Dante Liban, et al. v. Richard Gordon, G.R. No.

175352, January
18, 2011
RESOLUTION

LEONARDO-DE CASTRO, J.:

I. THE FACTS

Petitioners Liban, et al., who were officers of the Board of Directors of the Quezon City Red
Cross Chapter, filed with the Supreme Court what they styled as “Petition to Declare Richard J. Gordon
as Having Forfeited His Seat in the Senate” against respondent Gordon, who was elected Chairman
of the Philippine National Red Cross (PNRC) Board of Governors during his incumbency as Senator.

Petitioners alleged that by accepting the chairmanship of the PNRC Board of Governors,
respondent Gordon ceased to be a member of the Senate pursuant to Sec. 13, Article VI of the
Constitution, which provides that “[n]o Senator . . . may 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, during his term without forfeiting his seat.” Petitioners
cited the case of Camporedondo vs. NLRC, G.R. No. 129049, decided August 6, 1999, which held
that the PNRC is a GOCC, in supporting their argument that respondent Gordon automatically forfeited
his seat in the Senate when he accepted and held the position of Chairman of the PNRC Board of
Governors.

Formerly, in its Decision dated July 15, 2009, the Court, voting 7-5,[1] held that the office of
the PNRC Chairman is NOT a government office or an office in a GOCC for purposes of the prohibition
in Sec. 13, Article VI of the 1987 Constitution. The PNRC Chairman is elected by the PNRC Board of
Governors; he is not appointed by the President or by any subordinate government official. Moreover,
the PNRC is NOT a GOCC because it is a privately-owned, privately-funded, and privately-run
charitable organization and because it is controlled by a Board of Governors four-fifths of which are
private sector individuals. Therefore, respondent Gordon did not forfeit his legislative seat when he
was elected as PNRC Chairman during his incumbency as Senator.

The Court however held further that the PNRC Charter, R.A. 95, as amended by PD 1264 and
1643, is void insofar as it creates the PNRC as a private corporation since Section 7, Article XIV of the
1935 Constitution states that “[t]he Congress shall not, except by general law, provide for the
formation, organization, or regulation of private corporations, unless such corporations are owned or
controlled by the Government or any subdivision or instrumentality thereof.” The Court thus directed
the PNRC to incorporate under the Corporation Code and register with the Securities and Exchange
Commission if it wants to be a private corporation. The fallo of the Decision read:

WHEREFORE, we declare that the office of the Chairman of the Philippine National Red Cross is
not a government office or an office in a government-owned or controlled corporation for purposes of the
prohibition in Section 13, Article VI of the 1987 Constitution. We also declare that Sections 1, 2, 3, 4(a), 5,
6, 7, 8, 9, 10, 11, 12, and 13 of the Charter of the Philippine National Red Cross, or Republic Act No. 95,
as amended by Presidential Decree Nos. 1264 and 1643, are VOID because they create the PNRC as a
private corporation or grant it corporate powers.

Respondent Gordon filed a Motion for Clarification and/or for Reconsideration of

the Decision. The PNRC likewise moved to intervene and filed its own Motion for Partial
Reconsideration. They basically questioned the second part of the Decision with regard to the
pronouncement on the nature of the PNRC and the constitutionality of some provisions of the
PNRC Charter.

II. THE ISSUE

Was it correct for the Court to have passed upon and decided on the issue of the
constitutionality of the PNRC charter? Corollarily: What is the nature of the PNRC?

III. THE RULING

[The Court GRANTED reconsideration and MODIFIED the dispositive portion of the Decision
by deleting the second sentence thereof.]

NO, it was not correct for the Court to have decided on the constitutional issue because
it was not the very lis mota of the case. The PNRC is sui generis in nature; it is neither strictly
a GOCC nor a private corporation.

The issue of constitutionality of R.A. No. 95 was not raised by the parties, and was not among
the issues defined in the body of the Decision; thus, it was not the very lis mota of the case. We have
reiterated the rule as to when the Court will consider the issue of constitutionality in Alvarez v. PICOP
Resources, Inc., thus:

This Court will not touch the issue of unconstitutionality unless it is the very lis mota. 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 such question will be unavoidable.

[T]his Court should not have declared void certain sections of . . . the PNRC
Charter. Instead, the Court should have exercised judicial restraint on this matter, especially since
there was some other ground upon which the Court could have based its judgment. Furthermore, the
PNRC, the entity most adversely affected by this declaration of unconstitutionality, which was not even
originally a party to this case, was being compelled, as a consequence of the Decision, to suddenly
reorganize and incorporate under the Corporation Code, after more than sixty (60) years of
existence in this country.

Since its enactment, the PNRC Charter was amended several times, particularly on June 11,
1953, August 16, 1971, December 15, 1977, and October 1, 1979, by virtue of R.A. No. 855, R.A. No.
6373, P.D. No. 1264, and P.D. No. 1643, respectively. The passage of several laws relating to the
PNRC’s corporate existence notwithstanding the effectivity of the constitutional proscription on the
creation of private corporations by law is a recognition that the PNRC is not strictly in the nature of a
private corporation contemplated by the aforesaid constitutional ban.

A closer look at the nature of the PNRC would show that there is none like it[,] not just in terms
of structure, but also in terms of history, public service and official status accorded to it by the State
and the international community. There is merit in PNRC’s contention that its structure is sui
generis. It is in recognition of this sui generis character of the PNRC that R.A. No. 95 has remained
valid and effective from the time of its enactment in March 22, 1947 under the 1935 Constitution and
during the effectivity of the 1973 Constitution and the 1987 Constitution. The PNRC Charter and its
amendatory laws have not been questioned or challenged on constitutional grounds, not even in this
case before the Court now.

[T]his Court [must] recognize the country’s adherence to the Geneva Convention and respect
the unique status of the PNRC in consonance with its treaty obligations. The Geneva Convention has
the force and effect of law. Under the Constitution, the Philippines adopts the generally accepted
principles of international law as part of the law of the land. This constitutional provision must be
reconciled and harmonized with Article XII, Section 16 of the Constitution, instead of using the latter
to negate the former. By requiring the PNRC to organize under the Corporation Code just like any
other private corporation, the Decision of July 15, 2009 lost sight of the PNRC’s special status under
international humanitarian law and as an auxiliary of the State, designated to assist it in discharging
its obligations under the Geneva Conventions.

The PNRC, as a National Society of the International Red Cross and Red Crescent Movement,
can neither “be classified as an instrumentality of the State, so as not to lose its character of neutrality”
as well as its independence, nor strictly as a private corporation since it is regulated by international
humanitarian law and is treated as an auxiliary of the State.

Although [the PNRC] is neither a subdivision, agency, or instrumentality of the government,

nor a GOCC or a subsidiary thereof . . . so much so that respondent, under the Decision, was correctly
allowed to hold his position as Chairman thereof concurrently while he served as a Senator, such a
conclusion does not ipso facto imply that the PNRC is a “private corporation” within the contemplation
of the provision of the Constitution, that must be organized under the Corporation Code. [T]he sui
generis character of PNRC requires us to approach controversies involving the PNRC on a case-to-
case basis.

In sum, the PNRC enjoys a special status as an important ally and auxiliary of the government
in the humanitarian field in accordance with its commitments under international law. This Court
cannot all of a sudden refuse to recognize its existence, especially since the issue of the
constitutionality of the PNRC Charter was never raised by the parties. It bears emphasizing that the
PNRC has responded to almost all national disasters since 1947, and is widely known to provide a
substantial portion of the country’s blood requirements. Its humanitarian work is unparalleled. The
Court should not shake its existence to the core in an untimely and drastic manner that would not only
have negative consequences to those who depend on it in times of disaster and armed hostilities but
also have adverse effects on the image of the Philippines in the international community. The sections
of the PNRC Charter that were declared void must therefore stay.

[Thus, R.A. No. 95 remains valid and constitutional in its entirety. The Court MODIFIED the
dispositive portion of the Decision by deleting the second sentence, to now read as follows:

WHEREFORE, we declare that the office of the Chairman of the Philippine National Red Cross is
not a government office or an office in a government-owned or controlled corporation for purposes of the
prohibition in Section 13, Article VI of the 1987 Constitution.]
CASE DIGEST: BOY SCOUTS OF THE PHILIPPINES v. COMMISSION ON AUDIT. G.R.
No.177131; June 7, 2011.

FACTS: This case arose when the COA issued Resolution No. 99-011on August 19, 1999 ("the COA
Resolution"), with the subject "Defining the Commissions policy with respect to the audit of the Boy Scouts of
the Philippines." In its whereas clauses, the COA Resolution stated that the BSP was created as a public
corporation under Commonwealth Act No. 111, as amended by Presidential Decree No. 460 and Republic Act
No. 7278; that in Boy Scouts of the Philippines v. National Labor Relations Commission, the Supreme Court
ruled that the BSP, as constituted under its charter, was a "government-controlled corporation within the
meaning of Article IX(B)(2)(1) of the Constitution"; and that "the BSP is appropriately regarded as a
government instrumentality under the 1987 Administrative Code." The COA Resolution also cited its
constitutional mandate under Section 2(1), Article IX (D).Finally, the COA Resolution reads:

NOW THEREFORE, in consideration of the foregoing premises, the COMMISSION PROPER HAS
RESOLVED, AS IT DOES HEREBY RESOLVE,to conduct an annual financial audit of the Boy Scouts of the
Philippines in accordance with generally accepted auditing standards, and express an opinion on whether the
financial statements which include the Balance Sheet, the Income Statement and the Statement of Cash Flows
present fairly its financial position and results of operations.

xxxx

BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision,the Boy Scouts of the
Philippines shall be classified among the government corporations belonging to the Educational, Social,
Scientific, Civic and Research Sectorunder the Corporate Audit Office I, to be audited, similar to the
subsidiary corporations, by employing the team audit approach
ISSUE: Does COA have jurisdiction over BSP?

HELD: After looking at the legislative history of its amended charter and carefully studying the applicable
laws and the arguments of both parties, [the Supreme Court found] that the BSP is a public corporation and its
funds are subject to the COA's audit jurisdiction.

The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936), entitled "An Act to Create a
Public Corporation to be Known as the Boy Scouts of the Philippines, and to Define its Powers and Purposes"
created the BSP as a "public corporation"

There are three classes of juridical persons under Article 44 of the Civil Code and the BSP, as presently
constituted under Republic Act No. 7278,falls under the second classification.Article 44 reads:

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2)Other corporations,institutions and entities for public interest or purpose created by law; their personality
begins as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations forprivate interest or purposeto which the law grants a juridical
personality, separate and distinct from that of each shareholder, partner or member.

The BSP, which is a corporation created for a public interest or purpose, is subject to the law creating it under
Article 45 of the Civil Code, which provides:

Art. 45.Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed by the laws creating
or recognizing them.

Private corporations are regulated by laws of general application on the subject.

Partnerships and associations for private interest or purpose are governed by the provisions of this Code
concerning partnerships.

The purpose of the BSP as stated in its amended charter shows that it was created in order to implement a State
policy declared in Article II, Section 13 of the Constitution, which reads:

Section 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. It shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in public and civic affairs.

Evidently, the BSP, which was created by a special law to serve a public purpose in pursuit of a constitutional
mandate, comes within the class of "public corporations" defined by paragraph 2, Article 44 of the Civil Code
and governed by the law which creates it, pursuant to Article 45 of the same Code. DENIED.
PSPCA VS. COA DIGEST
DECEMBER 21, 2016 ~ VBDIAZ

PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS vs. COA.

G.R. No. 169752 September 25, 2007

FACTS:

The petitioner was incorporated as a juridical entity over one hundred years ago by virtue of Act No.
1285, enacted on January 19, 1905, by the Philippine Commission. The petitioner, at the time it was
created, was composed of animal aficionados and animal propagandists. The objects of the
petitioner, as stated in Section 2 of its charter, shall be to enforce laws relating to cruelty inflicted
upon animals or the protection of animals in the Philippine Islands, and generally, to do and perform
all things which may tend in any way to alleviate the suffering of animals and promote their
welfare.
At the time of the enactment of Act No. 1285, the original Corporation Law, Act No. 1459, was not
yet in existence. Act No. 1285 antedated both the Corporation Law and the constitution of the SEC.
For the purpose of enhancing its powers in promoting animal welfare and enforcing laws for the
protection of animals, the petitioner was initially imbued under its charter with the power to
apprehend violators of animal welfare laws. In addition, the petitioner was to share 1/2 of the fines
imposed and collected through its efforts for violations of the laws related thereto.
Subsequently, however, the power to make arrests as well as the privilege to retain a portion of the
fines collected for violation of animal-related laws were recalled by virtue of C.A. No. 148. Whereas,
the cruel treatment of animals is now an offense against the State, penalized under our statutes, which
the Government is duty bound to enforce;
When the COA was to perform an audit on them they refuse to do so, by the reason that they are a
private entity and not under the said commission. It argued that COA covers only government
entities. On the other hand the COA decided that it is a government entity.
ISSUE: WON the said petitioner is a private entity.

RULING:

YES. First, the Court agrees with the petitioner that the “charter test” cannot be applied. Essentially,
the “charter test” provides that the test to determine whether a corporation is government owned or
controlled, or private in nature is simple. Is it created by its own charter for the exercise of a public
function, or by incorporation under the general corporation law? Those with special charters are
government corporations subject to its provisions, and its employees are under the jurisdiction of the
CSC, and are compulsory members of the GSIS.
And since the “charter test” had been introduced by the 1935 Constitution and not earlier, it follows
that the test cannot apply to the petitioner, which was incorporated by virtue of Act No. 1285,
enacted on January 19, 1905. Settled is the rule that laws in general have no retroactive effect, unless
the contrary is provided. All statutes are to be construed as having only a prospective operation,
unless the purpose and intention of the legislature to give them a retrospective effect is expressly
declared or is necessarily implied from the language used. In case of doubt, the doubt must be
resolved against the retrospective effect.
 Second, a reading of petitioner’s charter shows that it is not subject to control or supervision by
any agency of the State, unlike GOCCs. No government representative sits on the board of trustees
of the petitioner. Like all private corporations, the successors of its members are determined
voluntarily and solely by the petitioner in accordance with its by-laws, and may exercise those
powers generally accorded to private corporations, such as the powers to hold property, to sue and be
sued, to use a common seal, and so forth. It may adopt by-laws for its internal operations: the
petitioner shall be managed or operated by its officers “in accordance with its by-laws in force.”
Third. The employees of the petitioner are registered and covered by the SSS at the latter’s
initiative, and not through the GSIS, which should be the case if the employees are considered
government employees. This is another indication of petitioner’s nature as a private entity.
Fourth. The respondents contend that the petitioner is a “body politic” because its primary
purpose is to secure the protection and welfare of animals which, in turn, redounds to the public
good. This argument, is not tenable. The fact that a certain juridical entity is impressed with public
interest does not, by that circumstance alone, make the entity a public corporation, inasmuch as a
corporation may be private although its charter contains provisions of a public character,
incorporated solely for the public good. This class of corporations may be considered quasi-public
corporations, which are private corporations that render public service, supply public wants, or
pursue other eleemosynary objectives. While purposely organized for the gain or benefit of its
members, they are required by law to discharge functions for the public benefit. Examples of these
corporations are utility, railroad, warehouse, telegraph, telephone, water supply corporations and
transportation companies. It must be stressed that a quasi-public corporation is a species of private
corporations, but the qualifying factor is the type of service the former renders to the public: if it
performs a public service, then it becomes a quasi-public corporation.
Authorities are of the view that the purpose alone of the corporation cannot be taken as a safe guide,
for the fact is that almost all corporations are nowadays created to promote the interest, good, or
convenience of the public. A bank, for example, is a private corporation; yet, it is created for a
public benefit. Private schools and universities are likewise private corporations; and yet, they are
rendering public service. Private hospitals and wards are charged with heavy social
responsibilities. More so with all common carriers. On the other hand, there may exist a public
corporation even if it is endowed with gifts or donations from private individuals.
The true criterion, therefore, to determine whether a corporation is public or private is found in the
totality of the relation of the corporation to the State. If the corporation is created by the State as the
latter’s own agency or instrumentality to help it in carrying out its governmental functions, then that
corporation is considered public; otherwise, it is private. Applying the above test, provinces,
chartered cities, and barangays can best exemplify public corporations. They are created by the State
as its own device and agency for the accomplishment of parts of its own public works.
Fifth. The respondents argue that since the charter of the petitioner requires the latter to render
periodic reports to the Civil Governor, whose functions have been inherited by the President, the
petitioner is, therefore, a government instrumentality.
This contention is inconclusive. By virtue of the fiction that all corporations owe their very
existence and powers to the State, the reportorial requirement is applicable to all corporations of
whatever nature, whether they are public, quasi-public, or private corporations—as creatures of the
State, there is a reserved right in the legislature to investigate the activities of a corporation to
determine whether it acted within its powers. In other words, the reportorial requirement is the
principal means by which the State may see to it that its creature acted according to the powers and
functions conferred upon it.
 THE PROVINCE OF NORTH COTABATO, et al . v . THE GOVERNMENT OF
THE REPUBLIC OF THE PHILIPPINES, et al .

President Gloria Macapagal-Arroyo, in line with the government‘s policy of pursuing

peace negotiations with the Moro Islamic Liberation Front (MILF), asked Prime Minister
Mahathir Mohammad to convince the MILF to continue negotiating with the government.
MILF, thereafter, convened its Central Committee and decided to meet with the
Government of the Republic of the Philippines (GRP). Formal peace talks were held in
Libya which resulted to the crafting of the GRP-MILF Tripoli Agreement on Peace (Tripoli
Agreement 2001) which consists of three (3) aspects: a.) security aspect; b.)
rehabilitation aspect; and c.) ancestral domain aspect. Various negotiations were held
which led to the finalization of the Memorandum of Agreement on the Ancestral Domain
(MOA-AD). The said memorandum was set to be signed last August 5, 2008. In its body,
it grants ―the authority and jurisdiction over the Ancestral Domain and Ancestral Lands
of the Bangsamoro to the Bangsamoro Juridical Entity (BJE). The latter, in addition, has
the freedom to enter into any economic cooperation and trade relation with foreign
countries. ―The sharing between the Central Government and the BJE of total
production pertaining to natural resources is to be 75:25 in favor of the BJE. The MOA-
AD further provides for the extent of the territory of the Bangsamoro. It describes it as
―the land mass as well as the maritime, terrestrial, fluvial and alluvial domains, including
the aerial domain and the atmospheric space above it, embracing the Mindanao-Sulu-
Palawan geographic region. With regard to governance, on the other hand, a shared
responsibility and authority between the Central Government and BJE was provided. The
relationship was described as ―associative. With the formulation of the MOA-AD,
petitioners aver that the negotiation and finalization of the MOA-AD violates
constitutional and statutory provisions on public consultation, as mandated by Executive
Order No. 3, and right to information. They further contend that it violates the
Constitution and laws. Hence, the filing of the petition.

ISSUES:

1) Whether or not the MOA-AD violates constitutional and statutory provisions on public
consultation and right to information 2) Whether or not the MOA-AD violates the
Constitution and the laws.

HELD:

The MOA-AD subject of the present cases is of public concern, involving as it does the
sovereignty and territorial integrity of the State, which directly affects the lives of the
public at large. Intended as a ―splendid symmetry to the right to information under the
Bill of Rights is the policy of public disclosure under Section 28, Article II of the
Constitution which provides that 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. Moreover, the policy of full public disclosure enunciated in
above-quoted Section 28 complements the right of access to information on matters of
public concern found in the Bill of Rights. The right to information guarantees the right
of the people to demand information, while Section 28 recognizes the duty of officialdom
to give information even if nobody demands. The policy of public disclosure establishes a
concrete ethical principle for the conduct of public affairs in a genuinely open democracy,
with the people‘s right to know as the centerpiece. It is a mandate of the State to be
accountable by following such policy. These provisions are vital to the exercise of the
freedom of expression and essential to hold public officials at all times accountable to the
people. Indubitably, the effectivity of the policy of public disclosure need not await the
passing of a statute. As Congress cannot revoke this principle, it is merely directed to
provide for ―reasonable safeguards.‖ The complete and effective exercise of the right to
information necessitates that its complementary provision on public disclosure derive the
same self-executory nature. Since both provisions go hand-in-hand, it is absurd to say
that the broader right to information on matters of public concern is already enforceable
while the correlative duty of the State to disclose its transactions involving public interest
is not enforceable until there is an enabling law. Respondents cannot thus point to the
absence of an implementing legislation as an excuse in not effecting such policy. An
essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State
that the channels for free political discussion be maintained to the end that the
government may perceive and be responsive to the people‘s will. Envisioned to be
corollary to the twin rights to information and disclosure is the design for feedback
mechanisms. The imperative of a public consultation, as a species of the right to
information, is evident in the ―marching orders‖ to respondents. The mechanics for the
duty to disclose information and to conduct public consultation regarding the peace
agenda and process is manifestly provided by E.O. No. 3. The preambulatory clause of
E.O. No. 3 declares that there is a need to further enhance the contribution of civil society
to the comprehensive peace process by institutionalizing the people‘s participation. One
of the three underlying principles of the comprehensive peace process is that it ―should
be community-based, reflecting the sentiments, values and principles important to all
Filipinos and ―shall be defined not by the government alone, nor by the different
contending groups only, but by all Filipinos as one community. Included as a component
of the comprehensive peace process is consensus-building and empowerment for peace,
which includes ―continuing consultations on both national and local levels to build
consensus for a peace agenda and process, and the mobilization and facilitation of
people‘s participation in the peace process.Clearly, E.O. No. 3 contemplates not just the
conduct of a plebiscite to effectuate “continuing” consultations, contrary to respondents’
position that plebiscite is “more than sufficient consultation.Further, E.O. No. 3
enumerates the functions and responsibilities of the PAPP, one of which is to ―conduct
regular dialogues with the National Peace Forum (NPF) and other peace partners to seek
relevant information, comments, recommendations as well as to render appropriate and
timely reports on the progress of the comprehensive peace process. E.O. No. 3 mandates
the establishment of the NPF to be ―the principal forum for the Presidential Adviser on
Peace Progress (PAPP) to consult with and seek advi[c]e from the peace advocates, peace
partners and concerned sectors of society on both national and local levels, on the
implementation of the comprehensive peace process, as well as for government[-]civil
society dialogue and consensus-building on peace agenda and initiatives. In fine, E.O. No.
3 establishes petitioners’ right to be consulted on the peace agenda, as a corollary to the
constitutional right to information and disclosure. In general, the objections against the
MOA-AD center on the extent of the powers conceded therein to the BJE. Petitioners
assert that the powers granted to the BJE exceed those granted to any local government
under present laws, and even go beyond those of the present ARMM. Before assessing
some of the specific powers that would have been vested in the BJE, however, it would be
useful to turn first to a general idea that serves as a unifying link to the different provisions
of the MOA-AD, namely, the international law concept of association. Significantly, the
MOA-AD explicitly alludes to this concept, indicating that the Parties actually framed its
provisions with it in mind. Association is referred to in paragraph 3 on TERRITORY,
paragraph 11 on RESOURCES, and paragraph 4 on GOVERNANCE. It is in the last
mentioned provision, however, that the MOA-AD most clearly uses it to describe the
envisioned relationship between the BJE and the Central Government.

4. The relationship between the Central Government and the Bangsamoro juridical entity
shall be associative characterized by shared authority and responsibility with a structure
of governance based on executive, legislative, judicial and administrative institutions with
defined powers and functions in the comprehensive compact. A period of transition shall
be established in a comprehensive peace compact specifying the relationship between the
Central Government and the BJE. The nature of the ―associative relationship may have
been intended to be defined more precisely in the still to be forged Comprehensive
Compact. Nonetheless, given that there is a concept of ―association in international law,
and the MOA-AD – by its inclusion of international law instruments in its TOR– placed
itself in an international legal context, that concept of association may be brought to bear
in understanding the use of the term ―associative in the MOA-AD. The MOA-AD contains
many provisions which are consistent with the international legal concept of association,
specifically the following: the BJE‘s capacity to enter into economic and trade relations
with foreign countries, the commitment of the Central Government to ensure the BJE‘s
participation in meetings and events in the ASEAN and the specialized UN agencies, and
the continuing responsibility of the Central Government over external defense. Moreover,
the BJE‘s right to participate in Philippine official missions bearing on negotiation of
border agreements, environmental protection, and sharing of revenues pertaining to the
bodies of water adjacent to or between the islands forming part of the ancestral domain,
resembles the right of the governments of FSM and the Marshall Islands to be consulted
by the U.S. government on any foreign affairs matter affecting them. These provisions of
the MOA indicate, among other things, that the Parties aimed to vest in the BJE the status
of an associated state or, at any rate, a status closely approximating it. The concept of
association is not recognized under the present Constitution. No province, city, or
municipality, not even the ARMM, is recognized under our laws as having an
―associative‖ relationship with the national government. Indeed, the concept implies
powers that go beyond anything ever granted by the Constitution to any local or regional
government. It also implies the recognition of the associated entity as a state. The
Constitution, however, does not contemplate any state in this jurisdiction other than the
Philippine State, much less does it provide for a transitory status that aims to prepare any
part of Philippine territory for independence.
Even the mere concept animating many of the MOA-AD‘s provisions, therefore, already
requires for its validity the amendment of constitutional provisions, specifically the
following provisions of Article X:
SECTION 1. The territorial and political subdivisions of the Republic of the Philippines
are the provinces, cities, municipalities, and barangays. There shall be autonomous
regions in Muslim Mindanao and the Cordilleras as hereinafter provided. SECTION 15.
There shall be created autonomous regions in Muslim Mindanao and in the Cordilleras
consisting of provinces, cities, municipalities, and geographical areas sharing common
and distinctive historical and cultural heritage, economic and social structures, and other
relevant characteristics within the framework of this Constitution and the national
sovereignty as well as territorial integrity of the Republic of the Philippines.
It is not merely an expanded version of the ARMM, the status of its relationship with the
national government being fundamentally different from that of the ARMM. Indeed, BJE
is a state in all but name as it meets the criteria of a state laid down in the Montevideo
Convention, namely, a permanent population, a defined territory, a government, and a
capacity to enter into relations with other states.
The defining concept underlying the relationship between the national government and
the BJE being itself contrary to the present Constitution, it is not surprising that many of
the specific provisions of the M OA-AD on the formation and powers of the BJE are in
conflict with the Constitution and the laws. Article X, Section 18 of the Constitution
provides that ―[t]he creation of the autonomous region shall be effective when approved
by a majority of the votes cast by the constituent units in a plebiscite called for the
purpose, provided that only provinces, cities, and geographic areas voting favorably in
such plebiscite shall be included in the autonomous region.
The BJE is more of a state than an autonomous region. But even assuming that it is
covered by the term ―autonomous region in the constitutional provision just quoted, the
MOA-AD would still be in conflict with it. Under paragraph 2(c) on TERRITORY in
relation to 2(d) and 2(e), the present geographic area of the ARMM and, in addition, the
municipalities of Lanao del Norte which voted for inclusion in the ARMM during the 2001
plebiscite – Baloi, Munai, Nunungan, Pantar, Tagoloan and Tangkal – are automatically
part of the BJE without need of another plebiscite, in contrast to the areas under
Categories A and B mentioned earlier in the overview. That the present components of
the ARMM and the above-mentioned municipalities voted for inclusion therein in 2001,
however, does not render another plebiscite unnecessary under the Constitution,
precisely because what these areas voted for then was their inclusion in the ARMM, not
the BJE.
Article II, Section 22 of the Constitution must also be amended if the scheme envisioned
in the MOA-AD is to be effected. That constitutional provision states: ―The State
recognizes and promotes the rights of indigenous cultural communities within the
framework of national unity and development. An associative arrangement does not
uphold national unity. While there may be a semblance of unity because of the associative
ties between the BJE and the national government, the act of placing a portion of
Philippine territory in a status which, in international practice, has generally been a
preparation for independence, is certainly not conducive to national unity.
The MOA-AD cannot be reconciled with the present Constitution and laws. Not only its
specific provisions but the very concept underlying them, namely, the associative
relationship envisioned between the GRP and the BJE, are unconstitutional, for the
concept presupposes that the associated entity is a state and implies that the same is on
its way to independence.
While there is a clause in the MOA-AD stating that the provisions thereof inconsistent
with the present legal framework will not be effective until that framework is amended,
the same does not cure its defect. The inclusion of provisions in the MOA-AD establishing
an associative relationship between the BJE and the Central Government is, itself, a
violation of the Memorandum of Instructions from the President dated March 1, 2001,
addressed to the government peace panel. Moreover, as the clause is worded, it virtually
guarantees that the necessary amendments to the Constitution and the laws will
eventually be put in place. Neither the GRP Peace Panel nor the President herself is
authorized to make such a guarantee. Upholding such an act would amount to authorizing
a usurpation of the constituent powers vested only in Congress, a Constitutional
Convention, or the people themselves through the process of initiative, for the only way
that the Executive can ensure the outcome of the amendment process is through an undue
influence or interference with that process.
Limbona vs. Mangelin
GR No. 80391 28 February 1989

Facts: Petitioner, Sultan Alimbusar Limbona, was elected Speaker of the

Regional Legislative Assembly or Batasang Pampook of Central Mindanao
(Assembly). On October 21, 1987 Congressman Datu Guimid Matalam,
Chairman of the Committee on Muslim Affairs of the House of
Representatives, invited petitioner in his capacity as Speaker of the
Assembly of Region XII in a consultation/dialogue with local government
officials. Petitioner accepted the invitation and informed the Assembly
members through the Assembly Secretary that there shall be no session in
November as his presence was needed in the house committee hearing of
Congress. However, on November 2, 1987, the Assembly held a session in
defiance of the Limbona's advice, where he was unseated from his position.
Petitioner prays that the session's proceedings be declared null and void and
be it declared that he was still the Speaker of the Assembly. Pending further
proceedings of the case, the SC received a resolution from the Assembly
expressly expelling petitioner's membership therefrom. Respondents argue
that petitioner had "filed a case before the Supreme Court against some
members of the Assembly on a question which should have been resolved
within the confines of the Assembly," for which the respondents now submit
that the petition had become "moot and academic" because its resolution.

Issue: Whether or not the courts of law have jurisdiction over the
autonomous governments or regions. What is the extent of self-government
given to the autonomous governments of Region XII?

Held: Autonomy is either decentralization of administration or

decentralization of power. There is decentralization of administration when
the central government delegates administrative powers to political
subdivisions in order to broaden the base of government power and in the
process to make local governments "more responsive and accountable". At
the same time, it relieves the central government of the burden of managing
local affairs and enables it to concentrate on national concerns. The
President exercises "general supervision" over them, but only to "ensure
that local affairs are administered according to law." He has no control over
their acts in the sense that he can substitute their judgments with his own.
Decentralization of power, on the other hand, involves an abdication of
political power in the favor of local governments units declared to be
autonomous. In that case, the autonomous government is free to chart its
own destiny and shape its future with minimum intervention from central
authorities.

An autonomous government that enjoys autonomy of the latter category

[CONST. (1987), Art. X, Sec. 15.] is subject alone to the decree of the
organic act creating it and accepted principles on the effects and limits of
"autonomy." On the other hand, an autonomous government of the former
class is, as we noted, under the supervision of the national government
acting through the President (and the Department of Local Government). If
the Sangguniang Pampook (of Region XII), then, is autonomous in the latter
sense, its acts are, debatably beyond the domain of this Court in perhaps
the same way that the internal acts, say, of the Congress of the Philippines
are beyond our jurisdiction. But if it is autonomous in the former category
only, it comes unarguably under our jurisdiction. An examination of the very
Presidential Decree creating the autonomous governments of Mindanao
persuades us that they were never meant to exercise autonomy in the
second sense (decentralization of power). PD No. 1618, in the first place,
mandates that "[t]he President shall have the power of general supervision
and control over Autonomous Regions." Hence, we assume jurisdiction. And
if we can make an inquiry in the validity of the expulsion in question, with
more reason can we review the petitioner's removal as Speaker.

This case involves the application of a most

important constitutional policy and principle, that of local autonomy. We
have to obey the clear mandate on local autonomy.

Where a law is capable of two interpretations, one in favor of centralized

power in Malacañang and the other beneficial to local autonomy, the scales
must be weighed in favor of autonomy.

Upon the facts presented, we hold that the November 2 and 5, 1987
sessions were invalid. It is true that under Section 31 of the Region XII
Sanggunian Rules, "[s]essions shall not be suspended or adjourned except
by direction of the Sangguniang Pampook". But while this opinion is in
accord with the respondents' own, we still invalidate the twin sessions in
question, since at the time the petitioner called the "recess," it was not a
settled matter whether or not he could do so. In the second place, the
invitation tendered by the Committee on Muslim Affairs of the House of
Representatives provided a plausible reason for the intermission sought.
Also, assuming that a valid recess could not be called, it does not appear
that the respondents called his attention to this mistake. What appears is
that instead, they opened the sessions themselves behind his back in an
apparent act of mutiny. Under the circumstances, we find equity on his side.
For this reason, we uphold the "recess" called on the ground of good faith.
CASE DIGEST (Transportation Law): Bantangas CATV
vs. C.A.
BATANGAS CATV, INC. vs. THE COURT OF APPEALS, THE BATANGAS
CITY SANGGUNIANG PANLUNGSOD and BATANGAS CITY MAYOR
[G.R. No. 138810. September 29, 2004]

FACTS:
On July 28, 1986, respondent Sangguniang Panlungsod enacted
Resolution No. 210 granting petitioner a permit to construct, install, and
operate a CATV system in Batangas City. Section 8 of the Resolution
provides that petitioner is authorized to charge its subscribers the
maximum rates specified therein, “provided, however, that any increase of
rates shall be subject to the approval of the Sangguniang Panlungsod.

Sometime in November 1993, petitioner increased its subscriber rates from

P88.00 to P180.00 per month. As a result, respondent Mayor wrote
petitioner a letter threatening to cancel its permit unless it secures the
approval of respondent Sangguniang Panlungsod, pursuant to Resolution
No. 210.

Petitioner then filed with the RTC, Branch 7, Batangas City, a petition for
injunction alleging that respondent Sangguniang Panlungsod has no
authority to regulate the subscriber rates charged by CATV operators
because under Executive Order No. 205, the National Telecommunications
Commission (NTC) has the sole authority to regulate the CATV operation in
the Philippines.

ISSUE :
may a local government unit (LGU) regulate the subscriber rates charged
by CATV operators within its territorial jurisdiction?

HELD: No.

xxx

The logical conclusion, therefore, is that in light of the above laws and E.O.
No. 436, the NTC exercises regulatory power over CATV operators to the
exclusion of other bodies.
xxx

Like any other enterprise, CATV operation maybe regulated by LGUs under
the general welfare clause. This is primarily because the CATV system
commits the indiscretion of crossing public properties. (It uses public
properties in order to reach subscribers.) The physical realities of
constructing CATV system – the use of public streets, rights of ways, the
founding of structures, and the parceling of large regions – allow an LGU a
certain degree of regulation over CATV operators.

xxx

But, while we recognize the LGUs’ power under the general welfare clause,
we cannot sustain Resolution No. 210. We are convinced that respondents
strayed from the well recognized limits of its power. The flaws in Resolution
No. 210 are: (1) it violates the mandate of existing laws and (2) it violates
the State’s deregulation policy over the CATV industry.

LGUs must recognize that technical matters concerning CATV operation

are within the exclusive regulatory power of the NTC.
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