other Operating Expenses 17 Training and Seminars Expenses 7,236
02 Traveling Expenses 32,841 18 Extraordinary and Miscellaneous Expenses 14,474
03 Communication Services 7,666 20 Anti-Insurgency/Contingency Emergency Expenses 9,400
04 Repair and Maintenance of Government Facilities 1,220 23 Advertising and Publication 242
05 Repair and Maintenance of Government Vehicles 318 24 Fidelity Bonds and Insurance Premiums 1,420
06 Transportation Services 128 29 Other Services 284,209
07 Supplies and Materials 20,189 ————
08 Rents 24,584 Total Maintenance and Other Operating Expenditures 557,234
14 Water/Illumination and Power 6,561 ————
15 Social Security Benefits and Other Claims 3,270 Total Current Operating Expenditures 1,165,297
17 Training and Seminars Expenses 2,225 =======
18 Extraordinary and Miscellaneous Expenses 9,360 (GAA of 1994, pp. 11-12)
23 Advertising and Publication The Special Provision Applicable to the Congress of the Philippines provides:
24 Fidelity Bonds and Insurance Premiums 1,325 4. Realignment of Allocation for Operational Expenses. A member of Congress may realign his
29 Other Services 89,778 allocation for operational expenses to any other expenses category provide the total of said
———— allocation is not exceeded. (GAA of 1994, p. 14).
Total Maintenance and Other Operating Expenditures 200,415 The appropriation for operating expenditures for each House is further divided into expenditures
———— for salaries, personal services, other compensation benefits, maintenance expenses and other
Total Current Operating Expenditures 464,447 operating expenses. In turn, each member of Congress is allotted for his own operating
======= expenditure a proportionate share of the appropriation for the House to which he belongs. If he
(GAA of 1994, pp. 3-4) does not spend for one items of expense, the provision in question allows him to transfer his
The 1994 operating expenditures for the House of Representatives are as follows: allocation in said item to another item of expense.
Personal Services Petitioners assail the special provision allowing a member of Congress to realign his allocation for
Salaries, Permanent 261,557 operational expenses to any other expense category (Rollo, pp. 82-92), claiming that this practice
Salaries/Wages, Contractual/Emergency 143,643 is prohibited by Section 25(5), Article VI of the Constitution. Said section provides:
———— No law shall be passed authorizing any transfer of appropriations: however, the President, the
Total Salaries and Wages 405,200 President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the
======= Supreme Court, and the heads of Constitutional Commissions may, by law, be authorized to
Other Compensation augment any item in the general appropriations law for their respective offices from savings in
Step Increments 4,312 other items of their respective appropriations.
Honoraria and Commutable The proviso of said Article of the Constitution grants the President of the Senate and the Speaker
Allowances 4,764 of the House of Representatives the power to augment items in an appropriation act for their
Compensation Insurance respective offices from savings in other items of their appropriations, whenever there is a law
Premiums 1,159 authorizing such augmentation.
Pag-I.B.I.G. Contributions 5,231 The special provision on realignment of the operating expenses of members of Congress is
Medicare Premiums 2,281 authorized by Section 16 of the General Provisions of the GAA of 1994, which provides:
Expenditure Components. Except by act of the Congress of the Philippines, no change or
Bonus and Cash Gift 35,669 modification shall be made in the expenditure items authorized in this Act and other appropriation
Terminal Leave Benefits 29 laws unless in cases

240
of augmentations from savings in appropriations as authorized under Section 25(5) of Article VI of
the Constitution (GAA of 1994, p. 1273).
Petitioners argue that the Senate President and the Speaker of the House of Representatives, but
not the individual members of Congress are the ones authorized to realign the savings as
appropriated.
Under the Special Provisions applicable to the Congress of the Philippines, the members of
Congress only determine the necessity of the realignment of the savings in the allotments for their
operating expenses. They are in the best position to do so because they are the ones who know
whether there are savings available in some items and whether there are deficiencies in other
items of their operating expenses that need augmentation. However, it is the Senate President
and the Speaker of the House of Representatives, as the case may be, who shall approve the
realignment. Before giving their stamp of approval, these two officials will have to see to it that:
(1) The funds to be realigned or transferred are actually savings in the items of expenditures from
which the same are to be taken; and
(2) The transfer or realignment is for the purposes of augmenting the items of expenditure to
which said transfer or realignment is to be made.
3. Highest Priority for Debt Service
While Congress appropriated P86,323,438,000.00 for debt service (Article XLVII of the GAA of
1994), it appropriated only P37,780,450,000.00 for the Department of Education Culture and
Sports. Petitioners urged that Congress cannot give debt service the highest priority in the GAA of
1994 (Rollo, pp. 93-94) because under the Constitution it should be education that is entitled to
the highest funding. They invoke Section 5(5), Article XIV thereof, which provides:
(5) The State shall assign the highest budgetary priority to education and ensure that teaching will
attract and retain its rightful share of the best available talents through adequate remuneration and
other means of job satisfaction and fulfillment.
This issue was raised in Guingona, Jr. v. Carague, 196 SCRA 221 (1991), where this Court held
that Section 5(5), Article XIV of the Constitution, is merely directory, thus:
While it is true that under Section 5(5), Article XIV of the Constitution, Congress is mandated to
"assign the highest budgetary priority to education" in order to "insure that teaching will attract and
retain its rightful share of the best available talents through adequate remuneration and other
means of job satisfaction and fulfillment," it does not thereby follow that the hands of Congress are
so hamstrung as to deprive it the power to respond to the imperatives of the national interest and
for the attainment of other state policies or objectives.
As aptly observed by respondents, since 1985, the budget for education has tripled to upgrade
and improve the facility of the public school system. The compensation of teachers has been
doubled. The amount of P29,740,611,000.00 set aside for the Department of Education, Culture
and Sports under the General Appropriations Act (R.A. No. 6381), is the highest budgetary
allocation among all department budgets. This is a clear compliance with the aforesaid
constitutional mandate according highest priority to education.
Having faithfully complied therewith, Congress is certainly not without any power, guided only by
its good judgment, to provide an appropriation, that can reasonably service our enormous debt,
the greater portion of which was inherited from the previous administration. It is not only a matter
of honor and to protect the credit standing of the country. More especially, the very survival of our
economy is at stake. Thus, if in the process Congress appropriated an amount for debt service
bigger than the share allocated to education, the Court finds and so holds that said appropriation
cannot be thereby assailed as unconstitutional.
G.R. No. 113105
G.R. No. 113174
Veto of Provision on Debt Ceiling
The Congress added a Special Provision to Article XLVIII (Appropriations for Debt Service) of the
GAA of 1994 which provides:
Special Provisions
1. Use of the Fund. The appropriation authorized herein shall be used for payment of principal and
interest of foreign and domestic indebtedness; PROVIDED, That any payment in excess of the
amount herein appropriated shall be subject to the approval of the President of the Philippines
with the concurrence of the Congress of the Philippines; PROVIDED, FURTHER, That in no case
shall this fund be used to pay for the liabilities of the Central Bank Board of Liquidators.
2. Reporting Requirement. The Bangko Sentral ng Pilipinas and the Department of Finance shall
submit a quarterly report of actual foreign and domestic debt service payments to the House
Committee on Appropriations and Senate Finance Committee within one (1) month after each
quarter (GAA of 1944, pp. 1266).
The President vetoed the first Special Provision, without vetoing the P86,323,438,000.00
appropriation for debt service in said Article. According to the President's Veto Message:
IV. APPROPRIATIONS FOR DEBT SERVICE
I would like to emphasize that I concur fully with the desire of Congress to reduce the debt burden
by decreasing the appropriation for debt service as well as the inclusion of the Special Provision
quoted below. Nevertheless, I believe that this debt reduction scheme cannot be validly done
through the 1994 GAA. This must be addressed by revising our debt policy by way of innovative
and comprehensive debt reduction programs conceptualized within the ambit of the Medium-Term
Philippine Development Plan.
Appropriations for payment of public debt, whether foreign or domestic, are automatically
appropriated pursuant to the Foreign Borrowing Act and Section 31 of P.D. No. 1177 as reiterated
under Section 26, Chapter 4, Book VI of E.O. No. 292, the Administrative Code of 1987. I wish to
emphasize that the constitutionality of such automatic provisions on debt servicing has been
upheld by the Supreme Court in the case of "Teofisto T. Guingona, Jr., and Aquilino Q. Pimentel,
Jr. v. Hon. Guillermo N. Carague, in his capacity as Secretary of Budget and Management, et al.,"
G.R. No. 94571, dated April 22, 1991.
I am, therefore vetoing the following special provision for the reason that the GAA is not the
appropriate legislative measure to amend the provisions of the Foreign Borrowing Act, P.D. No.
1177 and E.O. No. 292:
Use of the Fund. The appropriation authorized herein shall be used for payment of principal and
interest of foreign and domestic indebtedness: PROVIDED, That any payment in excess of the
amount herein appropriated shall be subject to the approval of the President of the Philippines
with the concurrence of the Congress of the Philippines: PROVIDED, FURTHER, That in no case
shall this fund be used to pay for the liabilities of the Central Bank Board of Liquidators (GAA of
1994, p. 1290).
Petitioners claim that the President cannot veto the Special Provision on the appropriation for debt
service without vetoing the entire amount of P86,323,438.00 for said purpose (Rollo, G.R. No.
113105, pp. 93-98; Rollo, G.R. No. 113174, pp. 16-18). The Solicitor General counterposed that
the Special Provision did not relate to the item of appropriation for debt service and could
therefore be the subject of an item veto (Rollo, G.R. No. 113105, pp. 54-60; Rollo, G.R. No.
113174, pp. 72-82).
This issue is a mere rehash of the one put to rest in Gonzales v. Macaraig, Jr., 191 SCRA 452
(1990). In that case, the issue was stated by the Court, thus:
The fundamental issue raised is whether or not the veto by the President of Section 55 of the 1989
Appropriations Bill (Section 55
FY '89), and subsequently of its counterpart Section 16 of the 1990 Appropriations Bill (Section 16
FY '90), is unconstitutional and without effect.
The Court re-stated the issue, just so there would not be any misunderstanding about it, thus:
The focal issue for resolution is whether or not the President exceeded the item-veto power
accorded by the Constitution. Or differently put, has the President the power to veto "provisions" of
an Appropriations Bill?
The bases of the petition in Gonzales, which are similar to those invoked in the present case, are
stated as follows:
In essence, petitioners' cause is anchored on the following grounds: (1) the President's line-veto
power as regards appropriation bills is limited to item/s and does not cover provision/s; therefore,
she exceeded her authority when she vetoed Section 55 (FY '89) and Section 16 (FY '90) which
are provisions; (2) when the President objects to a provision of an appropriation bill, she cannot
exercise the item-veto power but should veto the entire bill; (3) the item-veto power does not carry
with it the power to strike out conditions or restrictions for that would be legislation, in violation of
the doctrine of separation of powers; and (4) the power of augmentation in Article VI, Section 25
[5] of the 1987 Constitution, has to be provided for by law and, therefore, Congress is also vested
with the prerogative to impose restrictions on the exercise of that power.
The restrictive interpretation urged by petitioners that the President may not veto a provision
without vetoing the entire bill not only disregards the basic principle that a distinct and severable
241
part of a bill may be the subject of a separate veto but also overlooks the Constitutional mandate
that any provision in the general appropriations bill shall relate specifically to some particular
appropriation therein and that any such provision shall be limited in its operation to the
appropriation to which it relates (1987 Constitution, Article VI, Section 25 [2]). In other words, in
the true sense of the term, a provision in an Appropriations Bill is limited in its operation to some
particular appropriation to which it relates, and does not relate to the entire bill.
The Court went one step further and ruled that even assuming arguendo that "provisions" are
beyond the executive power to veto, and Section 55
(FY '89) and Section 16 (FY '90) were not "provisions" in the budgetary sense of the term, they are
"inappropriate provisions" that should be treated as "items" for the purpose of the President's veto
power.
The Court, citing Henry v. Edwards, La., 346 So. 2d 153 (1977), said that Congress cannot
include in a general appropriations bill matters that should be more properly enacted in separate
legislation, and if it does that, the inappropriate provisions inserted by it must be treated as "item",
which can be vetoed by the President in the exercise of his item-veto power.
It is readily apparent that the Special Provision applicable to the appropriation for debt service
insofar as it refers to funds in excess of the amount appropriated in the bill, is an "inappropriate"
provision referring to funds other than the P86,323,438,000.00 appropriated in the General
Appropriations Act of 1991.
Likewise the vetoed provision is clearly an attempt to repeal Section 31 of P.D. No. 1177 (Foreign
Borrowing Act) and E.O. No. 292, and to reverse the debt payment policy. As held by the Court in
Gonzales, the repeal of these laws should be done in a separate law, not in the appropriations
law.
The Court will indulge every intendment in favor of the constitutionality of a veto, the same as it
will presume the constitutionality of an act of Congress (Texas Co. v. State, 254 P. 1060; 31 Ariz,
485, 53 A.L.R. 258 [1927]).
The veto power, while exercisable by the President, is actually a part of the legislative process
(Memorandum of Justice Irene Cortes as Amicus Curiae, pp. 3-7). That is why it is found in Article
VI on the Legislative Department rather than in Article VII on the Executive Department in the
Constitution. There is, therefore, sound basis to indulge in the presumption of validity of a veto.
The burden shifts on those questioning the validity thereof to show that its use is a violation of the
Constitution.
Under his general veto power, the President has to veto the entire bill, not merely parts thereof
(1987 Constitution, Art. VI, Sec. 27[1]). The exception to the general veto power is the power
given to the President to veto any particular item or items in a general appropriations bill (1987
Constitution, Art. VI,
Sec. 27[2]). In so doing, the President must veto the entire item.
A general appropriations bill is a special type of legislation, whose content is limited to specified
sums of money dedicated to a specific purpose or a separate fiscal unit (Beckman, The Item Veto
Power of the Executive,
31 Temple Law Quarterly 27 [1957]).
The item veto was first introduced by the Organic Act of the Philippines passed by the U.S.
Congress on August 29, 1916. The concept was adopted from some State Constitutions.
Cognizant of the legislative practice of inserting provisions, including conditions, restrictions and
limitations, to items in appropriations bills, the Constitutional Convention added the following
sentence to Section 20(2), Article VI of the 1935 Constitution:
. . . When a provision of an appropriation bill affect one or more items of the same, the President
cannot veto the provision without at the same time vetoing the particular item or items to which it
relates . . . .
In short, under the 1935 Constitution, the President was empowered to veto separately not only
items in an appropriations bill but also "provisions".
While the 1987 Constitution did not retain the aforementioned sentence added to Section 11(2) of
Article VI of the 1935 Constitution, it included the following provision:
No provision or enactment shall be embraced in the general appropriations bill unless it relates
specifically to some particular appropriation therein. Any such provision or enactment shall be
limited in its operation to the appropriation to which it relates (Art. VI, Sec. 25[2]).
In Gonzales, we made it clear that the omission of that sentence of Section 16(2) of the 1935
Constitution in the 1987 Constitution should not be interpreted to mean the disallowance of the
power of the President to veto a "provision".
As the Constitution is explicit that the provision which Congress can include in an appropriations
bill must "relate specifically to some particular appropriation therein" and "be limited in its
operation to the appropriation to which it relates," it follows that any provision which does not
relate to any particular item, or which extends in its operation beyond an item of appropriation, is
considered "an inappropriate provision" which can be vetoed separately from an item. Also to be
included in the category of "inappropriate provisions" are unconstitutional provisions and
provisions which are intended to amend other laws, because clearly these kind of laws have no
place in an appropriations bill. These are matters of general legislation more appropriately dealt
with in separate enactments. Former Justice Irene Cortes, as Amicus Curiae, commented that
Congress cannot by law establish conditions for and regulate the exercise of powers of the
President given by the Constitution for that would be an unconstitutional intrusion into executive
prerogative.
The doctrine of "inappropriate provision" was well elucidated in Henry v. Edwards, supra., thus:
Just as the President may not use his item-veto to usurp constitutional powers conferred on the
legislature, neither can the legislature deprive the Governor of the constitutional powers conferred
on him as chief executive officer of the state by including in a general appropriation bill matters
more properly enacted in separate legislation. The Governor's constitutional power to veto bills of
general legislation . . . cannot be abridged by the careful placement of such measures in a general
appropriation bill, thereby forcing the Governor to choose between approving unacceptable
substantive legislation or vetoing "items" of expenditures essential to the operation of government.
The legislature cannot by location of a bill give it immunity from executive veto. Nor can it
circumvent the Governor's veto power over substantive legislation by artfully drafting general law
measures so that they appear to be true conditions or limitations on an item of appropriation.
Otherwise, the legislature would be permitted to impair the constitutional responsibilities and
functions of a co-equal branch of government in contravention of the separation of powers
doctrine . . . We are no more willing to allow the legislature to use its appropriation power to
infringe on the Governor's constitutional right to veto matters of substantive legislation than we are
to allow the Governor to encroach on the Constitutional powers of the legislature. In order to avoid
this result, we hold that, when the legislature inserts inappropriate provisions in a general
appropriation bill, such provisions must be treated as "items" for purposes of the Governor's item
veto power over general appropriation bills.
xxx xxx xxx
. . . Legislative control cannot be exercised in such a manner as to encumber the general
appropriation bill with veto-proof "logrolling measures", special interest provisions which could not
succeed if separately enacted, or "riders", substantive pieces of legislation incorporated in a bill to
insure passage without veto . . . (Emphasis supplied).
Petitioners contend that granting arguendo that the veto of the Special Provision on the ceiling for
debt payment is valid, the President cannot automatically appropriate funds for debt payment
without complying with the conditions for automatic appropriation under the provisions of R.A. No.
4860 as amended by P.D. No. 81 and the provisions of P.D. No. 1177 as amended by the
Administrative Code of 1987 and P.D. No. 1967 (Rollo, G.R. No. 113766, pp. 9-15).
Petitioners cannot anticipate that the President will not faithfully execute the laws. The writ of
prohibition will not issue on the fear that official actions will be done in contravention of the laws.
The President vetoed the entire paragraph one of the Special Provision of the item on debt
service, including the provisions that the appropriation authorized in said item "shall be used for
payment of the principal and interest of foreign and domestic indebtedness" and that "in no case
shall this fund be used to pay for the liabilities of the Central Bank Board of Liquidators." These
provisions are germane to and have a direct connection with the item on debt service. Inherent in
the power of appropriation is the power to specify how the money shall be spent (Henry v.
Edwards, LA, 346 So., 2d., 153). The said provisos, being appropriate provisions, cannot be
vetoed separately. Hence the item veto of said provisions is void.
We reiterate, in order to obviate any misunderstanding, that we are sustaining the veto of the
Special Provision of the item on debt service only with respect to the proviso therein requiring that
"any payment in excess of the amount herein, appropriated shall be subject to the approval of the
President of the Philippines with the concurrence of the Congress of the Philippines . . ."
242
G.R. NO. 113174
G.R. NO. 113766
G.R. NO. 11388
1. Veto of provisions for revolving funds of SUC's.
In the appropriation for State Universities and Colleges (SUC's), the President vetoed special
provisions which authorize the use of income and the creation, operation and maintenance of
revolving funds. The Special Provisions vetoed are the following:
(H. 7) West Visayas State University
Equal Sharing of Income. Income earned by the University subject to Section 13 of the special
provisions applicable to all State Universities and Colleges shall be equally shared by the
University and the University Hospital (GAA of 1994, p. 395).
xxx xxx xxx
(J. 3) Leyte State College
Revolving Fund for the Operation of LSC House and Human Resources Development Center
(HRDC). The income of Leyte State College derived from the operation of its LSC House and
HRDC shall be constituted into a Revolving Fund to be deposited in an authorized government
depository bank for the operational expenses of these projects/services. The net income of the
Revolving Fund at the end of the year shall be remitted to the National Treasury and shall accrue
to the General Fund. The implementing guidelines shall be issued by the Department of Budget
and Management (GAA of 1994, p. 415).
The vetoed Special Provisions applicable to all SUC's are the following:
12. Use of Income from Extension Services. State Universities and Colleges are authorized to use
their income from their extension services. Subject to the approval of the Board of Regents and
the approval of a special budget pursuant to Sec. 35, Chapter 5, Book VI of E.O.
No. 292, such income shall be utilized solely for faculty development, instructional materials and
work study program (GAA of 1994, p. 490).
xxx xxx xxx
13. Income of State Universities and Colleges. The income of State Universities and Colleges
derived from tuition fees and other sources as may be imposed by governing boards other than
those accruing to revolving funds created under LOI Nos. 872 and 1026 and those authorized to
be recorded as trust receipts pursuant to Section 40, Chapter 5, Book VI of E.O. No. 292 shall be
deposited with the National Treasury and recorded as a Special Account in the General Fund
pursuant to P.D. No. 1234 and P.D. No. 1437 for the use of the institution, subject to Section 35,
Chapter 5, Book VI of E.O. No. 292L PROVIDED, That disbursements from the Special Account
shall not exceed the amount actually earned and deposited: PROVIDED, FURTHER, That a cash
advance on such income may be allowed State half of income actually realized during the
preceding year and this cash advance shall be charged against income actually earned during the
budget year: AND PROVIDED, FINALLY, That in no case shall such funds be used to create
positions, nor for payment of salaries, wages or allowances, except as may be specifically
approved by the Department of Budge and Management for income-producing activities, or to
purchase equipment or books, without the prior approval of the President of the Philippines
pursuant to Letter of Implementation No. 29.
All collections of the State Universities and Colleges for fees, charges and receipts intended for
private recipient units, including private foundations affiliated with these institutions shall be duly
acknowledged with official receipts and deposited as a trust receipt before said income shall be
subject to Section 35, Chapter 5, Book VI of E.O. No. 292
(GAA of 1994, p. 490).
The President gave his reason for the veto thus:
Pursuant to Section 65 of the Government Auditing Code of the Philippines, Section 44, Chapter
5, Book VI of E.O. No. 292, s. 1987 and Section 22, Article VII of the Constitution, all income
earned by all Government offices and agencies shall accrue to the General Fund of the
Government in line with the One Fund Policy enunciated by Section 29 (1), Article VI and Section
22, Article VII of the Constitution. Likewise, the creation and establishment of revolving funds shall
be authorized by substantive law pursuant to Section 66 of the Government Auditing Code of the
Philippines and Section 45, Chapter 5, Book VI of E.O. No. 292.
Notwithstanding the aforementioned provisions of the Constitution and existing law, I have noted
the proliferation of special provisions authorizing the use of agency income as well as the creation,
operation and maintenance of revolving funds.
I would like to underscore the facts that such income were already considered as integral part of
the revenue and financing sources of the National Expenditure Program which I previously
submitted to Congress. Hence, the grant of new special provisions authorizing the use of agency
income and the establishment of revolving funds over and above the agency appropriations
authorized in this Act shall effectively reduce the financing sources of the 1994 GAA and, at the
same time, increase the level of expenditures of some agencies beyond the well-coordinated,
rationalized levels for such agencies. This corresponding increases the overall deficit of the
National Government (Veto Message, p. 3).
Petitioners claim that the President acted with grave abuse of discretion when he disallowed by
his veto the "use of income" and the creation of "revolving fund" by the Western Visayas State
University and Leyte State Colleges when he allowed other government offices, like the National
Stud Farm, to use their income for their operating expenses (Rollo, G.R. No. 113174, pp. 15-16).
There was no undue discrimination when the President vetoed said special provisions while
allowing similar provisions in other government agencies. If some government agencies were
allowed to use their income and maintain a revolving fund for that purpose, it is because these
agencies have been enjoying such privilege before by virtue of the special laws authorizing such
practices as exceptions to the "one-fund policy" (e.g., R.A. No. 4618 for the National Stud Farm,
P.D. No. 902-A for the Securities and Exchange Commission; E.O. No. 359 for the Department of
Budget and Management's Procurement Service).
2. Veto of provision on 70% (administrative)/30% (contract) ratio for road maintenance.
In the appropriation for the Department of Public Works and Highways, the President vetoed the
second paragraph of Special Provision No. 2, specifying the 30% maximum ration of works to be
contracted for the maintenance of national roads and bridges. The said paragraph reads as
follows:
2. Release and Use of Road Maintenance Funds. Funds allotted for the maintenance and repair of
roads which are provided in this Act for the Department of Public Works and Highways shall be
released to the respective Engineering District, subject to such rules and regulations as may be
prescribed by the Department of Budget and Management. Maintenance funds for roads and
bridges shall be exempt from budgetary reserve.
Of the amount herein appropriated for the maintenance of national roads and bridges, a maximum
of thirty percent (30%) shall be contracted out in accordance with guidelines to be issued by the
Department of Public Works and Highways. The balance shall be used for maintenance by force
account.
Five percent (5%) of the total road maintenance fund appropriated herein to be applied across the
board to the allocation of each region shall be set aside for the maintenance of roads which may
be converted to or taken over as national roads during the current year and the same shall be
released to the central office of the said department for eventual
sub-allotment to the concerned region and district: PROVIDED, That any balance of the said five
percent (5%) shall be restored to the regions on a pro-rata basis for the maintenance of existing
national roads.
No retention or deduction as reserves or overhead expenses shall be made, except as authorized
by law or upon direction of the President
(GAA of 1994, pp. 785-786; Emphasis supplied).
The President gave the following reason for the veto:
While I am cognizant of the well-intended desire of Congress to impose certain restrictions
contained in some special provisions, I am equally aware that many programs, projects and
activities of agencies would require some degree of flexibility to ensure their successful
implementation and therefore risk their completion. Furthermore, not only could these restrictions
and limitations derail and impede program implementation but they may also result in a breach of
contractual obligations.
D.1.a. A study conducted by the Infrastructure Agencies show that for practical intent and
purposes, maintenance by contract could be undertaken to an optimum of seventy percent (70%)
and the remaining thirty percent (30%) by force account. Moreover, the policy of maximizing
implementation through contract maintenance is a covenant of the Road and Road Transport
Program Loan from the Asian Development Bank (ADB Loan No. 1047-PHI-1990) and Overseas
Economic Cooperation Fund (OECF Loan No. PH-C17-199). The same is a covenant under the
World Bank (IBRD) Loan for the Highway Management Project (IBRD Loan
No. PH-3430) obtained in 1992.
243
In the light of the foregoing and considering the policy of the government to encourage and
maximize private sector participation in the regular repair and maintenance of infrastructure
facilities, I am directly vetoing the underlined second paragraph of Special Provision No. 2 of the
Department of Public Works and Highways (Veto Message, p. 11).
The second paragraph of Special Provision No. 2 brings to fore the divergence in policy of
Congress and the President. While Congress expressly laid down the condition that only 30% of
the total appropriation for road maintenance should be contracted out, the President, on the basis
of a comprehensive study, believed that contracting out road maintenance projects at an option of
70% would be more efficient, economical and practical.
The Special Provision in question is not an inappropriate provision which can be the subject of a
veto. It is not alien to the appropriation for road maintenance, and on the other hand, it specified
how the said item shall be expended — 70% by administrative and 30% by contract.
The 1987 Constitution allows the addition by Congress of special provisions, conditions to items in
an expenditure bill, which cannot be vetoed separately from the items to which they relate so long
as they are "appropriate" in the budgetary sense (Art. VII, Sec. 25[2]).
The Solicitor General was hard put in justifying the veto of this special provision. He merely
argued that the provision is a complete turnabout from an entrenched practice of the government
to maximize contract maintenance (Rollo, G.R. No. 113888, pp. 85-86). That is not a ground to
veto a provision separate from the item to which it refers.
The veto of the second paragraph of Special Provision No. 2 of the item for the DPWH is therefore
unconstitutional.
3. Veto of provision on purchase of medicines by AFP.
In the appropriation for the Armed Forces of the Philippines (AFP), the President vetoed the
special provision on the purchase by the AFP of medicines in compliance with the Generics Drugs
Law (R.A. No. 6675). The vetoed provision reads:
12. Purchase of Medicines. The purchase of medicines by all Armed Forces of the Philippines
units, hospitals and clinics shall strictly comply with the formulary embodied in the National Drug
Policy of the Department of Health (GAA of 1994, p. 748).
According to the President, while it is desirable to subject the purchase of medicines to a standard
formulary, "it is believed more prudent to provide for a transition period for its adoption and smooth
implementation in the Armed Forces of the Philippines" (Veto Message, p. 12).
The Special Provision which requires that all purchases of medicines by the AFP should strictly
comply with the formulary embodied in the National Drug Policy of the Department of Health is an
"appropriate" provision. it is a mere advertence by Congress to the fact that there is an existing
law, the Generics Act of 1988, that requires "the extensive use of drugs with generic names
through a rational system of procurement and distribution." The President believes that it is more
prudent to provide for a transition period for the smooth implementation of the law in the case of
purchases by the Armed Forces of the Philippines, as implied by Section 11 (Education Drive) of
the law itself. This belief, however, cannot justify his veto of the provision on the purchase of
medicines by the AFP.
Being directly related to and inseparable from the appropriation item on purchases of medicines
by the AFP, the special provision cannot be vetoed by the President without also vetoing the said
item (Bolinao Electronics Corporation v. Valencia, 11 SCRA 486 [1964]).
4. Veto of provision on prior approval of Congress for purchase of military equipment.
In the appropriation for the modernization of the AFP, the President vetoed the underlined proviso
of Special Provision No. 2 on the "Use of Fund," which requires the prior approval of Congress for
the release of the corresponding modernization funds, as well as the entire Special Provisions
No. 3 on the "Specific Prohibition":
2. Use of the Fund. Of the amount herein appropriated, priority shall be given for the acquisition of
AFP assets necessary for protecting marine, mineral, forest and other resources within Philippine
territorial borders and its economic zone, detection, prevention or deterrence of air or surface
intrusions and to support diplomatic moves aimed at preserving national dignity, sovereignty and
patrimony: PROVIDED, That the said modernization fund shall not be released until a Table of
Organization and Equipment for FY 1994-2000 is submitted to and approved by Congress.
3. Specific Prohibition. The said Modernization Fund shall not be used for payment of six (6)
additional S-211 Trainer planes, 18 SF-260 Trainer planes and 150 armored personnel carriers
(GAA of 1994, p. 747).
As reason for the veto, the President stated that the said condition and prohibition violate the
Constitutional mandate of non-impairment of contractual obligations, and if allowed, "shall
effectively alter the original intent of the AFP Modernization Fund to cover all military equipment
deemed necessary to modernize the Armed Forces of the Philippines" (Veto Message, p. 12).
Petitioners claim that Special Provision No. 2 on the "Use of Fund" and Special Provision No. 3
are conditions or limitations related to the item on the AFP modernization plan.
The requirement in Special Provision No. 2 on the "Use of Fund" for the AFP modernization
program that the President must submit all purchases of military equipment to Congress for its
approval, is an exercise of the "congressional or legislative veto." By way of definition, a
congressional veto is a means whereby the legislature can block or modify administrative action
taken under a statute. It is a form of legislative control in the implementation of particular executive
actions. The form may be either negative, that is requiring disapproval of the executive action, or
affirmative, requiring approval of the executive action. This device represents a significant attempt
by Congress to move from oversight of the executive to shared administration (Dixon, The
Congressional Veto and Separation of Powers: The Executive on a Leash,
56 North Carolina Law Review, 423 [1978]).
A congressional veto is subject to serious questions involving the principle of separation of
powers.
However the case at bench is not the proper occasion to resolve the issues of the validity of the
legislative veto as provided in Special Provisions Nos. 2 and 3 because the issues at hand can be
disposed of on other grounds. Any provision blocking an administrative action in implementing a
law or requiring legislative approval of executive acts must be incorporated in a separate and
substantive bill. Therefore, being "inappropriate" provisions, Special Provisions Nos. 2 and 3 were
properly vetoed.
As commented by Justice Irene Cortes in her memorandum as Amicus Curiae: "What Congress
cannot do directly by law it cannot do indirectly by attaching conditions to the exercise of that
power (of the President as Commander-in-Chief) through provisions in the appropriation law."
Furthermore, Special Provision No. 3, prohibiting the use of the Modernization Funds for payment
of the trainer planes and armored personnel carriers, which have been contracted for by the AFP,
is violative of the Constitutional prohibition on the passage of laws that impair the obligation of
contracts (Art. III, Sec. 10), more so, contracts entered into by the Government itself.
The veto of said special provision is therefore valid.
5. Veto of provision on use of savings to augment AFP pension funds.
In the appropriation for the AFP Pension and Gratuity Fund, the President vetoed the new
provision authorizing the Chief of Staff to use savings in the AFP to augment pension and gratuity
funds. The vetoed provision reads:
2. Use of Savings. The Chief of Staff, AFP, is authorized, subject to the approval of the Secretary
of National Defense, to use savings in the appropriations provided herein to augment the pension
fund being managed by the AFP Retirement and Separation Benefits System as provided under
Sections 2(a) and 3 of P.D. No. 361 (GAA of 1994,
p. 746).
According to the President, the grant of retirement and separation benefits should be covered by
direct appropriations specifically approved for the purpose pursuant to Section 29(1) of Article VI
of the Constitution. Moreover, he stated that the authority to use savings is lodged in the officials
enumerated in Section 25(5) of Article VI of the Constitution (Veto Message, pp. 7-8).
Petitioners claim that the Special Provision on AFP Pension and Gratuity Fund is a condition or
limitation which is so intertwined with the item of appropriation that it could not be separated
therefrom.
The Special Provision, which allows the Chief of Staff to use savings to augment the pension fund
for the AFP being managed by the AFP Retirement and Separation Benefits System is violative of
Sections 25(5) and 29(1) of the Article VI of the Constitution.
Under Section 25(5), no law shall be passed authorizing any transfer of appropriations, and under
Section 29(1), no money shall be paid out of
the Treasury except in pursuance of an appropriation made by law. While Section 25(5) allows as
an exception the realignment of savings to augment items in the general appropriations law for the
executive branch, such right must and can be exercised only by the President pursuant to a
specific law.
6. Condition on the deactivation of the CAFGU's.
244
Congress appropriated compensation for the CAFGU's, including the payment of separation
benefits but it added the following Special Provision:
1. CAFGU Compensation and Separation Benefit. The appropriation authorized herein shall be
used for the compensation of CAFGU's including the payment of their separation benefit not
exceeding one (1) year subsistence allowance for the 11,000 members who will be deactivated in
1994. The Chief of Staff, AFP, shall, subject to the approval of the Secretary of National Defense,
promulgate policies and procedures for the payment of separation benefit (GAA of 1994, p. 740).
The President declared in his Veto Message that the implementation of this Special Provision to
the item on the CAFGU's shall be subject to prior Presidential approval pursuant to P.D. No. 1597
and R.A.. No. 6758. He gave the following reasons for imposing the condition:
I am well cognizant of the laudable intention of Congress in proposing the amendment of Special
Provision No. 1 of the CAFGU. However, it is premature at this point in time of our peace process
to earmark and declare through special provision the actual number of CAFGU members to be
deactivated in CY 1994. I understand that the number to be deactivated would largely depend on
the result or degree of success of the on-going peace initiatives which are not yet precisely
determinable today. I have desisted, therefore, to directly veto said provisions because this would
mean the loss of the entire special provision to the prejudice of its beneficient provisions. I
therefore declare that the actual implementation of this special provision shall be subject to prior
Presidential approval pursuant to the provisions of P.D. No. 1597 and
R.A. No. 6758 (Veto Message, p. 13).
Petitioners claim that the Congress has required the deactivation of the CAFGU's when it
appropriated the money for payment of the separation pay of the members of thereof. The
President, however, directed that the deactivation should be done in accordance to his timetable,
taking into consideration the peace and order situation in the affected localities.
Petitioners complain that the directive of the President was tantamount to an administrative
embargo of the congressional will to implement the Constitution's command to dissolve the
CAFGU's (Rollo, G.R. No. 113174,
p. 14; G.R. No. 113888, pp. 9, 14-16). They argue that the President cannot impair or withhold
expenditures authorized and appropriated by Congress when neither the Appropriations Act nor
other legislation authorize such impounding (Rollo, G.R. No. 113888, pp. 15-16).
The Solicitor General contends that it is the President, as Commander-in-Chief of the Armed
Forces of the Philippines, who should determine when the services of the CAFGU's are no longer
needed (Rollo, G.R. No. 113888,
pp. 92-95.).
This is the first case before this Court where the power of the President to impound is put in issue.
Impoundment refers to a refusal by the President, for whatever reason, to spend funds made
available by Congress. It is the failure to spend or obligate budget authority of any type (Notes:
Impoundment of Funds, 86 Harvard Law Review 1505 [1973]).
Those who deny to the President the power to impound argue that once Congress has set aside
the fund for a specific purpose in an appropriations act, it becomes mandatory on the part of the
President to implement the project and to spend the money appropriated therefor. The President
has no discretion on the matter, for the Constitution imposes on him the duty to faithfully execute
the laws.
In refusing or deferring the implementation of an appropriation item, the President in effect
exercises a veto power that is not expressly granted by the Constitution. As a matter of fact, the
Constitution does not say anything about impounding. The source of the Executive authority must
be found elsewhere.
Proponents of impoundment have invoked at least three principal sources of the authority of the
President. Foremost is the authority to impound given to him either expressly or impliedly by
Congress. Second is the executive power drawn from the President's role as Commander-in-
Chief. Third is the Faithful Execution Clause which ironically is the same provision invoked by
petitioners herein.
The proponents insist that a faithful execution of the laws requires that the President desist from
implementing the law if doing so would prejudice public interest. An example given is when
through efficient and prudent management of a project, substantial savings are made. In such a
case, it is sheer folly to expect the President to spend the entire amount budgeted in the law
(Notes: Presidential Impoundment: Constitutional Theories and Political Realities, 61 Georgetown
Law Journal 1295 [1973]; Notes; Protecting the Fisc: Executive Impoundment and Congressional
Power, 82 Yale Law Journal 1686 [1973).
We do not find anything in the language used in the challenged Special Provision that would imply
that Congress intended to deny to the President the right to defer or reduce the spending, much
less to deactivate 11,000 CAFGU members all at once in 1994. But even if such is the intention,
the appropriation law is not the proper vehicle for such purpose. Such intention must be embodied
and manifested in another law considering that it abrades the powers of the Commander-in-Chief
and there are existing laws on the creation of the CAFGU's to be amended. Again we state: a
provision in an appropriations act cannot
be used to repeal or amend other laws, in this case, P.D. No. 1597 and R.A. No. 6758.
7. Condition on the appropriation for the Supreme Court, etc.
(a) In the appropriations for the Supreme Court, Ombudsman, COA, and CHR, the Congress
added the following provisions:
The Judiciary
xxx xxx xxx
Special Provisions
1. Augmentation of any Item in the Court's Appropriations. Any savings in the appropriations for
the Supreme Court and the Lower Courts may be utilized by the Chief Justice of the Supreme
Court to augment any item of the Court's appropriations for (a) printing of decisions and
publication of "Philippine Reports"; (b) Commutable terminal leaves of Justices and other
personnel of the Supreme Court and payment of adjusted pension rates to retired Justices entitled
thereto pursuant to Administrative Matter No. 91-8-225-C.A.; (c) repair, maintenance,
improvement and other operating expenses of the courts' libraries, including purchase of books
and periodicals; (d) purchase, maintenance and improvement of printing equipment; (e) necessary
expenses for the employment of temporary employees, contractual and casual employees, for
judicial administration; (f) maintenance and improvement of the Court's Electronic Data
Processing System; (g) extraordinary expenses of the Chief Justice, attendance in international
conferences and conduct of training programs; (h) commutable transportation and representation
allowances and fringe benefits for Justices, Clerks of Court, Court Administrator, Chiefs of Offices
and other Court personnel in accordance with the rates prescribed by law; and (i) compensation of
attorney-de-officio: PROVIDED, That as mandated by LOI No. 489 any increase in salary and
allowances shall be subject to the usual procedures and policies as provided for under
P.D. No. 985 and other pertinent laws (GAA of 1994, p. 1128; Emphasis supplied).
xxx xxx xxx
Commission on Audit
xxx xxx xxx
5. Use of Savings. The Chairman of the Commission on Audit is hereby authorized, subject to
appropriate accounting and auditing rules and regulations, to use savings for the payment of fringe
benefits as may be authorized by law for officials and personnel of the Commission (GAA of 1994,
p. 1161; Emphasis supplied).
xxx xxx xxx
Office of the Ombudsman
xxx xxx xxx
6. Augmentation of Items in the appropriation of the Office of the Ombudsman. The Ombudsman
is hereby authorized, subject to appropriate accounting and auditing rules and regulations to
augment items of appropriation in the Office of the Ombudsman from savings in other items of
appropriation actually released, for: (a) printing and/or publication of decisions, resolutions,
training and information materials; (b) repair, maintenance and improvement of OMB Central and
Area/Sectoral facilities; (c) purchase of books, journals, periodicals and equipment;
(d) payment of commutable representation and transportation allowances of officials and
employees who by reason of their positions are entitled thereto and fringe benefits as may be
authorized specifically by law for officials and personnel of OMB pursuant to Section 8 of Article
IX-B of the Constitution; and (e) for other official purposes subject to accounting and auditing rules
and regulations (GAA of 1994, p. 1174; Emphasis supplied).
xxx xxx xxx
Commission on Human Rights
xxx xxx xxx
245
1. Use of Savings. The Chairman of the Commission on Human Rights (CHR) is hereby
authorized, subject to appropriate accounting and auditing rules and regulations, to augment any
item of appropriation in the office of the CHR from savings in other items of appropriations actually
released, for: (a) printing and/or publication of decisions, resolutions, training materials and
educational publications; (b) repair, maintenance and improvement of Commission's central and
regional facilities; (c) purchase of books, journals, periodicals and equipment, (d) payment of
commutable representation and transportation allowances of officials and employees who by
reason of their positions are entitled thereto and fringe benefits, as may be authorized by law for
officials and personnel of CHR, subject to accounting and auditing rules and regulations (GAA of
1994, p. 1178; Emphasis supplied).
In his Veto Message, the President expressed his approval of the conditions included in the GAA
of 1994. He noted that:
The said condition is consistent with the Constitutional injunction prescribed under Section 8,
Article IX-B of the Constitution which states that "no elective or appointive public officer or
employee shall receive additional, double, or indirect compensation unless specifically authorized
by law." I am, therefore, confident that the heads of the said offices shall maintain fidelity to the
law and faithfully adhere to the well-established principle on compensation standardization (Veto
Message, p. 10).
Petitioners claim that the conditions imposed by the President violated the independence and
fiscal autonomy of the Supreme Court, the Ombudsman, the COA and the CHR.
In the first place, the conditions questioned by petitioners were placed in the GAB by Congress
itself, not by the President. The Veto Message merely highlighted the Constitutional mandate that
additional or indirect compensation can only be given pursuant to law.
In the second place, such statements are mere reminders that the disbursements of
appropriations must be made in accordance with law. Such statements may, at worse, be treated
as superfluities.
(b) In the appropriation for the COA, the President imposed the condition that the implementation
of the budget of the COA be subject to "the guidelines to be issued by the President."
The provisions subject to said condition reads:
xxx xxx xxx
3. Revolving Fund. The income of the Commission on Audit derived from sources authorized by
the Government Auditing Code of the Philippines (P.D. No. 1445) not exceeding Ten Million Pesos
(P10,000,000) shall be constituted into a revolving fund which shall be used for maintenance,
operating and other incidental expenses to enhance audit services and audit-related activities. The
fund shall be deposited in an authorized government depository ban, and withdrawals therefrom
shall be made in accordance with the procedure prescribed by law and implementing rules and
regulations: PROVIDED, That any interests earned on such deposit shall be remitted at the end of
each quarter to the national Treasury and shall accrue to the General Fund: PROVIDED
FURTHER, That the Commission on Audit shall submit to the Department of Budget and
Management a quarterly report of income and expenditures of said revolving fund (GAA of 1994,
pp. 1160-1161).
The President cited the "imperative need to rationalize" the implementation, applicability and
operation of use of income and revolving funds. The Veto Message stated:
. . . I have observed that there are old and long existing special provisions authorizing the use of
income and the creation of revolving funds. As a rule, such authorizations should be discouraged.
However, I take it that these authorizations have legal/statutory basis aside from being already a
vested right to the agencies concerned which should not be jeopardized through the Veto
Message. There is, however, imperative need to rationalize their implementation, applicability and
operation. Thus, in order to substantiate the purpose and intention of said provisions, I hereby
declare that the operationalization of the following provisions during budget implementation shall
be subject to the guidelines to be issued by the President pursuant to Section 35, Chapter 5, Book
VI of E.O. No. 292 and Sections 65 and 66 of P.D. No. 1445 in relation to Sections 2 and 3 of the
General Provisions of this Act (Veto Message, p. 6; Emphasis Supplied.)
(c) In the appropriation for the DPWH, the President imposed the condition that in the
implementation of DPWH projects, the administrative and engineering overhead of 5% and 3%
"shall be subject to the necessary administrative guidelines to be formulated by the Executive
pursuant to existing laws." The condition was imposed because the provision "needs further study"
according to the President.
The following provision was made subject to said condition:
9. Engineering and Administrative Overhead. Not more than five percent (5%) of the amount for
infrastructure project released by the Department of Budget and Management shall be deducted
by DPWH for administrative overhead, detailed engineering and construction supervision, testing
and quality control, and the like, thus insuring that at least ninety-five percent (95%) of the
released fund is available for direct implementation of the project. PROVIDED, HOWEVER, That
for school buildings, health centers, day-care centers and barangay halls, the deductible amount
shall not exceed three percent (3%).
Violation of, or non-compliance with, this provision shall subject the government official or
employee concerned to administrative, civil and/or criminal sanction under Sections 43 and 80,
Book VI of E.O.
No. 292 (GAA of 1994, p. 786).
(d) In the appropriation for the National Housing Authority (NHA), the President imposed the
condition that allocations for specific projects shall be released and disbursed "in accordance with
the housing program of the government, subject to prior Executive approval."
The provision subject to the said condition reads:
3. Allocations for Specified Projects. The following allocations for the specified projects shall be
set aside for corollary works and used exclusively for the repair, rehabilitation and construction of
buildings, roads, pathwalks, drainage, waterworks systems, facilities and amenities in the area:
PROVIDED, That any road to be constructed or rehabilitated shall conform with the specifications
and standards set by the Department of Public Works and Highways for such kind of road:
PROVIDED, FURTHER, That savings that may be available in the future shall be used for road
repair, rehabilitation and construction:
(1) Maharlika Village Road — Not less than P5,000,000
(2) Tenement Housing Project (Taguig) — Not less than P3,000,000
(3) Bagong Lipunan Condominium Project (Taguig) — Not less than P2,000,000
4. Allocation of Funds. Out of the amount appropriated for the implementation of various projects
in resettlement areas, Seven Million Five Hundred Thousand Pesos (P7,500,000) shall be
allocated to the Dasmariñas Bagong Bayan resettlement area, Eighteen Million Pesos
(P18,000,000) to the Carmona Relocation Center Area (Gen. Mariano Alvarez) and Three Million
Pesos (P3,000,000) to the Bulihan Sites and Services, all of which will be for the cementing of
roads in accordance with DPWH standards.
5. Allocation for Sapang Palay. An allocation of Eight Million Pesos (P8,000,000) shall be set
aside for the asphalting of seven (7) kilometer main road of Sapang Palay, San Jose Del Monte,
Bulacan
(GAA of 1994, p. 1216).
The President imposed the conditions: (a) that the "operationalization" of the special provision on
revolving funds of the COA "shall be subject to guidelines to be issued by the President pursuant
to Section 35, Chapter 5,
Book VI of E.O. 292 and Sections 65 and 66 of P.D. No. 1445 in relation to Sections 2 and 3 of the
General Provisions of this Act" (Rollo, G.R.
No. 113174, pp. 5,7-8); (b) that the implementation of Special Provision No. 9 of the DPWH on the
mandatory retention of 5% and 3% of the amounts released by said Department "be subject to the
necessary administrative guidelines to be formulated by the Executive pursuant to existing law"
(Rollo, G.R. No. 113888; pp. 10, 14-16); and (c) that the appropriations authorized for the NHA
can be released only "in accordance with the housing program of the government subject to prior
Executive approval" (Rollo, G.R. No. 113888, pp. 10-11;
14-16).
The conditions objected to by petitioners are mere reminders that the implementation of the items
on which the said conditions were imposed, should be done in accordance with existing laws,
regulations or policies. They did not add anything to what was already in place at the time of the
approval of the GAA of 1994.
There is less basis to complain when the President said that the expenditures shall be subject to
guidelines he will issue. Until the guidelines are issued, it cannot be determined whether they are
proper or inappropriate. The issuance of administrative guidelines on the use of public funds
authorized by Congress is simply an exercise by the President of his constitutional duty to see that
the laws are faithfully executed (1987 Constitution, Art. VII, Sec. 17; Planas v. Gil 67 Phil. 62
[1939]). Under the Faithful Execution Clause, the President has the power to take "necessary and
246
proper steps" to carry into execution the law (Schwartz, On Constitutional Law, p. 147 [1977]).
These steps are the ones to be embodied in the guidelines.
IV
Petitioners chose to avail of the special civil actions but those remedies can be used only when
respondents have acted "without or in excess" of jurisdiction, or "with grave abuse of discretion,"
(Revised Rules of Court,
Rule 65, Section 2). How can we begrudge the President for vetoing the Special Provision on the
appropriation for debt payment when he merely followed our decision in Gonzales? How can we
say that Congress has abused its discretion when it appropriated a bigger sum for debt payment
than the amount appropriated for education, when it merely followed our dictum in Guingona?
Article 8 of the Civil Code of Philippines, provides:
Judicial decisions applying or interpreting the laws or the constitution shall from a part of the legal
system of the Philippines.
The Court's interpretation of the law is part of that law as of the date of its enactment since the
court's interpretation merely establishes the contemporary legislative intent that the construed law
purports to carry into effect (People v. Licera, 65 SCRA 270 [1975]). Decisions of the Supreme
Court assume the same authority as statutes (Floresca v. Philex Mining Corporation, 136 SCRA
141 [1985]).
Even if Guingona and Gonzales are considered hard cases that make bad laws and should be
reversed, such reversal cannot nullify prior acts done in reliance thereof.
WHEREFORE, the petitions are DISMISSED, except with respect to
(1) G.R. Nos. 113105 and 113766 only insofar as they pray for the annulment of the veto of the
special provision on debt service specifying that the fund therein appropriated "shall be used for
payment of the principal and interest of foreign and domestic indebtedness" prohibiting the use of
the said funds "to pay for the liabilities of the Central Bank Board of Liquidators", and (2) G.R. No.
113888 only insofar as it prays for the annulment of the veto of: (a) the second paragraph of
Special Provision No. 2 of the item of appropriation for the Department of Public Works and
Highways (GAA of 1994, pp. 785-786); and (b) Special Provision No. 12 on the purchase of
medicines by the Armed Forces of the Philippines (GAA of 1994, p. 748), which is GRANTED.
SO ORDERED.
Narvasa, C.J., Feliciano, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan
and Mendoza, JJ., concur.
Separate Opinions
PADILLA, J., concurring and dissenting:
I concur with the ponencia of Mr. Justice Camilo D. Quiason except in so far as it re-affirms the
Court's decision in Gonzalez v. Macaraig (191 SCRA 452).
Sec. 27(2), Art. VI of the Constitution states:
The President shall have the power to veto any particular item or items in an appropriation,
revenue, or tariff bill, but the veto shall not effect the item or items to which he does not object.
In my dissenting opinion in Gonzalez, I stated that:
The majority opinion positions the veto questioned in this case within the scope of Section 27(2)
[Article VI of the Constitution]. I do not see how this can be done without doing violence to the
constitutional design. The distinction between an item-veto and a provision veto has been
traditionally recognized in constitutional litigation and budgetary practice. As stated by Mr. Justice
Sutherland, speaking for the U.S. Supreme Court in Bengzon v. Secretary of Justice, 299 U.S.
410-416:
. . . An item of an appropriation bill obviously means an item which in itself is a specific
appropriation of money, not some general provisions of law which happens to be put into an
appropriation bill . . .
When the Constitution in Section 27(2) empowers the President to veto any particular item or
items in the appropriation act, it does not
confer — in fact, it excludes — the power to veto any particular provision or provisions in said act.
In an earlier case, Sarmiento v. Mison, et al., 156 SCRA 549, this court referred to its duty to
construe the Constitution, not in accordance with how the executive or the legislative would want it
construed, but in accordance with what it says and provides. When the Constitution states that the
President has the power to veto any particular item or items in the appropriation act, this must be
taken as a component of that delicate balance of power between the executive and legislative, so
that, for this Court to construe Sec. 27(2) of the Constitution as also empowering the President to
veto any particular provision or provisions in the appropriations act, is to load the scale in favor of
the executive, at the expense of that delicate balance of power.
I therefore disagree with the majority's pronouncements which would validate the veto by the
President of specific provisions in the appropriations act based on the contention that such are
"inappropriate provisions." Even assuming, for the sake of argument, that a provision in the
appropriations act is "inappropriate" from the Presidential standpoint, it is still a provision, not an
item, in an appropriations act and, therefore, outside the veto power of the Executive.
VITUG, J., concurring:
I concur on the points so well expounded by a most respected colleague, Mr. Justice Camilo D.
Quiason. I should like to highlight a bit, however, that part of the ponencia dealing on the
Countrywide Development Fund or, so commonly referred to as, the infamous "pork barrel".
I agree that it lies with Congress to determine in an appropriation act the activities and the projects
that are desirable and may thus be funded. Once, however, such identification and the
corresponding appropriation therefore is done, the legislative act is completed and it ends there.
Thereafter, the Executive is behooved, with exclusive responsibility and authority, to see to it that
the legislative will is properly carried out. I cannot subscribe to another theory invoked by some
quarters that, in so implementing the law, the Executive does so only by way of delegation.
Congress neither may delegate what it does not have nor may encroach on the powers of a co-
equal, independent and coordinate branch.
Within its own sphere, Congress acts as a body, not as the individuals that comprise it, in any
action or decision that can bind it, or be said to have been done by it, under its constitutional
authority. Even assuming that overseeing the laws it enacts continues to be a legislative process,
one that I find difficult to accept, it is Congress itself, not any of its members, that must exercise
that function.
I cannot debate the fact that the members of Congress, more than the President and his
colleagues, would have the best feel on the needs of their own respective cosntituents. I see no
legal obstacle, however, in their making, just like anyone else, the proper recommendations to
albeit not necessarily conclusive on, the President for the purpose. Neother would it be
objectionable for Congrss, by law, to appropriate funds for specific projects as it may be minded;
to give that authoriy, however, to the individual members of Congress in whatever guise, I am
afraid, would be constitutionality impermissible.
# Separate Opinions
PADILLA, J., concurring and dissenting:
I concur with the ponencia of Mr. Justice Camilo D. Quiason except in so far as it re-affirms the
Court's decision in Gonzalez v. Macaraig (191 SCRA 452).
Sec. 27(2), Art. VI of the Constitution states:
The President shall have the power to veto any particular item or items in an appropriation,
revenue, or tariff bill, but the veto shall not effect the item or items to which he does not object.
In my dissenting opinion in Gonzalez, I stated that:
The majority opinion positions the veto questioned in this case within the scope of Section 27(2)
[Article VI of the Constitution]. I do not see how this can be done without doing violence to the
constitutional design. The distinction between an item-veto and a provision veto has been
traditionally recognized in constitutional litigation and budgetary practice. As stated by Mr. Justice
Sutherland, speaking for the U.S. Supreme Court in Bengzon v. Secretary of Justice, 299 U.S.
410-416:
. . . An item of an appropriation bill obviously means an item which in itself is a specific
appropriation of money, not some general provisions of law which happens to be put into an
appropriation bill . . .
When the Constitution in Section 27(2) empowers the President to veto any particular item or
items in the appropriation act, it does not
confer — in fact, it excludes — the power to veto any particular provision or provisions in said act.
In an earlier case, Sarmiento v. Mison, et al., 156 SCRA 549, this court referred to its duty to
construe the Constitution, not in accordance with how the executive or the legislative would want it
construed, but in accordance with what it says and provides. When the Constitution states that the
247
President has the power to veto any particular item or items in the appropriation act, this must be
taken as a component of that delicate balance of power between the executive and legislative, so
that, for this Court to construe Sec. 27(2) of the Constitution as also empowering the President to
veto any particular provision or provisions in the appropriations act, is to load the scale in favor of
the executive, at the expense of that delicate balance of power.
I therefore disagree with the majority's pronouncements which would validate the veto by the
President of specific provisions in the appropriations act based on the contention that such are
"inappropriate provisions." Even assuming, for the sake of argument, that a provision in the
appropriations act is "inappropriate" from the Presidential standpoint, it is still a provision, not an
item, in an appropriations act and, therefore, outside the veto power of the Executive.
VITUG, J., concurring:
I concur on the points so well expounded by a most respected colleague, Mr. Justice Camilo D.
Quiason. I should like to highlight a bit, however, that part of the ponencia dealing on the
Countrywide Development Fund or, so commonly referred to as, the infamous "pork barrel".
I agree that it lies with Congress to determine in an appropriation act the activities and the projects
that are desirable and may thus be funded. Once, however, such identification and the
corresponding appropriation therefore is done, the legislative act is completed and it ends there.
Thereafter, the Executive is behooved, with exclusive responsibility and authority, to see to it that
the legislative will is properly carried out. I cannot subscribe to another theory invoked by some
quarters that, in so implementing the law, the Executive does so only by way of delegation.
Congress neither may delegate what it does not have nor may encroach on the powers of a co-
equal, independent and coordinate branch.
Within its own sphere, Congress acts as a body, not as the individuals that comprise it, in any
action or decision that can bind it, or be said to have been done by it, under its constitutional
authority. Even assuming that overseeing the laws it enacts continues to be a legislative process,
one that I find difficult to accept, it is Congress itself, not any of its members, that must exercise
that function.
I cannot debate the fact that the members of Congress, more than the President and his
colleagues, would have the best feel on the needs of their own respective constituents. I see no
legal obstacle, however, in their making, just like anyone else, the proper recommendations to,
albeit not necessarily conclusive on, the President for the purpose. Neither would it be
objectionable for Congress, by law, to appropriate funds for such specific projects as it may be
minded; to give that authority, however, to the individual members of Congress in whatever guise,
I am afraid, would be constitutionally impermissible. 15. Republic of the Philippines
SUPREME COURT
Manila
EN BANC

G.R. No. 176579 October 9, 2012

HEIRS OF WILSON P. GAMBOA,* Petitioners,

vs.

FINANCE SECRETARY MARGARITO B. TEVES, FINANCE

UNDERSECRETARYJOHN P. SEVILLA, AND COMMISSIONER RICARDO ABCEDE OF THE
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT(PCGG) IN THEIR CAPACITIES AS
CHAIR AND MEMBERS, RESPECTIVELY, OF THE PRIVATIZATION COUNCIL, CHAIRMAN
ANTHONI SALIM OF FIRST PACIFIC CO., LTD. IN HIS CAPACITY AS DIRECTOR OF METRO
PACIFIC ASSET HOLDINGS INC., CHAIRMAN MANUEL V. PANGILINAN OF PHILIPPINE
LONG DISTANCE TELEPHONE COMPANY (PLDT) IN HIS CAPACITY AS MANAGING
DIRECTOR OF FIRST PACIFIC CO., LTD., PRESIDENT NAPOLEON L. NAZARENO OF
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, CHAIR FE BARIN OF THE
SECURITIES AND EXCHANGE COMMISSION, and PRESIDENT FRANCIS LIM OF THE
PHILIPPINE STOCK EXCHANGE,
Respondents.

PABLITO V. SANIDAD and ARNO V. SANIDAD, Petitioner-in-Intervention.

248
RESOLUTION
CARPIO, J.:
This resolves the motions for reconsideration of the 28 June 2011 Decision filed by (1) the
Philippine Stock Exchange's (PSE) President, 1 (2) Manuel V. Pangilinan (Pangilinan),2 (3)
Napoleon L. Nazareno (Nazareno ),3 and ( 4) the Securities and Exchange Commission (SEC)4
(collectively, movants ).
The Office of the Solicitor General (OSG) initially filed a motion for reconsideration on behalf of the
SEC,5 assailing the 28 June 2011 Decision. However, it subsequently filed a Consolidated
Comment on behalf of the State,6 declaring expressly that it agrees with the Court's definition of
the term "capital" in Section 11, Article XII of the Constitution. During the Oral Arguments on 26
June 2012, the OSG reiterated its position consistent with the Court's 28 June 2011 Decision.
We deny the motions for reconsideration.
I.
Far-reaching implications of the legal issue justify treatment of petition for declaratory relief as one
for mandamus.
As we emphatically stated in the 28 June 2011 Decision, the interpretation of the term "capital" in
Section 11, Article XII of the Constitution has far-reaching implications to the national economy. In
fact, a resolution of this issue will determine whether Filipinos are masters, or second-class
citizens, in their own country. What is at stake here is whether Filipinos or foreigners will have
effective control of the Philippine national economy. Indeed, if ever there is a legal issue that has
far-reaching implications to the entire nation, and to future generations of Filipinos, it is the
threshold legal issue presented in this case.
Contrary to Pangilinan’s narrow view, the serious economic consequences resulting in the
interpretation of the term "capital" in Section 11, Article XII of the Constitution undoubtedly
demand an immediate adjudication of this issue. Simply put, the far-reaching implications of this
issue justify the treatment of the petition as one for mandamus.7
In Luzon Stevedoring Corp. v. Anti-Dummy Board,8 the Court deemed it wise and expedient to
resolve the case although the petition for declaratory relief could be outrightly dismissed for being
procedurally defective. There, appellant admittedly had already committed a breach of the Public
Service Act in relation to the Anti-Dummy Law since it had been employing non- American aliens
long before the decision in a prior similar case. However, the main issue in Luzon Stevedoring
was of transcendental importance, involving the exercise or enjoyment of rights, franchises,
privileges, properties and businesses which only Filipinos and qualified corporations could
exercise or enjoy under the Constitution and the statutes. Moreover, the same issue could be
raised by appellant in an appropriate action. Thus, in Luzon Stevedoring the Court deemed it
necessary to finally dispose of the case for the guidance of all concerned, despite the apparent
procedural flaw in the petition.
The circumstances surrounding the present case, such as the supposed procedural defect of the
petition and the pivotal legal issue involved, resemble those in Luzon Stevedoring. Consequently,
in the interest of substantial justice and faithful adherence to the Constitution, we opted to resolve
this case for the guidance of the public and all concerned parties.
II.
No change of any long-standing rule; thus, no redefinition of the term "capital."
Movants contend that the term "capital" in Section 11, Article XII of the Constitution has long been
settled and defined to refer to the total outstanding shares of stock, whether voting or non-voting.
In fact, movants claim that the SEC, which is the administrative agency tasked to enforce the 60-
40 ownership requirement in favor of Filipino citizens in the Constitution and various statutes, has
consistently adopted this particular definition in its numerous opinions. Movants point out that with
the 28 June 2011 Decision, the Court in effect introduced a "new" definition or "midstream
redefinition"9 of the term "capital" in Section 11, Article XII of the Constitution.
This is egregious error.
For more than 75 years since the 1935 Constitution, the Court has not interpreted or defined the
term "capital" found in various economic provisions of the 1935, 1973 and 1987 Constitutions.
There has never been a judicial precedent interpreting the term "capital" in the 1935, 1973 and
1987 Constitutions, until now. Hence, it is patently wrong and utterly baseless to claim that the
Court in defining the term "capital" in its 28 June 2011 Decision modified, reversed, or set aside
the purported long-standing definition of the term "capital," which supposedly refers to the total
outstanding shares of stock, whether voting or non-voting. To repeat, until the present case there
has never been a Court ruling categorically defining the term "capital" found in the various
economic provisions of the 1935, 1973 and 1987 Philippine Constitutions.
The opinions of the SEC, as well as of the Department of Justice (DOJ), on the definition of the
term "capital" as referring to both voting and non-voting shares (combined total of common and
preferred shares) are, in the first place, conflicting and inconsistent. There is no basis whatsoever
to the claim that the SEC and the DOJ have consistently and uniformly adopted a definition of the
term "capital" contrary to the definition that this Court adopted in its 28 June 2011 Decision.
In DOJ Opinion No. 130, s. 1985,10 dated 7 October 1985, the scope of the term "capital" in
Section 9, Article XIV of the 1973 Constitution was raised, that is, whether the term "capital"
includes "both preferred and common stocks." The issue was raised in relation to a stock-swap
transaction between a Filipino and a Japanese corporation, both stockholders of a domestic
corporation that owned lands in the Philippines. Then Minister of Justice Estelito P. Mendoza ruled
that the resulting ownership structure of the corporation would be unconstitutional because 60% of
the voting stock would be owned by Japanese while Filipinos would own only 40% of the voting
stock, although when the non-voting stock is added, Filipinos would own 60% of the combined
voting and non-voting stock. This ownership structure is remarkably similar to the current
ownership structure of PLDT. Minister Mendoza ruled:
xxxx
Thus, the Filipino group still owns sixty (60%) of the entire subscribed capital stock (common and
preferred) while the Japanese investors control sixty percent (60%) of the common (voting)
shares.
It is your position that x x x since Section 9, Article XIV of the Constitution uses the word "capital,"
which is construed "to include both preferred and common shares" and "that where the law does
not distinguish, the courts shall not distinguish."
xxxx
In light of the foregoing jurisprudence, it is my opinion that the stock-swap transaction in question
may not be constitutionally upheld. While it may be ordinary corporate practice to classify
corporate shares into common voting shares and preferred non-voting shares, any arrangement
which attempts to defeat the constitutional purpose should be eschewed. Thus, the resultant
equity arrangement which would place ownership of 60%11 of the common (voting) shares in the
Japanese group, while retaining 60% of the total percentage of common and preferred shares in
Filipino hands would amount to circumvention of the principle of control by Philippine stockholders
that is implicit in the 60% Philippine nationality requirement in the Constitution. (Emphasis
supplied)
In short, Minister Mendoza categorically rejected the theory that the term "capital" in Section 9,
Article XIV of the 1973 Constitution includes "both preferred and common stocks" treated as the
same class of shares regardless of differences in voting rights and privileges. Minister Mendoza
stressed that the 60-40 ownership requirement in favor of Filipino citizens in the Constitution is not
complied with unless the corporation "satisfies the criterion of beneficial ownership" and that in
applying the same "the primordial consideration is situs of control."
249
On the other hand, in Opinion No. 23-10 dated 18 August 2010, addressed to Castillo Laman Tan
Pantaleon & San Jose, then SEC General Counsel Vernette G. Umali-Paco applied the Voting
Control Test, that is, using only the voting stock to determine whether a corporation is a Philippine
national. The Opinion states:
Applying the foregoing, particularly the Control Test, MLRC is deemed as a Philippine national
because: (1) sixty percent (60%) of its outstanding capital stock entitled to vote is owned by a
Philippine national, the Trustee; and (2) at least sixty percent (60%) of the ERF will accrue to the
benefit of Philippine nationals. Still pursuant to the Control Test, MLRC’s investment in 60% of
BFDC’s outstanding capital stock entitled to vote shall be deemed as of Philippine nationality,
thereby qualifying BFDC to own private land.
Further, under, and for purposes of, the FIA, MLRC and BFDC are both Philippine nationals,
considering that: (1) sixty percent (60%) of their respective outstanding capital stock entitled to
vote is owned by a Philippine national (i.e., by the Trustee, in the case of MLRC; and by MLRC, in
the case of BFDC); and (2) at least 60% of their respective board of directors are Filipino citizens.
(Boldfacing and italicization supplied)
Clearly, these DOJ and SEC opinions are compatible with the Court’s interpretation of the 60-40
ownership requirement in favor of Filipino citizens mandated by the Constitution for certain
economic activities. At the same time, these opinions highlight the conflicting, contradictory, and
inconsistent positions taken by the DOJ and the SEC on the definition of the term "capital" found
in the economic provisions of the Constitution.
The opinions issued by SEC legal officers do not have the force and effect of SEC rules and
regulations because only the SEC en banc can adopt rules and regulations. As expressly provided
in Section 4.6 of the Securities Regulation Code,12 the SEC cannot delegate to any of its
individual Commissioner or staff the power to adopt any rule or regulation. Further, under Section
5.1 of the same Code, it is the SEC as a collegial body, and not any of its legal officers, that is
empowered to issue opinions and approve rules and regulations.
Thus:
4.6. The Commission may, for purposes of efficiency, delegate any of its functions to any
department or office of the Commission, an individual Commissioner or staff member of the
Commission except its review or appellate authority and its power to adopt, alter and supplement
any rule or regulation.
The Commission may review upon its own initiative or upon the petition of any interested party any
action of any department or office, individual Commissioner, or staff member of the Commission.
SEC. 5. Powers and Functions of the Commission.- 5.1. The Commission shall act with
transparency and shall have the powers and functions provided by this Code, Presidential Decree
No. 902-A, the Corporation Code, the Investment Houses Law, the Financing Company Act and
other existing laws. Pursuant thereto the Commission shall have, among others, the following
powers and functions:
xxxx
(g) Prepare, approve, amend or repeal rules, regulations and orders, and issue opinions and
provide guidance on and supervise compliance with such rules, regulations and orders;
x x x x (Emphasis supplied)
Thus, the act of the individual Commissioners or legal officers of the SEC in issuing opinions that
have the effect of SEC rules or regulations is ultra vires. Under Sections 4.6 and 5.1(g) of the
Code, only the SEC en banc can "issue opinions" that have the force and effect of rules or
regulations. Section 4.6 of the Code bars the SEC en banc from delegating to any individual
Commissioner or staff the power to adopt rules or regulations. In short, any opinion of individual
Commissioners or SEC legal officers does not constitute a rule or regulation of the SEC.
The SEC admits during the Oral Arguments that only the SEC en banc, and not any of its
individual commissioners or legal staff, is empowered to issue opinions which have the same
binding effect as SEC rules and regulations, thus:
JUSTICE CARPIO:
So, under the law, it is the Commission En Banc that can issue an
SEC Opinion, correct?
COMMISSIONER GAITE:13
That’s correct, Your Honor.
JUSTICE CARPIO:
Can the Commission En Banc delegate this function to an SEC officer?
COMMISSIONER GAITE:
Yes, Your Honor, we have delegated it to the General Counsel.
JUSTICE CARPIO:
It can be delegated. What cannot be delegated by the Commission En Banc to a commissioner or
an individual employee of the Commission?
COMMISSIONER GAITE:
Novel opinions that [have] to be decided by the En Banc...
JUSTICE CARPIO:
What cannot be delegated, among others, is the power to adopt or amend rules and regulations,
correct?
COMMISSIONER GAITE:
That’s correct, Your Honor.
JUSTICE CARPIO:
So, you combine the two (2), the SEC officer, if delegated that power, can issue an opinion but
that opinion does not constitute a rule or regulation, correct?
COMMISSIONER GAITE:
Correct, Your Honor.
JUSTICE CARPIO:
So, all of these opinions that you mentioned they are not rules and regulations, correct?
COMMISSIONER GAITE:
They are not rules and regulations.
JUSTICE CARPIO:
If they are not rules and regulations, they apply only to that particular situation and will not
constitute a precedent, correct?
COMMISSIONER GAITE:
Yes, Your Honor.14 (Emphasis supplied)
Significantly, the SEC en banc, which is the collegial body statutorily empowered to issue rules
and opinions on behalf of the SEC, has adopted even the Grandfather Rule in determining
compliance with the 60-40 ownership requirement in favor of Filipino citizens mandated by the
Constitution for certain economic activities. This prevailing SEC ruling, which the SEC correctly
adopted to thwart any circumvention of the required Filipino "ownership and control," is laid down
in the 25 March 2010 SEC en banc ruling in Redmont Consolidated Mines, Corp. v. McArthur
Mining, Inc., et al.,15 to wit:
The avowed purpose of the Constitution is to place in the hands of Filipinos the exploitation of our
natural resources. Necessarily, therefore, the Rule interpreting the constitutional provision should
not diminish that right through the legal fiction of corporate ownership and control. But the
constitutional provision, as interpreted and practiced via the 1967 SEC Rules, has favored
foreigners contrary to the command of the Constitution. Hence, the Grandfather Rule must be
applied to accurately determine the actual participation, both direct and indirect, of foreigners in a
corporation engaged in a nationalized activity or business.
Compliance with the constitutional limitation(s) on engaging in nationalized activities must be
determined by ascertaining if 60% of the investing corporation’s outstanding capital stock is owned
by "Filipino citizens", or as interpreted, by natural or individual Filipino citizens. If such investing
250
corporation is in turn owned to some extent by another investing corporation, the same process
must be observed. One must not stop until the citizenships of the individual or natural stockholders
of layer after layer of investing corporations have been established, the very essence of the
Grandfather Rule.
Lastly, it was the intent of the framers of the 1987 Constitution to adopt the Grandfather Rule. In
one of the discussions on what is now Article XII of the present Constitution, the framers made the
following exchange:
MR. NOLLEDO. In Sections 3, 9 and 15, the Committee stated local or Filipino equity and foreign
equity; namely, 60-40 in Section 3, 60-40 in Section 9, and 2/3-1/3 in Section 15.
MR. VILLEGAS. That is right.
MR. NOLLEDO. In teaching law, we are always faced with the question: ‘Where do we base the
equity requirement, is it on the authorized capital stock, on the subscribed capital stock, or on the
paid-up capital stock of a corporation’? Will the Committee please enlighten me on this?
MR. VILLEGAS. We have just had a long discussion with the members of the team from the UP
Law Center who provided us a draft. The phrase that is contained here which we adopted from the
UP draft is ‘60 percent of voting stock.’
MR. NOLLEDO. That must be based on the subscribed capital stock, because unless declared
delinquent, unpaid capital stock shall be entitled to vote.
MR. VILLEGAS. That is right.
MR. NOLLEDO. Thank you. With respect to an investment by one corporation in another
corporation, say, a corporation with 60-40 percent equity invests in another corporation which is
permitted by the Corporation Code, does the Committee adopt the grandfather rule?
MR. VILLEGAS. Yes, that is the understanding of the Committee.
MR. NOLLEDO. Therefore, we need additional Filipino capital?
MR. VILLEGAS. Yes. (Boldfacing and underscoring supplied; italicization in the original)
This SEC en banc ruling conforms to our 28 June 2011 Decision that the 60-40 ownership
requirement in favor of Filipino citizens in the Constitution to engage in certain economic activities
applies not only to voting control of the corporation, but also to the beneficial ownership of the
corporation. Thus, in our 28 June 2011 Decision we stated:
Mere legal title is insufficient to meet the 60 percent Filipinoowned "capital" required in the
Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with
60 percent of the voting rights, is required. The legal and beneficial ownership of 60 percent of the
outstanding capital stock must rest in the hands of Filipino nationals in accordance with the
constitutional mandate. Otherwise, the corporation is "considered as non-Philippine national[s]."
(Emphasis supplied)
Both the Voting Control Test and the Beneficial Ownership Test must be applied to determine
whether a corporation is a "Philippine national."
The interpretation by legal officers of the SEC of the term "capital," embodied in various opinions
which respondents relied upon, is merely preliminary and an opinion only of such officers. To
repeat, any such opinion does not constitute an SEC rule or regulation. In fact, many of these
opinions contain a disclaimer which expressly states: "x x x the foregoing opinion is based solely
on facts disclosed in your query and relevant only to the particular issue raised therein and shall
not be used in the nature of a standing rule binding upon the Commission in other cases whether
of similar or dissimilar circumstances."16 Thus, the opinions clearly make a caveat that they do
not constitute binding precedents on any one, not even on the SEC itself.
Likewise, the opinions of the SEC en banc, as well as of the DOJ, interpreting the law are neither
conclusive nor controlling and thus, do not bind the Court. It is hornbook doctrine that any
interpretation of the law that administrative or quasi-judicial agencies make is only preliminary,
never conclusive on the Court. The power to make a final interpretation of the law, in this case the
term "capital" in Section 11, Article XII of the 1987 Constitution, lies with this Court, not with any
other government entity.
In his motion for reconsideration, the PSE President cites the cases of National
Telecommunications Commission v. Court of Appeals17 and Philippine Long Distance Telephone
Company v. National Telecommunications Commission18 in arguing that the Court has already
defined the term "capital" in Section 11, Article XII of the 1987 Constitution.19
The PSE President is grossly mistaken. In both cases of National Telecommunications v. Court of
Appeals20 and Philippine Long Distance Telephone Company v. National Telecommunications
Commission,21 the Court did not define the term "capital" as found in Section 11, Article XII of the
1987 Constitution. In fact, these two cases never mentioned, discussed or cited Section 11, Article
XII of the Constitution or any of its economic provisions, and thus cannot serve as precedent in the
interpretation of Section 11, Article XII of the Constitution. These two cases dealt solely with the
determination of the correct regulatory fees under Section 40(e) and (f) of the Public Service Act,
to wit:
(e) For annual reimbursement of the expenses incurred by the Commission in the supervision of
other public services and/or in the regulation or fixing of their rates, twenty centavos for each one
hundred pesos or fraction thereof, of the capital stock subscribed or paid, or if no shares have
been issued, of the capital invested, or of the property and equipment whichever is higher.
(f) For the issue or increase of capital stock, twenty centavos for each one hundred pesos or
fraction thereof, of the increased capital. (Emphasis supplied)
The Court’s interpretation in these two cases of the terms "capital stock subscribed or paid,"
"capital stock" and "capital" does not pertain to, and cannot control, the definition of the term
"capital" as used in Section 11, Article XII of the Constitution, or any of the economic provisions of
the Constitution where the term "capital" is found. The definition of the term "capital" found in the
Constitution must not be taken out of context. A careful reading of these two cases reveals that
the terms "capital stock subscribed or paid," "capital stock" and "capital" were defined solely to
determine the basis for computing the supervision and regulation fees under Section 40(e) and (f)
of the Public Service Act.
III.
Filipinization of Public Utilities
The Preamble of the 1987 Constitution, as the prologue of the supreme law of the land, embodies
the ideals that the Constitution intends to achieve.22 The Preamble reads:
We, the sovereign Filipino people, imploring the aid of Almighty God, in order to build a just and
humane society, and establish a Government that shall embody our ideals and aspirations,
promote the common good, conserve and develop our patrimony, and secure to ourselves and our
posterity, the blessings of independence and democracy under the rule of law and a regime of
truth, justice, freedom, love, equality, and peace, do ordain and promulgate this Constitution.
(Emphasis supplied)
Consistent with these ideals, Section 19, Article II of the 1987 Constitution declares as State policy
the development of a national economy "effectively controlled" by Filipinos:
Section 19. The State shall develop a self-reliant and independent national economy effectively
controlled by Filipinos.
Fortifying the State policy of a Filipino-controlled economy, the Constitution decrees:
Section 10. The Congress shall, upon recommendation of the 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.
In the grant of rights, privileges, and concessions covering the national economy and patrimony,
the State shall give preference to qualified Filipinos.
The State shall regulate and exercise authority over foreign investments within its national
jurisdiction and in accordance with its national goals and priorities.23
Under Section 10, Article XII of the 1987 Constitution, Congress may "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
251
investments." Thus, in numerous laws Congress has reserved certain areas of investments to
Filipino citizens or to corporations at least sixty percent of the "capital" of which is owned by
Filipino citizens. Some of these laws are: (1) Regulation of Award of Government Contracts or
R.A. No. 5183; (2) Philippine Inventors Incentives Act or R.A. No. 3850; (3) Magna Carta for
Micro, Small and Medium Enterprises or R.A. No. 6977; (4) Philippine Overseas Shipping
Development Act or R.A. No. 7471; (5) Domestic Shipping Development Act of 2004 or R.A. No.
9295; (6) Philippine Technology Transfer Act of 2009 or R.A. No. 10055; and (7) Ship Mortgage
Decree or P.D. No. 1521.
With respect to public utilities, the 1987 Constitution specifically ordains:
Section 11. No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by
such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for
a longer period than fifty years. Neither shall any such franchise or right be granted except under
the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the
common good so requires. The State shall encourage equity participation in public utilities by the
general public. The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be citizens of the Philippines.
(Emphasis supplied)
This provision, which mandates the Filipinization of public utilities, requires that any form of
authorization for the operation of public utilities shall be granted only to "citizens of the Philippines
or to corporations or associations organized under the laws of the Philippines at least sixty per
centum of whose capital is owned by such citizens." "The provision is [an express] recognition of
the sensitive and vital position of public utilities both in the national economy and for national
security."24
The 1987 Constitution reserves the ownership and operation of public utilities exclusively to (1)
Filipino citizens, or (2) corporations or associations at least 60 percent of whose "capital" is owned
by Filipino citizens. Hence, in the case of individuals, only Filipino citizens can validly own and
operate a public utility. In the case of corporations or associations, at least 60 percent of their
"capital" must be owned by Filipino citizens. In other words, under Section 11, Article XII of the
1987 Constitution, to own and operate a public utility a corporation’s capital must at least be 60
percent owned by Philippine nationals.
IV.
Definition of "Philippine National"
Pursuant to the express mandate of Section 11, Article XII of the 1987 Constitution, Congress
enacted Republic Act No. 7042 or the Foreign Investments Act of 1991 (FIA), as amended, which
defined a "Philippine national" as follows:
SEC. 3. Definitions. - As used in this Act:
a. The term "Philippine national" shall mean a citizen of the Philippines; or a domestic partnership
or association wholly owned by citizens of the Philippines; or a corporation organized under the
laws of the Philippines of which at least sixty percent (60%) of the capital stock outstanding and
entitled to vote is owned and held by citizens of the Philippines; or a corporation organized abroad
and registered as doing business in the Philippines under the Corporation Code of which one
hundred percent (100%) of the capital stock outstanding and entitled to vote is wholly owned by
Filipinos or a trustee of funds for pension or other employee retirement or separation benefits,
where the trustee is a Philippine national and at least sixty percent (60%) of the fund will accrue to
the benefit of Philippine nationals: Provided, That where a corporation and its non-Filipino
stockholders own stocks in a Securities and Exchange Commission (SEC) registered enterprise,
at least sixty percent (60%) of the capital stock outstanding and entitled to vote of each of both
corporations must be owned and held by citizens of the Philippines and at least sixty percent
(60%) of the members of the Board of Directors of each of both corporations must be citizens of
the Philippines, in order that the corporation, shall be considered a "Philippine national."
(Boldfacing, italicization and underscoring supplied)
Thus, the FIA clearly and unequivocally defines a "Philippine national" as a Philippine citizen, or a
domestic corporation at least "60% of the capital stock outstanding and entitled to vote" is owned
by Philippine citizens.
The definition of a "Philippine national" in the FIA reiterated the meaning of such term as provided
in its predecessor statute, Executive Order No. 226 or the Omnibus Investments Code of 1987,25
which was issued by then President Corazon C. Aquino. Article 15 of this Code states:
Article 15. "Philippine national" shall mean a citizen of the Philippines or a diplomatic partnership
or association wholly-owned by citizens of the Philippines; or a corporation organized under the
laws of the Philippines of which at least sixty per cent (60%) of the capital stock outstanding and
entitled to vote is owned and held by citizens of the Philippines; or a trustee of funds for pension or
other employee retirement or separation benefits, where the trustee is a Philippine national and at
least sixty per cent (60%) of the fund will accrue to the benefit of Philippine nationals: Provided,
That where a corporation and its non-Filipino stockholders own stock in a registered enterprise, at
least sixty per cent (60%) of the capital stock outstanding and entitled to vote of both corporations
must be owned and held by the citizens of the Philippines and at least sixty per cent (60%) of the
members of the Board of Directors of both corporations must be citizens of the Philippines in order
that the corporation shall be considered a Philippine national. (Boldfacing, italicization and
underscoring supplied)
Under Article 48(3)26 of the Omnibus Investments Code of 1987, "no corporation x x x which is
not a ‘Philippine national’ x x x shall do business
x x x in the Philippines x x x without first securing from the Board of Investments a written
certificate to the effect that such business or economic activity x x x would not conflict with the
Constitution or laws of the Philippines."27 Thus, a "non-Philippine national" cannot own and
operate a reserved economic activity like a public utility. This means, of course, that only a
"Philippine national" can own and operate a public utility.
In turn, the definition of a "Philippine national" under Article 15 of the Omnibus Investments Code
of 1987 was a reiteration of the meaning of such term as provided in Article 14 of the Omnibus
Investments Code of 1981,28 to wit:
Article 14. "Philippine national" shall mean a citizen of the Philippines; or a domestic partnership or
association wholly owned by citizens of the Philippines; or a corporation organized under the laws
of the Philippines of which at least sixty per cent (60%) of the capital stock outstanding and
entitled to vote is owned and held by citizens of the Philippines; or a trustee of funds for pension or
other employee retirement or separation benefits, where the trustee is a Philippine national and at
least sixty per cent (60%) of the fund will accrue to the benefit of Philippine nationals: Provided,
That where a corporation and its non-Filipino stockholders own stock in a registered enterprise, at
least sixty per cent (60%) of the capital stock outstanding and entitled to vote of both corporations
must be owned and held by the citizens of the Philippines and at least sixty per cent (60%) of the
members of the Board of Directors of both corporations must be citizens of the Philippines in order
that the corporation shall be considered a Philippine national. (Boldfacing, italicization and
underscoring supplied)
Under Article 69(3) of the Omnibus Investments Code of 1981, "no corporation x x x which is not a
‘Philippine national’ x x x shall do business x x x in the Philippines x x x without first securing a
written certificate from the Board of Investments to the effect that such business or economic
activity x x x would not conflict with the Constitution or laws of the Philippines."29 Thus, a "non-
Philippine national" cannot own and operate a reserved economic activity like a public utility.
Again, this means that only a "Philippine national" can own and operate a public utility.
Prior to the Omnibus Investments Code of 1981, Republic Act No. 518630 or the Investment
Incentives Act, which took effect on 16 September 1967, contained a similar definition of a
"Philippine national," to wit:
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(f) "Philippine National" shall mean a citizen of the Philippines; or a partnership or association
wholly owned by citizens of the Philippines; or a corporation organized under the laws of the
Philippines of which at least sixty per cent of the capital stock outstanding and entitled to vote is
owned and held by citizens of the Philippines; or a trustee of funds for pension or other employee
retirement or separation benefits, where the trustee is a Philippine National and at least sixty per
cent of the fund will accrue to the benefit of Philippine Nationals: Provided, That where a
corporation and its non-Filipino stockholders own stock in a registered enterprise, at least sixty per
cent of the capital stock outstanding and entitled to vote of both corporations must be owned and
held by the citizens of the Philippines and at least sixty per cent of the members of the Board of
Directors of both corporations must be citizens of the Philippines in order that the corporation shall
be considered a Philippine National. (Boldfacing, italicization and underscoring supplied)
Under Section 3 of Republic Act No. 5455 or the Foreign Business Regulations Act, which took
effect on 30 September 1968, if the investment in a domestic enterprise by non-Philippine
nationals exceeds 30% of its outstanding capital stock, such enterprise must obtain prior approval
from the Board of Investments before accepting such investment. Such approval shall not be
granted if the investment "would conflict with existing constitutional provisions and laws regulating
the degree of required ownership by Philippine nationals in the enterprise."31 A "non-Philippine
national" cannot own and operate a reserved economic activity like a public utility. Again, this
means that only a "Philippine national" can own and operate a public utility.
The FIA, like all its predecessor statutes, clearly defines a "Philippine national" as a Filipino
citizen, or a domestic corporation "at least sixty percent (60%) of the capital stock outstanding and
entitled to vote" is owned by Filipino citizens. A domestic corporation is a "Philippine national" only
if at least 60% of its voting stock is owned by Filipino citizens. This definition of a "Philippine
national" is crucial in the present case because the FIA reiterates and clarifies Section 11, Article
XII of the 1987 Constitution, which limits the ownership and operation of public utilities to Filipino
citizens or to corporations or associations at least 60% Filipino-owned.
The FIA is the basic law governing foreign investments in the Philippines, irrespective of the
nature of business and area of investment. The FIA spells out the procedures by which non-
Philippine nationals can invest in the Philippines. Among the key features of this law is the concept
of a negative list or the Foreign Investments Negative List.32 Section 8 of the law states:
SEC. 8. List of Investment Areas Reserved to Philippine Nationals [Foreign Investment Negative
List]. - The Foreign Investment Negative List shall have two 2 component lists: A and B:
a. List A shall enumerate the areas of activities reserved to Philippine nationals by mandate of the
Constitution and specific laws.
b. List B shall contain the areas of activities and enterprises regulated pursuant to law:
1. which are defense-related activities, requiring prior clearance and authorization from the
Department of National Defense [DND] to engage in such activity, such as the manufacture,
repair, storage and/or distribution of firearms, ammunition, lethal weapons, military ordinance,
explosives, pyrotechnics and similar materials; unless such manufacturing or repair activity is
specifically authorized, with a substantial export component, to a non-Philippine national by the
Secretary of National Defense; or
2. which have implications on public health and morals, such as the manufacture and distribution
of dangerous drugs; all forms of gambling; nightclubs, bars, beer houses, dance halls, sauna and
steam bathhouses and massage clinics. (Boldfacing, underscoring and italicization supplied)
Section 8 of the FIA enumerates the investment areas "reserved to Philippine nationals." Foreign
Investment Negative List A consists of "areas of activities reserved to Philippine nationals by
mandate of the Constitution and specific laws," where foreign equity participation in any enterprise
shall be limited to the maximum percentage expressly prescribed by the Constitution and other
specific laws. In short, to own and operate a public utility in the Philippines one must be a
"Philippine national" as defined in the FIA. The FIA is abundant notice to foreign investors to what
extent they can invest in public utilities in the Philippines.
To repeat, among the areas of investment covered by the Foreign Investment Negative List A is
the ownership and operation of public utilities, which the Constitution expressly reserves to Filipino
citizens and to corporations at least 60% owned by Filipino citizens. In other words, Negative List
A of the FIA reserves the ownership and operation of public utilities only to "Philippine nationals,"
defined in Section 3(a) of the FIA as "(1) a citizen of the Philippines; x x x or (3) a corporation
organized under the laws of the Philippines of which at least sixty percent (60%) of the capital
stock outstanding and entitled to vote is owned and held by citizens of the Philippines; or (4) a
corporation organized abroad and registered as doing business in the Philippines under the
Corporation Code of which one hundred percent (100%) of the capital stock outstanding and
entitled to vote is wholly owned by Filipinos or a trustee of funds for pension or other employee
retirement or separation benefits, where the trustee is a Philippine national and at least sixty
percent (60%) of the fund will accrue to the benefit of Philippine nationals."
Clearly, from the effectivity of the Investment Incentives Act of 1967 to the adoption of the
Omnibus Investments Code of 1981, to the enactment of the Omnibus Investments Code of 1987,
and to the passage of the present Foreign Investments Act of 1991, or for more than four
decades, the statutory definition of the term "Philippine national" has been uniform and consistent:
it means a Filipino citizen, or a domestic corporation at least 60% of the voting stock is owned by
Filipinos. Likewise, these same statutes have uniformly and consistently required that only
"Philippine nationals" could own and operate public utilities in the Philippines. The following
exchange during the Oral Arguments is revealing:
JUSTICE CARPIO:
Counsel, I have some questions. You are aware of the Foreign Investments Act of 1991, x x x?
And the FIA of 1991 took effect in 1991, correct? That’s over twenty (20) years ago, correct?
COMMISSIONER GAITE:
Correct, Your Honor.
JUSTICE CARPIO:
And Section 8 of the Foreign Investments Act of 1991 states that []only Philippine nationals can
own and operate public utilities[], correct?
COMMISSIONER GAITE:
Yes, Your Honor.
JUSTICE CARPIO:
And the same Foreign Investments Act of 1991 defines a "Philippine national" either as a citizen of
the Philippines, or if it is a corporation at least sixty percent (60%) of the voting stock is owned by
citizens of the Philippines, correct?
COMMISSIONER GAITE:
Correct, Your Honor.
JUSTICE CARPIO:
And, you are also aware that under the predecessor law of the Foreign Investments Act of 1991,
the Omnibus Investments Act of 1987, the same provisions apply: x x x only Philippine nationals
can own and operate a public utility and the Philippine national, if it is a corporation, x x x sixty
percent (60%) of the capital stock of that corporation must be owned by citizens of the Philippines,
correct?
COMMISSIONER GAITE:
Correct, Your Honor.
JUSTICE CARPIO:
And even prior to the Omnibus Investments Act of 1987, under the Omnibus Investments Act of
1981, the same rules apply: x x x only a Philippine national can own and operate a public utility
and a Philippine national, if it is a corporation, sixty percent (60%) of its x x x voting stock, must be
owned by citizens of the Philippines, correct?
COMMISSIONER GAITE:
Correct, Your Honor.
JUSTICE CARPIO:
And even prior to that, under [the]1967 Investments Incentives Act and the Foreign Company Act
of 1968, the same rules applied, correct?
COMMISSIONER GAITE:
Correct, Your Honor.
JUSTICE CARPIO:
So, for the last four (4) decades, x x x, the law has been very consistent – only a Philippine
national can own and operate a public utility, and a Philippine national, if it is a corporation, x x x at
least sixty percent (60%) of the voting stock must be owned by citizens of the Philippines, correct?
COMMISSIONER GAITE:
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Correct, Your Honor.33 (Emphasis supplied)
Government agencies like the SEC cannot simply ignore Sections 3(a) and 8 of the FIA which
categorically prescribe that certain economic activities, like the ownership and operation of public
utilities, are reserved to corporations "at least sixty percent (60%) of the capital stock outstanding
and entitled to vote is owned and held by citizens of the Philippines." Foreign Investment Negative
List A refers to "activities reserved to Philippine nationals by mandate of the Constitution and
specific laws." The FIA is the basic statute regulating foreign investments in the Philippines.
Government agencies tasked with regulating or monitoring foreign investments, as well as
counsels of foreign investors, should start with the FIA in determining to what extent a particular
foreign investment is allowed in the Philippines. Foreign investors and their counsels who ignore
the FIA do so at their own peril. Foreign investors and their counsels who rely on opinions of SEC
legal officers that obviously contradict the FIA do so also at their own peril.
Occasional opinions of SEC legal officers that obviously contradict the FIA should immediately
raise a red flag. There are already numerous opinions of SEC legal officers that cite the definition
of a "Philippine national" in Section 3(a) of the FIA in determining whether a particular corporation
is qualified to own and operate a nationalized or partially nationalized business in the Philippines.
This shows that SEC legal officers are not only aware of, but also rely on and invoke, the
provisions of the FIA in ascertaining the eligibility of a corporation to engage in partially
nationalized industries. The following are some of such opinions:
1. Opinion of 23 March 1993, addressed to Mr. Francis F. How;
2. Opinion of 14 April 1993, addressed to Director Angeles T. Wong of the Philippine Overseas
Employment Administration;
3. Opinion of 23 November 1993, addressed to Messrs. Dominador Almeda and Renato S. Calma;
4. Opinion of 7 December 1993, addressed to Roco Bunag Kapunan Migallos & Jardeleza;
5. SEC Opinion No. 49-04, addressed to Romulo Mabanta Buenaventura Sayoc & De Los
Angeles;
6. SEC-OGC Opinion No. 17-07, addressed to Mr. Reynaldo G. David; and
7. SEC-OGC Opinion No. 03-08, addressed to Attys. Ruby Rose J. Yusi and Rudyard S.
Arbolado.
The SEC legal officers’ occasional but blatant disregard of the definition of the term "Philippine
national" in the FIA signifies their lack of integrity and competence in resolving issues on the 60-40
ownership requirement in favor of Filipino citizens in Section 11, Article XII of the Constitution.
The PSE President argues that the term "Philippine national" defined in the FIA should be limited
and interpreted to refer to corporations seeking to avail of tax and fiscal incentives under
investment incentives laws and cannot be equated with the term "capital" in Section 11, Article XII
of the 1987 Constitution. Pangilinan similarly contends that the FIA and its predecessor statutes
do not apply to "companies which have not registered and obtained special incentives under the
schemes established by those laws."
Both are desperately grasping at straws. The FIA does not grant tax or fiscal incentives to any
enterprise. Tax and fiscal incentives to investments are granted separately under the Omnibus
Investments Code of 1987, not under the FIA. In fact, the FIA expressly repealed Articles 44 to 56
of Book II of the Omnibus Investments Code of 1987, which articles previously regulated foreign
investments in nationalized or partially nationalized industries.
The FIA is the applicable law regulating foreign investments in nationalized or partially
nationalized industries. There is nothing in the FIA, or even in the Omnibus Investments Code of
1987 or its predecessor statutes, that states, expressly or impliedly, that the FIA or its predecessor
statutes do not apply to enterprises not availing of tax and fiscal incentives under the Code. The
FIA and its predecessor statutes apply to investments in all domestic enterprises, whether or not
such enterprises enjoy tax and fiscal incentives under the Omnibus Investments Code of 1987 or
its predecessor statutes. The reason is quite obvious – mere non-availment of tax and fiscal
incentives by a non-Philippine national cannot exempt it from Section 11, Article XII of the
Constitution regulating foreign investments in public utilities. In fact, the Board of Investments’
Primer on Investment Policies in the Philippines,34 which is given out to foreign investors,
provides:
PART III. FOREIGN INVESTMENTS WITHOUT INCENTIVES
Investors who do not seek incentives and/or whose chosen activities do not qualify for incentives,
(i.e., the activity is not listed in the IPP, and they are not exporting at least 70% of their production)
may go ahead and make the investments without seeking incentives. They only have to be guided
by the Foreign Investments Negative List (FINL).
The FINL clearly defines investment areas requiring at least 60% Filipino ownership. All other
areas outside of this list are fully open to foreign investors. (Emphasis supplied)
V.
Right to elect directors, coupled with beneficial ownership,translates to effective control.
The 28 June 2011 Decision declares that the 60 percent Filipino ownership required by the
Constitution to engage in certain economic activities applies not only to voting control of the
corporation, but also to the beneficial ownership of the corporation. To repeat, we held:
Mere legal title is insufficient to meet the 60 percent Filipino-owned "capital" required in the
Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with
60 percent of the voting rights, is required. The legal and beneficial ownership of 60 percent of the
outstanding capital stock must rest in the hands of Filipino nationals in accordance with the
constitutional mandate. Otherwise, the corporation is "considered as non-Philippine national[s]."
(Emphasis supplied)
This is consistent with Section 3 of the FIA which provides that where 100% of the capital stock is
held by "a trustee of funds for pension or other employee retirement or separation benefits," the
trustee is a Philippine national if "at least sixty percent (60%) of the fund will accrue to the benefit
of Philippine nationals." Likewise, Section 1(b) of the Implementing Rules of the FIA provides that
"for stocks to be deemed owned and held by Philippine citizens or Philippine nationals, mere legal
title is not enough to meet the required Filipino equity. Full beneficial ownership of the stocks,
coupled with appropriate voting rights, is essential."
Since the constitutional requirement of at least 60 percent Filipino ownership applies not only to
voting control of the corporation but also to the beneficial ownership of the corporation, it is
therefore imperative that such requirement apply uniformly and across the board to all classes of
shares, regardless of nomenclature and category, comprising the capital of a corporation. Under
the Corporation Code, capital stock35 consists of all classes of shares issued to stockholders, that
is, common shares as well as preferred shares, which may have different rights, privileges or
restrictions as stated in the articles of incorporation.36
The Corporation Code allows denial of the right to vote to preferred and redeemable shares, but
disallows denial of the right to vote in specific corporate matters. Thus, common shares have the
right to vote in the election of directors, while preferred shares may be denied such right.
Nonetheless, preferred shares, even if denied the right to vote in the election of directors, are
entitled to vote on the following corporate matters: (1) amendment of articles of incorporation; (2)
increase and decrease of capital stock; (3) incurring, creating or increasing bonded indebtedness;
(4) sale, lease, mortgage or other disposition of substantially all corporate assets; (5) investment
of funds in another business or corporation or for a purpose other than the primary purpose for
which the corporation was organized; (6) adoption, amendment and repeal of by-laws; (7) merger
and consolidation; and (8) dissolution of corporation.37
Since a specific class of shares may have rights and privileges or restrictions different from the
rest of the shares in a corporation, the 60-40 ownership requirement in favor of Filipino citizens in
Section 11, Article XII of the Constitution must apply not only to shares with voting rights but also
to shares without voting rights. Preferred shares, denied the right to vote in the election of
directors, are anyway still entitled to vote on the eight specific corporate matters mentioned above.
Thus, if a corporation, engaged in a partially nationalized industry, issues a mixture of common
and preferred non-voting shares, at least 60 percent of the common shares and at least 60
percent of the preferred non-voting shares must be owned by Filipinos. Of course, if a corporation
issues only a single class of shares, at least 60 percent of such shares must necessarily be owned
by Filipinos. In short, the 60-40 ownership requirement in favor of Filipino citizens must apply
separately to each class of shares, whether common, preferred non-voting, preferred voting or any
other class of shares. This uniform application of the 60-40 ownership requirement in favor of
Filipino citizens clearly breathes life to the constitutional command that the ownership and
operation of public utilities shall be reserved exclusively to corporations at least 60 percent of
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whose capital is Filipino-owned. Applying uniformly the 60-40 ownership requirement in favor of
Filipino citizens to each class of shares, regardless of differences in voting rights, privileges and
restrictions, guarantees effective Filipino control of public utilities, as mandated by the
Constitution.
Moreover, such uniform application to each class of shares insures that the "controlling interest" in
public utilities always lies in the hands of Filipino citizens. This addresses and extinguishes
Pangilinan’s worry that foreigners, owning most of the non-voting shares, will exercise greater
control over fundamental corporate matters requiring two-thirds or majority vote of all
shareholders.
VI.
Intent of the framers of the Constitution
While Justice Velasco quoted in his Dissenting Opinion38 a portion of the deliberations of the
Constitutional Commission to support his claim that the term "capital" refers to the total
outstanding shares of stock, whether voting or non-voting, the following excerpts of the
deliberations reveal otherwise. It is clear from the following exchange that the term "capital" refers
to controlling interest of a corporation, thus:
MR. NOLLEDO. In Sections 3, 9 and 15, the Committee stated local or Filipino equity and foreign
equity; namely, 60-40 in Section 3, 60-40 in Section 9 and 2/3-1/3 in Section 15.
MR. VILLEGAS. That is right.
MR. NOLLEDO. In teaching law, we are always faced with this question: "Where do we base the
equity requirement, is it on the authorized capital stock, on the subscribed capital stock, or on the
paid-up capital stock of a corporation"? Will the Committee please enlighten me on this?
MR. VILLEGAS. We have just had a long discussion with the members of the team from the UP
Law Center who provided us a draft. The phrase that is contained here which we adopted from the
UP draft is "60 percent of voting stock."
MR. NOLLEDO. That must be based on the subscribed capital stock, because unless declared
delinquent, unpaid capital stock shall be entitled to vote.
MR. VILLEGAS. That is right.
MR. NOLLEDO. Thank you.
With respect to an investment by one corporation in another corporation, say, a corporation with
60-40 percent equity invests in another corporation which is permitted by the Corporation Code,
does the Committee adopt the grandfather rule?
MR. VILLEGAS. Yes, that is the understanding of the Committee.
MR. NOLLEDO. Therefore, we need additional Filipino capital?
MR. VILLEGAS. Yes.39
xxxx
MR. AZCUNA. May I be clarified as to that portion that was accepted by the Committee.
MR. VILLEGAS. The portion accepted by the Committee is the deletion of the phrase "voting stock
or controlling interest."
MR. AZCUNA. Hence, without the Davide amendment, the committee report would read:
"corporations or associations at least sixty percent of whose CAPITAL is owned by such citizens."
MR. VILLEGAS. Yes.
MR. AZCUNA. So if the Davide amendment is lost, we are stuck with 60 percent of the capital to
be owned by citizens.
MR. VILLEGAS. That is right.
MR. AZCUNA. But the control can be with the foreigners even if they are the minority. Let us say
40 percent of the capital is owned by them, but it is the voting capital, whereas, the Filipinos own
the nonvoting shares. So we can have a situation where the corporation is controlled by foreigners
despite being the minority because they have the voting capital. That is the anomaly that would
result here.
MR. BENGZON. No, the reason we eliminated the word "stock" as stated in the 1973 and 1935
Constitutions is that according to Commissioner Rodrigo, there are associations that do not have
stocks. That is why we say "CAPITAL."
MR. AZCUNA. We should not eliminate the phrase "controlling interest."
MR. BENGZON. In the case of stock corporations, it is assumed.40 (Boldfacing and underscoring
supplied)
Thus, 60 percent of the "capital" assumes, or should result in, a "controlling interest" in the
corporation.
The use of the term "capital" was intended to replace the word "stock" because associations
without stocks can operate public utilities as long as they meet the 60-40 ownership requirement
in favor of Filipino citizens prescribed in Section 11, Article XII of the Constitution. However, this
did not change the intent of the framers of the Constitution to reserve exclusively to Philippine
nationals the "controlling interest" in public utilities.
During the drafting of the 1935 Constitution, economic protectionism was "the battle-cry of the
nationalists in the Convention."41 The same battle-cry resulted in the nationalization of the public
utilities.42 This is also the same intent of the framers of the 1987 Constitution who adopted the
exact formulation embodied in the 1935 and 1973 Constitutions on foreign equity limitations in
partially nationalized industries.
The OSG, in its own behalf and as counsel for the State,43 agrees fully with the Court’s
interpretation of the term "capital." In its Consolidated Comment, the OSG explains that the
deletion of the phrase "controlling interest" and replacement of the word "stock" with the term
"capital" were intended specifically to extend the scope of the entities qualified to operate public
utilities to include associations without stocks. The framers’ omission of the phrase "controlling
interest" did not mean the inclusion of all shares of stock, whether voting or non-voting. The OSG
reiterated essentially the Court’s declaration that the Constitution reserved exclusively to
Philippine nationals the ownership and operation of public utilities consistent with the State’s policy
to "develop a self-reliant and independent national economy effectively controlled by Filipinos."
As we held in our 28 June 2011 Decision, to construe broadly the term "capital" as the total
outstanding capital stock, treated as a single class regardless of the actual classification of shares,
grossly contravenes the intent and letter of the Constitution that the "State shall develop a self-
reliant and independent national economy effectively controlled by Filipinos." We illustrated the
glaring anomaly which would result in defining the term "capital" as the total outstanding capital
stock of a corporation, treated as a single class of shares regardless of the actual classification of
shares, to wit:
Let us assume that a corporation has 100 common shares owned by foreigners and 1,000,000
non-voting preferred shares owned by Filipinos, with both classes of share having a par value of
one peso (₱ 1.00) per share. Under the broad definition of the term "capital," such corporation
would be considered compliant with the 40 percent constitutional limit on foreign equity of public
utilities since the overwhelming majority, or more than 99.999 percent, of the total outstanding
capital stock is Filipino owned. This is obviously absurd.
In the example given, only the foreigners holding the common shares have voting rights in the
election of directors, even if they hold only 100 shares. The foreigners, with a minuscule equity of
less than 0.001 percent, exercise control over the public utility. On the other hand, the Filipinos,
holding more than 99.999 percent of the equity, cannot vote in the election of directors and hence,
have no control over the public utility. This starkly circumvents the intent of the framers of the
Constitution, as well as the clear language of the Constitution, to place the control of public utilities
in the hands of Filipinos. x x x
Further, even if foreigners who own more than forty percent of the voting shares elect an all-
Filipino board of directors, this situation does not guarantee Filipino control and does not in any
way cure the violation of the Constitution. The independence of the Filipino board members so
elected by such foreign shareholders is highly doubtful. As the OSG pointed out, quoting Justice
George Sutherland’s words in Humphrey’s Executor v. US,44 "x x x it is quite evident that one who
holds his office only during the pleasure of another cannot be depended upon to maintain an
attitude of independence against the latter’s will." Allowing foreign shareholders to elect a
controlling majority of the board, even if all the directors are Filipinos, grossly circumvents the
letter and intent of the Constitution and defeats the very purpose of our nationalization laws.
VII.
Last sentence of Section 11, Article XII of the Constitution
The last sentence of Section 11, Article XII of the 1987 Constitution reads:
The participation of foreign investors in the governing body of any public utility enterprise shall be
limited to their proportionate share in its capital, and all the executive and managing officers of
such corporation or association must be citizens of the Philippines.
During the Oral Arguments, the OSG emphasized that there was never a question on the intent of
the framers of the Constitution to limit foreign ownership, and assure majority Filipino ownership
and control of public utilities. The OSG argued, "while the delegates disagreed as to the
percentage threshold to adopt, x x x the records show they clearly understood that Filipino control
255
of the public utility corporation can only be and is obtained only through the election of a majority
of the members of the board."
Indeed, the only point of contention during the deliberations of the Constitutional Commission on
23 August 1986 was the extent of majority Filipino control of public utilities. This is evident from
the following exchange:
THE PRESIDENT. Commissioner Jamir is recognized.
MR. JAMIR. Madam President, my proposed amendment on lines 20 and 21 is to delete the
phrase "two thirds of whose voting stock or controlling interest," and instead substitute the words
"SIXTY PERCENT OF WHOSE CAPITAL" so that the sentence will read: "No franchise,
certificate, or any other form of authorization for the operation of a public utility shall be granted
except to citizens of the Philippines or to corporations or associations organized under the laws of
the Philippines at least SIXTY PERCENT OF WHOSE CAPITAL is owned by such citizens."
xxxx
THE PRESIDENT: Will Commissioner Jamir first explain?
MR. JAMIR. Yes, in this Article on National Economy and Patrimony, there were two previous
sections in which we fixed the Filipino equity to 60 percent as against 40 percent for foreigners. It
is only in this Section 15 with respect to public utilities that the committee proposal was increased
to two-thirds. I think it would be better to harmonize this provision by providing that even in the
case of public utilities, the minimum equity for Filipino citizens should be 60 percent.
MR. ROMULO. Madam President.
THE PRESIDENT. Commissioner Romulo is recognized.
MR. ROMULO. My reason for supporting the amendment is based on the discussions I have had
with representatives of the Filipino majority owners of the international record carriers, and the
subsequent memoranda they submitted to me. x x x
Their second point is that under the Corporation Code, the management and control of a
corporation is vested in the board of directors, not in the officers but in the board of directors. The
officers are only agents of the board. And they believe that with 60 percent of the equity, the
Filipino majority stockholders undeniably control the board. Only on important corporate acts can
the 40-percent foreign equity exercise a veto, x x x.
x x x x45
MS. ROSARIO BRAID. Madam President.
THE PRESIDENT. Commissioner Rosario Braid is recognized.
MS. ROSARIO BRAID. Yes, in the interest of equal time, may I also read from a memorandum by
the spokesman of the Philippine Chamber of Communications on why they would like to maintain
the present equity, I am referring to the 66 2/3. They would prefer to have a 75-25 ratio but would
settle for 66 2/3. x x x
xxxx
THE PRESIDENT. Just to clarify, would Commissioner Rosario Braid support the proposal of two-
thirds rather than the 60 percent?
MS. ROSARIO BRAID. I have added a clause that will put management in the hands of Filipino
citizens.
x x x x46
While they had differing views on the percentage of Filipino ownership of capital, it is clear that the
framers of the Constitution intended public utilities to be majority Filipino-owned and controlled. To
ensure that Filipinos control public utilities, the framers of the Constitution approved, as additional
safeguard, the inclusion of the last sentence of Section 11, Article XII of the Constitution
commanding that "[t]he participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be citizens of the Philippines." In other
words, the last sentence of Section 11, Article XII of the Constitution mandates that (1) the
participation of foreign investors in the governing body of the corporation or association shall be
limited to their proportionate share in the capital of such entity; and (2) all officers of the
corporation or association must be Filipino citizens.
Commissioner Rosario Braid proposed the inclusion of the phrase requiring the managing officers
of the corporation or association to be Filipino citizens specifically to prevent management
contracts, which were designed primarily to circumvent the Filipinization of public utilities, and to
assure Filipino control of public utilities, thus:
MS. ROSARIO BRAID. x x x They also like to suggest that we amend this provision by adding a
phrase which states: "THE MANAGEMENT BODY OF EVERY CORPORATION OR
ASSOCIATION SHALL IN ALL CASES BE CONTROLLED BY CITIZENS OF THE PHILIPPINES."
I have with me their position paper.
THE PRESIDENT. The Commissioner may proceed.
MS. ROSARIO BRAID. The three major international record carriers in the Philippines, which
Commissioner Romulo mentioned – Philippine Global Communications, Eastern
Telecommunications, Globe Mackay Cable – are 40-percent owned by foreign multinational
companies and 60-percent owned by their respective Filipino partners. All three, however, also
have management contracts with these foreign companies – Philcom with RCA, ETPI with Cable
and Wireless PLC, and GMCR with ITT. Up to the present time, the general managers of these
carriers are foreigners. While the foreigners in these common carriers are only minority owners,
the foreign multinationals are the ones managing and controlling their operations by virtue of their
management contracts and by virtue of their strength in the governing bodies of these carriers.47
xxxx
MR. OPLE. I think a number of us have agreed to ask Commissioner Rosario Braid to propose an
amendment with respect to the operating management of public utilities, and in this amendment,
we are associated with Fr. Bernas, Commissioners Nieva and Rodrigo. Commissioner Rosario
Braid will state this amendment now.
Thank you.
MS. ROSARIO BRAID. Madam President.
THE PRESIDENT. This is still on Section 15.
MS. ROSARIO BRAID. Yes.
MR. VILLEGAS. Yes, Madam President.
xxxx
MS. ROSARIO BRAID. Madam President, I propose a new section to read: ‘THE MANAGEMENT
BODY OF EVERY CORPORATION OR ASSOCIATION SHALL IN ALL CASES BE
CONTROLLED BY CITIZENS OF THE PHILIPPINES."
This will prevent management contracts and assure control by Filipino citizens. Will the committee
assure us that this amendment will insure that past activities such as management contracts will
no longer be possible under this amendment?
xxxx
FR. BERNAS. Madam President.
THE PRESIDENT. Commissioner Bernas is recognized.
FR. BERNAS. Will the committee accept a reformulation of the first part?
MR. BENGZON. Let us hear it.
FR. BERNAS. The reformulation will be essentially the formula of the 1973 Constitution which
reads: "THE PARTICIPATION OF FOREIGN INVESTORS IN THE GOVERNING BODY OF ANY
PUBLIC UTILITY ENTERPRISE SHALL BE LIMITED TO THEIR PROPORTIONATE SHARE IN
THE CAPITAL THEREOF AND..."
MR. VILLEGAS. "ALL THE EXECUTIVE AND MANAGING OFFICERS OF SUCH
CORPORATIONS AND ASSOCIATIONS MUST BE CITIZENS OF THE PHILIPPINES."
MR. BENGZON. Will Commissioner Bernas read the whole thing again?
FR. BERNAS. "THE PARTICIPATION OF FOREIGN INVESTORS IN THE GOVERNING BODY
OF ANY PUBLIC UTILITY ENTERPRISE SHALL BE LIMITED TO THEIR PROPORTIONATE
SHARE IN THE CAPITAL THEREOF..." I do not have the rest of the copy.
MR. BENGZON. "AND ALL THE EXECUTIVE AND MANAGING OFFICERS OF SUCH
CORPORATIONS OR ASSOCIATIONS MUST BE CITIZENS OF THE PHILIPPINES." Is that
correct?
MR. VILLEGAS. Yes.
MR. BENGZON. Madam President, I think that was said in a more elegant language. We accept
the amendment. Is that all right with Commissioner Rosario Braid?
MS. ROSARIO BRAID. Yes.
xxxx
MR. DE LOS REYES. The governing body refers to the board of directors and trustees.
MR. VILLEGAS. That is right.
MR. BENGZON. Yes, the governing body refers to the board of directors.
MR. REGALADO. It is accepted.
256
MR. RAMA. The body is now ready to vote, Madam President.
VOTING
xxxx
The results show 29 votes in favor and none against; so the proposed amendment is approved.
xxxx
THE PRESIDENT. All right. Can we proceed now to vote on Section 15?
MR. RAMA. Yes, Madam President.
THE PRESIDENT. Will the chairman of the committee please read Section 15?
MR. VILLEGAS. The entire Section 15, as amended, reads: "No franchise, certificate, or any other
form of authorization for the operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the laws of the Philippines at least
60 PERCENT OF WHOSE CAPITAL is owned by such citizens." May I request Commissioner
Bengzon to please continue reading.
MR. BENGZON. "THE PARTICIPATION OF FOREIGN INVESTORS IN THE GOVERNING BODY
OF ANY PUBLIC UTILITY ENTERPRISE SHALL BE LIMITED TO THEIR PROPORTIONATE
SHARE IN THE CAPITAL THEREOF AND ALL THE EXECUTIVE AND MANAGING OFFICERS
OF SUCH CORPORATIONS OR ASSOCIATIONS MUST BE CITIZENS OF THE PHILIPPINES."
MR. VILLEGAS. "NOR SHALL SUCH FRANCHISE, CERTIFICATE OR AUTHORIZATION BE
EXCLUSIVE IN CHARACTER OR FOR A PERIOD LONGER THAN TWENTY-FIVE YEARS
RENEWABLE FOR NOT MORE THAN TWENTY-FIVE YEARS. Neither shall any such franchise
or right be granted except under the condition that it shall be subject to amendment, alteration, or
repeal by Congress when the common good so requires. The State shall encourage equity
participation in public utilities by the general public."
VOTING
xxxx
The results show 29 votes in favor and 4 against; Section 15, as amended, is approved.48
(Emphasis supplied)
The last sentence of Section 11, Article XII of the 1987 Constitution, particularly the provision on
the limited participation of foreign investors in the governing body of public utilities, is a reiteration
of the last sentence of Section 5, Article XIV of the 1973 Constitution,49 signifying its importance
in reserving ownership and control of public utilities to Filipino citizens.
VIII.
The undisputed facts
There is no dispute, and respondents do not claim the contrary, that (1) foreigners own 64.27% of
the common shares of PLDT, which class of shares exercises the sole right to vote in the election
of directors, and thus foreigners control PLDT; (2) Filipinos own only 35.73% of PLDT’s common
shares, constituting a minority of the voting stock, and thus Filipinos do not control PLDT; (3)
preferred shares, 99.44% owned by Filipinos, have no voting rights; (4) preferred shares earn only
1/70 of the dividends that common shares earn;50 (5) preferred shares have twice the par value of
common shares; and (6) preferred shares constitute 77.85% of the authorized capital stock of
PLDT and common shares only 22.15%.
Despite the foregoing facts, the Court did not decide, and in fact refrained from ruling on the
question of whether PLDT violated the 60-40 ownership requirement in favor of Filipino citizens in
Section 11, Article XII of the 1987 Constitution. Such question indisputably calls for a presentation
and determination of evidence through a hearing, which is generally outside the province of the
Court’s jurisdiction, but well within the SEC’s statutory powers. Thus, for obvious reasons, the
Court limited its decision on the purely legal and threshold issue on the definition of the term
"capital" in Section 11, Article XII of the Constitution and directed the SEC to apply such definition
in determining the exact percentage of foreign ownership in PLDT.
IX.
PLDT is not an indispensable party;
SEC is impleaded in this case.
In his petition, Gamboa prays, among others:
xxxx
5. For the Honorable Court to issue a declaratory relief that ownership of common or voting shares
is the sole basis in determining foreign equity in a public utility and that any other government
rulings, opinions, and regulations inconsistent with this declaratory relief be declared
unconstitutional and a violation of the intent and spirit of the 1987 Constitution;
6. For the Honorable Court to declare null and void all sales of common stocks to foreigners in
excess of 40 percent of the total subscribed common shareholdings; and
7. For the Honorable Court to direct the Securities and Exchange Commission and Philippine
Stock Exchange to require PLDT to make a public disclosure of all of its foreign shareholdings and
their actual and real beneficial owners.
Other relief(s) just and equitable are likewise prayed for. (Emphasis supplied)
As can be gleaned from his prayer, Gamboa clearly asks this Court to compel the SEC to perform
its statutory duty to investigate whether "the required percentage of ownership of the capital stock
to be owned by citizens of the Philippines has been complied with [by PLDT] as required by x x x
the Constitution."51 Such plea clearly negates SEC’s argument that it was not impleaded.
Granting that only the SEC Chairman was impleaded in this case, the Court has ample powers to
order the SEC’s compliance with its directive contained in the 28 June 2011 Decision in view of
the far-reaching implications of this case. In Domingo v. Scheer,52 the Court dispensed with the
amendment of the pleadings to implead the Bureau of Customs considering (1) the unique
backdrop of the case; (2) the utmost need to avoid further delays; and (3) the issue of public
interest involved. The Court held:
The Court may be curing the defect in this case by adding the BOC as party-petitioner. The
petition should not be dismissed because the second action would only be a repetition of the first.
In Salvador, et al., v. Court of Appeals, et al., we held that this Court has full powers, apart from
that power and authority which is inherent, to amend the processes, pleadings, proceedings and
decisions by substituting as party-plaintiff the real party-in-interest. The Court has the power to
avoid delay in the disposition of this case, to order its amendment as to implead the BOC as party-
respondent. Indeed, it may no longer be necessary to do so taking into account the unique
backdrop in this case, involving as it does an issue of public interest. After all, the Office of the
Solicitor General has represented the petitioner in the instant proceedings, as well as in the
appellate court, and maintained the validity of the deportation order and of the BOC’s Omnibus
Resolution. It cannot, thus, be claimed by the State that the BOC was not afforded its day in court,
simply because only the petitioner, the Chairperson of the BOC, was the respondent in the CA,
and the petitioner in the instant recourse. In Alonso v. Villamor, we had the occasion to state:
There is nothing sacred about processes or pleadings, their forms or contents. Their sole purpose
is to facilitate the application of justice to the rival claims of contending parties. They were created,
not to hinder and delay, but to facilitate and promote, the administration of justice. They do not
constitute the thing itself, which courts are always striving to secure to litigants. They are designed
as the means best adapted to obtain that thing. In other words, they are a means to an end. When
they lose the character of the one and become the other, the administration of justice is at fault
and courts are correspondingly remiss in the performance of their obvious duty.53 (Emphasis
supplied)
In any event, the SEC has expressly manifested54 that it will abide by the Court’s decision and
defer to the Court’s definition of the term "capital" in Section 11, Article XII of the Constitution.
Further, the SEC entered its special appearance in this case and argued during the Oral
Arguments, indicating its submission to the Court’s jurisdiction. It is clear, therefore, that there
exists no legal impediment against the proper and immediate implementation of the Court’s
directive to the SEC.
PLDT is an indispensable party only insofar as the other issues, particularly the factual questions,
are concerned. In other words, PLDT must be impleaded in order to fully resolve the issues on (1)
whether the sale of 111,415 PTIC shares to First Pacific violates the constitutional limit on foreign
ownership of PLDT; (2) whether the sale of common shares to foreigners exceeded the 40 percent
limit on foreign equity in PLDT; and (3) whether the total percentage of the PLDT common shares
with voting rights complies with the 60-40 ownership requirement in favor of Filipino citizens under
the Constitution for the ownership and operation of PLDT. These issues indisputably call for an
examination of the parties’ respective evidence, and thus are clearly within the jurisdiction of the
SEC. In short, PLDT must be impleaded, and must necessarily be heard, in the proceedings
before the SEC where the factual issues will be thoroughly threshed out and resolved.
Notably, the foregoing issues were left untouched by the Court. The Court did not rule on the
factual issues raised by Gamboa, except the single and purely legal issue on the definition of the
257
term "capital" in Section 11, Article XII of the Constitution. The Court confined the resolution of the
instant case to this threshold legal issue in deference to the fact-finding power of the SEC.
Needless to state, the Court can validly, properly, and fully dispose of the fundamental legal issue
in this case even without the participation of PLDT since defining the term "capital" in Section 11,
Article XII of the Constitution does not, in any way, depend on whether PLDT was impleaded.
Simply put, PLDT is not indispensable for a complete resolution of the purely legal question in this
case.55 In fact, the Court, by treating the petition as one for mandamus,56 merely directed the
SEC to apply the Court’s definition of the term "capital" in Section 11, Article XII of the Constitution
in determining whether PLDT committed any violation of the said constitutional provision. The
dispositive portion of the Court’s ruling is addressed not to PLDT but solely to the SEC, which is
the administrative agency tasked to enforce the 60-40 ownership requirement in favor of Filipino
citizens in Section 11, Article XII of the Constitution.
Since the Court limited its resolution on the purely legal issue on the definition of the term "capital"
in Section 11, Article XII of the 1987 Constitution, and directed the SEC to investigate any violation
by PLDT of the 60-40 ownership requirement in favor of Filipino citizens under the Constitution,57
there is no deprivation of PLDT’s property or denial of PLDT’s right to due process, contrary to
Pangilinan and Nazareno’s misimpression. Due process will be afforded to PLDT when it presents
proof to the SEC that it complies, as it claims here, with Section 11, Article XII of the Constitution.
X.
Foreign Investments in the Philippines
Movants fear that the 28 June 2011 Decision would spell disaster to our economy, as it may result
in a sudden flight of existing foreign investors to "friendlier" countries and simultaneously deterring
new foreign investors to our country. In particular, the PSE claims that the 28 June 2011 Decision
may result in the following: (1) loss of more than ₱ 630 billion in foreign investments in PSE-listed
shares; (2) massive decrease in foreign trading transactions; (3) lower PSE Composite Index; and
(4) local investors not investing in PSE-listed shares.58
Dr. Bernardo M. Villegas, one of the amici curiae in the Oral Arguments, shared movants’
apprehension. Without providing specific details, he pointed out the depressing state of the
Philippine economy compared to our neighboring countries which boast of growing economies.
Further, Dr. Villegas explained that the solution to our economic woes is for the government to
"take-over" strategic industries, such as the public utilities sector, thus:
JUSTICE CARPIO:
I would like also to get from you Dr. Villegas if you have additional information on whether this high
FDI59 countries in East Asia have allowed foreigners x x x control [of] their public utilities, so that
we can compare apples with apples.
DR. VILLEGAS:
Correct, but let me just make a comment. When these neighbors of ours find an industry strategic,
their solution is not to "Filipinize" or "Vietnamize" or "Singaporize." Their solution is to make sure
that those industries are in the hands of state enterprises. So, in these countries, nationalization
means the government takes over. And because their governments are competent and honest
enough to the public, that is the solution. x x x 60 (Emphasis supplied)
If government ownership of public utilities is the solution, then foreign investments in our public
utilities serve no purpose. Obviously, there can never be foreign investments in public utilities if, as
Dr. Villegas claims, the "solution is to make sure that those industries are in the hands of state
enterprises." Dr. Villegas’s argument that foreign investments in telecommunication companies
like PLDT are badly needed to save our ailing economy contradicts his own theory that the
solution is for government to take over these companies. Dr. Villegas is barking up the wrong tree
since State ownership of public utilities and foreign investments in such industries are
diametrically opposed concepts, which cannot possibly be reconciled.
In any event, the experience of our neighboring countries cannot be used as argument to decide
the present case differently for two reasons. First, the governments of our neighboring countries
have, as claimed by Dr. Villegas, taken over ownership and control of their strategic public utilities
like the telecommunications industry. Second, our Constitution has specific provisions limiting
foreign ownership in public utilities which the Court is sworn to uphold regardless of the
experience of our neighboring countries.
In our jurisdiction, the Constitution expressly reserves the ownership and operation of public
utilities to Filipino citizens, or corporations or associations at least 60 percent of whose capital
belongs to Filipinos. Following Dr. Villegas’s claim, the Philippines appears to be more liberal in
allowing foreign investors to own 40 percent of public utilities, unlike in other Asian countries
whose governments own and operate such industries.
XI.
Prospective Application of Sanctions
In its Motion for Partial Reconsideration, the SEC sought to clarify the reckoning period of the
application and imposition of appropriate sanctions against PLDT if found violating Section 11,
Article XII of the Constitution.1avvphi1
As discussed, the Court has directed the SEC to investigate and determine whether PLDT violated
Section 11, Article XII of the Constitution. Thus, there is no dispute that it is only after the SEC has
determined PLDT’s violation, if any exists at the time of the commencement of the administrative
case or investigation, that the SEC may impose the statutory sanctions against PLDT. In other
words, once the 28 June 2011 Decision becomes final, the SEC shall impose the appropriate
sanctions only if it finds after due hearing that, at the start of the administrative case or
investigation, there is an existing violation of Section 11, Article XII of the Constitution. Under
prevailing jurisprudence, public utilities that fail to comply with the nationality requirement under
Section 11, Article XII and the FIA can cure their deficiencies prior to the start of the administrative
case or investigation.61
XII.
Final Word
The Constitution expressly declares as State policy the development of an economy "effectively
controlled" by Filipinos. Consistent with such State policy, the Constitution explicitly reserves the
ownership and operation of public utilities to Philippine nationals, who are defined in the Foreign
Investments Act of 1991 as Filipino citizens, or corporations or associations at least 60 percent of
whose capital with voting rights belongs to Filipinos. The FIA’s implementing rules explain that
"[f]or stocks to be deemed owned and held by Philippine citizens or Philippine nationals, mere
legal title is not enough to meet the required Filipino equity. Full beneficial ownership of the stocks,
coupled with appropriate voting rights is essential." In effect, the FIA clarifies, reiterates and
confirms the interpretation that the term "capital" in Section 11, Article XII of the 1987 Constitution
refers to shares with voting rights, as well as with full beneficial ownership. This is precisely
because the right to vote in the election of directors, coupled with full beneficial ownership of
stocks, translates to effective control of a corporation.
Any other construction of the term "capital" in Section 11, Article XII of the Constitution
contravenes the letter and intent of the Constitution. Any other meaning of the term "capital"
openly invites alien domination of economic activities reserved exclusively to Philippine nationals.
Therefore, respondents’ interpretation will ultimately result in handing over effective control of our
national economy to foreigners in patent violation of the Constitution, making Filipinos second-
class citizens in their own country.
Filipinos have only to remind themselves of how this country was exploited under the Parity
Amendment, which gave Americans the same rights as Filipinos in the exploitation of natural
resources, and in the ownership and control of public utilities, in the Philippines. To do this the
1935 Constitution, which contained the same 60 percent Filipino ownership and control
requirement as the present 1987 Constitution, had to be amended to give Americans parity rights
with Filipinos. There was bitter opposition to the Parity Amendment62 and many Filipinos eagerly
awaited its expiration. In late 1968, PLDT was one of the American-controlled public utilities that
258
became Filipino-controlled when the controlling American stockholders divested in anticipation of Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
the expiration of the Parity Amendment on 3 July 1974.63 No economic suicide happened when Resolution had been reached in consultation before the case was assigned to the writer of the
control of public utilities and mining corporations passed to Filipinos’ hands upon expiration of the opinion of the Court.
Parity Amendment. MARIA LOURDES P.A. SERENO
Chief Justice
Movants’ interpretation of the term "capital" would bring us back to the same evils spawned by the
Parity Amendment, effectively giving foreigners parity rights with Filipinos, but this time even Footnotes
without any amendment to the present Constitution. Worse, movants’ interpretation opens up our * The Heirs of Wilson P. Gamboa substituted petitioner Wilson P. Gamboa per Resolution dated
national economy to effective control not only by Americans but also by all foreigners, be they 17 April 2012 which noted the Manifestation of Lauro Gamboa dated 12 April 2012.
Indonesians, Malaysians or Chinese, even in the absence of reciprocal treaty arrangements. At 1 Rol/o(Vol.lll),pp.l431-1451. Dated II July2011.
least the Parity Amendment, as implemented by the Laurel-Langley Agreement, gave the capital- 2 Id. at 1563-1613. Dated 14 July 2011.
starved Filipinos theoretical parity – the same rights as Americans to exploit natural resources, 3 Id. at 1454-1537. Dated 15 July 2011.
and to own and control public utilities, in the United States of America. Here, movants’ 4 Id. at 1669-1680. Through its Office of the General Counsel and Commissioner Manuel llubeiio
interpretation would effectively mean a unilateral opening up of our national economy to all B. Gaite. In its Manifestation and Omnibus Motion dated 29 July 20 II, the SEC manifested that the
foreigners, without any reciprocal arrangements. That would mean that Indonesians, Malaysians position of the OSG on the meaning of the term "capital" does not reflect the view of the SEC.
and Chinese nationals could effectively control our mining companies and public utilities while The SEC sought a partial re~onsideration praying that the statement on SEC's unlawful neglect of
Filipinos, even if they have the capital, could not control similar corporations in these countries. its statutory duty be expunged and for clarification on the reckoning period of the imposition of any
sanctions against PLOT.
The 1935, 1973 and 1987 Constitutions have the same 60 percent Filipino ownership and control 5 Id. at 1614-1627. Dated 13 July 2011. On behalfofthe SEC, by special appearance. The OSG
requirement for public utilities like PLOT. Any deviation from this requirement necessitates an prayed that the Court's decision "be cured of its procedural defect which however should not
amendment to the Constitution as exemplified by the Parity Amendment. This Court has no power prevail over the substantive aspect of the Decision."
to amend the Constitution for its power and duty is only to faithfully apply and interpret the 6 I d. at 2102-2124. Filed on 15 December 20 II.
Constitution. 7 Salvacion v. Central Bank of the Philippines, 343 Phil. 539 (1997).
8 150-B Phil. 380 (1972).
WHEREFORE, we DENY the motions for reconsideration WITH FINALITY. No further pleadings 9 Rollo (Vol. III), p. 1583.
shall be entertained. 10 Addressed to Gov. Lilia Bautista of the Board of Investments.
SO ORDERED. 11 A typographical error in DOJ Opinion No. 130 where it states 80%.
ANTONIO T. CARPIO 12 Republic Act No. 8799.
Associate Justice 13 General Counsel and Commissioner Manuel Huberto B. Gaite of the Securities and Exchange
WE CONCUR: Commission.
MARIA LOURDES P.A. SERENO 14 TSN (Oral Arguments), 26 June 2012, pp. 81-83. Emphasis supplied.
Chief Justice 15 SEC En Banc Case No. 09-09-177, 25 March 2010.
PRESBITERO J. VELASCO, JR. 16 SEC Opinion No. 49-04, Re: Corporations considered as Philippine Nationals, dated 22
Associate Justice December 2004, addressed to Romulo Mabanta Buenaventura Sayoc & De Los Angeles and
TERESITA J. LEONARDO-DE CASTRO signed by General Counsel Vernette G. Umali-Paco; SEC-OGC Opinion No. 03-08, dated 15
Associate Justice January 2008, addressed to Attys. Ruby Rose J. Yusi and Rudyard S. Arbolado and signed by
ARTURO D. BRION General Counsel Vernette G. Umali-Paco; SEC-OGC Opinion No. 09-09, dated 28 April 2009,
Associate Justice addressed to Villaraza Cruz Marcelo Angangco and signed by General Counsel Vernette G.
DIOSDADO M. PERALTA Umali-Paco; SECOGC Opinion No. 08-10, dated 8 February 2010, addressed to Mr. Teodoro B.
Associate Justice Quijano and signed by General Counsel Vernette G. Umali-Paco; SEC-OGC Opinion No. 23-10,
LUCAS P. BERSAMIN dated 18 August 2010, addressed to Castillo Laman Tan Pantaleon and San Jose and signed by
Associate Justice General Counsel Vernette G. Umali-Paco; SEC-OGC Opinion No. 18-07, dated 28 November
MARIANO C. DEL CASTILLO 2007, addressed to Mr. Rafael C. Bueno, Jr. and signed by General Counsel Vernette G. Umali-
Associate Justice Paco.
ROBERTO A. ABAD In SEC Opinion No. 32-03, dated 2 June 2003, addressed to National Telecommunications
Associate Justice Commissioner Armi Jane R. Borje, SEC General Counsel Vernette G. Umali-Paco stated:
MARTIN S. VILLARAMA, JR. In this light, it is imperative that we reiterate the policy of this Commission (SEC) in refraining from
Associate Justice rendering opinions that might prejudice or affect the outcome of a case, which is subject to present
JOSE PORTUGAL PEREZ litigation before the courts, or any other forum for that matter. The opinion, which may be rendered
Associate Justice thereon, would not be binding upon any party who would in all probability, if the opinion happens
JOSE C. MENDOZA to be adverse to his or its interest, take issue therewith and contest it before the proper venue.
Associate Justice The Commission, therefore, has to refrain from giving categorical answers to your query.
BIENVENIDO L. REYES 17 370 Phil. 538 (1999).
Associate Justice 18 G.R. No. 152685, 4 December 2007, 539 SCRA 365.
ESTELA M. PERLAS-BERNABE 19 Rollo (Vol. III), pp. 1392-1393.
Associate Justice 20 Supra.
CERTIFICATION 21 Supra.

259
22 De Leon, Hector S., TEXTBOOK ON THE PHILIPPINE CONSTITUTION, 2005 Edition, pp. 32,
33.
23 Section 10, Article XII of the 1987 Constitution.
24 Bernas, Joaquin G., S.J., THE 1987 CONSTITUTION OF THE REPUBLIC OF THE
PHILIPPINES: A COMMENTARY, 1996 Edition, p. 1044, citing Smith, Bell and Co. v. Natividad,
40 Phil. 136, 148 (1919); Luzon Stevedoring Corporation v. Anti-Dummy Board, 150-B Phil. 380,
403-404 (1972).
25 Issued on 17 July 1987.
26 Articles 44 to 56 of the Omnibus Investments Code of 1987 were later repealed by the Foreign
Investments Act of 1991. See infra, p. 26.
27 Article 48. Authority to Do Business. No alien, and no firm association, partnership, corporation
or any other form of business organization formed, organized, chartered or existing under any
laws other than those of the Philippines, or which is not a Philippine national, or more than forty
percent (40%) of the outstanding capital of which is owned or controlled by aliens shall do
business or engage in any economic activity in the Philippines or be registered, licensed, or
permitted by the Securities and Exchange Commission or by any other bureau, office, agency,
political subdivision or instrumentality of the government, to do business, or engage in any
economic activity in the Philippines without first securing a written certificate from the Board of
Investments to the effect:
xxxx
(3) That such business or economic activity by the applicant would not conflict with the
Constitution or laws of the Philippines;
xxxx
28 Presidential Decree No. 1789.
29 Article 69. Authority to Do Business. No alien, and no firm, association, partnership, corporation
or any other form of business organization formed, organized, chartered or existing under any
laws other than those of the Philippines, or which is not a Philippine national, or more than thirty
(30%) per cent of the outstanding capital of which is owned or controlled by aliens shall do
business or engage in any economic activity in the Philippines, or be registered, licensed, or
permitted by the Securities and Exchange Commission or by any other bureau, office, agency,
political subdivision or instrumentality of the government, to do business, or engage in any
economic activity in the Philippines, without first securing a written certificate from the Board of
Investments to the effect:
xxxx
(3) That such business or economic activity by the applicant would not conflict with the
Constitution or laws of the Philippines;
xxxx
30 An Act Prescribing Incentives And Guarantees To Investments In The Philippines, Creating A
Board Of Investments, Appropriating The Necessary Funds Therefor And For Other Purposes.
31 Section 3 of RA No. 5455 states:
Section 3. Permissible Investments. If an investment by a non-Philippine national in an enterprise
not registered under the Investment Incentives Act is such that the total participation by non-
Philippine nationals in the outstanding capital thereof shall exceed thirty per cent, the enterprise
must obtain prior authority from the Board of Investments, which authority shall be granted unless
the proposed investment
(a) Would conflict with existing constitutional provisions and laws regulating the degree of required
ownership by Philippine nationals in the enterprise; or
(b) Would pose a clear and present danger of promoting monopolies or combinations in restraint
of trade; or
(c) Would be made in an enterprise engaged in an area adequately being exploited by Philippine
nationals; or
(d) Would conflict or be inconsistent with the Investments Priorities Plan in force at the time the
investment is sought to be made; or
(e) Would not contribute to the sound and balanced development of the national economy on a
self-sustaining basis.
xxxx
32 Executive Order No. 858, Promulgating the Eighth Regular Foreign Investment Negative List,
signed on 5 February 2010, http://www.boi.gov.ph/pdf/laws/eo/EO%20858.pdf (accessed 17
August 2011).
33 TSN (Oral Arguments), 26 June 2012, pp. 71-74.
34 Published by the Board of Investments. For on-line copy, see
http://www.fdi.net/documents/WorldBank/databases/philippines/primer.htm (accessed 3
September 2012)
35 In his book, Fletcher explains:
The term "stock" has been used in the same sense as "capital stock" or "capital," and it has been
said that "tis primary meaning is capital, in whatever form it may be invested. More commonly, it is
now being used to designate shares of the stock in the hands of the individual shareholders, or the
certificates issued by the corporation to them. (Fletcher Cyclopedia of the Law of Private
Corporations, 1995 Revised Volume, Vol. 11, § 5079, p. 13; citations omitted).
36 SECTION 137. Outstanding capital stock defined. - The term "outstanding capital stock" as
used in this Code, means the total shares of stock issued to subscribers or stockholders, whether
or not fully or partially paid, except treasury shares.
SEC. 6. Classification of shares. - The shares of stock of stock corporations may be divided into
classes or series of shares, or both, any of which classes or series of shares may have such
rights, privileges or restrictions as may be stated in the articles of incorporation: Provided, That no
share may be deprived of voting rights except those classified and issued as "preferred" or
"redeemable" shares, unless otherwise provided in this Code: Provided, further, That there shall
always be a class or series of shares which have complete voting rights. Any or all of the shares
or series of shares may have a par value or have no par value as may be provided for in the
articles of incorporation: Provided, however, That banks, trust companies, insurance companies,
public utilities, and building and loan associations shall not be permitted to issue no-par value
shares of stock.
Preferred shares of stock issued by any corporation may be given preference in the distribution of
the assets of the corporation in case of liquidation and in the distribution of dividends, or such
other preferences as may be stated in the articles of incorporation which are not violative of the
provisions of this Code: Provided, That preferred shares of stock may be issued only with a stated
par value. The board of directors, where authorized in the articles of incorporation, may fix the
terms and conditions of preferred shares of stock or any series thereof: Provided, That such terms
and conditions shall be effective upon the filing of a certificate thereof with the Securities and
Exchange Commission.
Shares of capital stock issued without par value shall be deemed fully paid and non-assessable
and the holder of such shares shall not be liable to the corporation or to its creditors in respect
thereto: Provided; That shares without par value may not be issued for a consideration less than
the value of five (₱ 5.00) pesos per share: Provided, further, That the entire consideration received
by the corporation for its no-par value shares shall be treated as capital and shall not be available
for distribution as dividends.
A corporation may, furthermore, classify its shares for the purpose of insuring compliance with
constitutional or legal requirements.
Except as otherwise provided in the articles of incorporation and stated in the certificate of stock,
each share shall be equal in all respects to every other share.
xxxx
37 Under Section 6 of the Corporation Code.
38 Dissenting Opinion to the 28 June 2011 Decision.
39 Record of the Constitutional Commission, Vol. III, pp. 255-256.
40 Id. at 360.
41 Aruego, Jose M., THE FRAMING OF THE PHILIPPINE CONSTITUTION, Vol. II, 1936, p. 658.
42 Id.
43 The OSG stated, "It must be stressed that when the OSG stated its concurrence with the
Honorable Court’s ruling on the proper definition of capital, it did so, not on behalf of the SEC, its
individual client in this case. Rather, the OSG did so in the exercise of its discretion not only in its
capacity as statutory counsel of the SEC but as counsel for no less than the State itself."
44 295 U.S. 602, 55 S.Ct. 869, U.S. 1935 (27 May 1935).
45 Record of the Constitutional Commission, Vol. 3, pp. 650-651 (23 August 1986).
46 Record of the Constitutional Commission, Vol. 3, pp. 652-653 (23 August 1986).
260
47 Record of the Constitutional Commission, Vol. 3, p. 652 (23 August 1986).
48 Record of the Constitutional Commission, Vol. 3, pp. 665-667 (23 August 1986).
49 Section 5, Article XIV of the 1973 Constitution provides:
Section 5. No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least sixty per centum of the capital of which is
owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in
character or for a longer period than fifty years. Neither shall any such franchise or right be
granted except under the condition that it shall be subject to amendment, alteration, or repeal by
the National Assembly when the public interest so requires. The State shall encourage equity
participation in public utilities by the general public. The participation of foreign investors in the
governing body of any public utility enterprise shall be limited to their proportionate share in the
capital thereof. (Emphasis supplied)
50 For the year 2009.
51 SEC. 17. Grounds when articles of incorporation or amendment may be rejected or
disapproved. – The Securities and Exchange Commission may reject the articles of incorporation
or disapprove any amendment thereto if the same is not in compliance with the requirements of
this Code: Provided, That the Commission shall give the incorporators a reasonable time within
which to correct or modify the objectionable portions of the articles or amendment. The following
are grounds for such rejection or disapproval:
xxxx
(4) That the percentage of ownership of the capital stock to be owned by citizens of the Philippines
has not been complied with as required by existing laws or the Constitution. (Emphasis supplied)
Section 5 of R.A. No. 8799 provides:
Section 5. Powers and Functions of the Commission.– 5.1. The Commission shall act with
transparency and shall have the powers and functions provided by this Code, Presidential Decree
No. 902-A, the Corporation Code, the Investment Houses Law, the Financing Company Act and
other existing laws. Pursuant thereto the Commission shall have, among others, the following
powers and functions:
(a) Have jurisdiction and supervision over all corporations, partnerships or associations who are
the grantees of primary franchises and/or a license or a permit issued by the Government;
xxxx
(c) Approve, reject, suspend, revoke or require amendments to registration statements, and
registration and licensing applications;
xxxx
(f) Impose sanctions for the violation of laws and the rules, regulations and orders, issued
pursuant thereto;
xxxx
(i) Issue cease and desist orders to prevent fraud or injury to the investing public;
xxxx
(m) Suspend, or revoke, after proper notice and hearing the franchise or certificate of registration
of corporations, partnership or associations, upon any of the grounds provided by law; and
(n) Exercise such other powers as may be provided by law as well as those which may be implied
from, or which are necessary or incidental to the carrying out of, the express powers granted the
Commission to achieve the objectives and purposes of these laws.
52 466 Phil. 235 (2004).
53 Id. at 266-267.
54 In its Manifestation and Omnibus Motion dated 29 July 2011, the SEC stated: "The
Commission respectfully manifests that the position of the Office of the Solicitor General (‘OSG’)
on the meaning of the term "capital" does not reflect the view of the Commission. The
Commission’s position has been laid down in countless opinions that needs no reiteration. The
Commission, however, would submit to whatever would be the final decision of this Honorable
Court on the meaning of the term "capital." (Emphasis supplied; citations omitted)
In its Memorandum, the SEC stated: "In the event that this Honorable Court rules with finality on
the meaning of "capital", the SEC will yield to the Court and follow its interpretation."
55 In Lucman v. Malawi, 540 Phil. 289 (2006), the Court defined indispensable parties as parties
ininterest without whom there can be no final determination of an action.
56 Section 3, Rule 65 of the Rules of Court states:
SEC. 3. Petition for mandamus. – When any tribunal, corporation, board, officer or person
unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting
from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a
right or office to which such other is entitled, and there is no other plain, speedy and adequate
remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in
the proper court, alleging the facts with certainty and praying that judgment be rendered
commanding the respondent, immediately or at some other time to be specified by the court, to do
the act required to be done to protect the rights of the petitioner and to pay the damages sustained
by the petitioner by reason of the wrongful acts of the respondent.
xxxx
57 See Lucman v. Malawi, supra, where the Court referred to the Department of Interior and Local
Government (though not impleaded) for investigation and appropriate action the matter regarding
the withdrawals of deposits representing the concerned barangays’ Internal Revenue Allotments.
58 Rollo (Vol. III), pp. 1444-1445.
59 Foreign Direct Investments.
60 TSN (Oral Arguments), 26 June 2012, p. 117.
61 See Halili v. Court of Appeals, 350 Phil. 906 (1998); United Church Board for World Ministries
v. Sebastian, 242 Phil. 848 (1988).
62 Urbano A. Zafra, The Laurel-Langley Agreement and the Philippine Economy, p. 43 (1973).
See also Mabanag v. Lopez Vito, 78 Phil. 1 (1947).
63 See Hadi Salehi Esfahani, The Political Economy of the Philippines’ Telecommunications
Sector, World Bank Policy Research Department (1994).
The Lawphil Project - Arellano Law Foundation
DISSENTING OPINION
VELASCO, JR., J.:
Before Us are separate motions for recon~ideration of the Court's June 28, 2011 Decision, 1
which partially granted the petition for prohibition, injunction and declaratory relief interposed by
Wilson P. Gamboa (petitioner or Gamboa). Very simply, the Court held that the term "capital"
appearing in Section 11, Article XII of the 1987 Constitution refers only to common shares or
shares of stock entitled to vote in the election of the members of the board of directors of a public
utility, and not to the total outstanding capital stock.
Respondents Manuel V. Pangilinan (Pangilinan) and Napoleon L.Nazare no (Nazareno)
separately moved for reconsideration on procedural and substantive grounds, but reserved their
main arguments against the majority's holding on the meaning of "capital." The Office of the
Solicitor General (OSG), which initially representL:d the Securities and Exchange Commission
(SEC), also requested recon~itkratiun even as it manifested agreement with the majority's
construal ct' the \Vord "capital." Unable to join the OSG's stand on the determinative issue of
capital, the SEC sought leave to join the fray on its mvn. fn its Jtdotion to Admit A1anifestation and
Omnibus Motion, the SEC stated that the OSG’s position on said issue does not reflect its own
and in fact diverges from what the Commission has consistently adopted prior to this case. And
because the decision in question has a penalty component which it is tasked to impose, SEC
requested clarification as to when the reckoning period of application of the appropriate sanctions
may be imposed on Philippine Long Distance Telephone Company (PLDT) in case the SEC
determines that it has violated Sec. 11, Art. XII of the Constitution.
To the foregoing motions, the main petitioner, now deceased, filed his Comment and/or
Opposition to Motions for Reconsideration.
Acting on the various motions and comment, the Court conducted and heard the parties in oral
arguments on April 17 and June 26, 2012.
After considering the parties’ positions as articulated during the oral arguments and in their
pleadings and respective memoranda, I vote to grant reconsideration. This disposition is
consistent with my dissent, on procedural and substantive grounds, to the June 28, 2011 majority
Decision.
Conspectus
The core issue is the meaning of the word "capital" in the opening sentence of Sec. 11, Art. XII of
the 1987 Constitution which reads:
261
Section 11. No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by
such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for
a longer period than fifty years. Neither shall any such franchise or right be granted except under
the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the
common good so requires. The State shall encourage equity participation in public utilities by the
general public. The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be citizens of the Philippines.
(Emphasis supplied.)
For an easier comprehension of the two contrasting positions on the contentious meaning of the
word "capital," as found in the first sentence of the aforequoted provision, allow me to present a
brief comparative analysis showing the dissimilarities.
The majority, in the June 28, 2011 Decision, as reiterated in the draft resolution, is of the view that
the word "capital" in the first sentence of Sec. 11, Art. XII refers to common shares or voting
shares only; thus limiting foreign ownership of such shares to 40%. The rationale, as stated in the
basic ponencia, is that this interpretation ensures that control of the Board of Directors stays in the
hands of Filipinos, since foreigners can only own a maximum of 40% of said shares and,
accordingly, can only elect the equivalent percentage of directors. As a necessary corollary,
Filipino stockholders can always elect 60% of the Board of Directors which, to the majority,
translates to control over the corporation.
The opposite view is that the word "capital" in the first sentence refers to the entire capital stock of
the corporation or both voting and non-voting shares and NOT solely to common shares. From
this standpoint, 60% control over the capital stock or the stockholders owning both voting and non-
voting shares is assured to Filipinos and, as a consequence, over corporate matters voted upon
and decisions reached during stockholders’ meetings. On the other hand, the last sentence of
Sec. 11, Art. XII, with the word "capital" embedded in it, is the provision that ensures Filipino
control over the Board of Directors and its decisions.
To resolve the conflicting interpretations of the word "capital," the first sentence of Sec. 11, Art. XII
must be read and considered in conjunction with the last sentence of said Sec. 11 which
prescribes that "the participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital." After all, it is an established
principle in constitutional construction that provisions in the Constitution must be harmonized.
It has been made very clear during the oral arguments and even by the parties’ written
submissions that control by Filipinos over the public utility enterprise exists on three (3) levels,
namely:
1. Sixty percent (60%) control of Filipinos over the capital stock which covers both voting and non-
voting shares and inevitably over the stockholders. This level of control is embodied in the first
sentence of Sec. 11, Art. XII which reads:
Section 11. No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by
such citizens x x x.
The word "capital" in the above provision refers to capital stock or both voting and non-voting
shares. Sixty percent (60%) control over the capital stock translates to control by Filipinos over
almost all decisions by the stockholders during stockholders’ meetings including ratification of the
decisions and acts of the Board of Directors. During said meetings, voting and even non-voting
shares are entitled to vote. The exercise by non-voting shares of voting rights over major
corporate decisions is expressly provided in Sec. 6 of the Corporation Code which reads:
Sec. 6. x x x x
Where the articles of incorporation provide for non-voting shares in the cases allowed by this
Code, the holders of such shares shall nevertheless be entitled to vote on the following matters:
1. Amendment of the articles of incorporation;
2. Adoption and amendment of by-laws;
3. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of the
corporate property;
4. Incurring, creating or increasing bonded indebtedness;
5. Increase or decrease of capital stock;
6. Merger or consolidation of the corporation with another corporation or other corporations;
7. Investment of corporate funds in another corporation or business in accordance with this Code;
and
8. Dissolution of the corporation.
Construing the word "capital" in the first sentence of Sec. 11, Art. XII of the Constitution as capital
stock would ensure Filipino control over the public utility with respect to major corporate decisions.
If we adopt the view espoused by Justice Carpio that the word "capital" means only common
shares or voting shares, then foreigners can own even up to 100% of the non-voting shares. In
such a situation, foreigners may very well exercise control over all major corporate decisions as
their ownership of the nonvoting shares remains unfettered by the 40% cap laid down in the first
sentence of Sec. 11, Art. XII. This will spawn an even greater anomaly because it would give the
foreigners the opportunity to acquire ownership of the net assets of the corporation upon its
dissolution to include what the Constitution enjoins––land ownership possibly through dummy
corporations. With the view of Justice Carpio, Filipinos will definitely lose control over major
corporate decisions which are decided by stockholders owning the majority of the non-voting
shares.
2. Sixty percent (60%) control by Filipinos over the common shares or voting shares and
necessarily over the Board of Directors of the public utility. Control on this level is guaranteed by
the last sentence of Sec. 11, Art. XII which reads:
The participation of foreign investors in the governing body of any public utility enterprise shall be
limited to their proportionate share in its "capital" x x x.
In its ordinary signification, "participation" connotes "the action or state of taking part with others in
an activity."2 This participation in its decision-making function can only be the right to elect board
directors. Hence, the last sentence of Sec. 11, Art. XII of the Constitution effectively restricts the
right of foreigners to elect directors to the board in proportion to the limit on their total
shareholdings. Since the first part of Sec. 11, Art. XII of the Constitution specifies a 40% limit of
foreign ownership in the total capital of the public utility corporation, then the rights of foreigners to
be elected to the board of directors, is likewise limited to 40 percent. If the foreign ownership of
common shares is lower than 40%, the participation of foreigners is limited to their proportionate
share in the capital stock.
In the highly hypothetical public utility corporation with 100 common shares and 1,000,000
preferred non-voting shares, or a total of 1,000,100 shares cited in the June 28, 2011 Decision,
foreigners can thus only own up to 400,040 shares of the corporation, consisting of the maximum
40 (out of the 100) voting shares and 400,000 non-voting shares. And, assuming a 10- member
board, the foreigners can elect only 4 members of the board using the 40 voting shares they are
allowed to own.
Following, in fine, the dictates of Sec. 11, Art. XII, as couched, the foreign shareholders’ right to
elect members of the governing board of a given public utility corporation is proportional only to
their right to hold a part of the total shareholdings of that entity. Since foreigners can only own, in
the maximum, up to 40% of the total shareholdings of the company, then their voting entitlement
as to the numerical composition of the board would depend on the level of their shareholding in
relation to the capital stock, but in no case shall it exceed the 40% threshold.
Contrary to the view of Justice Carpio that the objective behind the first sentence of Sec. 11, Art.
XII is to ensure control of Filipinos over the Board of Directors by limiting foreign ownership of the
common shares or voting shares up to 40%, it is actually the first part of the aforequoted last
sentence of Sec. 11, Art. XII that limits the rights of foreigners to elect not more than 40% of the
board seats thus ensuring a clear majority in the Board of Directors to Filipinos. If we follow the
line of reasoning of Justice Carpio on the meaning of the word "capital" in the first sentence, then
there is no need for the framers of the Constitution to incorporate the last sentence in Sec. 11, Art.
XII on the 40% maximum participation of the foreigners in the Board of Directors. The last
sentence would be a useless redundancy, a situation doubtless unintended by the framers of the
Constitution. A construction that renders a part of the law or Constitution being construed
superfluous is an aberration,3 for it is at all times presumed that each word used in the law is
intentional and has a particular and special role in the approximation of the policy sought to be
attained, ut magis valeat quam pereat.
3. The third level of control proceeds from the requirement tucked in the second part of the
ultimate sentence that "all the executive and managing officers of the corporation must be citizens
262
of the Philippines." This assures full Filipino control, at all times, over the management of the
public utility.
To summarize, the Constitution, as enacted, establishes not just one but a three-tiered control-
enhancing-and-locking mechanism in Sec. 11, Article XII to ensure that Filipinos will always have
full beneficial ownership and control of public utility corporations:
1. 40% ceiling on foreign ownership in the capital stock that ensures sixty percent (60%) Filipino
control over the capital stock which covers both voting and non-voting shares. As a consequence,
Filipino control over the stockholders is assured. (First sentence of Sec. 11, Art. XII). Thus,
foreigners can own only up to 40% of the capital stock.
2. 40% ceiling on the right of foreigners to elect board directors that guarantees sixty percent
(60%) Filipino control over the Board of Directors. (First part of last sentence of Sec. 11, Art. XII).
3. Reservation to Filipino citizens of the executive and managing officers, regardless of the level of
alien equity ownership to secure total Filipino control over the management of the public utility
enterprise (Second part of last sentence of Sec. 11, Art. XII). Thus, all executive and managing
officers must be Filipinos.
Discussion
Undoubtedly there is a clash of conflicting opinions as to what "capital" in the first sentence of Sec.
11, Art. XII means. The majority says it refers only to common or voting shares. The minority says
it includes both voting and non-voting shares. A resort to constitutional construction is
unavoidable.
It is settled though that the "primary source from which to ascertain constitutional intent or purpose
is the language of the constitution itself."4 To this end, the words used by the Constitution should
as much as possible be understood in their ordinary meaning as the Constitution is not a lawyer’s
document.5 This approach, otherwise known as the verba legis rule, should be applied save
where technical terms are employed.6
The plain meaning of "capital" in the first
sentence of Sec. 11, Art. XII of the Constitution
includes both voting and non-voting shares
J.M. Tuason & Co., Inc. v. Land Tenure Administration illustrates the verba legis rule. There, the
Court cautions against departing from the commonly understood meaning of ordinary words used
in the Constitution, viz.:
We look to the language of the document itself in our search for its meaning. We do not of course
stop there, but that is where we begin. It is to be assumed that the words in which constitutional
provisions are couched express the objective sought to be attained. They are to be given their
ordinary meaning except where technical terms are employed in which case the significance thus
attached to them prevails. As the Constitution is not primarily a lawyer's document, it being
essential for the rule of law to obtain that it should ever be present in the people's consciousness,
its language as much as possible should be understood in the sense they have in common use.
What it says according to the text of the provision to be construed compels acceptance and
negates the power of the courts to alter it, based on the postulate that the framers and the people
mean what they say. Thus, there are cases where the need for construction is reduced to a
minimum.7 (Emphasis supplied.)
The primary reason for the verba legis approach, as pointed out by Fr. Joaquin Bernas during the
June 26, 2012 arguments, is that the people who ratified the Constitution voted on their
understanding of the word capital in its everyday meaning. Fr. Bernas elucidated thus:
x x x Over the years, from the 1935 to the 1973 and finally even under the 1987 Constitution, the
prevailing practice has been to base the 60-40 proportion on total outstanding capital stock, that
is, the combined total of common and non-voting preferred shares. This is what occasioned the
case under consideration.
What is the constitutional relevance of this continuing practice? I suggest that it is relevant for
determining what the people in the street voted for when they ratified the Constitution. When the
draft of a Constitution is presented to the people for ratification, what the people vote on is not the
debates in the constituent body but the text of the draft. Concretely, what the electorate voted on
was their understanding of the word capital in its everyday meaning they encounter in daily life.
We cannot attribute to the voters a jurist’s sophisticated meaning of capital and its breakdown into
common and preferred. What they vote on is what they see. Nor do they vote on what the drafters
saw as assumed meaning, to use Bengzon’s explanation. In the language of the sophisticates,
what voters in a plebiscite vote on is verba legis and not anima legis about which trained jurists
debate.
What then does it make of the contemporary understanding by SEC etc. Is the contemporary
understanding unconstitutional or constitutional? I hesitate to characterize it as constitutional or
unconstitutional. I would merely characterize it as popular. What I mean is it reflects the common
understanding of the ordinary populi, common but incomplete.8 (Emphasis supplied.)
"Capital" in the first sentence of Sec. 11, Art. XII must then be accorded a meaning accepted,
understood, and used by an ordinary person not versed in the technicalities of law. As defined in a
non-legal dictionary, capital stock or capital is ordinarily taken to mean "the outstanding shares of
a joint stock company considered as an aggregate"9 or "the ownership element of a corporation
divided into shares and represented by certificates."10
The term "capital" includes all the outstanding shares of a company that represent "the proprietary
claim in a business."11 It does not distinguish based on the voting feature of the stocks but refers
to all shares, be they voting or non-voting. Neither is the term limited to the management aspect of
the corporation but clearly refers to the separate aspect of ownership of the corporate shares
thereby encompassing all shares representing the equity of the corporation.
This plain meaning, as understood, accepted, and used in ordinary parlance, hews with the
definition given by Black who equates capital to capital stock12 and defines it as "the total number
of shares of stock that a corporation may issue under its charter or articles of incorporation,
including both common stock and preferred stock."13 This meaning is also reflected in legal
commentaries on the Corporation Code. The respected commentator Ruben E. Agpalo defines
"capital" as the "money, property or means contributed by stockholders for the business or
enterprise for which the corporation was formed and generally implies that such money or property
or means have been contributed in payment for stock issued to the contributors."14 Meanwhile,
"capital stock" is "the aggregate of the shares actually subscribed [or] the amount subscribed and
paid-in and upon which the corporation is to conduct its operations, or the amount paid-in by its
stockholders in money, property or services with which it is to conduct its business."15
This definition has been echoed by numerous other experts in the field of corporation law. Dean
Villanueva wrote, thus:
In defining the relationship between the corporation and its stockholders, the capital stock
represents the proportional standing of the stockholders with respect to the corporation and
corporate matters, such as their rights to vote and to receive dividends.
In financial terms, the capital stock of the corporation as reflected in the financial statement of the
corporation represents the financial or proprietary claims of the stockholders to the net assets of
the corporation upon dissolution. In addition, the capital stock represents the totality of the portion
of the corporation’s assets and receivables which are covered by the trust fund doctrine and
provide for the amount of assets and receivables of the corporation which are deemed protected
for the benefit of the corporate creditors and from which the corporation cannot declare any
dividends. 16 (Emphasis supplied.)
Similarly, renowned author Hector S. de Leon defines "capital" and "capital stock" in the following
manner:
Capital is used broadly to indicate the entire property or assets of the corporation. It includes the
amount invested by the stockholders plus the undistributed earnings less losses and expenses. In
the strict sense, the term refers to that portion of the net assets paid by the stockholders as
consideration for the shares issued to them, which is utilized for the prosecution of the business of
the corporation. It includes all balances or instalments due the corporation for shares of stock sold
by it and all unpaid subscription for shares.
xxxx
The term is also used synonymously with the words "capital stock," as meaning the amount
subscribed and paid-in and upon which the corporation is to conduct its operation (11 Fletcher
Cyc. Corp., p. 15 [1986 ed.]) and it is immaterial how the stock is classified, whether as common
or preferred.17 (Emphasis and underscoring supplied.)
Hence, following the verba legis approach, I see no reason to stray away from what appears to be
a common and settled acceptation of the word "capital," given that, as used in the constitutional
provision in question, it stands unqualified by any restrictive or expansive word as to reasonably
justify a distinction or a delimitation of the meaning of the word. Ubi lex non distinguit nos
distinguere debemus, when the law does not distinguish, we must not distinguish.18 Using this
plain meaning of "capital" within the context of Sec. 11, Art. XII, foreigners are entitled to own not
263
more than 40% of the outstanding capital stock, which would include both voting and non-voting
shares.
Extraneous aids to ferret out constitutional intent
When the seeming ambiguity on the meaning of "capital" cannot be threshed out by looking at the
language of the Constitution, then resort to extraneous aids has become imperative. The Court
can utilize the following extraneous aids, to wit: (1) proceedings of the convention; (2) changes in
phraseology; (3) history or realities existing at the time of the adoption of the Constitution; (4) prior
laws and judicial decisions; (5) contemporaneous construction; and (6) consequences of
alternative interpretations.19 I submit that all these aids of constitutional construction affirm that
the only acceptable construction of "capital" in the first sentence of Sec. 11, Art. XII of the 1987
Constitution is that it refers to all shares of a corporation, both voting and non-voting.
Deliberations of the Constitutional Commission
of 1986 demonstrate that capital means both
voting and non-voting shares (1st extrinsic aid)
The proceedings of the 1986 Constitutional Commission that drafted the 1987 Constitution were
accurately recorded in the Records of the Constitutional Commission.
To bring to light the true meaning of the word "capital" in the first line of Sec. 11, Art. XII, one must
peruse, dissect and analyze the entire deliberations of the Constitutional Commission pertinent to
the article on national economy and patrimony, as quoted below:
August 13, 1986, Wednesday
PROPOSED RESOLUTION NO. 496
RESOLUTION TO INCORPORATE IN THE NEW CONSTITUTION AN ARTICLE ON NATIONAL
ECONOMY AND PATRIMONY
Be it resolved as it is hereby resolved by the Constitutional Commission in session assembled, To
incorporate the National Economy and Patrimony of the new Constitution, the following provisions:
ARTICLE____
NATIONAL ECONOMY AND PATRIMONY
SECTION 1. The State shall develop a self-reliant and independent national economy. x x x
xxxx
SEC. 3. x x x The exploration, development, and utilization of natural resources shall be under the
full control and supervision of the State. Such activities may be directly undertaken by the State, or
it may enter into co-production, joint venture, production-sharing agreements with Filipino citizens
or corporations or associations at least sixty percent of whose voting stock or controlling interest is
owned by such citizens. x x x
xxxx
SEC. 9. The Congress shall reserve to citizens of the Philippines or to corporations or
associations at least sixty per cent of whose voting stock or controlling interest is owned by such
citizens or such higher percentage as Congress may prescribe, certain areas of investments when
the national interest so dictates.
xxxx
SEC. 15. No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least two-thirds of whose voting stock or controlling
interest is owned by such citizens. Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment, alteration, or repeal by Congress when
the common good so requires. The State shall encourage equity participation in public utilities by
the general public. (Origin of Sec. 11, Article XII)
xxxx
MR. NOLLEDO. In Sections 3, 9 and 15, the Committee stated local or Filipino equity and foreign
equity; namely, 60-40 in Section 3, 60-40 in Section 9, and 2/3-1/3 in Section 15.
MR. VILLEGAS. That is right.
MR. NOLLEDO. In teaching law, we are always faced with this question: "Where do we base the
equity requirement, is it on the authorized capital stock, on the subscribed capital stock, or on the
paid-up capital stock of a corporation?" Will the Committee please enlighten me on this?
MR. VILLEGAS. We have just had a long discussion with the members of the team from the UP
Law Center who provided us a draft. The phrase that is contained here which we adopted from the
UP draft is "60 percent of voting stock."
MR. NOLLEDO. That must be based on the subscribed capital stock, because unless declared
delinquent, unpaid capital stock shall be entitled to vote.
MR. VILLEGAS. That is right.
MR. NOLLEDO. Thank you.
With respect to an investment by one corporation in another corporation, say, a corporation with
60-40 percent equity invests in another corporation which is permitted by the Corporation Code,
does the Committee adopt the grandfather rule?
MR. VILLEGAS. Yes, that is the understanding of the Committee.
MR. NOLLEDO. Therefore, we need additional Filipino capital?
MR. VILLEGAS. Yes.20
August 14, 1986, Thursday
MR. FOZ. Mr. Vice-President, in Sections 3 and 9, the provision on equity is both 60 percent, but I
notice that this is now different from the provision in the 1973 Constitution in that the basis for the
equity provision is voting stock or controlling interest instead of the usual capital percentage as
provided for in the 1973 Constitution. We would like to know what the difference would be
between the previous and the proposed provisions regarding equity interest.
MR. VILLEGAS. Commissioner Suarez will answer that.
MR. SUAREZ. Thank you.
As a matter of fact, this particular portion is still being reviewed by this Committee. In Section 1,
Article XIII of the 1935 Constitution, the wording is that the percentage should be based on the
capital which is owned by such citizens. In the proposed draft, this phrase was proposed: "voting
stock or controlling interest." This was a plan submitted by the UP Law Center.
Three days ago, we had an early morning breakfast conference with the members of the UP Law
Center and precisely, we were seeking clarification regarding the difference. We would have three
criteria to go by: One would be based on capital, which is capital stock of the corporation,
authorized, subscribed or paid up, as employed under the 1935 and the 1973 Constitution. The
idea behind the introduction of the phrase "voting stock or controlling interest" was precisely to
avoid the perpetration of dummies, Filipino dummies of multinationals. It is theoretically possible
that a situation may develop where these multinational interests would not really be only 40
percent but will extend beyond that in the matter of voting because they could enter into what is
known as a voting trust or voting agreement with the rest of the stockholders and, therefore,
notwithstanding the fact that on record their capital extent is only up to 40-percent interest in the
corporation, actually, they would be managing and controlling the entire company. That is why the
UP Law Center members suggested that we utilize the words "voting interest" which would
preclude multinational control in the matter of voting, independent of the capital structure of the
corporation. And then they also added the phrase "controlling interest" which up to now they have
not been able to successfully define the exact meaning of. But they mentioned the situation where
theoretically the board would be controlled by these multinationals, such that instead of, say, three
Filipino directors out of five, there would be three foreign directors and, therefore, they would be
controlling the management of the company with foreign interest. That is why they volunteered to
flesh out this particular portion which was submitted by them, but up to now, they have not come
up with a constructive rephrasing of this portion. And as far as I am concerned, I am not speaking
in behalf of the Committee, I would feel more comfortable if we go back to the wording of the 1935
and the 1973 Constitution, that is to say, the 60-40 percentage could be based on the capital stock
of the corporation.
MR. FOZ. I understand that that was the same view of Dean Carale who does not agree with the
others on this panel at the UP Law Center regarding the percentage of the ratio.
MR. SUAREZ. That is right. Dean Carale shares my sentiment about this matter.
MR. BENGZON. I also share the sentiment of Commissioner Suarez in that respect. So there are
already two in the Committee who want to go back to the wording of the 1935 and the 1973
Constitution.21
August 15, 1986, Friday
MR. MAAMBONG. I ask that Commissioner Treñas be recognized for an amendment on line 14.
THE PRESIDENT. Commissioner Treñas is recognized.
MR. TREÑAS. Madam President, may I propose an amendment on line 14 of Section 3 by
deleting therefrom "whose voting stock and controlling interest." And in lieu thereof, insert the
CAPITAL so the line should read: "associations at least sixty percent of the CAPITAL is owned by
such citizens.
264
MR. VILLEGAS. We accept the amendment.
MR. TREÑAS. Thank you.
THE PRESIDENT. The amendment of Commissioner Treñas on line 14 has been accepted by the
Committee.
Is there any objection? (Silence) The Chair hears none; the amendment is approved.
xxxx
THE PRESIDENT. Commissioner Suarez is recognized.
MR. SUAREZ. Thank you, Madam President.
Two points actually are being raised by Commissioner Davide’s proposed amendment. One has
reference to the percentage of holdings and the other one is the basis for that percentage. Would
the body have any objection if we split it into two portions because there may be several
Commissioners who would be willing to accept the Commissioner’s proposal on capital stock in
contradistinction to a voting stock for controlling interest?
MR. VILLEGAS. The proposal has been accepted already.
MR. DAVIDE. Yes, but it was 60 percent.
MR. VILLEGAS. That is right.
MR. SUAREZ. So, it is now 60 percent as against wholly owned?
MR. DAVIDE. Yes.
MR. SUAREZ. Is the Commissioner not insisting on the voting capital stock because that was
already accepted by the Committee?
MR. DAVIDE. Would it mean that it would be 100-percent voting capital stock?
MR. SUAREZ. No, under the Commissioner’s proposal it is just "CAPITAL" not "stock."
MR. DAVIDE. No, I want it to be very clear. What is the alternative proposal of the Committee?
How shall it read?
MR. SUAREZ. It will only read something like: "the CAPITAL OF WHICH IS FULLY owned."
MR. VILLEGAS. Let me read lines 12 to 14 which state:
… enter into co-production, joint venture, production sharing agreements with Filipino citizens or
corporations or associations at least 60 percent of whose CAPITAL is owned by such citizens.
We are going back to the 1935 and 1973 formulations.
MR. DAVIDE. I cannot accept the proposal because the word CAPITAL should not really be the
guiding principle. It is the ownership of the corporation. It may be voting or not voting, but that is
not the guiding principle.
MR. SUAREZ. So, the Commissioner is insisting on the use of the term "CAPITAL STOCK"?
MR. DAVIDE. Yes, to be followed by the phrase "WHOLLY owned."
MR. SUAREZ. Yes, but we are only concentrating on the first point – "CAPITAL STOCK" or
merely "CAPITAL."
MR. DAVIDE. CAPITAL STOCK?
MR. SUAREZ. Yes, it is "CAPITAL STOCK."
SUSPENSION OF SESSION
At 4:42 p.m., the session was resumed.
THE PRESIDENT. The session is resumed.
Commissioner Davide is to clarify his point.
MR. VILLEGAS. Yes, Commissioner Davide has accepted the word "CAPITAL" in place of "voting
stock or controlling interest." This is an amendment already accepted by the Committee.
We would like to call for a vote on 100-percent Filipino versus 60- percent Filipino.
MR. ALONTO. Is it 60 percent?
MR. VILLEGAS. Sixty percent, yes.
MR. GASCON. Madam President, shall we vote on the proposed amendment of Commissioner
Davide of "ONE HUNDRED PERCENT?"
MR. VILLEGAS. Yes.
MR. GASCON. Assuming that it is lost, that does not prejudice any other Commissioner to make
any recommendations on other percentages?
MR. VILLEGAS. I would suggest that we vote on "sixty," which is indicated in the committee
report.
MR. GASCON. It is the amendment of Commissioner Davide that we should vote on, not the
committee report.
MR. VILLEGAS. Yes, it is all right.
MR. AZCUNA. Madam President.
THE PRESIDENT. Commissioner Azcuna is recognized.
MR. AZCUNA. May I be clarified as to that portion that was accepted by the Committee?
MR. VILLEGAS. The portion accepted by the Committee is the deletion of the phrase "voting stock
or controlling interest."
MR. AZCUNA. Hence, without the Davide amendment, the committee report would read:
"corporations or associations at least sixty percent of whose CAPITAL is owned by such citizens."
MR. VILLEGAS. Yes.
MR. AZCUNA. So if the Davide amendment is lost, we are stuck with 60 percent of the capital to
be owned by citizens?
MR. VILLEGAS. That is right.
MR. AZCUNA. But the control can be with the foreigners even if they are the minority. Let us say
40 percent of the capital is owned by them, but it is the voting capital, whereas, the Filipinos own
the nonvoting shares. So we can have a situation where the corporation is controlled by foreigners
despite being the minority because they have the voting capital. That is the anomaly that would
result there.
MR. BENGZON. No, the reason we eliminated the word "stock" as stated in the 1973 and 1935
Constitutions is that according to Commissioner Rodrigo, there are associations that do not have
stocks. That is why we say "CAPITAL."
MR. AZCUNA. We should not eliminate the phrase "controlling interest."
MR. BENGZON. In the case of stock corporations, it is assumed.
MR. AZCUNA. Yes, but what I mean is that the control should be with the Filipinos.
MR. BENGZON. Yes, that is understood.
MR. AZCUNA. Yes, because if we just say "sixty percent of whose capital is owned by the
Filipinos," the capital may be voting or nonvoting.
MR. BENGZON. That is correct.
MR. AZCUNA. My concern is the situation where there is a voting stock. It is a stock corporation.
What the Committee requires is that 60 percent of the capital should be owned by Filipinos. But
that would not assure control because that 60 percent may be non-voting.
MS. AQUINO. Madam President.
MR. ROMULO. May we vote on the percentage first?
THE PRESIDENT. Before we vote on this, we want to be clarified first.
MS. AQUINO. Madam President.
THE PRESIDENT. Commissioner Aquino is recognized.
MS. AQUINO. I would suggest that we vote on the Davide amendment which is 100-percent
capital, and if it is voted down, then we refer to the original draft which is "capital stock" not just
"capital."
MR. AZCUNA. The phrase "controlling interest" is an important consideration.
THE PRESIDENT. Let us proceed to vote then.
MR. PADILLA. Madam President.
THE PRESIDENT. The Vice-President, Commissioner Padilla, is recognized.
MR. PADILLA. The Treñas amendment has already been approved. The only one left is the
Davide amendment which is substituting the "sixty percent" to "WHOLLY owned by Filipinos." (The
Treñas amendment deleted the phrase "whose voting stocks and controlling interest" and inserted
the word "capital." It approved the phrase "associations at least sixty percent of the CAPITAL is
owned by such citizens.)(see page 16)
Madam President, I am against the proposed amendment of Commissioner Davide because that
is an ideal situation where domestic capital is available for the exploration, development and
utilization of these natural resources, especially minerals, petroleum and other mineral oils. These
are not only risky business but they also involve substantial capital. Obviously, it is an ideal
situation but it is not practical. And if we adopt the 100-percent capital of Filipino citizens, I am
afraid that these natural resources, particularly these minerals and oil, et cetera, may remain
hidden in our lands, or in other offshore places without anyone being able to explore, develop or
utilize them. If it were possible to have a 100-percent Filipino capital, I would prefer that rather
than the 60 percent, but if we adopt the 100 percent, my fear is that we will never be able to
explore, develop and utilize our natural resources because we do not have the domestic
resources for that.
MR. DAVIDE. Madam President, may I be allowed to react?
THE PRESIDENT. Commissioner Davide is recognized.
265
MR. DAVIDE. I am very glad that Commissioner Padilla emphasized minerals, petroleum and
mineral oils. The Commission has just approved the possible foreign entry into the development,
exploration and utilization of these minerals, petroleum and other mineral oils by virtue of the
Jamir amendment. I voted in favour of the Jamir amendment because it will eventually give way to
vesting in exclusively Filipino citizens and corporations wholly owned by Filipino citizens the right
to utilize the other natural resources. This means that as a matter of policy, natural resources
should be utilized and exploited only by Filipino citizens or corporations wholly owned by such
citizens. But by virtue of the Jamir amendment, since we feel that Filipino capital may not be
enough for the development and utilization of minerals, petroleum and other mineral oils, the
President can enter into service contracts with foreign corporations precisely for the development
and utilization of such resources. And so, there is nothing to fear that we will stagnate in the
development of minerals, petroleum, and mineral oils because we now allow service contracts. It
is, therefore, with more reason that at this time we must provide for a 100-percent Filipinization
generally to all natural resources.
MR. VILLEGAS. I think we are ready to vote, Madam President.
THE PRESIDENT. The Acting Floor Leader is recognized.
MR. MAAMBONG. Madam President, we ask that the matter be put to a vote.
THE PRESIDENT. Will Commissioner Davide please read lines 14 and 15 with his amendment.
MR. DAVIDE. Lines 14 and 15, Section 3, as amended, will read: "associations whose CAPITAL
stock is WHOLLY owned by such citizens."
VOTING
THE PRESIDENT. As many as are in favour of this proposed amendment of Commissioner
Davide on lines 14 and 15 of Section 3, please raise their hand. (Few Members raised their hand.)
As many as are against the amendment, please raise their hand. (Several Members raised their
hand.)
The results show 16 votes in favour and 22 against; the amendment is lost.
MR. MAAMBONG. Madam President, I ask that Commissioner Davide be recognized once more
for further amendments.
THE PRESIDENT. Commissioner Davide is recognized.
MR. DAVIDE. Thank you, Madam President.
This is just an insertion of a new paragraph between lines 24 and 25 of Section 3 of the same
page. It will read as follows: THE GOVERNING AND MANAGING BOARDS OF SUCH
CORPORATIONS SHALL BE VESTED EXCLUSIVELY IN CITIZENS OF THE PHILIPPINES.
MR. VILLEGAS. Which corporations is the Commissioner referring to?
MR. DAVIDE. This refers to corporations 60 percent of whose capital is owned by such citizens.
MR. VILLEGAS. Again the amendment will read…
MR. DAVIDE. "THE GOVERNING AND MANAGING BODIES OF SUCH CORPORATIONS
SHALL BE VESTED EXCLUSIVELY IN CITIZENS OF THE PHILIPPINES."
REV. RIGOS. Madam President.
THE PRESIDENT. Commissioner Rigos is recognized.
REV. RIGOS. I wonder if Commissioner Davide would agree to put that sentence immediately
after "citizens" on line 15.
MR. ROMULO. May I ask a question. Presumably, it is 60-40?
MR. DAVIDE. Yes.
MR. ROMULO. What about the 40 percent? Would they not be entitled to a proportionate seat in
the board?
MR. DAVIDE. Under my proposal, they should not be allowed to sit in the board.
MR. ROMULO. Then the Commissioner is really proposing 100 percent which is the opposite
way?
MR. DAVIDE. Not necessarily, because if 40 percent of the capital stock will be owned by aliens
who may sit in the board, they can still exercise their right as ordinary stockholders and can submit
the necessary proposal for, say, a policy to be undertaken by the board.
MR. ROMULO. But that is part of the stockholder’s right – to sit in the board of directors.
MR. DAVIDE. That may be allowed but this is a very unusual and abnormal situation so the
Constitution itself can prohibit them to sit in the board.
MR. ROMULO. But it would be pointless to allow them 40 percent when they cannot sit in the
board nor have a say in the management of the company. Likewise, that would be extraordinary
because both the 1935 and the 1973 Constitutions allowed not only the 40 percent but
commensurately they were represented in the board and management only to the extent of their
equity interest, which is 40 percent. The management of a company is lodged in the board; so if
the 60 percent, which is composed of Filipinos, controls the board, then the Filipino part has
control of the company.
I think it is rather unfair to say: "You may have 40 percent of the company, but that is all. You
cannot manage, you cannot sit in the board." That would discourage investments. Then it is like
having a one hundredpercent ownership; I mean, either we allow a 60-40 with full rights to the 40
percent, limited as it is as to a minority, or we do not allow them at all. This means if it is allowed;
we cannot have it both ways.
MR. DAVIDE. The aliens cannot also have everything. While they may be given entry into
subscriptions of the capital stock of the corporation, it does not necessarily follow that they cannot
be deprived of the right of membership in the managing or in the governing board of a particular
corporation. But it will not totally deprive them of a say because they can still exercise the ordinary
rights of stockholders. They can submit their proposal and they can be heard.
MR. ROMULO. Yes, but they have no vote. That is like being represented in the Congress but not
being allowed to vote like our old resident Commissioners in the United States. They can be
heard; they can be seen but they cannot vote.
MR. DAVIDE. If that was allowed under that situation, why can we not do it now in respect to our
natural resources? This is a very critical and delicate issue.
MR. ROMULO. Precisely, we used to complain how unfair that was. One can be seen and heard
but he cannot vote.
MR. DAVIDE. We know that under the corporation law, we have the rights of the minority
stockholders. They can be heard. As a matter of fact, they can probably allow a proxy to vote for
them and, therefore, they still retain that specific prerogative to participate just like what we did in
the Article on Social Justice.
MR. ROMULO. That would encourage dummies if we give them proxies.
MR. DAVIDE. As a matter of fact, when it comes to encouraging dummies, by allowing 40-percent
ownership to come in we will expect the proliferation of corporations actually owned by aliens
using dummies.
MR. ROMULO. No, because 40 percent is a substantial and fair share and, therefore, the bona
fide foreign investor is satisfied with that proportion. He does not have to look for dummies. In fact,
that is what assures a genuine investment if we give a foreign investor the 40 percent and all the
rights that go with it. Otherwise, we are either discouraging the investment altogether or we are
encouraging circumvention. Let us be fair. If it is 60-40, then we give him the right, limited as to his
minority position.
MR. MAAMBONG. Madam President, the body would like to know the position of the Committee
so that we can put the matter to a vote.
MR. VILLEGAS. The Committee does not accept the amendment.
THE PRESIDENT. The Committee does not accept.
Will Commissioner Davide insist on his amendment?
MR. DAVIDE. We request a vote.
THE PRESIDENT. Will Commissioner Davide state his proposed amendment again?
MR. DAVIDE. The proposed amendment would be the insertion of a new paragraph to Section 3,
between lines 24 and 25, page 2, which reads: "THE GOVERNING AND MANAGING BODIES OF
SUCH CORPORATIONS SHALL BE VESTED EXCLUSIVELY IN CITIZENS OF THE
PHILIPPINES."
MR. PADILLA. Madam President.
THE PRESIDENT. Commissioner Padilla is recognized.
MR. PADILLA. Madam President, may I just say that this Section 3 speaks of "co-production, joint
venture, production sharing agreements with Filipino citizens." If the foreign share of, say, 40
percent will not be represented in the board or in management, I wonder if there would be any
foreign investor who will accept putting capital but without any voice in management. I think that
might make the provision on "coproduction, joint venture and production sharing" illusory.
VOTING
THE PRESIDENT. If the Chair is not mistaken, that was the same point expressed by
Commissioner Romulo, a member of the Committee.
As many as are in favour of the Davide amendment, please raise their hand. (Few Members
raised their hand.)
266
As many as are against, please raise their hand. (Several Members raised their hand.)
As many as are abstaining, please raise their hand. (One Member raised his hand.)
xxxx
THE PRESIDENT. Commissioner Garcia is recognized.
MR. GARCIA. My amendment is on Section 3, the same item which Commissioner Davide tried to
amend. It is basically on the share of 60 percent. I would like to propose that we raise the 60
percent to SEVENTY-FIVE PERCENT so the line would read: "SEVENTY-FIVE PERCENT of
whose CAPITAL is owned by such citizens."
THE PRESIDENT. What does the Committee say?
SUSPENSION OF SESSION
MR. VILLEGAS. The Committee insists on staying with the 60 percent – 60-40.
Madam President, may we ask for a suspension of the session.
THE PRESIDENT. The session is suspended.
It was 5:07 p.m.
RESUMPTION OF SESSION
At 5:31 p.m., the session was resumed.
THE PRESIDENT. The session is resumed.
MR. SARMIENTO. Madam President.
THE PRESIDENT. The Acting Floor Leader, Commissioner Sarmiento, is recognized.
MR. SARMIENTO: Commissioner Garcia still has the floor. May I ask that he be recognized.
THE PRESIDENT. Commissioner Garcia is recognized.
MR. GARCIA. Thank you very much, Madam President.
I would like to propose the following amendment on Section 3, line 14 on page 2. I propose to
change the word "sixty" to SEVENTY-FIVE. So, this will read: "or it may enter into co-production,
joint venture, production sharing agreements with Filipino citizens or corporations or associations
at least SEVENTY-FIVE percent of whose CAPITAL stock or controlling interest is owned by such
citizens."
MR. VILLEGAS. This is just a correction. I think Commissioner Azcuna is not insisting on the
retention of the phrase "controlling interest," so we will retain "CAPITAL" to go back really to the
1935 and 1973 formulations.
MR. BENNAGEN. May I suggest that we retain the phrase "controlling interest"?
MR. VILLEGAS. Yes, we will retain it. (The statement of Commissioner Villegas is possibly
erroneous considering his consistent statement, especially during the oral arguments, that the
Constitutional Commission rejected the UP Proposal to use the phrase "controlling interest.")
THE PRESIDENT. Are we now ready to vote?
MR. SARMIENTO. Yes, Madam President.
VOTING
THE PRESIDENT. As many as are in favour of the proposed amendment of Commissioner Garcia
for "SEVENTY-FIVE" percent, please raise their hand. (Few Members raised their hand.)
As many as are against the amendment, please raise their hand. (Several Members raised their
hand.)
As many as are abstaining, please raise their hand. (One Member raised his hand.)
The results show 16 votes in favour, 18 against and 1 abstention; the Garcia amendment is lost.
MR. SARMIENTO. Madam President, may I ask that Commissioner Foz be recognized.
THE PRESIDENT. Commissioner Foz is recognized.
MR. FOZ. After losing by only two votes, I suppose that this next proposal will finally get the vote
of the majority. The amendment is to provide for at least TWO-THIRDS.
MR. SUAREZ. It is equivalent to 66 2/3.
THE PRESIDENT. Will the Commissioner repeat?
MR. FOZ. I propose "TWO-THIRDS of whose CAPITAL is owned by such citizens." Madam
President, we are referring to the same provision to which the previous amendments have been
suggested. First, we called for a 100-percent ownership; and then, second, we called for a 75-
percent ownership by Filipino citizens.
So my proposal is to provide for at least TWO-THIRDS of the capital to be owned by Filipino
citizens. I would like to call the attention of the body that the same ratio or equity requirement is
provided in the case of public utilities. And if we are willing to provide such equity requirements in
the case of public utilities, we should at least likewise provide the same equity ratio in the case of
natural resources.
MR. VILLEGAS. Commissioner Romulo will respond.
MR. ROMULO. I just want to point out that there is an amendment here filed to also reduce the
ratio in Section 15 to 60-40.
MR. PADILLA. Madam President.
THE PRESIDENT. Commissioner Padilla is recognized.
MR. PADILLA. The 60 percent which appears in the committee report has been repeatedly upheld
in various votings. One proposal was whole – 100 percent; another one was 75 percent and now it
is 66 2/3 percent. Is not the decision of this Commission in voting to uphold the percentage in the
committee report already a decision on this issue?
MR. FOZ. Our amendment has been previously brought to the attention of the body.
MR. VILLEGAS. The Committee does not accept the Commissioner’s amendment. This has been
discussed fully and, with only one-third of the vote, it is like having nothing at all in decision-
making. It can be completely vetoed.
MR. RODRIGO. Madam President.
THE PRESIDENT. Commissioner Rodrigo is recognized.
MR. RODRIGO. This is an extraordinary suggestion. But considering the circumstances that the
proposals from the 100 percent to 75 percent lost, and now it went down to 66 2/3 percent, we
might go down to 65 percent next time. So I suggest that we vote between 66 2/3 and 60 percent.
Which does the body want? Then that should be the end of it; otherwise, this is ridiculous. After
this, if the 66 2/3 percent will lose, then somebody can say: "Well, how about 65 percent?"
THE PRESIDENT. The Chair was made to understand that Commissioner Foz’ proposal is the
last proposal on this particular line. Will Commissioner Foz restate his proposal?
MR. FOZ. My proposal is "TWO-THIRDS of whose CAPITAL or controlling interest is owned by
such citizens."
VOTING
THE PRESIDENT. We now put Commissioner Foz’ amendment to a vote.
As many as are in favour of the amendment of Commissioner Foz, please raise their hand. (Few
Members raised their hand.)
As many as are against, please raise their hand. (Several Members raised their hand.)
The results show 17 votes in favour, 20 against, and not abstention; the amendment is lost.22
xxxx
August 22, 1986, Friday
THE PRESIDENT. Commissioner Nolledo is recognized.
MR. NOLLEDO. Thank you, Madam President.
I would like to propound some questions to the chairman and members of the committee. I have
here a copy of the approved provisions on Article on the National Economy and Patrimony. On
page 2, the first two lines are with respect to the Filipino and foreign equity and I said: "At least
sixty percent of whose capital or controlling interest is owned by such citizens."
I notice that this provision was amended by Commissioner Davide by changing "voting stocks" to
"CAPITAL," but I still notice that there appears the term "controlling interest" which seems to refer
to assocaitions other than corporations and it is merely 50 percent plus one percent which is less
than 60 percent. Besides, the wordings may indicate that the 60 percent may be based not only on
capital but also on controlling interest; it could mean 60 percent or 51 percent.
Before I propound the final question, I would like to make a comment in relation to Section 15
since they are related to each other. I notice that in Section 15, there still appears the phrase
"voting stock or controlling interest." The term "voting stocks" as the basis of the Filipino equity
means that if 60 percent of the voting stocks belong to Filipinos, foreigners may now own more
than 40 percent of the capital as long as the 40 percent or the excess thereof will cover nonvoting
stock. This is aside from the fact that under the Corporation Code, even nonvoting shares can
vote on certain instances. Control over investments may cover aspects of management and
participation in the fruits of production or exploitation.
So, I hope the committee will consider favorably my recommendation that instead of using
"controlling interests," we just use "CAPITAL" uniformly in cases where foreign equity is permitted
by law, because the purpose is really to help the Filipinos in the exploitation of natural resources
and in the operation of public utilities. I know the committee, at its own instance, can make the
amendment.
What does the committee say?
267
MR. VILLEGAS. We completely agree with the Commissioner’s views. Actually, it was really an
oversight. We did decide on the word "CAPITAL." I think it was the opinion of the majority that the
phrase "controlling interest" is ambiguous.
So, we do accept the Commissioner’s proposal to eliminate the phrase "or controlling interest" in
all the provisions that talk about foreign participation.
MR. NOLLEDO. Not only in Section 3, but also with respect to Section 15.
Thank you very much.
MR. MAAMBONG. Madam President.
THE PRESIDENT. Commissioner Maambong is recognized.
MR. MAAMBONG. In view of the manifestation of the committee, I would like to be clarified on the
use of the word "CAPITAL."
MR. VILLEGAS. Yes, that was the word used in the 1973 and 1935 Constitutions.
MR. MAAMBONG. Let us delimit ourselves to that word "CAPITAL". In the Corporation Law, if I
remember correctly, we have three types of capital: the authorized capital stock, the subscribed
capital stock and the paid-up capital stock.
The authorized capital stock could be interpreted as the capital of the corporation itself because
that is the totality of the investment of the corporation as stated in the articles of incorporation.
When we refer to 60 percent, are we referring to the authorized capital stock or the paid-up capital
stock since the determinant as to who owns the corporation, as far as equity is concerned, is the
subscription of the person?
I think we should delimit ourselves also to what we mean by 60 percent. Are we referring to the
authorized capital stock or to the subscribed capital stock, because the determination, as I said,
on the controlling interest of a corporation is based on the subscribed capital stock? I would like a
reply on that.
MR. VILLEGAS. Commissioner Suarez, a member of the committee, would like to answer that.
THE PRESIDENT. Commissioner Suarez is recognized.
MR. SUAREZ. Thank you, Madam President.
We stated this because there might be a misunderstanding regarding the interpretation of the term
"CAPITAL" as now used as the basis for the percentage of foreign investments in appropriate
instances and the interpretation attributed to the word is that it should be based on the paidup
capital. We eliminated the use the phrase "voting stock or controlling interest" because that is only
used in connection with the matter of voting. As a matter of fact, in the declaration of dividends for
private corporations, it is usually based on the paid-up capitalization.
So, what is really the dominant factor to be considered in matters of determining the 60-40
percentage should really be the paid-up capital of the corporation.
MR. MAAMBONG. I would like to get clarification on this. If I remember my corporation law
correctly, we usually use a determinant in order to find out what the ratio of ownership is, not really
on the paid-up capital stock but on the subscribed capital stock.
For example, if the whole authorized capital stock of the corporation is ₱ 1 million, if the
subscription is 60 percent of ₱ 1 million which is ₱ 600,000, then that is supposed to be the
determinant whether there is a sharing of 60 percent of Filipinos or not. It is not really on the paid-
up capital because once a person subscribes to a capital stock then whether that capital stock is
paid up or not, does not really matter, as far as the books of the corporation are concerned. The
subscribed capital stock is supposed to be owned by the person who makes the subscription.
There are so many laws on how to collect the delinquency and so on.
I view of the Commissioner’s answer, I would like to know whether he is determined to put on the
record that in order to determine the 60-40 percent sharing, we have to determine whether we will
use a determinant which is the subscribed capital stock or the paid-up capital stock.
MR SUAREZ. We are principally concerned about the interpretation which would be attached to it;
that is, it should be limited to authorized capital stock, not to subscribed capital stock.
I will give the Commissioner an illustration of what he is explaining to the Commission.
MR. MAAMBONG. Yes, thank you.
MR. SUAREZ. Let us say the authorized capital stock is ₱ 1 million. Under the present rules in the
Securities and Exchange Commission, at least 25 percent of that amount must be subscribed and
at least 25 percent of this subscribed capital must be paid up.
Now, let us discuss the basis of 60-40. To illustrate the matter further, let us say that 60 percent of
the subscriptions would be allocated to Filipinos and 40 percent of the subscribed capital would be
held by foreigners. Then we come to the paid-up capitalization. Under the present rules in the
Securities and Exchange Commission, a foreign corporation is supposed to subscribe to a 40-
percent share which must be fully paid up.
On the other hand, the 60 percent allocated to Filipinos need not be paid up. However, at least 25
percent of the subscription must be paid up for purposes of complying with the Corporation Law.
We can illustrate the matter further by saying that the compliance of 25 percent paid-up of the
subscribed capital would be fulfilled by the full payment of the 40 percent by the foreigners.
So, we have a situation where the Filipino percentage of 60 may not even comply with the 25-
percent requirement because of the totality due to the fully payment of the 40-percent of the
foreign investors, the payment of 25 percent paid-up on the subscription would have been
considered fulfilled. That is exactly what we are trying to avoid.
MR. MAAMBONG I appreciate very much the explanation but I wonder if the committee would
subscribe to that view because I will stick to my thinking that in the computation of the 60-40 ratio,
the basis should be on the subscription. If the subscription is being done by 60 percent Filipinos,
whether it is paid-up or not and the subscription is accepted by the corporation, I think that is the
proper determinant. If we base the 60-40 on the paid-up capital stock, we have a problem here
where the 40 percent is fully paid up and the 60 percent is not fully paid up – this may be contrary
to the provisions of the Constitution. So I would like to ask for the proper advisement from the
Committee as to what should be the proper interpretation because this will cause havoc on the
interpretation of our Corporation Law.
MR. ROMULO. Madam President.
THE PRESIDENT. Commissioner Romulo is recognized.
MR. ROMULO. We go by the established rule which I believe is uniformly held. It is based on the
subscribed capital. I know only of one possible exception and that is where the bylaws prohibit the
subscriber from voting. But that is a very rare provision in bylaws. Otherwise, my information and
belief is that it is based on the subscribed capital.
MR. MAAMBONG. It is, therefore, the understanding of this Member that the Commissioner is
somewhat revising the answer of Commissioner Suarez to that extent?
MR. ROMULO. No, I do not think we contradict each other. He is talking really of the instance
where the subscriber is a non-resident and, therefore, must fully pay. That is how I understand his
position.
MR. MAAMBONG. My understanding is that in the computation of the 60-40 sharing under the
present formulation, the determinant is the paid-up capital stock to which I disagree.
MR. ROMULO. At least, from my point of view, it is the subscribed capital stock.
MR. MAAMBONG. Then that is clarified.23
xxxx
August 23, 1986, Saturday
MS. ROSARIO BRAID. Madam President, I propose a new section to read: "THE MANAGEMENT
BODY OF EVERY CORPORATION OR ASSOCIATION SHALL IN ALL CASES BE
CONTROLLED BY CITIZENS OF THE PHILIPPINES."
This will prevent management contracts and assure control by Filipino citizens. Will the committee
assure us that this amendment will insure that past activities such as management contracts will
no longer be possible under this amendment?
MR. ROMULO. Madam President, if I may reply.
THE PRESIDENT. Commissioner Romulo is recognized.
MR. ROMULO. May I ask the proponent to read the amendment again.
MS. ROSARIO BRAID. The amendment reads: "THE MANAGEMENT BODY OF EVERY
CORPORATION OR ASSOCIATION SHALL IN ALL CASES BE CONTROLLED BY CITIZENS
OF THE PHILIPPINES."
MR. DE LOS REYES. Madam President, will Commissioner Rosario Braid agree to a
reformulation of her amendment for it to be more comprehensive and all-embracing?
THE PRESIDENT. Commissioner de los Reyes is recognized.
MR. DE LOS REYES. This is an amendment I submitted to the committee which reads:
"MAJORITY OF THE DIRECTORS OR TRUSTEES AND ALL THE EXECUTIVE AND
MANAGING OFFICERS OF SUCH CORPORATION OR ASSOCIATION MUST BE CITIZENS OF
THE PHILIPPINES."
This amendment is more direct because it refers to particular officers to be all-Filipino citizens.
MR. BENGZON. Madam President.
THE PRESIDENT. Commissioner Bengzon is recognized.
268
MR. BENGZON. The committee sitting out here accepts the amendment of Commissioner de los
Reyes which subsumes the amendment of Commissioner Rosario Braid.
THE PRESIDENT. So this will be a joint amendment now of Commissioners Rosario Braid, de los
Reyes and others.
MR. REGALADO. Madam President, I join in that amendment with the request that it will be the
last sentence of Section 15 because we intend to put an anterior amendment. However, that
particular sentence which subsumes also the proposal of Commissioner Rosario Braid can just be
placed as the last sentence of the article.
THE PRESIDENT. Is that acceptable to the committee?
MR. VILLEGAS. Yes, Madam President.
MS. ROSARIO BRAID. Thank you.
MR. RAMA, The body is now ready to vote on the amendment.
FR. BERNAS. Madam President.
THE PRESIDENT. Commissioner Bernas is recognized.
FR. BERNAS. Will the committee accept a reformulation of the first part?
MR. BENGZON. Let us hear it.
FR. BERNAS. The reformulation will be essentially the formula of the 1973 Constitution which
reads: "THE PARTICIPATION OF FOREIGN INVESTORS IN THE GOVERNING BODY OF ANY
PUBLIC UTILITY ENTERPRISE SHALL BE LIMITED TO THEIR PROPORTIONATE SHARE IN
THE CAPITAL THEREOF AND…"
MR. VILLEGAS. "ALL THE EXECUTIVE AND MANAGING OFFICERS OF SUCH
CORPORATIONS AND ASSOCIATIONS MUST BE CITIZENS OF THE PHILIPPINES."
MR. BENGZON. Will Commissioner Bernas read the whole thing again?
FR. BERNAS. "THE PARTICIPATION OF FOREIGN INVESTORS IN THE GOVERNING BODY
OF ANY PUBLIC UTILITY ENTERPRISE SHALL BE LIMITED TO THEIR PROPORTIONATE
SHARE IN THE CAPITAL THEREOF…" I do not have the rest of the copy.
MR. BENGZON. "AND ALL THE EXECUTIVE AND MANAGING OFFICERS OF SUCH
CORPORATIONS OR ASSOCIATIONS MUST BE CITIZENS OF THE PHILIPPINES." Is that
correct?
MR. VILLEGAS. Yes.
MR. BENGZON. Madam President, I think that was said in a more elegant language. We accept
the amendment. Is that all right with Commissioner Rosario Braid?
MS. ROSARIO BRAID. Yes.
THE PRESIDENT. The original authors of this amendment are Commissioners Rosario Braid, de
los Reyes, Regalado, Natividad, Guingona and Fr. Bernas.
MR. DE LOS REYES. The governing body refers to the board of directors and trustees.
MR. VILLEGAS. That is right.
MR. BENGZON. Yes, the governing body refers to the board of directors.
MR. REGALADO. It is accepted.
MR. RAMA. The body is now ready to vote, Madam President.
VOTING
THE PRESIDENT. As many as are in favour of this proposed amendment which should be the last
sentence of Section 15 and has been accepted by the committee, pleas raise their hand. (All
Members raised their hand.)
As many as are against, please raise their hand. (No Member raised his hand.)
The results show 29 votes in favour and none against; so the proposed amendment is
approved.24
It can be concluded that the view advanced by Justice Carpio is incorrect as the deliberations
easily reveal that the intent of the framers was not to limit the definition of the word "capital" as
meaning voting shares/stocks.
The majority in the original decision reproduced the CONCOM deliberations held on August 13
and August 15, 1986, but neglected to quote the other pertinent portions of the deliberations that
would have shed light on the true intent of the framers of the Constitution.
It is conceded that Proposed Resolution No. 496 on the language of what would be Art. XII of the
Constitution contained the phrase "voting stock or controlling interest," viz:
PROPOSED RESOLUTION NO. 496
RESOLUTION TO INCORPORATE IN THE NEW CONSTITUTION AN ARTICLE ON NATIONAL
ECONOMY AND PATRIMONY
Be it resolved as it is hereby resolved by the Constitutional Commission in session assembled, To
incorporate the National Economy and Patrimony of the new Constitution, the following provisions:
ARTICLE____
NATIONAL ECONOMY AND PATRIMONY
xxxx
SEC. 15. No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines at least two-thirds of whose voting stock or controlling
interest is owned by such citizens. Neither shall any such franchise or right be granted except
under the condition that it shall be subject to amendment, alteration, or repeal by Congress when
the common good so requires. The State shall encourage equity participation in public utilities by
the general public.25 (This became Sec. 11, Art. XII)(Emphasis supplied.)
The aforequoted deliberations disclose that the Commission eventually and unequivocally decided
to use "capital," which refers to the capital stock of the corporation, "as was employed in the 1935
and 1973 Constitution," instead of the proposed "voting stock or controlling interest" as the basis
for the percentage of ownership allowed to foreigners. The following exchanges among
Commissioners Foz, Suarez and Bengzon reflect this decision, but the majority opinion in the
June 28, 2011 Decision left their statements out:
MR. FOZ. Mr. Vice-President, in Sections 3 and 9,26 the provision on equity is both 60 percent,
but I notice that this is now different from the provision in the 1973 Constitution in that the basis for
the equity provision is voting stock or controlling interest instead of the usual capital percentage as
provided for in the 1973 Constitution. We would like to know what the difference would be
between the previous and the proposed provisions regarding equity interest.
xxxx
MR. SUAREZ. x x x As a matter of fact, this particular portion is still being reviewed x x x. In
Section 1, Article XIII of the 1935 Constitution, the wording is that the percentage should be based
on the capital which is owned by such citizens. In the proposed draft, this phrase was proposed:
"voting stock or controlling interest." This was a plan submitted by the UP Law Center.
x x x We would have three criteria to go by: One would be based on capital, which is capital stock
of the corporation, authorized, subscribed or paid up, as employed under the 1935 and the 1973
Constitution. The idea behind the introduction of the phrase "voting stock or controlling interest"
was precisely to avoid the perpetration of dummies, Filipino dummies of multinationals. It is
theoretically possible that a situation may develop where these multinational interests would not
really be only 40 percent but will extend beyond that in the matter of voting because they could
enter into what is known as a voting trust or voting agreement with the rest of the stockholders
and, therefore, notwithstanding the fact that on record their capital extent is only up to 40- percent
interest in the corporation, actually, they would be managing and controlling the entire company.
That is why the UP Law Center members suggested that we utilize the words "voting interest"
which would preclude multinational control in the matter of voting, independent of the capital
structure of the corporation. And then they also added the phrase "controlling interest" which up to
now they have not been able to successfully define the exact meaning of. x x x And as far as I am
concerned, I am not speaking in behalf of the Committee, I would feel more comfortable if we go
back to the wording of the 1935 and the 1973 Constitution, that is to say, the 60-40 percentage
could be based on the capital stock of the corporation.
xxxx
MR. BENGZON. I also share the sentiment of Commissioner Suarez in that respect. So there are
already two in the Committee who want to go back to the wording of the 1935 and the 1973
Constitution.27
In fact, in another portion of the CONCOM deliberations conveniently glossed over by the June 28,
2011 Decision, then Commissioner Davide strongly resisted the retention of the term "capital" as
used in the 1935 and 1973 Constitution on the ground that the term refers to both voting and
nonvoting. Eventually, however, he came around to accept the use of "CAPITAL" along with the
majority of the members of the Committee on Natural Economy and Patrimony in the afternoon
session held on August 15, 1986:
MR. TREÑAS. x x x may I propose an amendment on line 14 of Section 3 by deleting therefrom
"whose voting stock and controlling interest." And in lieu thereof, insert the CAPITAL so the line
should read: "associations at least sixty percent of the CAPITAL is owned by such citizens.
MR. VILLEGAS. We accept the amendment.
269
MR. TREÑAS. Thank you.
THE PRESIDENT. The amendment of Commissioner Treñas on line 14 has been accepted by the
Committee.
Is there any objection? (Silence) The Chair hears none; the amendment is approved.28
xxxx
MR. SUAREZ. x x x Two points are being raised by Commissioner Davide’s proposed
amendment. One has reference to the percentage of holdings and the other one is the basis for
the percentage x x x x Is the Commissioner not insisting on the voting capital stock because that
was already accepted by the Committee?
MR. DAVIDE. Would it mean that it would be 100-percent voting capital stock?
MR. SUAREZ. No, under the Commissioner’s proposal it is just "CAPITAL" not "stock."
MR. DAVIDE. No, I want it to be very clear. What is the alternative proposal of the Committee?
How shall it read?
MR. SUAREZ. It will only read something like: "the CAPITAL OF WHICH IS FULLY owned."
MR. VILLEGAS. Let me read lines 12 to 14 which state:
… enter into co-production, joint venture, production sharing agreements with Filipino citizens or
corporations or associations at least 60 percent of whose CAPITAL is owned by such citizens.
We are going back to the 1935 and 1973 formulations.
MR. DAVIDE. I cannot accept the proposal because the word CAPITAL should not really be the
guiding principle. It is the ownership of the corporation. It may be voting or not voting, but that is
not the guiding principle.
xxxx
THE PRESIDENT…. Commissioner Davide is to clarify his point.
MR. VILLEGAS. Yes, Commissioner Davide has accepted the word "CAPITAL" in place of "voting
stock or controlling interest." This is an amendment already accepted by the Committee.29
The above exchange precedes the clarifications made by then Commissioner Azcuna, which were
cited in the June 28, 2011 Decision. Moreover, the statements made subsequent to the portion
quoted in the June 28, 2011 Decision emphasize the CONCOM’s awareness of the plain meaning
of the term "capital" without the qualification espoused in the majority’s decision:
MR. AZCUNA. May I be clarified as to [what] was accepted x x x.
MR. VILLEGAS. The portion accepted by the Committee is the deletion of the phrase "voting stock
or controlling interest."
MR. AZCUNA. Hence, without the Davide amendment, the committee report would read:
"corporations or associations at least sixty percent of whose CAPITAL is owned by such citizens."
MR. VILLEGAS. Yes.
MR. AZCUNA. So if the Davide amendment is lost, we are stuck with 60 percent of the capital to
be owned by citizens?
MR. VILLEGAS. That is right.
MR. AZCUNA. But the control can be with the foreigners even if they are the minority. Let us say
40 percent of the capital is owned by them, but it is the voting capital, whereas, the Filipinos own
the nonvoting shares. So we can have a situation where the corporation is controlled by foreigners
despite being the minority because they have the voting capital. That is the anomaly that would
result here.
MR. BENGZON. No, the reason we eliminated the word "stock" as stated in the 1973 and 1935
Constitutions is that xxx there are associations that do not have stocks. That is why we say
"CAPITAL."
MR. AZCUNA. We should not eliminate the phrase "controlling interest."
MR. BENGZON. In the case of stock corporation, it is assumed.
MR. AZCUNA. Yes, but what I mean is that the control should be with the Filipinos.
MR. BENGZON. Yes, that is understood.
MR. AZCUNA. Yes, because if we just say "sixty percent of whose capital is owned by the
Filipinos," the capital may be voting or non-voting.
MR. BENGZON. That is correct.30
More importantly, on the very same August 15, 1986 session, Commissioner Azcuna no longer
insisted on retaining the delimiting phrase "controlling interest":
MR. GARCIA. Thank you very much, Madam President.
I would like to propose the following amendment on Section 3, line 14 on page 2. I propose to
change the word "sixty" to SEVENTY-FIVE. So, this will read: "or it may enter into co-production,
joint venture, production sharing agreements with Filipino citizens or corporations or associations
at least SEVENTY-FIVE percent of whose CAPITAL stock or controlling interest is owned by such
citizens."
MR. VILLEGAS. This is just a correction. I think Commissioner Azcuna is not insisting on the
retention of the phrase "controlling interest," so we will retain "CAPITAL" to go back really to the
1935 and 1973 formulations.31 (Emphasis supplied.)
The later deliberations held on August 22, 1986 further underscore the framers’ true intent to
include both voting and non-voting shares as coming within the pale of the word "capital." The UP
Law Center attempted to limit the scope of the word along the line then and now adopted by the
majority, but, as can be gleaned from the following discussion, the framers opted not to adopt the
proposal of the UP Law Center to add the more protectionist phrase "voting stock or controlling
interest":
MR. NOLLEDO. x x x I would like to propound some questions xxx. I have here a copy of the
approved provisions on Article on the National Economy and Patrimony. x x x
I notice that this provision was amended by Commissioner Davide by changing "voting stocks" to
"CAPITAL," but I still notice that there appears the term "controlling interest" x x x. Besides, the
wordings may indicate that the 60 percent may be based not only on capital but also on controlling
interest; it could mean 60 percent or 51 percent.
Before I propound the final question, I would like to make a comment in relation to Section 15
since they are related to each other. I notice that in Section 15, there still appears the phrase
"voting stock or controlling interest." The term "voting stocks" as the basis of the Filipino equity
means that if 60 percent of the voting stocks belong to Filipinos, foreigners may now own more
than 40 percent of the capital as long as the 40 percent or the excess thereof will cover nonvoting
stock. This is aside from the fact that under the Corporation Code, even nonvoting shares can
vote on certain instances. Control over investments may cover aspects of management and
participation in the fruits of production or exploitation.
So, I hope the committee will consider favorably my recommendation that instead of using
"controlling interests," we just use "CAPITAL" uniformly in cases where foreign equity is permitted
by law, because the purpose is really to help the Filipinos in the exploitation of natural resources
and in the operation of public utilities. x x x
What does the committee say?
MR. VILLEGAS. We completely agree with the Commissioner’s views. Actually, it was really an
oversight. We did decide on the word "CAPITAL." I think it was the opinion of the majority that the
phrase "controlling interest" is ambiguous.
So, we do accept the Commissioner’s proposal to eliminate the phrase "or controlling interest" in
all the provisions that talk about foreign participation.
MR. NOLLEDO. Not only in Section 3, but also with respect to Section 15.32 (Emphasis supplied.)
In fact, on the very same day of deliberations, the Commissioners clarified that the proper and
more specific "interpretation" that should be attached to the word "capital" is that it refers to the
"subscribed capital," a corporate concept defined as "that portion of the authorized capital stock
that is covered by subscription agreements whether fully paid or not"33 and refers to both voting
and non-voting shares:
MR. MAAMBONG. x x x I would like to be clarified on the use of the word "CAPITAL."
MR. VILLEGAS. Yes, that was the word used in the 1973 and the 1935 Constitutions.
MR. MAAMBONG. Let us delimit ourselves to that word "CAPITAL." In the Corporation Law, if I
remember correctly, we have three types of capital: the authorized capital stock, the subscribed
capital stock and the paid-up capital stock.
xxxx
I would like to get clarification on this. If I remember my corporation law correctly, we usually use a
determinant in order to find out what the ratio of ownership is, not really on the paid-up capital
stock but on the subscribe capital stock.
xxxx
x x x I would like to know whether (Commissioner Suarez) is determined to put on the record that
in order to determine the 60-40 percent sharing, we have to determine whether we will use a
determinant which is the subscribed capital stock or the paid-up capital stock.
MR. SUAREZ. We are principally concerned about the interpretation which would be attached to
it, that is, it should be limited to authorized capital stock, not to subscribed capital stock.
I will give the Commissioner an illustration of what he is explaining to the Commission.
270
xxxx
Let us say authorized capital stock is ₱ 1 million. Under the present rules in the [SEC], at least 25
percent of that amount must be subscribed and at least 25 percent of this subscribed capital must
be paid up.
Now, let us discuss the basis of 60-40. To illustrate the matter further, let us say that 60 percent of
the subscriptions would be allocated to Filipinos and 40 percent of the subscribed capital stock
would be held by foreigners. Then we come to the paid-up capitalization. Under the present rules
in the [SEC], a foreign corporation is supposed to subscribe to 40-percent share which must be
fully paid up.
On the other hand, the 60 percent allocated to Filipinos need not be paid up. However, at least 25
percent of the subscription must be paid up for purposes of complying with the Corporation Law.
We can illustrate the matter further by saying that the compliance of 25 percent paid-up of the
subscribed capital would be fulfilled by the full payment of the 40 percent by the foreigners.
So, we have a situation where the Filipino percentage of 60 may not even comply with the 25-
percent requirement because of the totality due to the full payment of the 40-percent of the foreign
investors, the payment of 25 percent paid-up on the subscription would have been considered
fulfilled. That is exactly what we are trying to avoid.
MR. MAAMBONG. I appreciate very much the explanation but I wonder if the committee would
subscribe to that view because I will stick to my thinking that in the computation of the 60-40 ratio,
the basis should be on the subscription. x x x
xxxx
MR. ROMULO. We go by the established rule which I believe is uniformly held. It is based on the
subscribed capital. x x x
xxxx
I do not think that we contradict each other. (Commisioner Suarez) is talking really of the instance
where the subscriber is a non-resident and, therefore, must fully pay. That is how I understand his
position.
MR. MAAMBONG. My understanding is that in the computation of the 60-40 sharing under the
present formulation, the determinant is the paid-up capital stock to which I disagree.
MR . ROMULO. At least, from my point of view, it is the subscribed capital stock."34
Clearly, while the concept of voting capital as the norm to determine the 60-40 Filipino-alien ratio
was initially debated upon as a result of the proposal to use "at least two-thirds of whose voting
stock or controlling interest is owned by such citizens,"35 in what would eventually be Sec. 11, Art.
XII of the Constitution, that proposal was eventually discarded. And nowhere in the records of the
CONCOM can it be deduced that the idea of full ownership of voting stocks presently parlayed by
the majority was earnestly, if at all, considered. In fact, the framers decided that the term "capital,"
as used in the 1935 and 1973 Constitutions, should be properly interpreted as the "subscribed
capital," which, again, does not distinguish stocks based on their board-membership voting
features.
Indeed, the phrase "voting stock or controlling interest" was suggested for and in fact deliberated,
but was similarly dropped in the approved draft provisions on National Economy and Patrimony,
particularly in what would become Sections 236 and 10,37 Article XII of the 1987 Constitution.
However, the framers expressed preference to the formulation of the provision in question in the
1935 and 1973 Constitutions, both of which employed the word "capital" alone. This was very
apparent in the aforementioned deliberations and affirmed by amicus curiae Dr. Bernardo Villegas,
Chair of the Committee on the National Economy and Patrimony in charge of drafting Section 11
and the rest of Article XII of the Constitution. During the June 26, 2012 oral arguments, Dr.
Villegas manifested that:
x x x Justice Abad was right. [If i]t was not in the minds of the Commissioners to define capital
broadly, these additional provisions would be meaningless. And it would have been really more or
less expressing some kind of a contradiction in terms. So, that is why I was pleasantly surprised
that one of the most pro-Filipino members of the Commission, Atty. Jose Suarez, who actually
voted "NO" to the entire Constitution has only said, was one of the first to insist, during one of the
plenary sessions that we should reject the UP Law Center recommendation. In his words, I quote
"I would feel more comfortable if we go back to the wording of the 1935 and 1970 Constitutions
that is to say the 60-40 percentage could be based on the capital stock of the corporation." The
final motion was made by Commissioner Efren Treñas, in the same plenary session when he
moved, "Madam President, may I propose an amendment on line 14 of Section 3 by deleting
therefrom ‘whose voting stock and controlling interest’ and in lieu thereof, insert capital, so the line
should read: "associations of at least sixty percent (60%) of the capital is owned by such citizens."
After I accepted the amendment since I was the chairman of the National Economy Committee, in
the name of the Committee, the President of the Commission asked for any objection. When no
one objected, the President solemnly announced that the amendment had been approved by the
Plenary. It is clear, therefore, that in the minds of the Commissioners the word "capital" in Section
11 of Article XII refers, not to voting stock, but to total subscribed capital, both common and
preferred.38 (Emphasis supplied.)
There was no change in phraseology from the 1935 and
1973 Constitutions, or a transitory provision that signals
such change, with respect to foreign ownership in public
utility corporations (2nd extrinsic aid)
If the framers wanted the word "capital" to mean voting capital stock, their terminology would have
certainly been unmistakably limiting as to leave no doubt about their intention. But the framers
consciously and purposely excluded restrictive phrases, such as "voting stocks" or "controlling
interest," in the approved final draft, the proposal of the UP Law Center, Commissioner Davide
and Commissioner Azcuna notwithstanding. Instead, they retained "capital" as "used in the 1935
and 1973 Constitutions."39 There was, therefore, a conscious design to avoid stringent words that
would limit the meaning of "capital" in a sense insisted upon by the majority. Cassus omissus pro
omisso habendus est––a person, object, or thing omitted must have been omitted intentionally.
More importantly, by using the word "capital," the intent of the framers of the Constitution was to
include all types of shares, whether voting or nonvoting, within the ambit of the word.
History or realities or circumstances prevailing during the
drafting of the Constitution validate the adoption of the plain
meaning of "Capital" (3rd extrinsic aid)
This plain, non-exclusive interpretation of "capital" also comes to light considering the economic
backdrop of the 1986 CONCOM when the country was still starting to rebuild the financial markets
and regain the foreign investors’ confidence following the changes caused by the toppling of the
Martial Law regime. As previously pointed out, the Court, in construing the Constitution, must take
into consideration the aims of its framers and the evils they wished to avoid and address. In Civil
Liberties Union v. Executive Secretary,40 We held:
A foolproof yardstick in constitutional construction is the intention underlying the provision under
consideration. Thus, it has been held that the Court in construing a Constitution should bear in
mind the object sought to be accomplished by its adoption, and the evils, if any, sought to be
prevented or remedied. A doubtful provision will be examined in the light of the history of the
times, and the condition and circumstances under which the Constitution was framed. The object
is to ascertain the reason which induced the framers of the Constitution to enact the particular
provision and the purpose sought to be accomplished thereby, in order to construe the whole as to
make the words consonant to that reason and calculated to effect that purpose. (Emphasis
supplied.)
It is, thus, proper to revisit the circumstances prevailing during the drafting period. In an astute
observation of the economic realities in 1986, quoted by respondent Pangilinan, University of the
Philippines School of Economics Professor Dr. Emmanuel S. de Dios examined the nation’s dire
need for foreign investments and foreign exchange during the time when the framers deliberated
on what would eventually be the National Economy and Patrimony provisions of the Constitution:
The period immediately after the 1986 EDSA Revolution is well known to have witnessed the
country’s deepest economic crisis since the Second World War. Official data readily show this
period was characterised by the highest unemployment, highest interest rates, and largest
contractions in output the Philippine economy experienced in the postwar period. At the start of
the Aquino administration in 1986, total output had already contracted by more than seven percent
annually for two consecutive years (1984 and 1985), inflation was running at an average of 35
percent, unemployment more than 11 percent, and the currency devalued by 35 percent.
The proximate reason for this was the moratorium on foreigndebt payments the country had called
in late 1983, effectively cutting off the country’s access to international credit markets (for a deeper
contemporary analysis of what led to the debt crisis, see de Dios 1984). The country therefore had
to subsist only on its current earnings from exports, which meant there was a critical shortage of
foreign exchange. Imports especially of capital goods and intermediate goods therefore had to be
drastically curtailed x x x.
271
For the same reasons, obviously, new foreign investments were unlikely to be forthcoming. This is
recorded by Bautista 2003:158, who writes:
Long-term capital inflows have been rising at double-digit rates since 1980, except during 1986-
1990, a time of great political and economic uncertainty following the period of martial law under
President Marcos.
The foreign-exchange controls then effectively in place will have made importing inputs difficult for
new enterprises, particularly foreign investors (especially Japanese) interested in relocating some
of theirexport-oriented but import-dependent operations to the Philippines. x x x The same foreign-
exchange restrictions would have made the freedom to remit profits a dicey affairs. Finally,
however, the period was also characterised by extreme political uncertainty, which did not cease
even after the Marcos regime was toppled.41 x x x
Surely, it was far from the minds of the framers to alienate and disenfranchise foreign investors by
imposing an indirect restriction that only exacerbates the dichotomy between management and
ownership without the actual guarantee of giving control and protection to the Filipino investors.
Instead, it can be fairly assumed that the framers intended to avoid further economic meltdown
and so chose to attract foreign investors by allowing them to 40% equity ownership of the entirety
of the corporate shareholdings but, wisely, imposing limits on their participation in the governing
body to ensure that the effective control and ultimate economic benefits still remained with the
Filipino shareholders.
Judicial decisions and prior laws use and/or treat
"capital" as "capital stock" (4th extrinsic aid)
That the term "capital" in Sec. 11, Art. XII is equivalent to "capital stock," which encompasses all
classes of shares regardless of their nomenclature or voting capacity, is easily determined by a
review of various laws passed prior to the ratification of the 1987 Constitution. In 1936, for
instance, the Public Service Act42 established the nationality requirement for corporations that
may be granted the authority to operate a "public service,"43 which include most of the present-
day public utilities, by referring to the paid-up "capital stock" of a corporation, viz:
Sec. 16. Proceedings of the Commission, upon notice and hearing. – The Commission shall have
power, upon proper notice and hearing in accordance with the rules and provisions of this Act,
subject to the limitations and exceptions mentioned and saving provisions to the contrary:
(a) To issue certificates which shall be known as certificates of public convenience, authorizing the
operation of public service within the Philippines whenever the Commission finds that the
operation of the public service proposed and the authorization to do business will promote the
public interest in a proper and suitable manner. Provided, That thereafter, certificates of public
convenience and certificates of public convenience and necessity will be granted only to citizens
of the Philippines or of the United States or to corporations, co-partnerships, associations or joint-
stock companies constituted and organized under the laws of the Philippines; Provided, That sixty
per centum of the stock or paid-up capital of any such corporations, co-partnership, association or
joint-stock company must belong entirely to citizens of the Philippines or of the United States:
Provided, further, That no such certificates shall be issued for a period of more than fifty years.
(Emphasis supplied.)
The heading of Sec. 2 of Commonwealth Act No. (CA) 108, or the Anti-Dummy Law, which was
approved on October 30, 1936, similarly conveys the idea that the term "capital" is equivalent to
"capital stock"44:
Section 2. Simulation of minimum capital stock — In all cases in which a constitutional or legal
provision requires that, in order that a corporation or association may exercise or enjoy a right,
franchise or privilege, not less than a certain per centum of its capital must be owned by citizens of
the Philippines or of any other specific country, it shall be unlawful to falsely simulate the existence
of such minimum stock or capital as owned by such citizens, for the purpose of evading said
provision. The president or managers and directors or trustees of corporations or associations
convicted of a violation of this section shall be punished by imprisonment of not less than five nor
more than fifteen years, and by a fine not less than the value of the right, franchise or privilege,
enjoyed or acquired in violation of the provisions hereof but in no case less than five thousand
pesos.45 (Emphasis and underscoring supplied.)
Pursuant to these legislative acts and under the aegis of the Constitutional nationality requirement
of public utilities then in force, Congress granted various franchises upon the understanding that
the "capital stock" of the grantee is at least 60% Filipino. In 1964, Congress, via Republic Act No.
(RA) 4147,46 granted Filipinas Orient Airway, Inc. a legislative franchise to operate an air carrier
upon the understanding that its "capital stock" was 60% percent Filipino-owned. Section 14 of RA
4147, provided:
Sec. 14. This franchise is granted with the understanding that the grantee is a corporation sixty
per cent of the capital stock of which is the bona fide property of citizens of the Philippines and
that the interest of such citizens in its capital stock or in the capital of the Company with which it
may merge shall at no time be allowed to fall below such percentage, under the penalty of the
cancellation of this franchise. (Emphasis and underscoring supplied.)
The grant of a public utility franchise to Air Manila. Inc. to establish and maintain air transport in
the country a year later pursuant to RA 450147 contained exactly the same Filipino capitalization
requirement imposed in RA 4147:
Sec. 14. This franchise is granted with the understanding that the grantee is a corporation, sixty
per cent of the capital stock of which is owned or the bona fide property of citizens of the
Philippines and that the interest of such citizens in its capital stock or in the capital of the company
with which it may merge shall at no time be allowed to fall below such percentage, under the
penalty of the cancellation of this franchise. (Emphasis and underscoring supplied.)
In like manner, RA 5514,48 which granted a franchise to the Philippine Communications Satellite
Corporation in 1969, required of the grantee to execute management contracts only with
corporations whose "capital or capital stock" are at least 60% Filipino:
Sec. 9. The grantee shall not lease, transfer, grant the usufruct of, sell or assign this franchise to
any person or entity, except any branch or instrumentality of the Government, without the previous
approval of the Congress of the Philippines: Provided, That the grantee may enter into
management contract with any person or entity, with the approval of the President of the
Philippines: Provided, further, That such person or entity with whom the grantee may enter into
management contract shall be a citizen of the Philippines and in case of an entity or a corporation,
at least sixty per centum of the capital or capital stock of which is owned by citizens of the
Philippines. (Emphasis supplied.)
In 1968, RA 5207,49 otherwise known as the "Atomic Energy Regulatory Act of 1968," considered
a corporation sixty percent of whose capital stock as domestic:
Sec. 9. Citizenship Requirement. No license to acquire, own, or operate any atomic energy facility
shall be issued to an alien, or any corporation or other entity which is owned or controlled by an
alien, a foreign corporation, or a foreign government.
For purposes of this Act, a corporation or entity is not owned or controlled by an alien, a foreign
corporation of a foreign government if at least sixty percent (60%) of its capital stock is owned by
Filipino citizens. (Emphasis supplied.)
Anent pertinent judicial decisions, this Court has used the very same definition of capital as
equivalent to the entire capital stockholdings in a corporation in resolving various other issues. In
National Telecommunications Commission v. Court of Appeals,50 this Court, thus, held:
The term "capital" and other terms used to describe the capital structure of a corporation are of
universal acceptance, and their usages have long been established in jurisprudence. Briefly,
capital refers to the value of the property or assets of a corporation. The capital subscribed is the
total amount of the capital that persons (subscribers or shareholders) have agreed to take and pay
for, which need not necessarily be, and can be more than, the par value of the shares. In fine, it is
the amount that the corporation receives, inclusive of the premiums if any, in consideration of the
original issuance of the shares. In the case of stock dividends, it is the amount that the corporation
transfers from its surplus profit account to its capital account. It is the same amount that can
loosely be termed as the "trust fund" of the corporation. The "Trust Fund" doctrine considers this
subscribed capital as a trust fund for the payment of the debts of the corporation, to which the
creditors may look for satisfaction. Until the liquidation of the corporation, no part of the subscribed
capital may be returned or released to the stockholder (except in the redemption of redeemable
shares) without violating this principle. Thus, dividends must never impair the subscribed capital;
subscription commitments cannot be condoned or remitted; nor can the corporation buy its own
shares using the subscribed capital as the consideration therefor.51
This is similar to the holding in Banco Filipino v. Monetary Board52 where the Court treated the
term "capital" as including both common and preferred stock, which are usually deprived of voting
rights:
It is clear from the law that a solvent bank is one in which its assets exceed its liabilities. It is a
basic accounting principle that assets are composed of liabilities and capital. The term "assets"
includes capital and surplus" (Exley v. Harris, 267 p. 970, 973, 126 Kan., 302). On the other hand,
272
the term "capital" includes common and preferred stock, surplus reserves, surplus and undivided
profits. (Manual of Examination Procedures, Report of Examination on Department of Commercial
and Savings Banks, p. 3-C). If valuation reserves would be deducted from these items, the result
would merely be the networth or the unimpaired capital and surplus of the bank applying Sec. 5 of
RA 337 but not the total financial condition of the bank.
In Commissioner of Internal Revenue v. Court of Appeals,53 the Court alluded to the doctrine of
equality of shares in resolving the issue therein and held that all shares comprise the capital stock
of a corporation:
A common stock represents the residual ownership interest in the corporation. It is a basic class of
stock ordinarily and usually issued without extraordinary rights or privileges and entitles the
shareholder to a pro rata division of profits. Preferred stocks are those which entitle the
shareholder to some priority on dividends and asset distribution. Both shares are part of the
corporation’s capital stock. Both stockholders are no different from ordinary investors who take on
the same investment risks. Preferred and common shareholders participate in the same venture,
willing to share in the profit and losses of the enterprise. Moreover, under the doctrine of equality
of shares --- all stocks issued by the corporation are presumed equal with the same privileges and
liabilities, provided that the Articles of Incorporation is silent on such differences.54 (Emphasis
supplied.)
The SEC has reflected the popular contemporaneous
construction of capital in computing the nationality
requirement based on the total capital stock, not only
the voting stock, of a corporation (5th extrinsic aid)
The SEC has confirmed that, as an institution, it has always interpreted and applied the 40%
maximum foreign ownership limit for public utilities to the total capital stock, and not just its total
voting stock.
In its July 29, 2011 Manifestation and Omnibus Motion, the SEC reaffirmed its longstanding
practice and history of enforcement of the 40% maximum foreign ownership limit for public utilities,
viz:
5. The Commission respectfully submits that it has always performed its duty under Section 17(4)
of the Corporation Code to enforce the foreign equity restrictions under Section 11, Article XII of
the Constitution on the ownership of public utilities.
xxxx
8. Thus, in determining compliance with the Constitutional restrictions on foreign equity, the
Commission consistently construed and applied the term "capital" in its commonly accepted
usage, that is – the sum total of the shares subscribed irrespective of their nomenclature and
whether or not they are voting or non-voting (Emphasis supplied).
9. This commonly accepted usage of the term ‘capital’ is based on persuasive authorities such as
the widely esteemed Fletcher Cyclopedia of the Law of Private Corporations, and doctrines from
American Jurisprudence. To illustrate, in its Opinion dated February 15, 1988 addresses to
Gozon, Fernandez, Defensor and Associates, the Commission discussed how the term ‘capital’ is
commonly used:
"Anent thereto, please be informed that the term ‘capital’ as applied to corporations, refers to the
money, property or means contributed by stockholders as the form or basis for the business or
enterprise for which the corporation was formed and generally implies that such money or property
or means have been contributed in payment for stock issued to the contributors. (United Grocers,
Ltd. v. United States F. Supp. 834, cited in 11 Fletcher, Cyc. Corp., 1986, rev. vol., sec. 5080 at
18). As further ruled by the court, ‘capital of a corporation is the fund or other property, actually or
potentially in its possession, derived or to be derived from the sale by it of shares of its stock or his
exchange by it for property other than money. This fund includes not only money or other property
received by the corporation for shares of stock but all balances of purchase money, or
instalments, due the corporation for shares of stock sold by it, and all unpaid subscriptions for
shares.’" (Williams v. Brownstein, 1F. 2d 470, cited in 11 Fletcher, Cyc. Corp., 1058 rev. vol., sec.
5080, p. 21).
The term ‘capital’ is also used synonymously with the words ‘capital stock’, as meaning the
amount subscribed and paidin and upon which the corporation is to conduct its operation. (11
Fletcher, Cyc. Corp. 1986, rev. vol., sec. 5080 at 15). And, as held by the court in Haggard v.
Lexington Utilities Co., (260 Ky 251, 84 SW 2d 84, cited in 11 Fletcher, Cyc. Corp., 1958 rev. vol.,
sec. 5079 at 17), ‘The capital stock of a corporation is the amount paidin by its stockholders in
money, property or services with which it is to conduct its business, and it is immaterial how the
stock is classified, whether as common or preferred.’
The Commission, in a previous opinion, ruled that the term ‘capital’ denotes the sum total of the
shares subscribed and paid by the shareholders or served to be paid, irrespective of their
nomenclature. (Letter to Supreme Technotronics Corporation, dated April 14, 1987)." (Emphasis
ours)
10. Further, in adopting this common usage of the term ‘capital,’ the Commission believed in good
faith and with sound reasons that it was consistent with the intent and purpose of the Constitution.
In an Opinion dated 27 December 1995 addressed to Joaquin Cunanan & Co. the Commission
observed that:
"To construe the 60-40% equity requirement as merely based on the voting shares, disregarding
the preferred non-voting share, not on the total outstanding subscribed capital stock, would give
rise to a situation where the actual foreign interest would not really be only 40% but may extend
beyond that because they could also own even the entire preferred non-voting shares. In this
situation, Filipinos may have the control in the operation of the corporation by way of voting rights,
but have no effective ownership of the corporate assets which includes lands, because the actual
Filipino equity constitutes only a minority of the entire outstanding capital stock. Therefore, in
essence, the company, although controlled by Filipinos, is beneficially owned by foreigners since
the actual ownership of at least 60% of the entire outstanding capital stocks would be in the hands
of foreigners. Allowing this situation would open the floodgates to circumvention of the intent of the
law to make the Filipinos the principal beneficiaries in the ownership of alienable lands."
(Emphasis ours)
11. The foregoing settled principles and esteemed authorities relied upon by the Commission
show that its interpretation of the term ‘capital’ is reasonable.
12. And, it is well settled that courts must give due deference to an administrative agency’s
reasonable interpretation of the statute it enforces.55
It should be borne in mind that the SEC is the government agency invested with the jurisdiction to
determine at the first instance the observance by a public utility of the constitutional nationality
requirement prescribed vis-à-vis the ownership of public utilities56 and to interpret legislative acts,
like the FIA. The rationale behind the doctrine of primary jurisdiction lies on the postulate that such
administrative agency has the "special knowledge, experience and tools to determine technical
and intricate matters of fact…"57 Thus, the determination of the SEC is afforded great respect by
other executive agencies, like the Department of Justice (DOJ),58 and by the courts.
Verily, when asked as early as 1988– "Would it be legal for foreigners to own in a public utility
entity more than 40% of the common shares but not more than 40% of the total outstanding
capital stock which would include both common and non-voting preferred shares?" –the SEC,
citing Fletcher, invariably answered in the affirmative, whether the poser was made in light of the
present or previous Constitutions:
The pertinent provision of the Philippine Constitution under Article XII, Section 7, reads in part
thus:
"No franchise, certificate, or any form of authorization for the operation of a public utility shall be
granted except to citizens of the Philippines, or to corporations or associations organized under
the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens. . ."
xxx
The issue raised on your letter zeroes in on the meaning of the word "capital" as used in the
above constitutional provision. Anent thereto, please be informed that the term "capital" as applied
to corporations, refers to the money, property or means contributed by stockholders as the form or
basis for the business or enterprise for which the corporation was formed and generally implies
that such money or property or means have been contributed in payment for stock issued to the
contributors. (United Grocers, Ltd. v. United States F. Supp. 834, cited in 11 Fletcher, Cyc. Corp.,
1986, rev. vol., sec. 5080 at 18). As further ruled by the court, "capital of a corporation is the fund
or other property, actually or potentially in its possession, derived or to be derived from the sale by
it of shares of its stock or his exchange by it for property other than money. This fund includes not
only money or other property received by the corporation for shares of stock but all balances of
purchase money, or installments, due the corporation for shares of stock sold by it, and all unpaid
subscriptions for shares." (Williams v. Brownstein, 1F. 2d 470, cited in 11 Fletcher, Cyc. Corp.,
1058 rev. vol., sec. 5080, p. 21).
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The term "capital" is also used synonymously with the words "capital stock", as meaning the
amount subscribed and paid-in and upon which the corporation is to conduct its operation. (11
Fletcher, Cyc. Corp. 1986, rev. vol., sec. 5080 at 15). And, as held by the court in Haggard v.
Lexington Utilities Co., (260 Ky 251, 84 SW 2d 84, cited in 11 Fletcher, Cyc. Corp., 1958 rev. vol.,
sec. 5079 at 17), "The capital stock of a corporation is the amount paid-in by its stockholders in
money, property or services with which it is to conduct its business, and it is immaterial how the
stock is classified, whether as common or preferred."
The Commission, in a previous opinion, ruled that the term ‘capital’ denotes the sum total of the
shares subscribed and paid by the shareholders or served to be paid, irrespective of their
nomenclature. (Letter to Supreme Technotronics Corporation, dated April 14, 1987). Hence, your
query is answered in the affirmative.59 (Emphasis supplied.)
As it were, the SEC has held on the same positive response long before the 1987 Constitution
came into effect, a matter of fact which has received due acknowledgment from this Court. In
People v. Quasha,60 a case decided under the 1935 Constitution, this Court narrated that in 1946
the SEC approved the incorporation of a common carrier, a public utility, where Filipinos, while not
holding the controlling vote, owned the majority of the capital, viz:
The essential facts are not in dispute. On November 4, 1946, the Pacific Airways Corporation
registered its articles of incorporation with the [SEC]. The articles were prepared and the
registration was effected by the accused, who was in fact the organizer of the corporation. The
articles stated that the primary purpose of the corporation was to carry on the business of a
common carrier by air, land, or water, that its capital stock was ₱ 1,000,000, represented by 9,000
preferred and 100,000 common shares, each preferred share being of the par value of ₱ 100 and
entitled to 1/3 vote and each common share, of the par value of ₱ 1 and entitled to one vote; that
the amount of capital stock actually subscribed was ₱ 200,000, and the names of the subscriber
were Arsenio Baylon, Eruin E. Shannahan, Albert W. Onstott, James O’bannon, Denzel J. Cavin,
and William H. Quasha, the first being a Filipino and the other five all Americans; that Baylon’s
subscription was for 1,145 preferred shares, of the total value of ₱ 114,500 and 6,500 common
shares, of the total par value of ₱ 6,500, while the aggregate subscriptions of the American
subscribers were for 200 preferred shares, of the total par value of ₱ 20,000 and 59,000 common
shares, of the total par value of ₱ 59,000; and that Baylon and the American subscribers had
already paid 25 percent of their respective subscriptions. Ostensibly the owner of, or subscriber to,
60.005 per cent of the subscribed capital stock of the corporation, Baylon, did not have the
controlling vote because of the difference in voting power between the preferred shares and the
common shares. Still, with the capital structure as it was, the articles of incorporation were
accepted for registration and a certificate of incorporation was issued by the [SEC]. (Emphasis
supplied.)
The SEC has, through the years, stood by this interpretation. In an Opinion dated November 21,
1989, the SEC held that the basis of the computation for the nationality requirement is the total
outstanding capital stock, to wit:
As to the basis of computation of the 60-40 percentage nationality requirement under existing laws
(whether it should be based on the number of shares or the aggregate amount in pesos of the par
value of the shares), the following definitions of corporate terms are worth mentioning.
"The term capital stock signifies the aggregate of the shares actually subscribed". (11 Fletcher,
Cyc. Corps. (1971 Rev. Vol.) sec. 5082, citing Goodnow v. American Writing Paper Co., 73 NJ Eq.
692, 69 A 1014 aff'g 72 NJ Eq. 645, 66 A, 607).
"Capital stock means the capital subscribed (the share capital)". (Ibid., emphasis supplied).
"In its primary sense a share of stock is simply one of the proportionate integers or units, the sum
of which constitutes the capital stock of corporation. (Fletcher, sec. 5083).
The equitable interest of the shareholder in the property of the corporation is represented by the
term stock, and the extent of his interest is described by the term shares. The expression shares
of stock when qualified by words indicating number and ownership expresses the extent of the
owner's interest in the corporate property (Ibid, Sec. 5083, emphasis supplied).
Likewise, in all provisions of the Corporation Code the stockholders’ right to vote and receive
dividends is always determined and based on the "outstanding capital stock", defined as follows:
"SECTION 137. Outstanding capital stock defined. — The term "outstanding capital stock" as
used in this Code, means the total shares of stock issued to subscribers or stockholders, whether
or not fully or partially paid (as long as there is a binding subscription agreement, except treasury
shares."
The computation, therefore, should be based on the total outstanding capital stock, irrespective of
the amount of the par value of the shares.
Then came SEC-OGC Opinion No. 08-14 dated June 02, 2008:
The instant query now centers on whether both voting and nonvoting shares are included in the
computation of the required percentage of Filipino equity, As a rule, the 1987 Constitution does
not distinguish between voting and non-voting shares with regard to the computation of the
percentage interest by Filipinos and non-Filipinos in a company. In other words, non-voting shares
should be included in the computation of the foreign ownership limit for domestic corporation. This
was the rule applied [in SEC Opinion No. 04-30 x x x It was opined therein that the ownership of
the shares of stock of a corporation is based on the total outstanding or subscribed/issued capital
stock regardless of whether they are classified as common voting shares or preferred shares
without voting rights. This is in line with the policy of the State to develop an independent national
economy effectively controlled by Filipinos. x x x (Emphasis added.)
The SEC again echoed the same interpretation in an Opinion issued last April 19, 2011 wherein it
stated, thus:
This is, thus, the general rule, such that when the provision merely uses the term "capital" without
qualification (as in Section 11, Article XII of the 1987 Constitution, which deals with equity
structure in a public utility company), the same should be interpreted to refer to the sum total of
the outstanding capital stock, irrespective of the nomenclature or classification as common,
preferred, voting or non-voting.61
The above construal is in harmony with the letter and spirit of Sec. 11, Art. XII of the Constitution
and its counterpart provisions in the 1935 and 1973 Constitution and, thus, is entitled to respectful
consideration. As the Court declared in Philippine Global Communications, Inc. v. Relova:62
x x x As far back as In re Allen, (2 Phil. 630) a 1903 decision, Justice McDonough, as ponente,
cited this excerpt from the leading American case of Pennoyer v. McConnaughy, decided in 1891:
"The principle that the contemporaneous construction of a statute by the executive officers of the
government, whose duty it is to execute it, is entitled to great respect, and should ordinarily control
the construction of the statute by the courts, is so firmly embedded in our jurisprudence that no
authorities need be cited to support it.’ x x x There was a paraphrase by Justice Malcolm of such a
pronouncement in Molina v. Rafferty, (37 Phil. 545) a 1918 decision:" Courts will and should
respect the contemporaneous construction placed upon a statute by the executive officers whose
duty it is to enforce it, and unless such interpretation is clearly erroneous will ordinarily be
controlled thereby. (Ibid, 555) Since then, such a doctrine has been reiterated in numerous
decisions.63 (Emphasis supplied.)
Laxamana v. Baltazar64 restates this long-standing dictum: "[w]here a statute has received a
contemporaneous and practical interpretation and the statute as interpreted is re-enacted, the
practical interpretation is accorded greater weight than it ordinarily receives, and is regarded as
presumptively the correct interpretation of the law. The rule here is based upon the theory that the
legislature is acquainted with the contemporaneous interpretation of a statute, especially when
made by an administrative body or executive officers charged with the duty of administering or
enforcing the law, and therefore impliedly adopts the interpretation upon re-enactment."65 Hence,
it can be safely assumed that the framers, in the course of deliberating the 1987 Constitution,
knew of the adverted SEC interpretation.
Parenthetically, it is immaterial whether the SEC opinion was rendered by the banc or by the SEC-
Office of the General Counsel (OGC) considering that the latter has been given the authority to
issue opinions on the laws that the SEC implements under SEC-EXS. Res. No. 106, Series of
2002.66 The conferment does not violate Sec. 4.667 of the Securities and Regulation Code (SRC)
that proscribes the non-delegation of the legislative rule making power of the SEC, which is in the
nature of subordinate legislation. As may be noted, the same Sec. 4.6 does not mention the SEC’s
power to issue interpretative "opinions and provide guidance on and supervise compliance with
such rules,"68 which is incidental to the SEC’s enforcement functions. A legislative rule and an
interpretative rule are two different concepts and the distinction between the two is established in
administrative law.69 Hence, the various opinions issued by the SEC-OGC deserve as much
respect as the opinions issued by the SEC en banc.
Nonetheless, the esteemed ponente posits that the SEC, contrary to its claim, has been less than
consistent in its construal of "capital." During the oral arguments, he drew attention to various SEC
Opinions, nine (9) to be precise, that purportedly consider "capital" as referring only to voting
stocks.
274
Refuting this position, the SEC in its Memorandum dated July 25, 2012 explained in some detail
that the Commission has been consistent in applying the term "capital" to the total outstanding
capital stock, whether voting or non-voting. The SEC Opinions referred to by Justice Carpio, which
cited the provisions of the FIA, is not, however, pertinent or decisive of the issue on the meaning
of "capital." The said SEC Memorandum states:
During the oral arguments held on 26 June 2012, the SEC was directed to explain nine (9) of its
Opinions in relation to the definition of "capital" as used in Section 11, Article XII of the
Constitution, namely: (1) Opinion dated 3 March 1993 for Mr. Francis F. How; (2) Opinion dated
14 April 1993 for Director Angeles T. Wong; (3) Opinion dated 23 November 1993 for Mssrs.
Dominador Almeda and Renato S. Calma; (4) Opinion dated 7 December 1993 for Roco Buñag
Kapunan Migallos & Jardeleza Law Offices; (5) Opinion dated 22 December 2004 for Romulo
Mabanta Buenaventura Sayoc & De Los Angeles; (6) Opinion dated 27 September 2007 for
Reynaldo G. David; (7) Opinion dated 28 November 2007 for Santiago & Santiago law Offices; (8)
Opinion dated 15 January 2008 for Attys. Ruby Rose J. Yusi and Rudyard S. Arbolado; and (9)
Opinion dated 18 August 2010 for Castillo Laman Tan Pantaleon & San Jose.
xxxx
With due respect, the issue of whether "capital" refers to outstanding capital stock or only voting
stocks was never raised in the requests for these opinions. In fact, the definition of "capital" could
not have been a relevant and/or a material issue in some of these opinions because the common
and preferred shares involved have the same voting rights. Also, some Opinions mentioned the
FIA to emphasize that the said law mandates the application of the Control Test. Moreover, these
Opinions state they are based solely on the facts disclosed and relevant only to the issues raised
therein.
For one, the Opinion dated 3 March 1993 for Mr. Francis F. How does not discuss whether
"capital" refers to total outstanding capital stock or only voting stocks. Instead, it talks about the
application of the Control test in a mining corporation by looking into the nationality of its investors.
The FIA is not mentioned to provide a definition of "capital," but to explain the nationality
requirement pertinent to investors of a mining corporation.
The Opinion dated 14 April 1993 for Dir. Angeles T. Wong also does not define "capital" as
referring to total outstanding capital or only to voting shares, but talks about the application of the
Control Test x x x. The FIA is again mentioned only to explain the nationality required of investors
of a corporation engaged in overseas recruitment.
The Opinion dated 23 November 1993 for Mssrs. Dominador Almeda and Renato S. Calma
distinguishes between the nationality of a corporation as an investing entity and the nationality of a
corporation as an investee corporation. The FIA is mentioned only in the discussion of the
nationality of the investors of a corporation owning land in the Philippines, composed of a trustee
for pension or other employee retirement or separation benefits, where the trustee is a Philippine
national and at least sixty percent (60%) of the fund will accrue to the benefit of Philippine
nationals, and another domestic corporation which is 100% foreign owned.
Unlike the Decision rendered by this Honorable Court on 28 June 2011, the Opinion dated 07
December 1993 for Roco Buñag Kapunan Migallos & Jardeleza does not parley on the issue of
the proper interpretation of "capital" because it is not a relevant and/or a material issue in this
opinion xxx. The FIA is mentioned only to explain the application of the control test. Note,
however, that manufacturing fertilizer is neither a nationalized or partly nationalized activity, which
is another reason why this Opinion has no relevance in this case.
The Opinion dated 22 December 2004 for Romulo Mabanta Buenaventura Sayoc & De Los
Angeles focuses on the nationality of the investors of a corporation that will acquire land wherein
one of the investors is a foundation. It confirms the view that the test for compliance with the
nationality requirement is based on the total outstanding capital stock irrespective of the amount of
the par value of shares. The FIA is used merely to justify the application of the Control Test as
adopted in the Department of Justice Opinion, No. 18, Series of 1989, dated 19 January 1989m
viz –
xxxx
The Opinion dated 27 September 2007 for Mr. Reynaldo G. David, likewise, does not discuss
whether "capital" refers to total outstanding capital stock or only to voting stocks, but rather
whether the Control Test is applicable in determining the nationality of the proposed corporate
bidder or buyer of PNOC-EDC shares. x x x The FIA was cited only to emphasize that the said law
mandates the application of the Control Test.
The Opinion dated 28 November 2007 for Santiago & Santiago Law Offices maintains and
supports the position of the Commission that Section 11, Article XII of the Constitution makes no
distinction between common and preferred shares, thus, both shares should be included in the
computation of the foreign equity cap for domestic corporations. Simply put, the total outstanding
capital stock, without regard to how the shares are classified, should be used as the basis in
determining the compliance by public utilities with the nationality requirement as provided for in
Section 11, Article XII of the Constitution. Notably, all shares of the subject corporation, Pilipinas
First, have voting rights, whether common or preferred. Hence, the issue on whether "capital"
refers to total outstanding capital stock or only to voting stocks has no relevance in this Opinion.
In the same way, the Opinion dated 15 January 2008 for Attys. Ruby Rose J. Yusi and Rudyard S.
Arbolada never discussed whether "capital" refers to outstanding capital stock or only to voting
stocks, but rather whether the Control Test is applicable or not. The FIA was used merely to justify
the application of the Control Test. More importantly, the term "capital" could not have been
relevant and/or material issue in this Opinion because the common and preferred shares involved
have the same voting rights.
The Opinion dated 18 August 2010 for Castillo Laman Tan Pantaleon & San Jose reiterates that
the test for compliance with the nationality requirement is based on the total outstanding capital
stock, irrespective of the amount of the par value of the shares. The FIA is mentioned only to
explain the application of the Control Test and the Grandfather Rule in a corporation owning land
in the Philippines by looking into the nationality of its investors. (Emphasis supplied).70
In view of the foregoing, it is submitted that the long-established interpretation and mode of
computing by the SEC of the total capital stock strongly recognize the intent of the framers of the
Constitution to allow access to much-needed foreign investments confined to 40% of the capital
stock of public utilities.
Consequences of alternative interpretation: mischievous
effects of the construction proposed in the petition and
sustained in the June 28, 2011 Decision. (6th extrinsic aid)
Filipino shareholders will not
control the fundamental corporate
matters nor own the majority
economic benefits of the public
utility corporation.
Indeed, if the Court persists in adhering to the rationale underlying the majority’s original
interpretation of "capital" found in the first sentence of Section 11, Article XII, We may perhaps be
allowing Filipinos to direct and control the daily business of our public utilities, but would
irrevocably and injudiciously deprive them of effective "control" over the major and equally
important corporate decisions and the eventual beneficial ownership of the corporate assets that
could include, among others, claim over our soil––our land. This undermines the clear textual
commitment under the Constitution that reserves ownership of disposable lands to Filipino
citizens. The interplay of the ensuing provisions of Article XII is unmistakable:
SECTION 2. All lands of the public domain x x x forests or timber, wildlife, flora and fauna, and
other natural resources are owned by the State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State. x x x
xxxx
SECTION 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
lands, and national parks. Agricultural lands of the public domain may be further classified by law
according to the uses which they may be devoted. Alienable lands of the public domain shall be
limited to agricultural lands. Private corporations or associations may not hold such alienable
lands except by lease, for a period not exceeding twenty-five years, renewable for not more than
twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines
may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof
by purchase, homestead or grant.
xxxx
SECTION 7. Save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations or associations qualified to acquire or hold lands of
the public domain. (Emphasis supplied.)
Consider the hypothetical case presented in the original ponencia:
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Let us assume that a corporation has 100 common shares owned by foreigners and 1,000,000
non-voting preferred shares owned by Filipinos, with both classes of share having a par value of
one peso (₱ 1.00) per share. Under the broad definition of the term "capital," such corporation
would be considered compliant with the 40 percent constitutional limit on foreign equity of public
utilities since the overwhelming majority, or more than 99.999 percent, of the total outstanding
capital stock is Filipino owned. This is obviously absurd.
Albeit trying not to appear to, the majority actually finds fault in the wisdom of, or motive behind,
the provision in question through "highly unlikely scenarios of clinical extremes," to borrow from
Veterans Federation Party v. COMELEC.71 It is submitted that the flip side of the ponencia’s
hypothetical illustration, which will be exhaustively elucidated in this opinion, is more anomalous
and prejudicial to Filipino interests.
For instance, let us suppose that the authorized capital stock of a public utility corporation is
divided into 100 common shares and 1,000,000 non-voting preferred shares. Since, according to
the Court’s June 28, 2011 Decision, the word "capital" in Sec. 11, Art. XII refers only to the voting
shares, then the 40% cap on foreign ownership applies only to the 100 common shares.
Foreigners can, therefore, own 100% of the 1,000,000 nonvoting preferred shares. But then again,
the ponencia continues, at least, the "control" rests with the Filipinos because the 60% Filipino-
owned common shares will necessarily ordain the majority in the governing body of the public
utility corporation, the board of directors/trustees. Hence, Filipinos are assured of control over the
day-to-day activities of the public utility corporation.
Let us, however, take this corporate scenario a little bit farther and consider the irresistible
implications of changes and circumstances that are inevitable and common in the business world.
Consider the simple matter of a possible investment of corporate funds in another corporation or
business, or a merger of the public utility corporation, or a possible dissolution of the public utility
corporation. Who has the "control" over these vital and important corporate matters? The last
paragraph of Sec. 6 of the Corporation Code provides:
Where the articles of incorporation provide for non-voting shares in the cases allowed by this
Code, the holders of such (non-voting) shares shall nevertheless be entitled to vote on the
following matters:
1. Amendment of the articles of incorporation;
2. Adoption and amendment of by-laws;
3. Sale, lease, exchange, mortgage, pledge or other disposition of all or substantially all of the
corporate property;
4. Incurring, creating or increasing bonded indebtedness;
5. Increase or decrease of capital stock;
6. Merger or consolidation of the corporation with another corporation or other corporations;
7. Investment of corporate funds in another corporation or business in accordance with this Code;
and
8. Dissolution of the corporation."(Emphasis and underscoring supplied.)
In our hypothetical case, all 1,000,100 (voting and non-voting) shares are entitled to vote in cases
involving fundamental and major changes in the corporate structure, such as those listed in Sec. 6
of the Corporation Code. Hence, with only 60 out of the 1,000,100 shares in the hands of the
Filipino shareholders, control is definitely in the hands of the foreigners. The foreigners can opt to
invest in other businesses and corporations, increase its bonded indebtedness, and even dissolve
the public utility corporation against the interest of the Filipino holders of the majority voting
shares. This cannot plausibly be the constitutional intent.
Consider further a situation where the majority holders of the total outstanding capital stock, both
voting and non-voting, decide to dissolve our hypothetical public utility corporation. Who will
eventually acquire the beneficial ownership of the corporate assets upon dissolution and
liquidation? Note that Sec. 122 of the Corporation Code states:
Section 122. Corporate liquidation.–Every corporation whose charter expires by its own limitation
or is annulled by forfeiture or otherwise, or whose corporate existence for other purposes is
terminated in any other manner, shall nevertheless be continued as a body corporate for three (3)
years… to dispose of and convey its property and to distribute its assets, but not for the purpose
of continuing the business for which it was established.
At any time during said three (3) years, the corporation is authorized and empowered to convey all
of its property to trustees for the benefit of stockholders, members, creditors, and other persons in
interest. From and after any such conveyance by the corporation of its property in trust for the
benefit of its stockholders, members, creditors and others in interest, all interest which the
corporation had in the property terminates, the legal interest vests in the trustees, and the
beneficial interest in the stockholders, members , creditors or other persons in interest. (Emphasis
and underscoring supplied.)
Clearly then, the bulk of the assets of our imaginary public utility corporation, which may include
private lands, will go to the beneficial ownership of the foreigners who can hold up to 40 out of the
100 common shares and the entire 1,000,000 preferred non-voting shares of the corporation.
These foreign shareholders will enjoy the bulk of the proceeds of the sale of the corporate lands,
or worse, exercise control over these lands behind the façade of corporations nominally owned by
Filipino shareholders. Bluntly, while the Constitution expressly prohibits the transfer of land to
aliens, foreign stockholders may resort to schemes or arrangements where such land will be
conveyed to their dummies or nominees. Is this not circumvention, if not an outright violation, of
the fundamental Constitutional tenet that only Filipinos can own Philippine land?
A construction of "capital" as referring to the total shareholdings of the company is an
acknowledgment of the existence of numerous corporate control-enhancing mechanisms, besides
ownership of voting rights, that limits the proportion between the separate and distinct concepts of
economic right to the cash flow of the corporation and the right to corporate control (hence, they
are also referred to as proportionality-limiting measures). This corporate reality is reflected in SRC
Rule 3(E) of the Amended Implementing Rules and Regulations (IRR) of the SRC and Sec. 3(g) of
The Real Estate Investment Trust Act (REIT) of 2009,72 which both provide that control can exist
regardless of ownership of voting shares. The SRC IRR states:
Control is the power to govern the financial and operating policies of an enterprise so as to obtain
benefits from its activities. Control is presumed to exist when the parent owns, directly or indirectly
through subsidiaries, more than one half of the voting power of an enterprise unless, in
exceptional circumstances, it can be clearly demonstrated that such ownership does not constitute
control. Control also exists even when the parent owns one half or less of the voting power of an
enterprise when there is:
i. Power over more than one half of the voting rights by virtue of an agreement with other
investors;
ii. Power to govern the financial and operating policies of the enterprise under a statute or an
agreement;
iii. Power to appoint or remove the majority of the members of the board of directors or equivalent
governing body;
iv. Power to cast the majority of votes at meetings of the board of directors or equivalent governing
body. (Emphasis and underscoring supplied.)
As shown above, ownership of voting shares or power alone without economic control of the
company does not necessarily equate to corporate control. A shareholder’s agreement can
effectively clip the voting power of a shareholder holding voting shares. In the same way, a voting
right ceiling, which is "a restriction prohibiting shareholders to vote above a certain threshold
irrespective of the number of voting shares they hold,"73 can limit the control that may be exerted
by a person who owns voting stocks but who does not have a substantial economic interest over
the company. So also does the use of financial derivatives with attached conditions to ensure the
acquisition of corporate control separately from the ownership of voting shares, or the use of
supermajority provisions in the bylaws and articles of incorporation or association. Indeed, there
are innumerable ways and means, both explicit and implicit, by which the control of a corporation
can be attained and retained even with very limited voting shares, i.e.., there are a number of
ways by which control can be disproportionately increased compared to ownership74 so long as
economic rights over the majority of the assets and equity of the corporation are maintained.
Hence, if We follow the construction of "capital" in Sec. 11, Art. XII stated in the ponencia of June
28, 2011 and turn a blind eye to these realities of the business world, this Court may have
veritably put a limit on the foreign ownership of common shares but have indirectly allowed
foreigners to acquire greater economic right to the cash flow of public utility corporations, which is
a leverage to bargain for far greater control through the various enhancing mechanisms or
proportionality-limiting measures available in the business world.
In our extremely hypothetical public utility corporation with the equity structure as thus described,
since the majority recognized only the 100 common shares as the "capital" referred to in the
Constitution, the entire economic right to the cash flow arising from the 1,000,000 non-voting
preferred shares can be acquired by foreigners. With this economic power, the foreign holders of
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the minority common shares will, as they easily can, bargain with the holders of the majority
common shares for more corporate control in order to protect their economic interest and reduce
their economic risk in the public utility corporation. For instance, they can easily demand the right
to cast the majority of votes during the meeting of the board of directors. After all, money
commands control.
The court cannot, and ought not, accept as correct a holding that routinely disregards legal and
practical considerations as significant as above indicated. Committing an error is bad enough,
persisting in it is worse.
Foreigners can be owners of fully
nationalized industries
Lest it be overlooked, "capital" is an oft-used term in the Constitution and various legislative acts
that regulate corporate entities. Hence, the meaning assigned to it within the context of a
constitutional provision limiting foreign ownership in corporations can affect corporations whose
ownership is reserved to Filipinos, or whose foreign equity is limited by law pursuant to Sec. 10,
Art. XII of the Constitution which states:
SECTION 10. The Congress shall, upon recommendation of the 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. (Emphasis supplied).
For instance, Republic Act No. 7042, also known as the Foreign Investments Act of 199175 (FIA),
provides for the formation of a Regular Foreign Investment Negative List (RFINL) covering
investment areas/activities that are partially or entirely reserved to Filipinos. The 8th RFINL76
provides that "No Foreign Equity" is allowed in the following areas of investments/activities:
1. Mass Media except recording (Article XVI, Section 1 of the Constitution and Presidential
Memorandum dated May 4, 1994);
2. Practice of all professions (Article XII, Section 14 of the Constitution and Section 1, RA
5181);77
3. Retail trade enterprises with paid-up capital of less than $2,500,000 (Section 5, RA 8762);
4. Cooperatives (Chapter III, Article 26, RA 6938);
5. Private Security Agencies (Section 4, RA 5487);
6. Small-scale Mining (Section 3, RA 7076)
7. Utilization of Marine Resources in archipelagic waters, territorial sea, and exclusive economic
zone as well as small scale utilization of natural resources in rivers, lakes, bays, and lagoons
(Article XII, Section 2 of the Constitution);
8. Ownership, operation and management of cockpits (Section 5, PD 449);
9. Manufacture, repair, stockpiling and/or distribution of nuclear weapons (Article II, Section 8 of
the Constitution);
10. Manufacture, repair, stockpiling and/or distribution of biological, chemical and radiological
weapons and anti-personnel mines (Various treaties to which the Philippines is a signatory and
conventions supported by the Philippines);
11. Manufacture of fire crackers and other pyrotechnic devices (Section 5, RA 7183).
If the construction of "capital," as espoused by the June 28, 2011 Decision, were to be sustained,
the reservation of the full ownership of corporations in the foregoing industries to Filipinos could
easily be negated by the simple expedience of issuing and making available non-voting shares to
foreigners. After all, these non-voting shares do not, following the June 28, 2011 Decision, form
part of the "capital" of these supposedly fully nationalized industries. Consequently, while Filipinos
can occupy all of the seats in the board of directors of corporations in fully nationalized industries,
it is possible for foreigners to own the majority of the equity of the corporations through "non-
voting" shares, which are nonetheless allowed to determine fundamental corporate matters
recognized in Sec. 6 of the Corporation Code. Filipinos may therefore be unwittingly deprived of
the "effective" ownership of corporations supposedly reserved to them by the Constitution and
various laws.
The Foreign Investments Act of 1991 does
not qualify or restrict the meaning of "capital"
in Sec. 11, Art. XII of the Constitution.
Nonetheless, Justice Carpio parlays the thesis that the FIA, and its predecessors, the Investments
Incentives Act of 1967 ("1967 IIA"),78 Omnibus Investments Code of 1981 ("1981 OIC"),79 and
the Omnibus Incentives Code of 1987 ("1987 OIC"),80 (collectively, "Investment Incentives Laws")
more particularly their definition of the term "Philippine National," constitutes a good guide for
ascertaining the intent behind the use of the term "capital" in Sec. 11, Art. XII—that it refers only to
voting shares of public utility corporations.
I cannot share this posture. The Constitution may only be amended through the procedure
outlined in the basic document itself.81 An amendment cannot, therefore, be made through the
expedience of a legislative action that diagonally opposes the clear provisions of the Constitution.
Indeed, the constitutional intent on the equity prescribed by Sec. 11, Art. XII cannot plausibly be
fleshed out by a look through the prism of economic statutes passed after the adoption of the
Constitution, such as the cited FIA, the Magna Carta for Micro, Small and Medium Industries
(Republic Act No. 6977) and other kindred laws envisaged to Filipinize certain areas of
investment. It should be the other way around. Surely, the definition of a "Philippine National" in
the FIA, or for that matter, the 1987 OIC82 could not have influenced the minds of the 1986
CONCOM or the people when they ratified the Constitution. As heretofore discussed, the primary
source whence to ascertain constitutional intent or purpose is the constitutional text, or, to be more
precise, the language of the provision itself,83 as inquiry on any controversy arising out of a
constitutional provision ought to start and end as much as possible with the provision itself.84
Legislative enactments on commerce, trade and national economy must be so construed, when
appropriate, to determine whether the purpose underlying them is in accord with the policies and
objectives laid out in the Constitution. Surely, a law cannot validly broaden or restrict the thrust of
a constitutional provision unless expressly sanctioned by the Constitution itself. And the Court may
not read into the Constitution an intent or purpose that is not there. Any attempt to enlarge the
breadth of constitutional limitations beyond what its provision dictates should be stricken down.
In fact, it is obvious from the FIA itself that its framers deemed it necessary to qualify the term
"capital" with the phrase "stock outstanding and entitled to vote" in defining a "Philippine National"
in Sec. 3(a). This only supports the construal that the term "capital," standing alone as in Sec. 11,
Art. XII of the Constitution, applies to all shares, whether classified as voting or non-voting, and
this is the interpretation in harmony with the Constitution.
In passing the FIA, the legislature could not have plausibly intended to restrict the 40% foreign
ownership limit imposed by the Constitution on all capital stock to only voting stock. Precisely,
Congress enacted the FIA to liberalize the laws on foreign investments. Such intent is at once
apparent in the very title of the statute, i.e., "An Act to Promote Foreign Investments," and the
policy: "attract, promote and welcome productive investments from foreign individuals,
partnerships, corporations, and government,"85 expresses the same.
The Senate, through then Senator Vicente Paterno, categorically stated that the FIA is aimed at
"liberalizing foreign investments"86 because "Filipino investment is not going to be enough [and]
we need the support and the assistance of foreign investors x x x."87 The senator made clear that
"the term ‘Philippine national’" means either Filipino citizens or enterprises of which the "total
Filipino ownership" is 60 percent or greater, thus:
Senator Paterno. May I first say that the term "Philippine national" means either Filipino citizens or
enterprises of which the total Filipino ownership is 60 percent or greater. In other words, we are
not excluding foreign participation in domestic market enterprises with total assets of less than ₱
25 million. We are merely limiting foreign participation to not more than 40 percent in this
definition.88
Even granting, arguendo, that the definition of a "Philippine National" in the FIA was lifted from the
Investment Incentives Laws issued in 1967, 1981, and 1987 that defined "Philippine National" as a
corporation 60% of whose voting stocks is owned by Filipino citizens, such definition does not limit
or qualify the nationality requirement prescribed for public utility corporations by Sec. 11, Art. XII of
the 1987 Constitution. The latter does not refer to the definition of a "Philippine National." Instead,
Sec. 11, Art. XII reiterates the use of the unqualified term "capital" in the 1935 and 1973
Constitutions. In fact, neither the 1973 Constitutional Convention nor the 1986 CONCOM alluded
to the Investment Incentives Laws in their deliberations on the nationality requirement of public
utility corporations. With the unequivocal rejection of the UP Law Center proposal to use the
qualifying "voting stock or controlling interest," the non-consideration of the Investment Incentives
Laws means that these laws are not pertinent to the issue of the Filipino-foreign capital ratio in
public utility corporations.
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Besides, none of the Investment Incentives Laws defining a "Philippine National" has sought to
expand or modify the definition of "capital," as used in the Constitutions then existing. The
definition of a "Philippine National" in these laws was, to stress, only intended to identify the
corporations qualified for registration to avail of the incentives prescribed therein. The definition
was not meant to find context outside the scope of the various Investment Incentives Laws, much
less to modify a nationality requirement set by the then existing Constitution. This much is obvious
in the very heading of the first of these Investment Incentives Laws, 1967 IIA :
SECTION 3. Definition of Terms. - For purposes of this Act:
xxxx
(f) "Philippine National" shall mean a citizen of the Philippines; or a partnership or association
wholly owned by citizens of the Philippines; or a corporation organized and existing under the laws
of the Philippines of which at least sixty per cent of the capital stock outstanding and entitled to
vote is owned and held by citizens of the Philippines xxxx (Emphasis and underscoring supplied.)
Indeed, the definition of a "Philippine National" in the FIA cannot apply to the ownership structure
of enterprises applying for, and those granted, a franchise to operate as a public utility under Sec.
11, Art. XII of the Constitution. As aptly observed by the SEC, the definition of a "Philippine
National" provided in the FIA refers only to a corporation that is permitted to invest in an enterprise
as a Philippine citizen (investorcorporation). The FIA does not prescribe the equity ownership
structure of the enterprise granted the franchise or the power to operate in a fully or partially
nationalized industry (investee-corporation). This is apparent from the FIA itself, which also
defines the act of an "investment" and "foreign investment":
Section 3. Definitions. – As used in this Act:
a) The term "Philippine national" shall mean a citizen of the Philippines, or a domestic partnership
or association wholly owned by citizens of the Philippines; or a corporation organized under the
laws of the Philippines of which at least sixty percent [60%] of the capital stock outstanding and
entitled to vote is owned and held by citizens of the Philippines x x x
b) The term "investment" shall mean equity participation in any enterprise organized or existing
the laws of the Philippines;
c) The term "foreign investment" shall mean as equity investment made by a non-Philippine
national in the form of foreign exchange and/or other assets actually transferred to the Philippines
and duly registered with the Central Bank which shall assess and appraise the value of such
assets other than foreign exchange.
In fact, Sec. 7 of the FIA, as amended, allows aliens or non-Philippine nationals to own an
enterprise up to the extent provided by the Constitution, existing laws or the FINL:
Sec. 7. Foreign investments in domestic market enterprises. – Non- Philippine nationals may own
up to one hundred percent [100%] of domestic market enterprises unless foreign ownership
therein is prohibited or limited by the Constitution and existing laws or the Foreign Investment
Negative List under Section 8 hereof. (Emphasis supplied.)
Hence, pursuant to the Eight Regular FINL, List A, the foreign "equity" is up to 40% in enterprises
engaged in the operation and management of public utilities while the remaining 60% of the
"equity" is reserved to Filipino citizens and "Philippine Nationals" as defined in Sec. 3(a) of the
FIA. Notably, the term "equity" refers to the "ownership interest in… a business"89 or a "share in a
publicly traded company,"90 and not to the "controlling" or "management" interest in a company. It
necessarily includes all and every share in a corporation, whether voting or non-voting.
Again, We must recognize the distinction of the separate concepts of "ownership" and "control" in
modern corporate governance in order to realize the intent of the framers of our Constitution to
reserve for Filipinos the ultimate and all-encompassing control of public utility entities from their
daily administration to the acts of ownership enumerated in Sec. 6 of the Corporation Code.91 As
elucidated, by equating the word "capital" in Sec. 11, Art. XII to the limited aspect of the right to
control the composition of the board of directors, the Court could very well be depriving Filipinos of
the majority economic interest in the public utility corporation and, thus, the effective control and
ownership of such corporation.
The Court has no jurisdiction over PLDT and foreign
stockholders who are indispensable parties in interest
More importantly, this Court cannot apply a new doctrine adopted in a precedent-setting decision
to parties that have never been given the chance to present their own views on the substantive
and factual issues involved in the precedent-setting case.
To recall, the instant controversy arose out of an original petition filed in February 2007 for, among
others, declaratory relief on Sec. 11, Art. XII of the 1987 Constitution "to clarify the intent of the
Constitutional Commission that crafted the 1987 Constitution to determine the very nature of such
limitation on foreign ownership."92
The petition impleaded the following personalities as the respondents: (1) Margarito B. Teves,
then Secretary of Finance and Chair of the Privatization Council; (2) John P. Sevilla, then
undersecretary for privatization of the Department of Finance; (3) Ricardo Abcede, commissioner
of the Presidential Commission on Good Government; (4) Anthoni Salim, chair of First Pacific Co.
Ltd. and director of Metro Pacific Asset Holdings, Inc. (MPAH); (5) Manuel V. Pangilinan, chairman
of the board of PLDT; (6) Napoleon L. Nazareno, the president of PLDT; (7) Fe Barin (Barin), then
chair of the SEC; and (8) Francis Lim (Lim), then president of the PSE.
Notably, neither PLDT itself nor any of its stockholders were named as respondents in the petition,
albeit it sought from the Court the following main reliefs:
5. x x x to issue a declaratory relief that ownership of common or voting shares is the sole basis in
determining foreign equity in a public utility and that any other government rulings, opinions, and
regulations inconsistent with this declaratory relief be declared as unconstitutional and a violation
of the intent and spirit of the 1987 Constitution;
6. x x x to declare null and void all sales of common stocks to foreigners in excess of 40 percent of
the total subscribed common shareholdings; and
7. x x x to direct the [SEC] and [PSE] to require PLDT to make a public disclosure of all of its
foreign shareholdings and their actual and real beneficial owners."
Clearly, the petition seeks a judgment that can adversely affect PLDT and its foreign shareholders.
If this Court were to accommodate the petition’s prayer, as the majority did in the June 28, 2011
Decision and proposes to do presently, PLDT stands to lose its franchise, while the foreign
stockholders will be compelled to divest their voting shares in excess of 40% of PLDT’s voting
stock, if any, even at a loss. It cannot, therefore, be gainsaid that PLDT and its foreign
shareholders are indispensable parties to the instant case under the terms of Secs. 2 and 7, Rule
3 of the Rules of Civil Procedure, which read:
Section 2. Parties in interest.–Every action must be prosecuted and defended in the name of the
real party in interest. All persons having an interest in the subject of the action and in obtaining the
relief demanded shall be joined as plaintiffs. All persons who claim an interest in the controversy
or the subject thereof adverse to the plaintiff, or who are necessary to a complete determination or
settlement of the questions involved therein, shall be joined as defendants.
xxxx
Section 7. Compulsory joinder of indispensable parties.– Parties in interest without whom no final
determination can be had of an action shall be joined either as plaintiffs or defendants.
Yet, again, PLDT and its foreign shareholders have not been given notice of this petition to appear
before, much less heard by, this Court. Nonetheless, the majority has allowed such irregularity in
contravention of the settled jurisprudence that an action cannot proceed unless indispensable
parties are joined93 since the non-joinder of these indispensable parties deprives the court the
jurisdiction to issue a decision binding on the indispensable parties that have not been joined or
impleaded. In other words, if an indispensable party is not impleaded, any personal judgment
would have no effectiveness94 as to them for the tribunal’s want of jurisdiction.
In Arcelona v. Court of Appeals,95 We explained that the basic notions of due process require the
observance of this rule that refuses the effectivity of a decision that was rendered despite the non-
joinder of indispensable parties:
Basic considerations of due process, however, impel a similar holding in cases involving
jurisdiction over the persons of indispensable parties which a court must acquire before it can
validly pronounce judgments personal to said defendants. Courts acquire jurisdiction over a party
plaintiff upon the filing of the complaint. On the other hand, jurisdiction over the person of a party
defendant is assured upon the service of summons in the manner required by law or otherwise by
his voluntary appearance. As a rule, if a defendant has not been summoned, the court acquires no
jurisdiction over his person, and a personal judgment rendered against such defendant is null and
void. A decision that is null and void for want of jurisdiction on the part of the trial court is not a
decision in the contemplation of law and, hence, it can never become final and executory.
Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest without
whom there can be no final determination of an action. As such, they must be joined either as
plaintiffs or as defendants. The general rule with reference to the making of parties in a civil action
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requires, of course, the joinder of all necessary parties where possible, and the joinder of all
indispensable parties under any and all conditions, their presence being a sine qua non for the
exercise of judicial power. It is precisely "when an indispensable party is not before the court (that)
the action should be dismissed." The absence of an indispensable party renders all subsequent
actions of the court null and void for want of authority to act, not only as to the absent parties but
even as to those present.96
Hence, the June 28, 2011 Decision having been rendered in a case where the indispensable
parties have not been impleaded, much less summoned or heard, cannot be given any effect and
is, thus, null and void. Ergo, the assailed June 28, 2011 Decision is virtually a useless judgment,
at least insofar as it tends to penalize PLDT and its foreign stockholders. It cannot bind and affect
PLDT and the foreign stockholders or be enforced and executed against them. It is settled that
courts of law "should not render judgments which cannot be enforced by any process known to the
law,"97 hence, this Court should have refused to give cognizance to the petition.
The ineffectivity caused by the non-joinder of the indispensable parties, the deprivation of their day
in court, and the denial of their right to due process, cannot be cured by the sophistic expedience
of naming PLDT in the fallo of the decision as a respondent. The dispositive portion of the June
28, 2011 Decision all the more only highlights the unenforceability of the majority’s disposition and
serves as an implied admission of this Court’s lack of jurisdiction over the persons of PLDT and its
foreign stockholders when it did not directly order the latter to dispose the common shares in
excess of the 40% limit. Instead, it took the circuitous route of ordering the SEC, in the fallo of the
assailed decision, "to apply this definition of the term ‘capital’ in determining the extent of
allowable ownership in respondent PLDT and, if there is a violation of Sec. 11, Art. XII of the
Constitution, to impose the appropriate sanctions under the law."98
Clearly, since PLDT and the foreign stockholders were not impleaded as indispensable parties to
the case, the majority would want to indirectly execute its decision which it could not execute
directly. The Court may be criticized for violating the very rules it promulgated and for trenching
the provisions of Sec. 5, Art. VIII of the Constitution, which defines the powers and jurisdiction of
this Court.
It is apropos to stress, as a reminder, that the Rules of Court is not a mere body of technical rules
that can be disregarded at will whenever convenient. It forms an integral part of the basic notion of
fair play as expressed in this Constitutional caveat: "No person shall be deprived of life, liberty or
property without due process of law,"99 and obliges this Court, as well as other courts and
tribunals, to hear a person first before rendering a judgment for or against him. As Daniel Webster
explained, "due process of law is more clearly intended the general law, a law which hears before
it condemns; which proceeds upon enquiry, and renders judgment only after trial."100 The
principle of due process of law "contemplates notice and opportunity to be heard before judgment
is rendered, affecting one’s person or property."101 Thus, this Court has stressed the strict
observance of the following requisites of procedural due process in judicial proceedings in order to
comply with this honored principle:
(1) There must be a court or tribunal clothed with judicial power to hear and determine the matter
before it;
(2) Jurisdiction must be lawfully acquired over the person of the defendant or over the property
which is the subject of the proceedings;
(3) The defendant must be given an opportunity to be heard; and
(4) Judgment must be rendered upon lawful hearing.102
Apparently, not one of these requisites has been complied with before the June 28, 2011 Decision
was rendered. Instead, PLDT and its foreign stockholders were not given their day in court, even
when they stand to lose their properties, their shares, and even the franchise to operate as a
public utility. This stands counter to our discussion in Agabon v. NLRC,103 where We emphasized
that the principle of due process comports with the simplest notions of what is fair and just:
To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies a system
of rights based on moral principles so deeply imbedded in the traditions and feelings of our people
as to be deemed fundamental to a civilized society as conceived by our entire history. Due
process is that which comports with the deepest notions of what is fair and right and just. It is a
constitutional restraint on the legislative as well as on the executive and judicial powers of the
government provided by the Bill of Rights.104
Parenthetically, the present petition partakes of a collateral attack on PLDT’s franchise as a public
utility. Giving due course to the recourse is contrary to the Court’s ruling in PLDT v. National
Telecommunications Commission,105 where We declared a franchise to be a property right that
can only be questioned in a direct proceeding.106 Worse, the June 28, 2011 Decision facilitates
and guarantees the success of that unlawful attack by allowing it to be undertaken in the absence
of PLDT.
The Philippine Government is barred by estoppel from
ordering foreign investors to divest voting shares
in public utilities in excess of the 40 percent cap
The Philippine government’s act of pushing for and approving the sale of the PTIC shares, which
is equivalent to 12 million PLDT common shares, to foreign investors precludes it from asserting
that the purchase violates the Constitutional limit on foreign ownership of public utilities so that the
foreign investors must now divest the common PLDT shares bought. The elementary principle that
a person is prevented from going back on his own act or representation to the prejudice of another
who relied thereon107 finds application in the present case.
Art. 1431 of the Civil Code provides that an "admission or representation is rendered conclusive
upon the person making it, and cannot be denied or disproved as against a person relying
thereon." This rule is supported by Section 2(a) of Rule 131 of the Rules of Court on the burden of
proof and presumptions, which states:
Section 2. Conclusive presumptions. – The following are instances of conclusive presumptions:
(a) Whenever a party has, by his own declaration, act, or omission, intentionally and deliberately
led another to believe a particular thing true, and to act upon such belief, he cannot, in any
litigation arising out of such declaration, act or omission, be permitted to falsify it.
The government cannot plausibly hide behind the mantle of its general immunity to resist the
application of this equitable principle for "the rule on non-estoppel of the government is not
designed to perpetrate an injustice."108 Hence, this Court has allowed several exceptions to the
rule on the government’s non-estoppel. As succinctly explained in Republic of the Philippines v.
Court of Appeals:109
The general rule is that the State cannot be put in estoppel by the mistakes or errors of its officials
or agents. However, like all general rules, this is also subject to exceptions, viz.:
"Estoppel against the public are little favored. They should not be invoked except in rare and
unusual circumstances and may not be invoked where they would operate to defeat the effective
operation of a policy adopted to protect the public. They must be applied with circumspection and
should be applied only in those special cases where the interests of justice clearly require it.
Nevertheless, the government must not be allowed to deal dishonorably or capriciously with its
citizens, and must not play an ignoble part or do a shabby thing; and subject to limitations . . ., the
doctrine of equitable estoppel may be invoked against public authorities as well as against private
individuals."
In Republic v. Sandiganbayan, the government, in its effort to recover ill-gotten wealth, tried to
skirt the application of estoppel against it by invoking a specific constitutional provision. The Court
countered:
"We agree with the statement that the State is immune from estoppel, but this concept is
understood to refer to acts and mistakes of its officials especially those which are irregular (Sharp
International Marketing vs. Court of Appeals, 201 SCRA 299; 306 1991; Republic v. Aquino, 120
SCRA 186 1983), which peculiar circumstances are absent in the case at bar. Although the State's
right of action to recover ill-gotten wealth is not vulnerable to estoppel[;] it is non sequitur to
suggest that a contract, freely and in good faith executed between the parties thereto is
susceptible to disturbance ad infinitum. A different interpretation will lead to the absurd scenario of
permitting a party to unilaterally jettison a compromise agreement which is supposed to have the
authority of res judicata (Article 2037, New Civil Code), and like any other contract, has the force
of law between parties thereto (Article 1159, New Civil Code; Hernaez vs. Kao, 17 SCRA 296
1966; 6 Padilla, Civil Code Annotated, 7th ed., 1987, p. 711; 3 Aquino, Civil Code, 1990 ed., p.
463) . . ."
The Court further declared that "(t)he real office of the equitable norm of estoppel is limited to
supply[ing] deficiency in the law, but it should not supplant positive law."110 (Emphasis supplied.)
Similarly, in Ramos v. Central Bank of the Philippines,111 this Court berated the government for
reneging on its representations and urged it to keep its word, viz:
Even in the absence of contract, the record plainly shows that the CB [Central Bank] made
express representations to petitioners herein that it would support the OBM [Overseas Bank of
Manila], and avoid its liquidation if the petitioners would execute (a) the Voting Trust Agreement
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turning over the management of OBM to the CB or its nominees, and (b) mortgage or assign their
properties to the Central Bank to cover the overdraft balance of OBM. The petitioners having
complied with these conditions and parted with value to the profit of the CB (which thus acquired
additional security for its own advances), the CB may not now renege on its representations and
liquidate the OBM, to the detriment of its stockholders, depositors and other creditors, under the
rule of promissory estoppel (19 Am. Jur., pages 657-658; 28 Am. Jur. 2d, 656-657; Ed. Note, 115
ALR, 157).
"The broad general rule to the effect that a promise to do or not to do something in the future does
not work an estoppel must be qualified, since there are numerous cases in which an estoppel has
been predicated on promises or assurances as to future conduct. The doctrine of ‘promissory
estoppel’ is by no means new, although the name has been adopted only in comparatively recent
years. According to that doctrine, an estoppel may arise from the making of a promise even
though without consideration, if it was intended that the promise should be relied upon and in fact
it was relied upon, and if a refusal to enforce it would be virtually to sanction the perpetration of
fraud or would result in other injustice. In this respect, the reliance by the promises is generally
evidenced by action or forbearance on his part, and the idea has been expressed that such action
or forbearance would reasonably have been expected by the promisor. Mere omission by the
promisee to do whatever the promisor promised to do has been held insufficient ‘forbearance’ to
give rise to a promissory estoppel." (19 Am. Jur., loc. cit.)
The exception established in the foregoing cases is particularly appropriate presently since the
"indirect" sale of PLDT common shares to foreign investors partook of a propriety business
transaction of the government which was not undertaken as an incident to any of its governmental
functions. Accordingly, the government, by concluding the sale, has descended to the level of an
ordinary citizen and stripped itself of the vestiges of immunity that is available in the performance
of governmental acts.112
Ergo, the government is vulnerable to, and cannot hold off, the application of the principle of
estoppel that the foreign investors can very well invoke in case they are compelled to divest the
voting shares they have previously acquired through the inducement of no less the government. In
other words, the government is precluded from penalizing these alien investors for an act
performed upon its guarantee, through its facilities, and with its imprimatur.
Under the "fair and equitable treatment" clause of our bilateral
investment treaties and fair trade agreements, foreign investors
have the right to rely on the same legal framework existing at the
time they made their investments
Not only is the government put in estoppel by its acts and representations during the sale of the
PTIC shares to MPAH, it is likewise bound by its guarantees in the Bilateral Investment Treaties
(BITs) and Free Trade Agreements (FTAs) with other countries.
To date, the Philippines has concluded numerous BITs and FTAs to encourage and facilitate
foreign direct investments in the country. These BITs and FTAs invariably contain guarantees
calculated to ensure the safety and stability of these foreign investments. Foremost of these is the
commitment to give fair and equitable treatment (FET) to the foreign investors and investments in
the country.
Take for instance the BIT concluded between the Philippines and China,113 Article 3(1) thereof
provides that "investments and activities associated with such investments of investors of either
Contracting Party shall be accorded equitable treatment and shall enjoy protection in the territory
of the other Contracting Party."114 The same assurance is in the Agreement on Investment of the
Framework Agreement on Comprehensive Economic Cooperation Between the Association of
Southeast Asian Nations and the People’s Republic of China (ASEAN-China Investment
Agreement)115 where the Philippines assured Chinese investors that the country "shall accord to
[them] fair and equitable treatment and full protection and security."116 In the same manner, the
Philippines agreed to "accord investments [made by Japanese investors] treatment in accordance
with international law, including fair and equitable treatment and full protection and security"117 in
the Agreement between the Republic of the Philippines and Japan for Economic Partnership
(JPEPA).118
Similar provisions are found in the ASEAN Comprehensive Investment Agreement (ACIA)119 and
the BITs concluded by the Philippines with, among others, the Argentine Republic,120
Australia,121 Austria,122 Bangladesh,123 Belgium,124 Cambodia,125 Canada,126 Chile,127 the
Czech Republic,128 Denmark,129 Finland,130 France,131 Germany,132 India,133 Indonesia,134
Iran,135 Italy,136 Mongolia,137 Myanmar,138 Netherlands,139 Pakistan,140 Portuguese
Republic,141 Romania,142 Russia,143 Saudi Arabia,144 Spain,145 Sweden,146 Switzerland,147
Thailand,148 Turkey,149 United Kingdom,150 and Vietnam.151
Explaining the FET as a standard concordant with the rule of law, Professor Vandevelde wrote
that it requires the host county to treat foreign investments with consistency, security, non-
discrimination and reasonableness:
The thesis is that the awards issued to date implicitly have interpreted the fair and equitable
treatment standard as requiring treatment in accordance with the concept of the rule of law. That
is, the concept of legality is the unifying theory behind the fair and equitable treatment standard.
xxxx
Thus, international arbitral awards interpreting the fair and equitable treatment standard have
incorporated the substantive and procedural principles of the rule of law into that standard. The
fair and equitable treatment standard in BITs has been interpreted as requiring that covered
investment or investors receive treatment that is reasonable, consistent, non-discriminatory,
transparent, and in accordance with due process. As will be seen, these principles explain virtually
all of the awards applying the fair and equitable treatment standard. No award is inconsistent with
this theory of the standard.
Understanding fair and equitable treatment as legality is consistent with the purposes of the BITs.
BITs essentially are instruments that impose legal restraints on the treatment of covered
investments and investors by host states. The very essence of a BIT is a partial subordination of
the sovereign's power to the legal constraints of the treaty. Further, individual BIT provisions are
themselves a reflection of the principles of the rule of law. (Emphasis and underscoring
supplied.)152
On the requirement of consistency, the International Centre for the Settlement of Investment
Disputes (ICSID) explained in Tecnicas Medioambientales Tecmed S.A. v. The united Mexican
States153 that the host country must maintain a stable and predictable legal and business
environment to accord a fair and equitable treatment to foreign investors.
153. The Arbitral Tribunal finds that the commitment of fair and equitable treatment included in
Article 4(1) of the Agreement is an expression and part of the bona fide principle recognized in
international law, although bad faith from the State is not required for its violation:
To the modern eye, what is unfair or inequitable need not equate with the outrageous or the
egregious. In particular, a State may treat foreign investment unfairly and inequitably without
necessarily acting in bad faith.
154. The Arbitral Tribunal considers that this provision of the Agreement, in light of the good faith
principle established by international law, requires the Contracting Parties to provide to
international investments treatment that does not affect the basic expectations that were taken into
account by the foreign investor to make the investment. The foreign investor expects the host
State to act in a consistent manner, free from ambiguity and totally transparently in its relations
with the foreign investor, so that it may know beforehand any and all rules and regulations that will
govern its investments, as well as the goals of the relevant policies and administrative practices or
directives, to be able to plan its investment and comply with such regulations. Any and all State
actions conforming to such criteria should relate not only to the guidelines, directives or
requirements issued, or the resolutions approved thereunder, but also to the goals underlying
such regulations. The foreign investor also expects the host State to act consistently, i.e. without
arbitrarily revoking any preexisting decisions or permits issued by the State that were relied upon
by the investor to assume its commitments as well as to plan and launch its commercial and
business activities. The investor also expects the State to use the legal instruments that govern
the actions of the investor or the investment in conformity with the function usually assigned to
such instruments, and not to deprive the investor of its investment without the required
compensation. In fact, failure by the host State to comply with such pattern of conduct with respect
to the foreign investor or its investments affects the investor’s ability to measure the treatment and
protection awarded by the host State and to determine whether the actions of the host State
conform to the fair and equitable treatment principle. Therefore, compliance by the host State with
such pattern of conduct is closely related to the above-mentioned principle, to the actual chances
of enforcing such principle, and to excluding the possibility that state action be characterized as
arbitrary; i.e. as presenting insufficiencies that would be recognized "…by any reasonable and
impartial man," or, although not in violation of specific regulations, as being contrary to the law
because:
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...(it) shocks, or at least surprises, a sense of juridical propriety. (Emphasis and underscoring
supplied added.)
The Philippines, therefore, cannot, without so much as a notice of policy shift, alter and change
the legal and business environment in which the foreign investments in the country were made in
the first place. These investors obviously made the decision to come in after studying the country’s
legal framework-its restrictions and incentives––and so, as a matter of fairness, they must be
accorded the right to expect that the same legal climate and the same substantive set of rules will
remain during the period of their investments.
The representation that foreigners can invest up to 40% of the entirety of the total stockholdings,
and not just the voting shares, of a public utility corporation is an implied covenant that the
Philippines cannot renege without violating the FET guarantee. Especially in this case where the
Philippines made specific commitments to countries like Japan and China that their investing
nationals can own up to 40% of the equity of a public utility like a telecommunications corporation.
In the table contained in Schedule 1(B), Annex 6 of the JPEPA, the Philippines categorically
represented that Japanese investors’ entry into the Philippine telecommunications industry,
specifically corporations offering "voice telephone services," is subject to only the following
requirements and conditions:
A. Franchise from Congress of the Philippines
B. Certificate of Public Convenience and Necessity (CPCN) from the National
Telecommunications Commission
C. Foreign equity is permitted up to 40 percent.
D. x x x154 (Emphasis supplied.)
The same representation is made in the Philippines’ Schedule of Specific Commitments appended
to the ASEAN-China Agreement on Trade in Services.155
Further, as previously pointed out, it was the Philippine government that pushed for and approved
the sale of the 111,415 PTIC shares to MPAH, thereby indirectly transferring the ownership of 6.3
percent of the outstanding common shares of PLDT, to a foreign firm and so increasing the foreign
voting shareholding in PLDT. Hence, the presence of good faith may not be convincingly argued in
favour of the Philippine government in a suit for violation of its FET guarantee.
In fact, it has been held that a bona fide change in policy by a branch of government does not
excuse compliance with the FET obligations. In Occidental Exploration and Production Company
(OEPC) v. the Republic of Ecuador,156 the United Nations Commission on International Trade
Law (UNCITRAL) ruled that Ecuador violated the US/Ecuador BIT by denying OEPC fair and
equitable treatment when it failed to provide a predictable framework for its investment planning.
Ruling thus, the tribunal cited Ecuador’s change in tax law and its tax authority’s unsatisfactory
and vague response to OEPC’s consulta, viz:
183. x x x The stability of the legal and business framework is thus an essential element of fair and
equitable treatment.
184. The tribunal must note in this context that the framework under which the investment was
made and operates has been changed in an important manner by actions adopted by [the
Ecuadorian tax authority]. … The clarifications that OEPC sought on the applicability of VAT by
means of "consulta" made to [the Ecuadorian tax authority] received a wholly unsatisfactory and
thoroughly vague answer. The tax law was changed without providing any clarity abut its meaning
and extend and the practice and regulations were also inconsistent with such changes.
185. Various arbitral tribunals have recently insisted on the need for this stability. The tribunal in
Metalcad held that the Respondent "failed to ensure a transparent and predictable framework for
Metalcad’s business planning and investment. The totality of these circumstances demonstrate a
lack of orderly process and timely disposition in relation to an investor of a Party acting in the
expectation that it would be treated fairly and justly…" x x x
186. It is quite clear from the record of this case and from the events discussed in this Final Award
that such requirements were not met by Ecuador. Moreover, this is an objective requirement that
does not depend on whether the Respondent has proceeded in good faith or not.
187. The Tribunal accordingly holds that the Respondent has breached its obligations to accord
fair and equitable treatment under Article II (3)
(a) of the Treaty. x x x
xxxx
191. The relevant question for international law in this discussion is not whether there is an
obligation to refund VAT, which is the point on which the parties have argued most intensely, but
rather whether the legal and business framework meets the requirements of stability and
predictability under international law. It was earlier concluded that there is not a VAT refund
obligation under international law, except in the specific case of the Andean Community Law,
which provides for the option of either compensation or refund, but there is certainly an obligation
not to alter the legal and business environment in which the investment has been made. In this
case it is the latter question that triggers a treatment that is not fair and equitable. (Emphasis
supplied.)
To maintain the FET guarantee contained in the various BITs and FTAs concluded by the country
and avert a deluge of investor suits before the ICSID, the UNCITRAL or other fora, any decision of
this court that tends to drastically alter the foreign investors’ basic expectations when they made
their investments, taking into account the consistent SEC Opinions and the executive and
legislative branches’ Specific Commitments, must be applied prospectively.
This Court cannot turn oblivious to the fact that if We diverge from the prospectivity rule and
implement the resolution on the present issue immediately and, without giving due deference to
the foreign investors’ rights to due process and the equal protection of the laws, compel the
foreign stockholders to divest their voting shares against their wishes at prices lower than the
acquisition costs, these foreign investors may very well shy away from Philippine stocks and avoid
investing in the Philippines. Not to mention, the validity of the franchise granted to PLDT and
similarly situated public utilities will be put under a cloud of doubt. Such uncertainty and the unfair
treatment of foreign investors who merely relied in good faith on the policies, rules and regulations
of the PSE and the SEC will likely upset the volatile capital market as it would have a negative
impact on the value of these companies that will discourage investors, both local and foreign, from
purchasing their shares. In which case, foreign direct investments (FDIs) in the country (which
already lags behind our Asian neighbors) will take a nosedive. Indeed, it cannot be gainsaid that a
sudden and unexpected deviation from the accepted and consistent construction of the term
"capital" will create a domino effect that may cripple our capital markets.
Therefore, in applying the new comprehensive interpretation of Sec. 11, Art. XII of the
Constitution, the current voting shares of the foreign investors in public utilities in excess of the
40% capital shall be maintained and honored. Otherwise the due process guarantee under the
Constitution and the long established precepts of justice, equity and fair play would be impaired.
Prospective application of new laws or changes in interpretation
The June 28, 2011 Decision construed "capital" in the first sentence of Section 11, Article XII of
the Constitution as "full beneficial ownership of 60 percent of the outstanding capital stocks
coupled with 60 percent of the voting rights." In the Resolution denying the motions for
reconsideration, it further amplified the scope of the word "capital" by clarifying that "the 60- 40
ownership requirement in favor of Filipino citizens must apply separately to each class of shares
whether common, preferred, preferred voting or any other class of shares." This is a radical
departure from the clear intent of the framers of the 1987 Constitution and the long established
interpretation ascribed to said word by the Securities and Exchange Commission—that "capital" in
the first sentence of Sec. 11, Art. XII means capital stock or BOTH voting and non-voting shares.
The recent interpretation enunciated in the June 28, 2011 and in the Resolution at hand can only
be applied PROSPECTIVELY. It cannot be applied retroactively to corporations such as PLDT
and its investors such as its shareholders who have all along relied on the consistent reading of
"capital" by SEC and the Philippine government to apply it to a public utility’s total capital stock.
Lex prospicit, non respicit – "laws have no retroactive effect unless the contrary is provided."157
As a necessary corollary, judicial rulings should not be accorded retroactive effect since "judicial
decisions applying or interpreting the laws or the Constitution shall form part of the legal system of
the Philippines."158 It has been the constant holding of the Court that a judicial decision setting a
new doctrine or principle ("precedent-setting decision") shall not retroactively apply to parties who
relied in good faith on the principles and doctrines standing prior to the promulgation thereof ("old
principles/doctrines"), especially when a retroactive application of the precedent-setting decision
would impair the rights and obligations of the parties. So it is that as early as 1940, the Court has
refused to apply the new doctrine of jus sanguinis to persons who relied in good faith on the
principle of jus soli adopted in Roa v. Collector of Customs.159 Similarly, in Co v. Court of
Appeals,160 the Court sustained petitioner Co’s bona fide reliance on the Minister of Justice’s
Opinion dated December 15, 1981 that the delivery of a "rubber" check as guarantee for an
obligation is not a punishable offense despite the Court’s pronouncement on September 21, 1987
in Que v. People that Batas Pambansa Blg. (BP) 22 nonetheless covers a check issued to
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guarantee the payment of an obligation. In so ruling, the Court quoted various decisions applying
precedent-setting decisions prospectively. We held:
Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal
system of the Philippines," according to Article 8 of the Civil Code. "Laws shall have no retroactive
effect, unless the contrary is provided," declares Article 4 of the same Code, a declaration that is
echoed by Article 22 of the Revised Penal Code: "Penal laws shall have a retroactive effect insofar
as they favor the person guilty of a felony, who is not a habitual criminal . . ."
xxxx
The principle of prospectivity has also been applied to judicial decisions which, "although in
themselves not laws, are nevertheless evidence of what the laws mean, . . . (this being) the
reason why under Article 8 of the New Civil Code, 'Judicial decisions applying or interpreting the
laws or the Constitution shall form a part of the legal system . . .' "
So did this Court hold, for example, in Peo. v. Jabinal, 55 SCRA 607, 611:
xxxx
So, too, did the Court rule in Spouses Gauvain and Bernardita Benzonan v. Court of Appeals, et
al. (G.R. No. 97973) and Development Bank of the Philippines v. Court of Appeals, et al. (G.R. No
97998), Jan. 27, 1992, 205 SCRA 515, 527-528:
xxxx
A compelling rationalization of the prospectivity principle of judicial decisions is well set forth in the
oft-cited case of Chicot County Drainage Dist. v. Baxter States Bank, 308 US 371, 374 1940. The
Chicot doctrine advocates the imperative necessity to take account of the actual existence of a
statute prior to its nullification, as an operative fact negating acceptance of "a principle of absolute
retroactive invalidity."
xxxx
Much earlier, in De Agbayani v. PNB, 38 SCRA 429 xxx the Court made substantially the same
observations…
xxxx
Again, treating of the effect that should be given to its decision in Olaguer v. Military Commission
No 34, — declaring invalid criminal proceedings conducted during the martial law regime against
civilians, which had resulted in the conviction and incarceration of numerous persons — this
Court, in Tan vs. Barrios, 190 SCRA 686, at p. 700, ruled as follows:
"In the interest of justice and consistency, we hold that Olaguer should, in principle, be applied
prospectively only to future cases and cases still ongoing or not yet final when that decision was
promulgated. x x x"
It would seem, then, that the weight of authority is decidedly in favor of the proposition that the
Court’s decision of September 21, 1987 in Que v. People, 154 SCRA 160 (1987) — i.e., that a
check issued merely to guarantee the performance of an obligation is nevertheless covered by
B.P. Blg. 22 — should not be given retrospective effect to the prejudice of the petitioner and other
persons similarly situated, who relied on the official opinion of the Minister of Justice that such a
check did not fall within the scope of B.P. Blg. 22. (Emphasis supplied).
Indeed, pursuant to the doctrine of prospectivity, new doctrines and principles must be applied
only to acts and events transpiring after the precedent-setting judicial decision, and not to those
that occurred and were caused by persons who relied on the "old" doctrine and acted on the faith
thereof.
Not content with changing the rule in the middle of the game, the majority, in the June 28, 2011
Decision, went a little further by ordering respondent SEC Chairperson "to apply this definition of
the term ‘capital’ in determining the extent of allowable foreign ownership in respondent Philippine
Long Distance Telephone Company, and if there is a violation of Section 11, Article XII of the
Constitution, to impose the appropriate sanctions under the law." This may be viewed as
unreasonable and arbitrary. The Court in the challenged June 28, 2011 Decision already made a
finding that foreigners hold 64.27% of the total number of PLDT common shares while Filipinos
hold only 35.73%.161 In this factual setting, PLDT will, as clear as day, face sanctions since its
present capital structure is presently in breach of the rule on the 40% cap on foreign ownership of
voting shares even without need of a SEC investigation.
In answering the SEC’s query regarding the proper period of application and imposition of
appropriate sanctions against PLDT, Justice Carpio tersely stated that "once the 28 June 2011
Decision becomes final, the SEC shall impose the appropriate sanctions only if it finds after due
hearing that, at the start of the administrative cases or investigation, there is an existing violation
of Sec. 11, Art. XII of the Constitution."162 As basis therefor, Justice Carpio cited Halili v. Court of
Appeals163 and United Church Board for World Ministries (UCBWM) v. Sebastian.164 However,
these cases do not provide a jurisprudential foundation to this mandate that may very well deprive
PLDT foreign shareholders of their voting shares. In fact, UCBWM v. Sebastian respected the
voluntary transfer in a will by an American of his shares of stocks in a land-holding corporation. In
the same manner, Halili v. Court of Appeals sustained as valid the waiver by an alien of her right
of inheritance over a piece of land in favour of her son. Nowhere in these cases did this Court
order the involuntary dispossession of corporate stocks by alien stockholders. At most, these two
cases only recognized the principle validating the transfer of land to an alien who, after the
transfer, subsequently becomes a Philippine citizen or transfers the land to a Filipino citizen. They
do not encompass the situation that will eventually ensue after the investigation conducted by the
SEC in accordance with the June 28, 2011 and the present resolution. They do not justify the
compulsory deprivation of voting shares in public utility corporations from foreign stockholders who
had legally acquired these stocks in the first instance.
The abrupt application of the construction of Sec. 11, Art. XII of the Constitution to foreigners
currently holding voting shares in a public utility corporation is not only constitutionally problematic;
it is likewise replete with pragmatic difficulties that could hinder the real-world translation of this
Court’s Resolution. Although apparently benevolent, the majority’s concession to allow "public
utilities that fail to comply with the nationality requirement under Section 11, Article XII and the FIA
[to] cure their deficiencies prior to the start of the administrative case or investigation"165 could
indirectly occasion a compulsory deprivation of the public utilities’ foreign stockholders of their
voting shares. Certainly, these public utilities must immediately pare down their foreign-owned
voting shares to avoid the imposable sanctions. This holds true especially for PLDT whose
64.27% of its common voting shares are foreign-subscribed and held. PLDT is, therefore, forced
to immediately deprive, or at the very least, dilute the property rights of their foreign stockholders
before the commencement of the administrative proceedings, which would be a mere farce
considering the transparency of the public utility from the onset.
Even with the chance granted to the public utilities to remedy their supposed deficiency, the
nebulous time-frame given by the majority, i.e., "prior to the start of the administrative case or
investigation,"166 may very well prove too short for these public utilities to raise the necessary
amount of money to increase the number of their authorized capital stock in order to dilute the
property rights of their foreign stockholders holding voting shares.167 Similarly, if they induce their
foreign stockholders to transfer the excess voting shares to qualified Philippine nationals, this
period before the filing of the administrative may not be sufficient for these stockholders to find
Philippine nationals willing to purchase these voting shares at the market price. This Court cannot
ignore the fact that the voting shares of Philippine public utilities like PLDT are listed and sold at
large in foreign capital markets. Hence, foreigners who have previously purchased their voting
shares in these markets will not have a ready Philippine market to immediately transfer their
shares. More than likely, these foreign stockholders will be forced to sell their voting shares at a
loss to the few Philippine nationals with money to spare, or the public utility itself will be
constrained to acquire these voting shares to the prejudice of its retained earnings.168
Whatever means the public utilities choose to employ in order to cut down the foreign
stockholdings of voting shares, it is necessary to determine who among the foreign stockholders
of these public utilities must bear the burden of unloading the voting shares or the dilution of their
property rights. In a situation like this, there is at present no settled rule on who should be
deprived of their property rights. Will it be the foreign stockholders who bought the latest
issuances? Or the first foreign stockholders of the public utility corporations? This issue cannot be
realistically settled within the time-frame given by the majority without raising more disputes. With
these loose ends, the majority cannot penalize the public utilities if they should fail to comply with
the directive of complying with the "nationality requirement under Section 11, Article XII and the
FIA" within the unreasonably nebulous and limited period "prior to the start of the administrative
case or investigation."169
In the light of the new pronouncement of the Court that public utilities that fail to comply with the
nationality requirement under Section 11, Article XII of the Constitution CAN CURE THEIR
DEFICIENCIES prior to the start of the administrative case or investigation, I submit that affected
companies like PLDT should be given reasonable time to undertake the necessary measures to
make their respective capital structure compliant, and the SEC, as the regulatory authority, should
come up with the appropriate guidelines on the process and supervise the same. SEC should
282
likewise adopt the necessary rules and regulations to implement the prospective compliance by all
affected companies with the new ruling regarding the interpretation of the provision in question.
Such rules and regulations must respect the due process rights of all affected corporations and
define a reasonable period for them to comply with the June 28, 2011 Decision.
A final note.
Year in and year out, the government’s trade managers attend economic summits courting
businessmen to invest in the country, doubtless promising them a playing field where the rules are
friendly as they are predictable. So it would appear odd if a branch of government would make
business life complicated for investors who are already here. Indeed, stability and predictability are
the key pillars on which our legal system must be founded and run to guarantee a business
environment conducive to the country’s sustainable economic growth. Hence, it behoves this
Court to respect the basic expectations taken into account by the investors at the time they made
the investments. In other words, it is the duty of this Court to stand guard against any untoward
change of the rules in the middle of the game.
I, therefore, vote to GRANT the motions for reconsideration and accordingly REVERSE and SET
ASIDE the June 28, 2011 Decision. The Court should declare that the word "capital" in the first
sentence of Section 11, Article Xll of the 1987 Constitution means the entire capital stock or both
voting and non-voting shares.
Since the June 28, 2011 Decision was however sustained, I submit that said decision should take
effect only on the date of its finality and should be applied prospectively.
PLDT should be given time to umkrtake the nec~ssary meast1res to make its capital structure
compliant, and th~ Securities and Exchange Commission should formulalc appropriate guidelines
and supervise the process. Said Commission should also adopt ruks and regulations to implement
the prospective compliance by all affected companies with the new ruling on the interpretation of
Sec. 11, Art. XII of the Constitution. Such rules and regulations must respect the due process
rights of all affected corporations and provide a reasonable period for them to com pi y with the
June 28, 2011 Decision. The rights of foreigners over the voting shares they presently own in
excess of 40% of said shares should, in the meantime, be respected.
PRESBITERO J. VELASCO, JR.
Associate Justice
Footnotes
1 Penned by Justice Antonio T. Carpio.
2 Webster’s Third New International Dictionary of the English Language: Unabridged (1981),
Springfield, MA, p. 1646.
3 Allied Banking Corporation v. Court of Appeals, G.R. No. 124290, January 16, 1998, 284 SCRA
327, 367 and Inding v. Sandiganbayan, G.R. No. 143047, July 14, 2004, 434 SCRA 388, 403.
4 Agpalo, Ruben E. Statutory Construction, 6th ed. (2009), p. 585.
5 Id.; citations omitted.
6 See also Macalintal v. Presidential Electoral Tribunal, G.R. No. 191618, November 23, 2010,
635 SCRA 783; La Bugal-B’Laan Tribal Assn., Inc. v. Ramos, G.R. No. 127882, December 1,
2002; Francisco v. House of Representatives, November 10, 2010; Victoria v. COMELEC, G.R.
No. 109005, January 10, 1994.
7 No. L-21064, February 18, 1970, 31 SCRA 413, 422-423.
8 Memorandum, The Meaning of "Capital," p. 10, read by Fr. Bernas as amicus curiae in the June
26, 2012 Oral Argument.
9 Webster’s Third New International Dictionary Unabridged, Merriam-Websters Inc., Springfield,
MA. 1981, p. 322.
10 Id.; emphasis supplied.
11 Id.
12 Black’s law Dictionary, 9th Ed., for the iPhone/iPad/iPod touch, Version 2.0.0 (B10239), p. 236.
13 Id.; emphasis supplied.
14 Agpalo, Ruben E. Agpalo’s Legal Words and Phrases, 1987 Ed., p. 96 citing Ruben E. Agpalo
Comments on the Corporation Code, 1993 ed., p. 45.
15 Id.
16 Villanueva, Cesar Lapuz. Philippine Corporate Law. 2003 Ed., p. 537. Emphasis and
underscoring supplied.
17 De Leon, Hector S. The Corporation Code of the Philippines Annotated, 2002 Ed. Manila, Phil.
P. 71-72 citing (SEC Opinion, Feb. 15, 1988 which states: The term "capital" denotes the sum
total of the shares subscribed and paid by the stockholders or agreed to be paid irrespective of
their nomenclature. It would, therefore, be legal for foreigners to own more than 40% of the
common shares but not more than the 40% constitutional limit of the outstanding capital stock
which would include both common and non-voting preferred shares." (Emphasis and underscoring
supplied.)
18 Tongson v. Arellano, G.R. No. 77104, November 6, 1992, 215 SCRA 426.
19 Agpalo, Ruben E. Statutory Construction, 6th ed. (2009), p. 588.
20 Record of the (1986) Constitutional Commission, Vol. III, pp. 250-256.
21 Id. at 326-327.
22 Id. at 357-365.
23 Id. at 582-584.
24 Id. at 665-666.
25 Record of the (1986) Constitutional Commission, Vol. III, pp. 250-251.
26 Referring to Sections 2 and 10, Article XII of the 1987 Constitution.
27 Records of the Constitutional Commission, Volume III, pp. 326-327.
28 Id. at 357.
29 Records of the Constitutional Commission, Volume III, pp. 357-360.
30 Records of the Constitutional Commission, Volume III, p. 360.
31 Id. at 364.
32 Id. at 582.
33 Sundiang Jose, R. and Aquino, Timoteo B. Reviewer on Commercial Law, 2006 Ed., p. 257.
34 Records of the Constitutional Commission, Volume III, pp. 583-584.
35 See Bernas, S.J., The Intent of the 1986 Constitution Writers, 1995 ed., p. 849.
36 Section 2, Article XII, 1987 Constitution:
Section 2. All 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 other natural
resources are owned by the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State. The State may directly
undertake such activities, or it may enter into coproduction, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or associations at least sixty per centum of
whose capital is owned by such citizens. x x x x (Emphasis supplied.)
37 Section 10, Article XII, 1987 Constitution:
Section 10. The Congress shall, upon recommendation of the 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. (Emphasis supplied.)
38 June 26, 2012 Oral Arguments TSN, pp. 115-116.
39 Records of the Constitutional Commission, Volume III, pp. 326, 583.
40 G.R. No. 83896, February 22, 1991, 194 SCRA 317.
41 Respondent Pangilinan’s Motion for Reconsideration dated July 14, 2011, pp. 36-37 citing
Philippine Institute of Development Studies, "Key Indicators of the Philippines, 1970-2011", at
http://econdb.pids.gov.ph/tablelists/table/326 and de Dios, E. (ed.) 1984 An Analysis of the
Philippine Economic Crisis. A workshop report. Quezon City: University of the Philippines; also de
Dios, E. 2009 "Governance, institutions, and political economy" in: D. Canlas, M.E. Khan and J.
Zhuang, eds. Diagnosing the Philippine economy: toward inclusive growth. London: Anthem Press
and Asian Development Bank. 295-336 and Bautista, R. 2003 "International dimensions", in: A.
Balisacan and H. Hill Eds. The Philippine economy: development, policies, and challenges. Oxford
University Press. 136- 171.
42 Commonwealth Act No. (CA) 146, as amended and modified by Presidential Decree No. 1,
Integrated Reorganization Plan and EO 546; Approved on November 7, 1936.
43 Sec. 13(b), CA 146: The term "public service" includes every person that now or hereafter may
own, operate, manage, or control in the Philippines, for hire or compensation, with general or
limited clientele, whether permanent, occasional or accidental, and done for general business
283
purposes, any common carrier, railroad, street railway, traction railway, sub-way motor vehicle,
either for freight or passenger, or both with or without fixed route and whether may be its
classification, freight or carrier service of any class, express service, steamboat or steamship line,
pontines, ferries, and water craft, engaged in the transportation of passengers or freight or both,
shipyard, marine railways, marine repair shop, [warehouse] wharf or dock, ice plant, ice-
refrigeration plant, canal, irrigation system, gas, electric light, heat and power water supply and
power, petroleum, sewerage system, wire or wireless communications system, wire or wireless
broadcasting stations and other similar public services x x x.
44 "Headnotes, heading or epigraphs of sections of a statute are convenient index to the contents
of its provisions." (Agpalo, Ruben, Statutory Construction, Sixth Edition 2009, p. 166 citing In re
Estate of Johnson, 39 Phil. 156 1918; Kare v. Platon, 56 Phil. 248 1931).
45 As amended by Republic Act No. 134, which was approved on June 14, 1947.
46 Entitled "An Act Granting A Franchise To Filipinas Orient Airways, Incorporated, To Establish
And Maintain Air Transport Service In The Philippines And Between The Philippines And Other
Countries." Approved on June 20, 1964.
47 Entitled "An Act Granting A Franchise To Air Manila, Incorporated, To Establish And Maintain
Air Transport Service In The Philippines And Between The Philippines And Other Countries."
Approved on June 19, 1965.
48 Entitled "An Act Granting The Philippine Communications Satellite Corporation A Franchise To
Establish And Operate Ground Satellite Terminal Station Or Stations For Telecommunication With
Satellite Facilities And Delivery To Common Carriers." Approved on June 21, 1969
49 Entitled "An Act Providing For The Licensing And Regulation Of Atomic Energy Facilities And
Materials, Establishing The Rules On Liability For Nuclear Damage, And For Other Purposes," as
amended by PD 1484. Approved on June 15, 1968 and published in the Official Gazette on May 5,
1969.
50 G.R. No. 127937 July 28, 1999, 311 SCRA 508.
51 Emphasis supplied.
52 G.R. No. 70054, December 11, 1991, 204 SCRA 767. Emphasis and underscoring supplied.
53 G.R. No. 108576, January 20, 1999, 301 SCRA 152.
54 See also Republic Planters Bank v. Agana, G.R. No. 51765, March 3, 1997, 269 SCRA 1,
where this Court stated that "Shareholders, both common and preferred, are considered risk
takers who invest capital in the business and who can look only to what is left after corporate
debts and liabilities are fully paid."
55 Citations omitted.
56 Ponencia, pp. 30-31.
57 Office of the Ombudsman v. Heirs of Margarita Vda. De Ventura, G.R. No. 151800, November
5, 2009, 605 SCRA 1.
58 In numerous Opinions, the DOJ refused to construe the Constitutional provisions on the
nationality requirement imposed by various legislative acts like the FIA, in relation to the 1987
Constitution, on the ground that the interpretation and application of the said law properly fall
within the jurisdiction of the National Economic Development Authority (NEDA), in consultation
with the Bureau of Investments (BOI) and the Securities and Exchange Commission. (Opinion No.
16, Series 1999, February 2, 1999 citing Sec. of Justice Opn. No. 3, current series; Nos. 16, 44
and 45, s. 1998; Opinion No. 13, Series of 2008, March 12, 2008 citing Sec. of Justice Op. NO.
53, current series No. 75, s. 2006.
59 SEC Opinion dated February 15, 1988.
60 93 Phil. 333 (1953).
61 SEC-OGC Opinion No. 26-11.
62 Philippine Global Communications, Inc. v. Relova, No. L-60548, November 10, 1986, 145
SCRA 385; citing Philippine Association of Free Labor Unions [PAFLU] v. Bureau of Labor
Relations, August 21, 1976, 72 SCRA 396, 402.
63 Id.
64 No. L-5955, September 19, 1952.
65 Id.
66 Annex "B" of the SEC Memorandum dated July 25, 2012 wherein the Commission Secretary
certified that: "During the Commission En Banc meeting held on July 2, 2002 at the Commission
Room, 8th Florr, SEC Building, EDSA, Greenhills, Mandaluyong City, the Commission En Banc
approved the following:
"RESOLVED, That all opinions to be issues by the SEC pursuant to a formal request, prepared
and acted upon by the appropriate operating departments shall be reviewed by the OGC and be
issued under the signature of the SEC General Counsel. Henceforth, all opinions to be issues by
the SEC shall be numbered accordingly
(SEC-EXS. RES. NO. 106 s, of 2002)
67 SEC. 4.6, SRC: The Commission may, for purposes of efficiency, delegate any of its functions
to any department or office of the Commission, an individual Commissioner or staff member of the
Commission except its review or appellate authority and its power to adopt, alter and supplement
any rule or regulation.
The Commission may review upon its own initiative or upon the petition of any interested party any
action of any department or office, individual Commissioner, or staff member of the Commission.
68 Sec. 5.1 (g), SRC.
69 Misamis Oriental Association of Coco Traders, Inc. v. Department of Finance Secretary, G.R.
No. 108524, November 10, 1994, 238 SCRA 63; citing Victorias Milling Co. v. Social Security
Commission, 114 Phil. 555 (1962) and Philippine Blooming Mills v. Social Security System, 124
Phil. 499 (1966).
70 SEC Memorandum dated July 25, 2012, pp. 33-36.
71 G.R. Nos. 136781, 136786, 136795, October 6, 2000, 342 SCRA 244, 270.
72 Republic Act 9856, Lapsed into law on December 17, 2009.
73 Report on the Proportionality Principle in the European Union: External Study Commissioned
by the European Commission, p. 7.
74 This fact is recognized even by the Organisation for Economic Cooperation and Development
(OECD), viz.:
"Economic literature traditionally identifies two main channels through which corporate investors
may decouple the cash flows and voting rights of shares, including the leveraging of voting power
and mechanisms to "lock in" control. The most commonly used such mechanisms are listed below.
Not covered by the present section are a number of company-internal arrangements that can in
some circumstances also be employed to leverage the control of certain shareholders. For
instance, the ongoing discussions in the United States about corporate proxies and the voting
arrangements at general meetings (e.g. majority versus plurality vote) may have important
ramifications for the allocation of control rights in US companies. In addition, a number of
marketed financial instruments are increasingly available that can be used by investors, including
incumbent management, to hedge their financial interest in a company while retaining voting
rights.
Leveraging of voting power. The two main types PLMs used to bolster the voting powers of
individuals, hence creating controlling shareholders, are differentiated voting rights on company
shares and multi-firm structures. Mechanisms include:
Differentiated voting rights. The most straightforward – and, as the case may be, transparent –
way of leveraging voting power is to stipulate differential voting rights in the corporate charter or
bylaws. Companies have gone about this in a number of ways, including dualclass share
structures and, in addition to common stock, issuing non-voting shares or preference shares
without or with limited voting rights. The latter is a borderline case: preference shares have
common characteristics with debt as well as equity, and in most jurisdictions they assume voting
rights if the issuers fail to honour their preference commitments.
Multi-firm structures. Voting rights can be separated from cash-flow rights even with a single
class of shares by creating a set of cascading shareholdings or a pyramidal hierarchy in which
higher-tier companies own shares in lower-tier companies. Pyramids are complementary to dual-
class share structures insofar as almost any pyramidal control structure can be reproduced
through dual (or, rather, multiple) share classes. However, for complex control structures, the
controlling shareholders may prefer pyramids since the underlying shares tend to be more liquid
than stocks split into several classes. (In the remainder of this paper the word "pyramid" is used
jointly to denote truly pyramidal structures and cascading shareholdings.)
Lock-in mechanisms. The other main category of PLMs consists of instruments that lock in control
– that is cut off, or in some cases bolster, the voting rights of common stock. A clear-cut lock-in
mechanism is voting right ceilings prohibiting shareholders from voting about a certain threshold
irrespective of the Corporate Affairs Division, Directorate for Financial and Enterprise Affairs
Organisation for Economic Co-operation and Development 2 rue André-Pascal, Paris 75116,
France www.oecd.org/daf/corporate-affairs/ number of voting shares they hold. Secondly, a type
284
of lock-in mechanism that confers greater voting right on selected shareholders is priority shares,
which grant their holders extraordinary power over specific types of corporate decisions. This type
of lock-in mechanism, when held by the state, is commonly referred to as a "golden share".
Finally, company bylaws or national legislation may contain supermajority provisions according to
which a simple majority is insufficient to approve certain major corporate changes.
Related or complementary instruments. Other instruments, while not themselves sources of
disproportionality, may either compound the effect of PLMs or produce some of the same
corporate governance consequences as PLMs. One example is cross-shareholdings, which can
be used to leverage the effectiveness of PLMs and, in consequence, are often an integral part of
pyramidal structures. A second such instrument is shareholder agreements that, while their effects
can be replicated by shareholders acting in concert of their own accord, nevertheless add an
element of certainty to voting coalitions…" (Lack of Proportionality between Ownership and
Control: Overview and Issues for Discussion. Issued by the Organisation for Economic Co-
Operation and Development (OECD) Steering Group on Corporate Governance, December 2007,
pp. 12-13. Available from http://www.oecd.org/dataoecd/21/32/40038351.pdf, last accessed
February 7, 2012. See also Clarke, Thomas and Chanlat, Jean Francois. European Corporate
Governance: Readings and Perspectives. (2009) Routledge, New York, p. 33; Report on the
Proportionality Principle in the European Union: External Study Commissioned by the European
Commission. See also Hu and Black, supra.
75 Approved on June 13, 1991, and amended by Republic Act No. 8179.
76 Executive Order No. 858, February 5, 2010.
77 See also PD 1570 (Aeronautical engineering); RA 8559 (Agricultural Engineering); RA 9297
(Chemical engineering); RA 1582 (Civil engineering) RA 7920 (Electrical Engineering); RA 9292
(Electronics and Communication Engineering); RA 8560 (Geodetic Engineering); RA 8495
(Mechanical Engineering); PD 1536 (Metallurgical Engineering); RA 4274 (Mining Engineering);
RA 4565 (Naval Architecture and Marine Engineering); RA 1364 (Sanitary Engineering; RA 2382
as amended by RA 4224 (Medicine); RA 5527 as amended by RA 6318, PD 6138, PD 498 and
PD 1534 (Medical Technology); RA 9484 (Dentistry); RA 7392 (Midwifery); RA 9173 (Nursing); PD
1286 (Nutrition and Dietetics); RA 8050 (Optometry); RA 5921 (Pharmacy); RA 5680 (Physical
and Occupational Therapy); RA 7431 (Radiologic and X-ray Technology); RA 9268 (Veterinary
Medicine); RA 9298 (Accountancy); RA 9266 (Architecture); RA 6506 (Criminology); RA 754
(Chemistry); RA 9280 (Customs Brokerage); PD 1308 (Environmental Planning); RA 6239
(Forestry); RA 4209 (Geology); RA 8534 (Interior Design); RA 9053 (Landscape Architecture);
Article VIII, Section 5 of the Constitution, Rule 138, Section 2 of the Rules of Court of the
Philippines (Law); RA 9246 (Librarianship); RA 8544 (Marine Deck Officers and Marine Engine
Officers); RA 1378 (Master Plumbing): RA 5197 (Sugar Technology); RA 4373 (Social Work); RA
7836 (Teaching); RA 8435 (Agriculture); RA 8550 (Fisheries); and RA 9258 (Guidance
Counselling).
78 Republic Act No. 5186, approved on September 16, 1967.
79 Presidential Decree 1789, Published in the Daily Express dated April 1, 1981 and Amended by
Batas Pambansa Blg. 391 otherwise known as "Investment Incentive Policy Act of 1983,"
approved April 28, 1983.
80 Executive Order (s1987) No. 226, known as the "Omnibus Investments Code of 1987,"
approved on July 16, 1987.
81 Section 1, Article XVII. Any amendment to, or revision of, this Constitution may be proposed
by:
(1) The Congress, upon a vote of three-fourths of all its Members; or
(2) A constitutional convention.
Section 2. Amendments to this Constitution may likewise be directly proposed by the people
through initiative….
xxx xxx xxx
Section 4. Any amendment to, or revisions of, this Constitution under Section 1 hereof shall be
valid when ratified by a majority vote of the votes cast in a plebiscite which shall be held not earlier
than sixty days nor later than ninety days after the approval of such amendment or revision.
82 The 1987 OIC was enacted as EO 226 on July 16, 1987, or after the ratification of the 1987
Constitution.
83 Ang Bagong Bayani v. COMELEC, 412 Phil. 308 (2001).
84 See Dissenting Opinion of Justice Padilla in Romualdez-Marcos v. COMELEC, G.R. No.
119976, September 18, 1995, 248 SCRA 300, 369.
85 Republic Act No. 7042, Section 2.
86 Record of the Senate, Vol. II, No. 57, p. 1965.
87 Id. at 1964.
88 Id. Vol. 3, No. 76, p. 205.
89 Black’s Law Dictionary, 9th Ed., for the iPhone/iPad/iPod touch. Version: 2.1.0 (B12136), p.
619.
90 Id.
91 As early as 1932, Adolf A. Berle and Gardine C. Means in their book "The Modern Corporation
and Private Property" explained that the large business corporation is characterized by
"separation of ownership and control." See also Hu, Henry T.C. and Black, Bernard S., Empty
Voting and Hidden (Morphable) Ownership: Taxonomy, Implications, and Reforms. As published
in Business Lawyer, Vol. 61, pp. 1011-1070, 2006; European Corporate Governance Institute -
Law Research Paper No. 64/2006; University of Texas Law, Law and Economics Research Paper
No. 70. Available at SSRN: http://ssrn.com/abstract=887183; Ringe, Wolf-Georg, Deviations from
Ownership-Control Proportionality - Economic Protectionism Revisited (2010). COMPANY LAW
AND ECONOMIC PROTECTIONISM - NEW CHALLENGES TO EUROPEAN INTEGRATION, U.
Bernitz and W.G. Ringe, eds., OUP, 2010; Oxford Legal Studies Research Paper No. 23/2011.
Available at SSRN: http://ssrn.com/abstract=1789089.
92 Rollo, p. 11.
93 Cortez v. Avila, 101 Phil 705 (1957); Borlasa v. Polistico, 47 Phil. 345 (1925).
94 Regalado, Remedial Law Compendium, p. 91.
95 G.R. No. 102900, October 2, 1997, 280 SCRA 20.
96 Id.; citing Echevarria v. Parsons Hardware Co., 51 Phil. 980, 987 (1927); Borlasa v. Polistico,
47 Phil. 345, 347 (1925); People et al. v. Hon. Rodriguez, et al., 106 Phil 325, 327 (1959), among
others. Emphasis and underscoring supplied.
97 Board of Ed. of City of San Diego v. Common Council of City of San Diego, 1 Cal.App. 311, 82
P. 89, Cal.App. 2 Dist. 1905, July 13, 1905 citing Johnson v. Malloy, 74 Cal. 432. See also Kilberg
v. Louisiana Highway Commission, 8 La.App. 441 cited in Perry v. Louisiana Highway
Commission 164 So. 335 La.App. 2 Cir. 1935. December 13, 1935 and Oregon v. Louisiana
Power & Light Co., 19 La.App. 628, 140 So. 282; Succession of Carbajal, 154 La. 1060, 98 So.
666 (1924) cited in In re Gulf Oxygen Welder's Supply Profit Sharing Plan and Trust Agreement
297 So.2d 663 LA 1974. July 1, 1974 .
98 Gamboa v. Teves, G.R. No. 176579, June 28, 2011, 652 SCRA 690, 744.
99 Section 1, Article III, 1987 Constitution.
100 Oscar Palma Pagasian v. Cesar Azura, A.M. No. RTJ-89-425, April 17, 1990, 184 SCRA 391.
101 Lopez v. Director of Lands, 47 Phil. 23, 32 (1924); emphasis supplied.
102 Banco Español Filipino v. Palanca, 37 Phil. 921, 934 (1918).
103 G.R. No. 158693, November 17, 2004, 442 SCRA 573.
104 G.R. No. 158693, November 17, 2004, 442 SCRA 573. Emphasis supplied.
105 G.R. No. 84404, October 18, 1990, 190 SCRA 717.
106 Id. at 729.
107 PNB v. Palma, G.R. No. 157279, August 9, 2005; citing Laurel v. Civil Service Commission,
G.R. No. 71562, October 28, 1991, 203 SCRA 195; Stokes v. Malayan Insurance Inc., 212 Phil.
705 (1984); Medija v. Patcho, 217 Phil. 509 (1984); Llacer v. Muñoz, 12 Phil. 328 (1908).
108 Leca Realty Corporation v. Republic of the Philippines, represented by the Department of
Public Works and Highways, G.R. No. 155605, September 27, 2006, 503 SCRA 563.
109 G.R. No. 116111, January 21, 1999, 301 SCRA 366.
110 Citing 31 CJS 675-676; Republic v. Sandiganbayan, G.R. No. 108292, September 10, 1993,
226 SCRA 314.
111 No. L-29352, October 4, 1971, 41 SCRA 565; see also San Roque Realty and Development
Corporation v. Republic of the Philippines (through the Armed Forced of the Philippines), G.R. No.
155605, September 27, 2006.
112 Republic v. Vinzon, G.R. No. 154705, June 26, 2003, 405 SCRA 126; Air Transportation
Office v. David and Ramos. G.R. No. 159402, February 23, 2011. See also Minucher v. Court of
Appeals, G.R. No. 142396, February 11, 2003 citing Gary L. Maris’, ‘International Law, An
Introduction,"
285
University Press of America, 1984, p. 119; D.W. Grieg, ‘International Law," London Butterworths,
1970, p. 221.
113 Particularly relevant in the case of PLDT whose biggest group of foreign shareholders is
Chinese, followed by the Japanese and the Americans. Per the General Information Sheet (GIS)
of PLDT as of June 14, 2012, the following are the foreign shareholders of PLDT: (1) Hong-Kong
based J.P. Morgan Asset Holdings (HK) Limited owns 49,023,801 common shares [including
8,533,253, shares of PLDT common stock underlying ADS beneficially owned by NTT DoCoMo
and 7,653,703 shares of PLDT common stock underlying ADS beneficially-owned by non-
Philippine wholly-owned subsidiaries of First Pacific Company, Limited]; the Japanese firms, (2)
NTT DoCoMo, Inc. holding 22,796,902 common shares; (3) NTT Communications Corporation
with 12,633,487 common shares; and the Americans, (4) HSBC OBO A/C 000-370817-550 with
2,690,316 common shares; (5) Edward Tortorici and/or Anita R. Tortorici with 96,874 common
shares; (6) Hare and Co., holding 34,811 common shares; and (7) Maurice Verstraete, with
29,744 common shares.
(http://www.pldt.com.ph/investor/Documents/GIS_(as%20of%2006%2029%2012)_final.pdf last
accessed September 25, 2012)
114 1992 Agreement Between the Government of The People’s Republic Of China and The
Government of the Republic of the Philippines Concerning Encouragement and Reciprocal
Protection of Investments, Signed in Manila, Philippines on July 20, 1992. Emphasis and
underscoring supplied.
115 January 14, 2007.
116 ASEAN-China Investment Agreement, Article 7(1), emphasis and underscoring supplied. See
also the ASEAN-Korea Investment Agreement, Article 5 (1).
117 JPEPA, Article 91. Emphasis and underscoring supplied.
118 Signed on September 9, 2006.
119 ACIA, Article II (1) requires that the parties thereto must give "investments of investors of [the
other parties] fair and equitable treatment and full protection and security." Emphasis and
underscoring supplied.
120 Article III (1) – Each Contracting Party shall at all times ensure fair and equitable treatment of
the investments by investors of the other Contracting Party and shall not impair the management,
maintenance, use, enjoyment or disposal thereof, through unjustified and discriminatory
measures. (Emphasis and underscoring supplied.)
121 Article 3(2) thereof provides that the Philippines "shall ensure that [Australian] investments are
accorded fair and equitable treatment."
122 Article 2 (1) – Each Contracting Party shall in its territory promote, as far as possible,
investments of investors of the other Contracting Party, admit such investments in accordance
with its legislation and in any case accord such investments fair and equitable treatment.
(Emphasis and underscoring supplied.)
123 Article III (1) – Investments and returns of investors of each Contracting Party shall at all times
be accorded fair and equitable treatment and shall enjoy full protection and security in the territory
of the other Contracting Party. (Emphasis and underscoring supplied.)
124 Article II – Each Contracting Party shall promote investments in its territory by investors of the
other Contracting Party and shall admit such investments in accordance with its Constitution, laws,
and regulations. Such investments shall be accorded fair and equitable treatment. (Emphasis and
underscoring supplied.)
125 Article II (2) – Investments of nationals of either Contracting Party shall at all times be
accorded fair and equitable treatment and shall enjoy adequate protection and security in the
territory of the other Contracting Party. Emphasis and underscoring supplied.)
126 Article II (2) – Each Contracting Party shall accord investments or returns of investors of the
other Contracting Party [:] (a) fair and equitable treatment in accordance with the principles of
international law, and (b) full protection and security. (Emphasis and underscoring supplied.)
127 Article IV (1) – Each Contracting Party shall guarantee fair and equitable treatment to
investments made by investors of the other Contracting Party on its territory and shall ensure that
the exercise of the right thus recognized shall not be hindered in practice. (Emphasis and
underscoring supplied.)
128 Article II (2) – Investment[s[] of investors of [the] other Contracting Party shall at all times be
accorded fair and equitable treatment and enjoy full protection and security in the territory of the
other Contracting Party. (Emphasis and underscoring supplied.)
129 Article III (1) – Each Contracting Party shall accord to investments made by investors of the
other Contracting Party fair and equitable treatment. (Emphasis and underscoring supplied.)
130 Article 3(1) – Each Contracting Party shall guarantee fair and equitable treatment to
investments made by investors of the other Contracting Party in its territory. Emphasis and
underscoring supplied.)
131 Article 3 – Either Contracting Party shall extend fair and equitable treatment in accordance
with the principles of International Law to investments made by nationals and companies of the
other Contracting Party in its territory and shall ensure that the exercise of the right thus
recognized shall not be hindered. Emphasis and underscoring supplied.)
132 Article 2 (1) – Each Contracting State shall promote as far as possible investments in its
territory by investors of the other Contracting Party and admit such investments in accordance
with its Constitution, laws and regulations as referred to in Article 1 paragraph 1. Such
investments shall be accorded fair and equitable treatment. (Emphasis and underscoring
supplied.)
133 Article IV (1) – Each Contracting Party shall accord fair and equitable treatment to
investments made by investors of the other Contracting Party in its territory. (Emphasis and
underscoring supplied)
134 Article II (2) – Investments of investors of either Contracting party shall at all times be
accorded fair and equitable treatment and shall enjoy adequate protection and security in the
territory of the other Contracting Party. (Emphasis and underscoring supplied)
135 Article 4(1) – Admitted investments of investors of one Contracting Party effected within the
territory of the other Contracting Party in accordance with the laws and regulations of the latter,
shall receive in the other Contracting Party full legal protection and fair treatment not less
favourable than that accorded to its own investor or investors of any third state which are in a
comparable situation.
136 Article I – Each Contracting Party shall promote as far as possible the investments in its
territory by investors of the other Contracting party admit such investments according to its laws
and regulations and accord such investments equitable and reasonable treatment. (Emphasis and
underscoring supplied)
137 Article IV (2) – Each Contracting Party shall ensure fair and equitable treatment within its
territory of the investments of the investors of the other Contracting Party… (Emphasis and
underscoring supplied)
138 Article I(1) – Each Contracting Party shall promote as far as possible investments in its
territory by nationals and companies of one Contracting Party and shall admit such investments in
accordance with its Constitution, laws and regulations. Such investments shall be accorded
equitable and reasonable treatment. ((Emphasis and underscoring supplied)
139 Article 3 (2) – Investments of nationals of either Contracting Party shall, in their entry,
operation, management, maintenance, use enjoyment or disposal, be accorded fair and equitable
treatment and shall enjoy full protection and security in the territory of the other Contracting party.
(Emphasis and underscoring supplied)
140 Article I – Each Contracting Party shall promote as far as possible investments in its territory
by investors of the other Contracting Party and shall admit such investments in accordance with its
Constitution, laws, and regulations. Such investments shall be accorded equitable and reasonable
treatment. (Emphasis supplied)
141 Article 2(1) – Each contracting party shall promote and encourage, as far as possible, within
its territory investments made by investors of the other Contracting Party and shall admit such
investments into its territory in accordance with its laws and regulations. It shall in any case accord
such investments fair and equitable treatment. (Emphasis and underscoring supplied)
142 Article 2(3) – Each Contracting Party undertakes to provide in its territory a fair and equitable
treatment for investments of investors of the other Contracting Party. Neither Contracting Party
shall in any way impair by arbitrary, unreasonable or discriminatory measures the management,
maintenance or use of investments as well as the right to the disposal thereof. (Emphasis and
underscoring supplied)
143 Article III (1) – Each Contracting Party shall ensure in its territory fair and equitable treatment
of the investments made by the investor of the other Contracting Party and any activities in
connection with such investments exclude the use of discriminatory measures that might hinder
management and administration of investments. (Emphasis and underscoring supplied)
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144 Article @(1) – Each Contracting Party shall in its territory promote as far as possible
investments by investors of the other Contracting Party and admit such investments in accordance
with its legislation. It shall in any case accord such investments free and equitable treatment.
(Emphasis supplied)
145 Article II – Each party shall promote, as far as possible, investments in its territory by
investors of the other Party and shall admit such investments in accordance with its existing laws
and regulation. Such investments shall be accorded equitable and fair treatment.(Emphasis and
underscoring supplied)
146 Article III (1) – Each Contracting Party shall at all times ensure fair and equitable treatment of
the investments by investors of the other contracting party and shall not impair the management,
maintenance, use, enjoyment or disposal thereof nor the acquisition of goods and services or the
sale of their production, through unreasonable or discriminatory measures. (Emphasis and
underscoring supplied)
147 Article IV (1) – Investments and returns of investors of each Contracting Party shall at all
times be accorded fair and equitable treatment and shall enjoy full protection and security in the
territory of the other Contracting Party. (Emphasis and underscoring supplied)
148 Article III (2) – Investments of national or companies of one Contracting Party in the territory
of the other Contracting Party, and also the returns therefrom, shall at all times be accorded fair
and equitable treatment and shall enjoy the constant protection and security in the territory of the
host country. (Emphasis and underscoring supplied)
149 Article II (1) – Each Contracting Party shall promote as far as possible investments in its
territory of one Contracting Party and shall admit, on a basis no less favourable than that accorded
in similar situations to investments of any third country, in accordance with its Constitution, laws
and regulations. Such investments shall be accorded equitable and reasonable treatment.
(Emphasis and underscoring supplied)
150 Article III (2) – Investments of nationals or companies of either Contracting Party shall at all
times be accorded fair and equitable treatment and shall enjoy full protection and security in the
territory of the other contracting party. (Emphasis and underscoring supplied)
151 Article II (2) – Investments of investors of each Contracting Party shall at all times be
accorded fair and equitable treatment and shall enjoy adequate protection and security in the
territory of the other Contracting Party. (Emphasis and underscoring supplied)
152 Kenneth J. Vandevelde, A Unified Theory of Fair and Equitable Treatment, 43 N.Y.U. J. Int'l L.
& Pol. 43.
153 ICSID Case No. ARB AF/00/2, Award of May 29, 2003.
154 Annex 6 Referred to in Chapter 7 of the JPEPA: Schedule of Specific Commitments and List
of Most-Favored-Nation Treatment Exemptions. Last accessed at
http://www.mofa.go.jp/region/asiapaci/philippine/epa0609/annex6.pdf on August 30, 20112.
155 Annex 1/SC1, ASEAN-China Agreement on Trade in Services. Last accessed at
http://www.asean.org/22160.htm on August 30, 2012.
156 London Court of International Arbitration Administered Case No. UN 3467, July 1, 2004. Last
accessed at http://arbitrationlaw.com/files/free_pdfs/Occidental%20v%20Ecuador%20-
%20Award.pdf on August 30, 2012.
157 Article 4, Civil Code of the Philippines.
158 Article 8, Civil Code of the Philippines.
159 23 Phil. 315 (1912).
160 G.R. No. 100776, October 28, 1993, 227 SCRA 444, 448-455; Monge, et al. v. Angeles, et al.,
101 Phil. 563 (1957); among others.
161 Decision, G.R. No. 176579, June 28, 2011.
162 Resolution, p. 47.
163 350 Phil. 906 (1998).
164 242 Phil. 848 (1988).
165 Resolution, p. 47.
166 Id.
167 Sec. 38, Corporation Code. Power to increase or decrease capital stock; incur, create or
increase bonded indebtedness. - No corporation shall increase or decrease its capital stock or
incur, create or increase any bonded indebtedness unless approved by a majority vote of the
board of directors and, at a stockholder's meeting duly called for the purpose, two-thirds (2/3) of
the outstanding capital stock shall favor the increase or diminution of the capital stock, or the
incurring, creating or increasing of any bonded indebtedness. Written notice of the proposed
increase or diminution of the capital stock or of the incurring, creating, or increasing of any bonded
indebtedness and of the time and place of the stockholder's meeting at which the proposed
increase or diminution of the capital stock or the incurring or increasing of any bonded
indebtedness is to be considered, must be addressed to each stockholder at his place of
residence as shown on the books of the corporation and deposited to the addressee in the post
office with postage prepaid, or served personally.
xxxx
Any increase or decrease in the capital stock or the incurring, creating or increasing of any bonded
indebtedness shall require prior approval of the Securities and Exchange Commission.
One of the duplicate certificates shall be kept on file in the office of the corporation and the other
shall be filed with the Securities and Exchange Commission and attached to the original articles of
incorporation.
From and after approval by the Securities and Exchange Commission and the issuance by the
Commission of its certificate of filing, the capital stock shall stand increased or decreased and the
incurring, creating or increasing of any bonded indebtedness authorized, as the certificate of filing
may declare: Provided, That the Securities and Exchange Commission shall not accept for filing
any certificate of increase of capital stock unless accompanied by the sworn statement of the
treasurer of the corporation lawfully holding office at the time of the filing of the certificate, showing
that at least twenty-five (25%) percent of such increased capital stock has been subscribed and
that at least twenty-five (25%) percent of the amount subscribed has been paid either in actual
cash to the corporation or that there has been transferred to the corporation property the valuation
of which is equal to twenty-five (25%) percent of the subscription: Provided, further, That no
decrease of the capital stock shall be approved by the Commission if its effect shall prejudice the
rights of corporate creditors. (Emphasis supplied.)
168 Sec. 41, Corporation Code. Power to acquire own shares. - A stock corporation shall have the
power to purchase or acquire its own shares for a legitimate corporate purpose or purposes,
including but not limited to the following cases: Provided, That the corporation has unrestricted
retained earnings in its books to cover the shares to be purchased or acquired:
1. To eliminate fractional shares arising out of stock dividends;
2. To collect or compromise an indebtedness to the corporation, arising out of unpaid subscription,
in a delinquency sale, and to purchase delinquent shares sold during said sale; and
3. To pay dissenting or withdrawing stockholders entitled to payment for their shares under the
provisions of this Code.
169 Resolution, p. 47.
The Lawphil Project - Arellano Law Foundation
DISSENTING OPINION
ABAD, J.:
In the Decision dated June 28, 2011, the Court partially granted the petition for prohibition,
injunction, declaratory relieC and declaration of nullity of sale, of Wilson P. Gamboa, a Philippine
Long Distance Telephone Company (PLDT) stockholder, and ruled that the term "capital" in
Section 11, Article XII of the 1987 Constitution refers only to shares of stock entitled to vote in the
election of directors, and thus only to common shares, and not to the total outstanding capital
stock (common and non-voting preferred shares). The Court also directed the Chairperson of the
Securities and Exchange Commission (SEC) to apply this definition of the term "capital" in
determining the extent of allowable hm~ign ownership in PLDT, and to impose the appropriate
sanctions if there is a violation of Section 11, Article XII ofthe 1987 Constitution.
Respondents Manuel V. Pangilinan, Napoleon L. Nazareno, Francis Lim, Pablito V. Sanidad, Arno
V. Sanidad, and the SEC filed their respective motions for reconsideration.
Thereafter, the Court conducted oral arguments to hear the parties on the following issues:
1. Whether the term ''capital" in Section ll, Article XII of the 1987 Constitution refers only to shares
of stock with the right to vote in the election of directors (common shares), or to all kinds of shares
of stock, including those with no right to vote in the election of directors;
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2. Assuming the term "capital" refers only to shares of stock with the right to vote in the election of
directors, whether this ruling of the Court should have retroactive effect to affect such shares of
stock owned by foreigners prior to this ruling;
3. Whether PLDT and its foreign stockholders are indispensable parties in the resolution of the
legal issue on the definition of the term "capital" in Section 11, Article XII of the 1987 Constitution;
and
3.1. If so, whether the Court has acquired jurisdiction over the persons of PLDT and its foreign
stockholders.
I am constrained to maintain my dissent to the majority opinion.
One. To reiterate, the authority to define and interpret the meaning of "capital" in Section 11,
Article XII of the 1987 Constitution belongs, not to the Court, but to Congress, as part of its policy
making powers. This matter is addressed to the sound discretion of the lawmaking department of
government since the power to authorize and control a public utility is admittedly a prerogative that
stems from Congress.1 It may very well in its wisdom define the limit of foreign ownership in public
utilities.
Section 11, Article XII of the 1987 Constitution which reads:
Section 11. No franchise, certificate, or any other form of authorization for the operation of a public
utility shall be granted except to citizens of the Philippines or to corporations or associations
organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by
such citizens; nor shall such franchise, certificate, or authorization be exclusive in character or for
a longer period than fifty years. Neither shall any such franchise or right be granted except under
the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the
common good so requires. The State shall encourage equity participation in public utilities by the
general public. The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be citizens of the Philippines.
is one of the constitutional provisions that are not self-executing and need sufficient details for a
meaningful implementation. While the provision states that no franchise for the operation of a
public utility shall be granted to a corporation organized under Philippine laws unless at least 60%
of its capital is owned by Filipino citizens, it does not provide for the meaning of the term "capital."
As Fr. Joaquin G. Bernas, S.J. explained, acting as Amicus Curiae, the result of the absence of a
clear definition of the term "capital," was to base the 60-40 proportion on the total outstanding
capital stock, that is, the combined total of both common and non-voting preferred shares. But
while this has become the popular and common understanding of the people, it is still incomplete.
He added that in the Foreign Investments Act of 1991 (FIA), Congress tried to clarify this
understanding by specifying what capital means for the purpose of determining corporate
citizenship, thus:
Sec. 3. Definitions. - As used in this Act:
a. The term "Philippine national" shall mean a citizen of the Philippines; of a domestic partnership
or association wholly owned by citizens of the Philippines; or a corporation organized under the
laws of the Philippines of which at least sixty percent (60%) of the capital stock outstanding and
entitled to vote is owned and held by citizens of the Philippines; or a corporation organized abroad
and registered as doing business in the Philippines under the Corporation Code of which one
hundred percent (100%) of the capital stock outstanding and entitled to vote is wholly owned by
Filipinos or a trustee of funds for pension or other employee retirement or separation benefits,
where the trustee is a Philippine national and at least sixty percent (60%) of the fund will accrue to
the benefit of Philippine nationals: Provided, That where a corporation and its non-Filipino
stockholders own stocks in a Securities and Exchange Commission (SEC) registered enterprise,
at least sixty percent (60%) of the capital stock outstanding and entitled to vote of each of both
corporations must be owned and held by citizens of the Philippines and at least sixty percent
(60%) of the members of the Board of Directors of each of both corporations must be citizens of
the Philippines, in order that the corporation, shall be considered a "Philippine national." (As
amended by Republic Act 8179)
Indeed, the majority opinion also resorted to the various investment Laws2 in construing the term
"capital." But while these laws admittedly govern foreign investments in the country, they do not
expressly or impliedly seek to supplant the ambiguity in the definition of the term "capital" nor do
they seek to modify foreign ownership limitation in public utilities. It is a rule that when the
operation of the statute is limited, the law should receive a restricted construction.3
More particularly, much discussion was made on the FIA since it was enacted after the 1987
Constitution took effect. Yet it does not seem to be a supplementary or enabling legislation which
accurately defines the term "capital."
For one, it specifically applies only to companies which intend to invest in certain areas of
investment. It does not apply to companies which intend to apply for a franchise, much less to
those which are already enjoying their franchise. It aims "to attract, promote or welcome
productive investments from foreign individuals, partnerships, corporations and government,
including their political subdivisions, in activities which significantly contribute to national
industrialization and socio-economic development."4 What the FIA provides are new rules for
investing in the country.
Moreover, with its adoption of the definition of the term "Philippine national," has the previous
understanding that the term "capital" referred to the total outstanding capital stock, as Fr. Bernas
explained, been supplanted or modified? While it is clear that the term "Philippine national" shall
mean a corporation organized under Philippine laws at least 60% of the capital stock outstanding
and entitled to vote is owned and held by Filipino citizens "as used in the FIA," it is not evident
whether Congress intended this definition to be used in all other cases where the term "capital"
presents itself as an issue.
Two. Granting that it is the Court, and not Congress, which must define the meaning of "capital," I
submit that it must be interpreted to encompass the entirety of a corporation’s outstanding capital
stock (both common and preferred shares, voting or non-voting).
First, the term "capital" is also used in the fourth sentence of Section 11, Article XII, as follows:
Section 11. xxx The participation of foreign investors in the governing body of any public utility
enterprise shall be limited to their proportionate share in its capital, and all the executive and
managing officers of such corporation or association must be citizens of the Philippines.
If the term "capital" as used in the first sentence is interpreted as pertaining only to shares of stock
with the right to vote in the election of directors, then such sentence will already prescribe the limit
of foreign participation in the election of the board of directors. On the basis of the first sentence
alone, the capacity of foreign stockholders to elect the directors will already be limited by their
ownership of 40% of the voting shares. This will then render the fourth sentence meaningless and
will run counter to the principle that the provisions of the Constitution should be read in
consonance with its other related provisions.
Second, Dr. Bernardo M. Villegas, also an Amicus Curiae, who was the Chairman of the
Committee on the National Economy that drafted Article XII of the 1987 Constitution, emphasized
that by employing the term "capital," the 1987 Constitution itself did not distinguish among classes
of shares.
During their Committee meetings, Dr. Villegas explained that in both economic and business
terms, the term "capital" found in the balance sheet of any corporation always meant the entire
capital stock, both common and preferred. He added that even the non-voting shares in a
corporation have a great influence in its major decisions such as: (1) the amendment of the
articles of incorporation; (2) the adoption and amendment of by-laws; (3) the sale, lease,
exchange, mortgage, pledge or other disposition of all or substantially all of the corporate property;
(4) incurring, creating or increasing bonded indebtedness; (5) the increase or decrease of capital
stock; (6) the merger or consolidation of the corporation with another corporation or other
corporations; (7) the investment of corporate funds in another corporation or business in
accordance with this Code; and (8) the dissolution of the corporation.
Thus, the Committee decisively rejected in the end the proposal of the UP Law Center to define
the term "capital" as voting stock or controlling interest. To quote Dr. Villegas, "in the minds of the
Commissioners the word ‘capital’ in Section 11 of Article XII refers, not to voting stock, but to total
subscribed capital, both common and preferred."
Finally, Dr. Villegas observed that our existing policy on foreign ownership in public utilities already
discourages, as it is, foreign investments to come in. To impose additional restrictions, such as the
restrictive interpretation of the term "capital," will only aggravate our already slow economic growth
and incapacity to compete with our East Asian neighbours.
The Court can simply adopt the interpretations given by Fr. Bernas and Dr. Villegas since they
were both part of the Constitutional Commission that drafted the 1987 Constitution. No one is in a
better position to determine the intent of the framers of the questioned provision than they are.
Furthermore, their interpretations also coincide with the long-standing practice to base the 60-40
proportion on the total outstanding capital stock, that is, both common and preferred shares.
288
For sure, both common and preferred shares have always been considered part of the
corporation’s capital stock. Its shareholders are no different from ordinary investors who take on
the same investment risks. They participate in the same venture, willing to share in the profits and
losses of the enterprise. Under the doctrine of equality of shares – all stocks issued by the
corporation are presumed equal with the same privileges and liabilities, provided that the Articles
of Incorporation is silent on such differences.5
As a final note, the Filipinization of public utilities under the 1987 Constitution is a recognition of
the very strategic position of public utilities both in the national economy and for national security.6
The participation of foreign capital is enjoined since the establishment and operation of public
utilities may require the investment of substantial capital which Filipino citizens may not afford. But
at the same time, foreign involvement is limited to prevent them from assuming control of public
utilities which may be inimical to national interest.7 Section 11, Article XII of the 1987 Constitution
already provides three limitations on foreign participation in public utilities. The Court need not add
more by further restricting the meaning of the term ''capital" when none was intended by the
flamers of the 1987 Constitution.
Based on these considerations, I vote to GRANT the motions for reconsideration.
ROBERTO A. ABAD
Associate Justice

Footnotes
1 Francisco, Jr. v. Toll Regulatory Board, G.R. No. 166910, October 19, 2010, 633 SCRA 470,
499.
2 These laws include the Investment Incentives Act of 1967, the Foreign Business Regulations Act
of 1968, the Omnibus Investments Code of 1981, the Omnibus Investments Code of 1987, and
the Foreign Investments Act of 1991.
3 Lokin, Jr. v. Commission on Elections, G.R. Nos. 179431-32 & 180443, June 22, 2010, 621
SCRA 385, 410.
4 Section 2, Foreign Investments Act of 1991.
5 Commissioner of Internal Revenue v. Court of Appeals, G.R. No. 108576, January 20, 1999,
301 SCRA 152, 187.
6 BERNAS, JOAQUIN G., FOREIGN RELATIONS IN CONSTITUTIONAL LAW, 1995 Ed., p. 87
citing Smith, Bell and Co. v. Natividad, 40 Phil 136, 148 ( 1919); Luzon Stevedoring Corponaion v
Anti-Dummy Board, 46 SCRA 474, 490 ( 1972); DE LEON, HECTORS., PHILIPPINE
CONSTITUTIONAL LAW (Principles and Cases), 2004 Ed., Vol. 2, p. 940.
7 DE LEON, HECTOR S., PHILIPPINE CONSTITUTIONAL LAW (Principles and Cas~s), 200:1
ic:J , Vol. 2, p. 946.

289