9.

Sema v COMELEC G.R. No. 177597 July 16, 2008. 07/13/2010 0 Comments Facts: On 28 August 2006, the ARMMs legislature, the ARMM Regional Assembly, exercising its power to create provinces under Section 19, Article VI of RA 9054, enacted Muslim Mindanao Autonomy Act No. 201 (MMA Act 201) creating the Province of Shariff Kabunsuan composed of the eight municipalities in the first district of Maguindanao. MMA Act 201 provides: Later, three new municipalities were carved out of the original nine municipalities constituting Shariff Kabunsuan, bringing its total number of municipalities to 11. Thus, what was left of Maguindanao were the municipalities constituting its second legislative district. Cotabato City, although part of Maguindanaos first legislative district, is not part of the Province of Maguindanao. On 6 February 2007, the Sangguniang Panlungsod of Cotabato City passed Resolution No. 3999 requesting the COMELEC to clarify the status of Cotabato City in view of the conversion of the First District of Maguindanao into a regular province under MMA Act 201. Resolution No. 07-0407, which adopted the recommendation of the COMELECs Law Department under a Memorandum dated 27 February 2007, provides in pertinent parts: Considering the foregoing, the Commission RESOLVED, as it hereby resolves, to adopt the recommendation of the Law Department that pending the enactment of the appropriate law by Congress, to maintain the status quo with Cotabato City as part of Shariff Kabunsuan in the First Legislative District of Maguindanao. On 10 May 2007, the COMELEC issued Resolution No. 7902, subject of these petitions, amending Resolution No. 07-0407 by renaming the legislative district in question as Shariff Kabunsuan Province with Cotabato City (formerly First District of Maguindanao with Cotabato City). Issue: The petitions raise the following issues: I. In G.R. No. 177597: (A) Preliminarily (1) whether the writs of Certiorari, Prohibition, and Mandamus are proper to test the constitutionality of COMELEC Resolution No. 7902; and (2) whether the proclamation of respondent Dilangalen as representative of Shariff Kabunsuan Province with Cotabato City mooted the petition in G.R. No. 177597. (B) On the merits (1) whether Section 19, Article VI of RA 9054, delegating to the ARMM

Regional Assembly the power to create provinces, cities, municipalities and barangays, is constitutional; and (2) if in the affirmative, whether a province created by the ARMM Regional Assembly under MMA Act 201 pursuant to Section 19, Article VI of RA 9054 is entitled to one representative in the House of Representatives without need of a national law creating a legislative district for such province. II. In G.R No. 177597 and G.R No. 178628, whether COMELEC Resolution No. 7902 is valid for maintaining the status quo in the first legislative district of Maguindanao (as Shariff Kabunsuan Province with Cotabato City [formerly First District of Maguindanao with Cotabato City]), despite the creation of the Province of Shariff Kabunsuan out of such district (excluding Cotabato City).

Held: WHEREFORE, we declare Section 19, Article VI of Republic Act No. 9054 UNCONSTITUTIONAL insofar as it grants to the Regional Assembly of the Autonomous Region in Muslim Mindanao the power to create provinces and cities. Thus, we declare VOID Muslim Mindanao Autonomy Act No. 201 creating the Province of Shariff Kabunsuan. Consequently, we rule that COMELEC Resolution No. 7902 is VALID. Ratio: The creation of any of the four local government units province, city, municipality or barangay must comply with three conditions. First, the creation of a local government unit must follow the criteria fixed in the Local Government Code. Second, such creation must not conflict with any provision of the Constitution. Third, there must be a plebiscite in the political units affected. There is neither an express prohibition nor an express grant of authority in the Constitution for Congress to delegate to regional or local legislative bodies the power to create local government units. However, under its plenary legislative powers, Congress can delegate to local legislative bodies the power to create local government units, subject to reasonable standards and provided no conflict arises with any provision of the Constitution. In fact, Congress has delegated to provincial boards, and city and municipal councils, the power to create barangays within their jurisdiction, subject to compliance with the criteria established in the Local Government Code, and the plebiscite requirement in Section 10, Article X of the Constitution. However, under the Local Government Code, only x x x an Act of Congress can create provinces, cities or municipalities. However, the creation of provinces and cities is another matter. Section 5 (3), Article VI of the Constitution provides, Each city with a population of at least two hundred fifty thousand, or each province, shall have at least one representative in the House of Representatives. Similarly, Section 3 of the Ordinance appended to the Constitution provides, Any province that may hereafter be created, or any city whose population may

hereafter increase to more than two hundred fifty thousand shall be entitled in the immediately following election to at least one Member x x x. Clearly, a province cannot be created without a legislative district because it will violate Section 5 (3), Article VI of the Constitution as well as Section 3 of the Ordinance appended to the Constitution. For the same reason, a city with a population of 250,000 or more cannot also be created without a legislative district. This textual commitment to Congress of the exclusive power to create or reapportion legislative districts is logical. Congress is a national legislature and any increase in its allowable membership or in its incumbent membership through the creation of legislative districts must be embodied in a national law. Only Congress can enact such a law. It would be anomalous for regional or local legislative bodies to create or reapportion legislative districts for a national legislature like Congress. An inferior legislative body, created by a superior legislative body, cannot change the membership of the superior legislative body. In view of certiorari and mandamus The purpose of the writ of Certiorari is to correct grave abuse of discretion by any tribunal, board, or officer exercising judicial or quasi-judicial functions. On the other hand, the writ of Mandamus will issue to compel a tribunal, corporation, board, officer, or person to perform an act which the law specifically enjoins as a duty. In view of mootness There is also no merit in the claim that respondent Dilangalens proclamation as winner in the 14 May 2007 elections for representative of Shariff Kabunsuan Province with Cotabato City mooted this petition. This case does not concern respondent Dilangalens election. Rather, it involves an inquiry into the validity of COMELEC Resolution No. 7902, as well as the constitutionality of MMA Act 201 and Section 19, Article VI of RA 9054. Admittedly, the outcome of this petition, one way or another, determines whether the votes cast in Cotabato City for representative of the district of Shariff Kabunsuan Province with Cotabato City will be included in the canvassing of ballots. However, this incidental consequence is no reason for us not to proceed with the resolution of the novel issues raised here. The Courts ruling in these petitions affects not only the recently concluded elections but also all the other succeeding elections for the office in question, as well as the power of the ARMM Regional Assembly to create in the future additional provinces. In view of the Felwa case As further support for her stance, petitioner invokes the statement in Felwa that when a province is created by statute, the corresponding representative district comes into existence neither by authority of that statute which cannot provide otherwise nor by apportionment, but by operation of the Constitution, without a reapportionment.

First. The issue in Felwa, among others, was whether Republic Act No. 4695 (RA 4695), creating the provinces of Benguet, Mountain Province, Ifugao, and KalingaApayao and providing for congressional representation in the old and new provinces, was unconstitutional for creating congressional districts without the apportionment provided in the Constitution. Thus, the Court sustained the constitutionality of RA 4695 because (1) it validly created legislative districts indirectly through a special law enacted by Congress creating a province and (2) the creation of the legislative districts will not result in breaching the maximum number of legislative districts provided under the 1935 Constitution. Felwa does not apply to the present case because in Felwa the new provinces were created by a national law enacted by Congress itself. Here, the new province was created merely by a regional law enacted by the ARMM Regional Assembly. What Felwa teaches is that the creation of a legislative district by Congress does not emanate alone from Congress power to reapportion legislative districts, but also from Congress power to create provinces which cannot be created without a legislative district. Thus, when a province is created, a legislative district is created by operation of the Constitution because the Constitution provides that each province shall have at least one representative in the House of Representatives. Moreover, if as Sema claims MMA Act 201 apportioned a legislative district to Shariff Kabunsuan upon its creation, this will leave Cotabato City as the lone component of the first legislative district of Maguindanao. However, Cotabato City cannot constitute a legislative district by itself because as of the census taken in 2000, it had a population of only 163,849. Second. Semas theory also undermines the composition and independence of the House of Representatives. Under Section 19, Article VI of RA 9054, the ARMM Regional Assembly can create provinces and cities within the ARMM with or without regard to the criteria fixed in Section 461 of RA 7160, namely: minimum annual income of P20,000,000, and minimum contiguous territory of 2,000 square kilometers or minimum population of 250,000. The following scenarios thus become distinct possibilities: It is axiomatic that organic acts of autonomous regions cannot prevail over the Constitution. Section 20, Article X of the Constitution expressly provides that the legislative powers of regional assemblies are limited [w]ithin its territorial jurisdiction and subject to the provisions of the Constitution and national laws, x x x. The Preamble of the ARMM Organic Act (RA 9054) itself states that the ARMM Government is established within the framework of the Constitution. This follows Section 15, Article X of the Constitution which mandates that the ARMM shall be created x x x within the framework of this Constitution and the national sovereignty as well as territorial integrity of the Republic of the Philippines.

14.
G.R. No. 190529 April 29, 2010 PHILIPPINE GUARDIANS BROTHERHOOD, INC. (PGBI), represented by its Secretary-General GEORGE "FGBF GEORGE" DULDULAO, Petitioner, vs. COMMISSION ON ELECTIONS, Respondent. RESOLUTION BRION, J.: The Philippine Guardians Brotherhood, Inc. (PGBI) seeks in this petition for certiorari1 and in the motion for reconsideration it subsequently filed to nullify Commission on Elections (COMELEC) Resolution No. 8679 dated October 13, 2009 insofar as it relates to PGBI, and the Resolution dated December 9, 2009 denying PGBIs motion for reconsideration in SPP No. 09-004 (MP). Via these resolutions, the COMELEC delisted PGBI from the roster of registered national, regional or sectoral parties, organizations or coalitions under the party-list system. BACKGROUND Section 6(8) of Republic Act No. 7941 (RA 7941), otherwise known as the Party-List System Act, provides: Section 6. Removal and/or Cancellation of Registration. The COMELEC may motu proprio or upon verified complaint of any interested party, remove or cancel, after due notice and hearing, the registration of any national, regional or sectoral party, organization or coalition on any of the following grounds: xxxx (8) It fails to participate in the last two (2) preceding elections or fails to obtain at least two per centum (2%) of the votes cast under the party-list system in the two (2) preceding elections for the constituency in which it has registered.[Emphasis supplied.] The COMELEC replicated this provision in COMELEC Resolution No. 2847 the Rules and Regulations Governing the Election of the Party-List Representatives through the Party-List System which it promulgated on June 25, 1996. For the upcoming May 2010 elections, the COMELEC en banc issued on October 13, 2009 Resolution No. 8679 deleting several party-list groups or organizations from the list of registered national, regional or sectoral parties, organizations or coalitions. Among the

party-list organizations affected was PGBI; it was delisted because it failed to get 2% of the votes cast in 2004 and it did not participate in the 2007 elections. Nevertheless, the COMELEC stated in this Resolution that any national, regional sectoral party or organizations or coalitions adversely affected can personally or through its authorized representative file a verified opposition on October 26, 2009. PGBI filed its Opposition to Resolution No. 8679, but likewise sought, through its pleading, the admission ad cautelam of its petition for accreditation as a party-list organization under the Party-List System Act. Among other arguments, PGBI asserted that: (1) The assailed resolution negates the right of movant and those similarly situated to invoke Section 4 of R.A. No. 7941, which allows any party, organization and coalition already registered with the Commission to no longer register anew; the party though is required to file with the Commission, not later than ninety (90) days before the election, a manifestation of its desire to participate in the party-list system; since PGBI filed a Request/Manifestation seeking a deferment of its participation in the 2007 elections within the required period prior to the 2007 elections, it has the option to choose whether or not to participate in the next succeeding election under the same conditions as to rights conferred and responsibilities imposed; (2) The Supreme Courts ruling in G.R. No. 177548 Philippine Mines Safety Environment Association, also known as "MINERO" v. Commission on Elections cannot apply in the instant controversy for two reasons: (a) the factual milieu of the cited case is removed from PGBIs; (b) MINERO, prior to delisting, was afforded the opportunity to be heard, while PGBI and the 25 others similarly affected by Resolution No. 8679 were not. Additionally, the requirement of Section 6(8) has been relaxed by the Courts ruling in G.R. No. 179271 (Banat v. COMELEC) and the exclusion of PGBI and the 25 other party-list is a denial of the equal protection of the laws; (3) The implementation of the challenged resolution should be suspended and/or aborted to prevent a miscarriage of justice in view of the failure to notify the parties in accordance with the same Section 6(8) or R.A. No. 7941.2 The COMELEC denied PGBIs motion/opposition for lack of merit. First, the COMELEC observed that PGBI clearly misunderstood the import of Section 4 of R.A. 7941.3 The provision simply means that without the required manifestation or if a party or organization does not participate, the exemption from registration does not arise and the party, organization or coalition must go through the process again and apply for requalification; a request for deferment would not exempt PGBI from registering anew. Second, the MINERO ruling is squarely in point, as MINERO failed to get 2% of the votes in 2001 and did not participate at all in the 2004 elections.

Third, PGBI was given an opportunity to be heard or to seek the reconsideration of the action or ruling complained of the essence of due process; this is clear from Resolution No. 8679 which expressly gave the adversely affected parties the opportunity to file their opposition. As regards the alternative relief of application for accreditation, the COMELEC found the motion to have been filed out of time, as August 17, 2009 was the deadline for accreditation provided in Resolution 8646. The motion was obviously filed months after the deadline. PGBI came to us in its petition for certiorari, arguing the same positions it raised with the COMELEC when it moved to reconsider its delisting. We initially dismissed the petition in light of our ruling in Philippine Mines Safety Environment Association, also known as "MINERO" v. Commission on Elections (Minero);4 we said that no grave abuse of discretion exists in a ruling that correctly applies the prevailing law and jurisprudence. Applying Section 6(8) of RA 7941, the Court disqualified MINERO under the following reasoning: Since petitioner by its own admission failed to get 2% of the votes in 2001 and did not participate at all in the 2004 elections, it necessarily failed to get at least two per centum (2%) of the votes cast in the two preceding elections. COMELEC, therefore, is not duty bound to certify it. PGBI subsequently moved to reconsider the dismissal of its petition. Among other arguments, PGBI claimed that the dismissal of the petition was contrary to law, the evidence and existing jurisprudence. Essentially, PGBI asserts that Section 6(8) of RA 7941 does not apply if one is to follow the tenor and import of the deliberations inclusive of the interpellations in Senate Bill No. 1913 on October 19, 1994. It cited the following excerpts from the Records of the Senate: Senator Gonzales: On the other hand, Mr. President, under ground no. (7), Section 5 there are actually two grounds it states: " Failure to participate in the last two (2) preceding elections or its failure to obtain at least ten percent (10%) of the votes case under the party-list system in either of the last two (2) preceding elections for the constituency in which it has registered" In short, the first ground is that, it failed to participate in the last two (2) preceding elections. The second is, failure to obtain at least 10 percent of the votes cast under the party-list system in either of the last two preceding elections, Mr. President, Senator Tolentino: Actually, these are two separate grounds. Senator Gonzales: There are actually two grounds, Mr. President. Senator Tolentino: Yes, Mr. President.5 [Underscoring supplied.]

PGBI thus asserts that Section 6(8) does not apply to its situation, as it is obvious that it failed to participate in one (1) but not in the two (2) preceding elections. Implied in this is that it also failed to secure the required percentage in one (1) but not in the two (2) preceding elections. Considering PGBIs arguments, we granted the motion and reinstated the petition in the courts docket. THE ISSUES We are called upon to resolve: (a) whether there is legal basis for delisting PGBI; and (b) whether PGBIs right to due process was violated. OUR RULING We find the petition partly impressed with merit. a. The Minero Ruling Our Minero ruling is an erroneous application of Section 6(8) of RA 7941; hence, it cannot sustain PGBIs delisting from the roster of registered national, regional or sectoral parties, organizations or coalitions under the party-list system. First, the law is clear the COMELEC may motu proprio or upon verified complaint of any interested party, remove or cancel, after due notice and hearing, the registration of any national, regional or sectoral party, organization or coalition if it: (a) fails to participate in the last two (2) preceding elections; or (b) fails to obtain at least two per centum (2%) of the votes cast under the party-list system in the two (2) preceding elections for the constituency in which it has registered.6 The word "or" is a disjunctive term signifying disassociation and independence of one thing from the other things enumerated; it should, as a rule, be construed in the sense in which it ordinarily implies, as a disjunctive word.7 Thus, the plain, clear and unmistakable language of the law provides for two (2) separate reasons for delisting. Second, Minero is diametrically opposed to the legislative intent of Section 6(8) of RA 7941, as PGBIs cited congressional deliberations clearly show. Minero therefore simply cannot stand. Its basic defect lies in its characterization of the non-participation of a party-list organization in an election as similar to a failure to garner the 2% threshold party-list vote. What Minero effectively holds is that a party list organization that does not participate in an election necessarily gets, by default, less than 2% of the party-list votes. To be sure, this is a confused interpretation of the law, given the laws clear and categorical language and the legislative intent to treat the two scenarios differently. A delisting based on a mixture or fusion of these two different and separate grounds for delisting is therefore a strained application of the law in

jurisdictional terms, it is an interpretation not within the contemplation of the framers of the law and hence is a gravely abusive interpretation of the law.8 What we say here should of course take into account our ruling in Barangay Association for Advancement and National Transparency v. COMELEC9 (Banat) where we partly invalidated the 2% party-list vote requirement provided in RA 7941 as follows: We rule that, in computing the allocation of additional seats, the continued operation of the two percent threshold for the distribution of the additional seats as found in the second clause of Section 11(b) of R.A. No. 7941 is unconstitutional. This Court finds that the two percent threshold makes it mathematically impossible to achieve the maximum number of available party list seats when the number of available party list seats exceeds 50. The continued operation of the two percent threshold in the distribution of the additional seats frustrates the attainment of the permissive ceiling that 20% of the members of the House of Representatives shall consist of party-list representatives. The disqualification for failure to get 2% party-list votes in two (2) preceding elections should therefore be understood in light of the Banat ruling that party-list groups or organizations garnering less than 2% of the party-list votes may yet qualify for a seat in the allocation of additional seats. We need not extensively discuss Banats significance, except to state that a party-list group or organization which qualified in the second round of seat allocation cannot now validly be delisted for the reason alone that it garnered less than 2% in the last two elections. In other words, the application of this disqualification should henceforth be contingent on the percentage of party-list votes garnered by the last party-list organization that qualified for a seat in the House of Representatives, a percentage that is less than the 2% threshold invalidated in Banat. The disqualification should now necessarily be read to apply to party-list groups or organizations that did not qualify for a seat in the two preceding elections for the constituency in which it registered. To reiterate, (a) Section 6(8) of RA 7941 provides for two separate grounds for delisting; these grounds cannot be mixed or combined to support delisting; and (b) the disqualification for failure to garner 2% party-list votes in two preceding elections should now be understood, in light of the Banat ruling, to mean failure to qualify for a party-list seat in two preceding elections for the constituency in which it has registered. This, we declare, is how Section 6(8) of RA 7941 should be understood and applied. We do so under our authority to state what the law is,10 and as an exception to the application of the principle of stare decisis. The doctrine of stare decisis et non quieta movere (to adhere to precedents and not to unsettle things which are established) is embodied in Article 8 of the Civil Code of the Philippines which provides, thus: ART. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines.

The doctrine enjoins adherence to judicial precedents. It requires courts in a country to follow the rule established in a decision of its Supreme Court. That decision becomes a judicial precedent to be followed in subsequent cases by all courts in the land. The doctrine of stare decisis is based on the principle that once a question of law has been examined and decided, it should be deemed settled and closed to further argument.11 The doctrine is grounded on the necessity for securing certainty and stability of judicial decisions, thus: Time and again, the court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of certainty, a conclusion reached in one case should be 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 relitigate the same issue.12 The doctrine though is not cast in stone for upon a showing that circumstances attendant in a particular case override the great benefits derived by our judicial system from the doctrine of stare decisis, the Court is justified in setting it aside.13 As our discussion above shows, the most compelling reason to abandon Minero exists; it was clearly an erroneous application of the law an application that the principle of stability or predictability of decisions alone cannot sustain. Minero did unnecessary violence to the language of the law, the intent of the legislature, and to the rule of law in general. Clearly, we cannot allow PGBI to be prejudiced by the continuing validity of an erroneous ruling. Thus, we now abandon Minero and strike it out from our ruling case law. We are aware that PGBIs situation a party list group or organization that failed to garner 2% in a prior election and immediately thereafter did not participate in the preceding election is something that is not covered by Section 6(8) of RA 7941. From this perspective, it may be an unintended gap in the law and as such is a matter for Congress to address. We cannot and do not address matters over which full discretionary authority is given by the Constitution to the legislature; to do so will offend the principle of separation of powers. If a gap indeed exists, then the present case should bring this concern to the legislatures notice. b. The Issue of Due Process On the due process issue, we agree with the COMELEC that PGBIs right to due process was not violated for PGBI was given an opportunity to seek, as it did seek, a

reconsideration of Resolution No. 8679. The essence of due process, we have consistently held, is simply the opportunity to be heard; as applied to administrative proceedings, due process is the opportunity to explain ones side or the opportunity to seek a reconsideration of the action or ruling complained of. A formal or trial-type hearing is not at all times and in all instances essential. The requirement is satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. What is frowned upon is absolute lack of notice and hearing x x x.14 We find it obvious under the attendant circumstances that PGBI was not denied due process. In any case, given the result of this Resolution, PGBI has no longer any cause for complaint on due process grounds. WHEREFORE, premises considered, we GRANT the petition and accordingly ANNUL COMELEC Resolution No. 8679 dated October 13, 2009 insofar as the petitioner PGBI is concerned, and the Resolution dated December 9, 2009 which denied PGBIs motion for reconsideration in SPP No. 09-004 (MP). PGBI is qualified to be voted upon as a party-list group or organization in the coming May 2010 elections. SO ORDERED. ARTURO D. BRION Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice ANTONIO T. CARPIO Associate Justice CONCHITA CARPIO MORALES Associate Justice ANTONIO EDUARDO B. NACHURA Associate Justice DIOSDADO M. PERALTA Associate Justice MARIANO C. DEL CASTILLO Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice RENATO C. CORONA Associate Justice PRESBITERO J. VELASCO, JR. Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice LUCAS P. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice JOSE PORTUGAL PEREZ Associate Justice

JOSE CATRAL MENDOZA Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court. REYNATO S. PUNO Chief Justice DISSENTING OPINION ABAD, J.: This case stems from the Commission on Elections (COMELEC) En Banc resolution removing petitioner Philippine Guardians Brotherhood, Inc. (PGBI) from the roster of registered party-list organizations because of its failure to obtain at least 2% party-list votes in the May 2004 election and to participate in the May 2007 election. I agree with the view of Justice Arturo D. Brion that Republic Act (R.A.) 7941 provides for two separate grounds for delisting a party-list organization, namely: a) failure to participate in the last two preceding elections; or b) failure to garner at least 2% of the votes cast under the party-list system in the two preceding elections for the constituency in which it has registered. I also agree that because of the Courts decision in BANAT,1 the needed minimum 2% of the votes cast in the two preceding elections should now be understood to mean the actual percentage of the votes garnered by the last party-list organization that qualified for a seat in the House of Representatives. But this could not apply to PGBI because BANAT took effect only in the preceding May 2007 elections and PGBI did not run in the same. It ran in the preceding May 2004 elections, when the BANAT ruling did not yet exist, but failed to get at least 2% of the votes cast in those elections. I must disagree with the ponencias view that the Court should reverse the Minero ruling2 that invoked Section 6(8) of R.A. 7941, which provides: Section 6. Refusal and/or Cancellation of Registration. -- The COMELEC may, motu proprio or upon verified complaint of any interested party, refuse or cancel, after due notice and hearing, the registration of any national, regional, or sectoral party, organization or coalition on any of the following grounds: xxxx

(8) It fails to participate in the last two (2) preceding elections fails to obtain at least two per centum (2%) of the votes cast under the party-list system in the two (2) preceding elections for the constituency in which it has registered. Since by its own admission, Minero failed to get at least 2% of the votes in the 2001 elections and did not participate at all in the 2004 elections, the Court held that it necessarily failed to get at least 2% of the votes cast in the two preceding elections. The COMELEC was thus justified in canceling its registration. The ponencia would allow PGBI to remain in the register of party-list organizations and avert disqualifications because, according to it, PGBI cannot be said to have failed to get at least 2% of the votes cast in the two preceding elections because it only ran in one of those two elections. It cannot also be said to have failed to take part in the two preceding elections because it ran in one of them. What is needed, the ponencia claims, are two strikes for the same ground in the two preceding elections. But it is evident from Section 6(8) above that the legislature intended the two separate testsfailure to take part in the last two preceding elections or failure to garner at least 2% of the votes cast in such electionsto be complimentary. Their purpose is to put every party-list organization, which won the right to be registered, to a two-election wringer, a voters preference test, for lack of a better term to describe it. This means that, to remain in the party-list register and enjoy the right to take part in the party-list election, a party must prove by the results of the preceding two elections that it retains the required level of voters preference. Failing in this, such party shall be dropped by the COMELEC, without prejudice to its applying for new registration after a mandatory one-term rest. If the ponencias views were to be followed, petitioner PGBI would be able to circumvent the voters preference test that it needs to pass to remain in the register of party-list organizations. It would succeed in putting one over the parties that exerted efforts to get the required level of voters preference. The following example should illustrate the unfair result: Election Year May 2004 May 2007 May 2010 Party-List X Deficient votes Deficient votes Cancelled Party-List Y Did not run Did not run Cancelled PGBI Party Deficient votes Did not run Not cancelled

The register of party-list organizations cannot be allowed to grow infinitely. The system cannot tolerate sectoral parties with low-levels of voters preference to remain on the ballot. For this reason, the legislature established a mechanism for attrition, the enforcement of which is an important responsibility of the COMELEC.

The Court must not abandon Minero. I vote to deny PGBIs motion for reconsideration. ROBERTO A. ABAD Associate Justice

18.
Senator abuses parliamentary immunity
In the recent administrative case of ANTERO J. POBRE vs. Sen. MIRIAM DEFENSOR- SANTIAGO, A.C. No. 7399, August 25, 2009, the Philippine Supreme Court dismissed the letter-complaint of Antero J. Pobre against Senator/Atty. Miriam Defensor-Santiago, conformably to Art. VI, Sec. 11 of the Constitution, but castigated, so to speak, the feisty and aggressive, if not foul-mouth, respondent lady senator for using what I would call intemperate and hate-filled language in a privilege speech she had delivered before the Philippine Senate which was directed against the Philippine Supreme Court Chief Justice Artemio Panganiban and the Judicial and Bar Council (JBC). The JBC had previously rejected her nomination as Chief Justice of the Philippine Supreme Court. I am truly glad the JBC had rejected her nomination to the highest tribunal of the land, considering her notorious public image as a war-freak person. In the aforecited case, although the Court held that the privilege speech of the combative lady senator was not actionable criminally or in a disciplinary proceeding under the Rules of Court, it however expressed its deep concern about the language Senator Santiago, a member of the Bar, used in her speech and its effect on the administration of justice. To the Court, the lady senator has undoubtedly crossed the limits of decency and good professional conduct. It is at once apparent that her statements in question were intemperate and highly improper in substance. To reiterate, she was quoted as stating that she wanted to spit on the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme Court, and calling the Court a Supreme Court of idiots. The offensive and disrespectful words of the lady senator were as follows: x x x I am not angry. I am irate. I am foaming in the mouth. I am homicidal. I am suicidal. I am humiliated, debased, degraded. And I am not only that, I feel like throwing up to be living my middle years in a country of this nature. I am nauseated. I spit on the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme Court, I am no longer interested in the position [of Chief Justice] if I was to be surrounded by idiots. I would rather be in another environment but not in the Supreme Court of idiots x x x. Let me digest the case for legal research purposes.

In his sworn letter/complaint dated December 22, 2006, with enclosures, Antero J. Pobre invited the Courts attention to the following excerpts of Senator Miriam DefensorSantiagos speech delivered on the Senate floor: "x x x I am not angry. I am irate. I am foaming in the mouth. I am homicidal. I am suicidal. I am humiliated, debased, degraded. And I am not only that, I feel like throwing up to be living my middle years in a country of this nature. I am nauseated. I spit on the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme Court, I am no longer interested in the position [of Chief Justice] if I was to be surrounded by idiots. I would rather be in another environment but not in the Supreme Court of idiots x x x." To Pobre, the foregoing statements reflected a total disrespect on the part of the speaker towards then Chief Justice Artemio Panganiban and the other members of the Court and constituted direct contempt of court. Accordingly, Pobre asked that disbarment proceedings or other disciplinary actions be taken against the lady senator. In her comment on the complaint dated April 25, 2007, Senator Santiago, through counsel, did not deny making the aforequoted statements. She, however, explained that those statements were covered by the constitutional provision on parliamentary immunity, being part of a speech she delivered in the discharge of her duty as member of Congress or its committee. The purpose of her speech, according to her, was to bring out in the open controversial anomalies in governance with a view to future remedial legislation. She averred that she wanted to expose what she believed to be an unjust act of the Judicial Bar Council [JBC], which, after sending out public invitations for nomination to the soon to-be vacated position of Chief Justice, would eventually inform applicants that only incumbent justices of the Supreme Court would qualify for nomination. She felt that the JBC should have at least given an advanced advisory that non-sitting members of the Court, like her, would not be considered for the position of Chief Justice. The immunity Senator Santiago claims is rooted primarily on the provision of Article VI, Section 11 of the Constitution, which provides: A Senator or Member of the House of Representative shall, in all offenses punishable by not more than six years imprisonment, be privileged from arrest while the Congress is in session. No member shall be questioned nor be held liable in any other place for any speech or debate in the Congress or in any committee thereof. Our Constitution enshrines parliamentary immunity to enable and encourage a representative of the public to discharge his public trust with firmness and success for it is indispensably necessary that he should enjoy the fullest liberty of speech and that he should be protected from resentment of every one, however, powerful, to whom the exercise of that liberty may occasion offense, the Court said, citing previous decided cases.

Without parliamentary immunity, parliament, or its equivalent, would degenerate into a polite and ineffective debating forum. Legislators are immune from deterrents to the uninhibited discharge of their legislative duties, not for their private indulgence, but for the public good. The privilege would be of little value if they could be subjected to the cost and inconvenience and distractions of a trial upon a conclusion of the pleader, or to the hazard of a judgment against them based upon a judges speculation as to the motives. The Court said that it does not interfere with the legislature or its members in the manner they perform their functions in the legislative floor or in committee rooms. Any claim of an unworthy purpose or of the falsity and mala fides of the statement uttered by the member of the Congress does not destroy the privilege. The disciplinary authority of the assembly and the voters, not the courts, can properly discourage or correct such abuses committed in the name of parliamentary immunity. Although the Court held that the privilege speech of the combative lady senator was not actionable criminally or in a disciplinary proceeding under the Rules of Court, it felt, however, expressed its deep concern about the language Senator Santiago, a member of the Bar, used in her speech and its effect on the administration of justice. To the Court, the lady senator has undoubtedly crossed the limits of decency and good professional conduct. It is at once apparent that her statements in question were intemperate and highly improper in substance. To reiterate, she was quoted as stating that she wanted to spit on the face of Chief Justice Artemio Panganiban and his cohorts in the Supreme Court, and calling the Court a Supreme Court of idiots. No lawyer who has taken an oath to maintain the respect due to the courts should be allowed to erode the peoples faith in the judiciary. The Court stated that in this case, the lady senator clearly violated Canon 8, Rule 8.01 and Canon 11 of the Code of Professional Responsibility, which respectively provide: "Canon 8, Rule 8.01.A lawyer shall not, in his professional dealings, use language which is abusive, offensive or otherwise improper. "Canon 11.A lawyer shall observe and maintain the respect due to the courts and to the judicial officers and should insist on similar conduct by others." It will be noted that Senator/Atty. Santiago was a former Regional Trial Court judge, a law professor, an oft-cited authority on constitutional and international law, an author of numerous law textbooks, and an elected senator of the land. Needless to stress, Senator Santiago, as a member of the Bar and officer of the court, like any other, was duty-bound to uphold the dignity and authority of this Court and to maintain the respect due its members. Lawyers in public service are keepers of public faith and are burdened with the higher degree of social responsibility, perhaps higher than their brethren in private practice. Senator Santiago should have known, as any perceptive individual, the impact her statements would make on the peoples faith in the integrity of the courts.

The Court stressed that a careful re-reading of her foul and repulsive utterances would readily show that her statements were expressions of personal anger and frustration at not being considered for the post of Chief Justice. In a sense, therefore, her remarks were outside the pale of her official parliamentary functions. Even parliamentary immunity must not be allowed to be used as a vehicle to ridicule, demean, and destroy the reputation of the Court and its magistrates, nor as armor for personal wrath and disgust. Authorities are agreed that parliamentary immunity is not an individual privilege accorded the individual members of the Parliament or Congress for their personal benefit, but rather a privilege for the benefit of the people and the institution that represents them. The Court stated that Senator Santiagos outburst was directly traceable to what she considered as an unjust act the JBC had taken in connection with her application for the position of Chief Justice. But while the JBC functions under the Courts supervision, its individual members, save perhaps for the Chief Justice who sits as the JBCs ex-officio chairperson, have no official duty to nominate candidates for appointment to the position of Chief Justice. The Court is, thus, at a loss to understand Senator Santiagos wholesale and indiscriminate assault on the members of the Court and her choice of critical and defamatory words against all of them. As explicit is the first canon of legal ethics which pronounces that it is the duty of a lawyer to maintain towards the Courts a respectful attitude, not for the sake of the temporary incumbent of the judicial office, but for the maintenance of its supreme importance. That same canon, as a corollary, makes it peculiarly incumbent upon lawyers to support the courts against unjust criticism and clamor. And more. The attorneys oath solemnly binds him to a conduct that should be with all good fidelity to the courts. A lawyer is an officer of the courts; he is, like the court itself, an instrument or agency to advance the ends of justice. His duty is to uphold the dignity and authority of the courts to which he owes fidelity, not to promote distrust in the administration of justice. Faith in the courts, a lawyer should seek to preserve. For, to undermine the judicial edifice is disastrous to the continuity of government and to the attainment of the liberties of the people. Thus has it been said of a lawyer that [a]s an officer of the court, it is his sworn and moral duty to help build and not destroy unnecessarily that high esteem and regard towards the courts so essential to the proper administration of justice. The Court in a subtle way criticized the Senate itself for neglecting its duty to discipline the respondent senator for her offensive language. The Rules of the Senate itself contains a provision on Unparliamentary Acts and Language that enjoins a Senator from using, under any circumstance, offensive or improper language against another Senator or against any public institution. But as to Senator Santiagos unparliamentary remarks, the Senate President had not apparently called her to order, let alone referred the matter to the Senate Ethics Committee for appropriate disciplinary action, as the Rules dictates under such circumstance. The lady senator clearly violated the rules of her own chamber. It is unfortunate that her peers bent backwards and avoided imposing their own rules on her.

19./ 20.
RESOLUTION LEONARDO-DE CASTRO, J.:

This resolves the Motion for Clarification and/or for Reconsideration[1] filed on August 10, 2009 by respondent Richard J. Gordon (respondent) of the Decision promulgated by this Court on July 15, 2009 (the Decision), the Motion for Partial Reconsideration[2] filed on August 27, 2009 by movant-intervenor Philippine National Red Cross (PNRC), and the latters Manifestation and Motion to Admit Attached Position Paper[3] filed on December 23, 2009. In the Decision,[4] the Court held that respondent did not forfeit his seat in the Senate when he accepted the chairmanship of the PNRC Board of Governors, as the office of the PNRC Chairman 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.[5] The Decision, however, further declared void the PNRC Charter insofar as it creates the PNRC as a private corporation and consequently ruled that the PNRC should incorporate under the Corporation Code and register with the Securities and Exchange Commission if it wants to be a private corporation.[6] The dispositive portion of the Decision reads 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. 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.[7] In his Motion for Clarification and/or for Reconsideration, respondent raises the following grounds: (1) as the issue of constitutionality of Republic Act (R.A.) No. 95 was not raised by the

parties, the Court went beyond the case in deciding such issue; and (2) as the Court decided that Petitioners did not have standing to file the instant Petition, the pronouncement of the Court on the validity of R.A. No. 95 should be considered obiter.[8] Respondent argues that the validity of R.A. No. 95 was a non-issue; therefore, it was unnecessary for the Court to decide on that question. Respondent cites Laurel v. Garcia,[9] wherein the Court said that it will not pass upon a constitutional question although properly presented by the record if the case can be disposed of on some other ground and goes on to claim that since this Court, in the Decision, disposed of the petition on some other ground, i.e., lack of standing of petitioners, there was no need for it to delve into the validity of R.A. No. 95, and the rest of the judgment should be deemed obiter. In its Motion for Partial Reconsideration, PNRC prays that the Court sustain the constitutionality of its Charter on the following grounds: A. THE ASSAILED DECISION DECLARING UNCONSTITUTIONAL REPUBLIC ACT NO. 95 AS AMENDED DEPRIVED INTERVENOR PNRC OF ITS CONSTITUTIONAL RIGHT TO DUE PROCESS. 1. INTERVENOR PNRC WAS NEVER A PARTY TO THE INSTANT CONTROVERSY. 2. THE CONSTITUTIONALITY OF REPUBLIC ACT NO. 95, AS AMENDED WAS NEVER AN ISSUE IN THIS CASE. B. THE CURRENT CHARTER OF PNRC IS PRESIDENTIAL DECREE NO. 1264 AND NOT REPUBLIC ACT NO. 95. PRESIDENTIAL DECREE NO. 1264 WAS NOT A CREATION OF CONGRESS. C. PNRCS STRUCTURE IS SUI GENERIS; IT IS A CLASS OF ITS OWN. WHILE IT IS PERFORMING HUMANITARIAN FUNCTIONS AS AN AUXILIARY TO GOVERNMENT, IT IS A NEUTRAL ENTITY SEPARATE AND INDEPENDENT OF GOVERNMENT CONTROL, YET IT DOES NOT QUALIFY AS STRICTLY PRIVATE IN CHARACTER.

In his Comment and Manifestation[10] filed on November 9, 2009, respondent manifests: (1) that he agrees with the position taken by

the PNRC in its Motion for Partial Reconsideration dated August 27, 2009; and (2) as of the writing of said Comment and Manifestation, there was pending before the Congress of the Philippines a proposed bill entitled An Act Recognizing the PNRC as an Independent, Autonomous, Non-Governmental Organization Auxiliary to the Authorities of the Republic of the Philippines in the Humanitarian Field, to be Known as The Philippine Red Cross.[11] After a thorough study of the arguments and points raised by the respondent as well as those of movant-intervenor in their respective motions, we have reconsidered our pronouncements in our Decision dated July 15, 2009 with regard to the nature of the PNRC and the constitutionality of some provisions of the PNRC Charter, R.A. No. 95, as amended. As correctly pointed out in respondents Motion, 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.,[12] 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. [13]

Under the rule quoted above, therefore, this Court should not have declared void certain sections of R.A. No. 95, as amended by Presidential Decree (P.D.) Nos. 1264 and 1643, 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. Its existence as a chartered corporation remained unchallenged on ground of unconstitutionality notwithstanding that R.A. No. 95 was enacted on March 22, 1947 during the effectivity of the 1935 Constitution, which provided for a proscription against the creation of private corporations by special law, to wit: SEC. 7. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations, unless such corporations are owned and controlled by the Government or any subdivision or instrumentality thereof. (Art. XIV, 1935 Constitution.) Similar provisions are found in Article XIV, Section 4 of the 1973 Constitution and Article XII, Section 16 of the 1987 Constitution. The latter reads: SECTION 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability.

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 PNRCs 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 PNRCs contention that its structure is sui generis. The PNRC succeeded the chapter of the American Red Cross which was in existence in the Philippines since 1917. It was created by an Act of

Congress after the Republic of the Philippines became an independent nation on July 6, 1946 and proclaimed on February 14, 1947 its adherence to the Convention of Geneva of July 29, 1929 for the Amelioration of the Condition of the Wounded and Sick of Armies in the Field (the Geneva Red Cross Convention). By that action the Philippines indicated its desire to participate with the nations of the world in mitigating the suffering caused by war and to establish in the Philippines a voluntary organization for that purpose and like other volunteer organizations established in other countries which have ratified the Geneva Conventions, to promote the health and welfare of the people in peace and in war.[14] The provisions of R.A. No. 95, as amended by R.A. Nos. 855 and 6373, and further amended by P.D. Nos. 1264 and 1643, show the historical background and legal basis of the creation of the PNRC by legislative fiat, as a voluntary organization impressed with public interest. Pertinently R.A. No. 95, as amended by P.D. 1264, provides: WHEREAS, during the meeting in Geneva, Switzerland, on 22 August 1894, the nations of the world unanimously agreed to diminish within their power the evils inherent in war; WHEREAS, more than one hundred forty nations of the world have ratified or adhered to the Geneva Conventions of August 12, 1949 for the Amelioration of the Condition of the Wounded and Sick of Armed Forces in the Field and at Sea, The Prisoners of War, and The Civilian Population in Time of War referred to in this Charter as the Geneva Conventions; WHEREAS, the Republic of the Philippines became an independent nation on July 4, 1946, and proclaimed on February 14, 1947 its adherence to the Geneva Conventions of 1929, and by the action, indicated its desire to participate with the nations of the world in mitigating the suffering caused by war and to establish in the Philippines a voluntary organization for that purpose as contemplated by the Geneva Conventions; WHEREAS, there existed in the Philippines since 1917 a chapter of the American National Red Cross which was terminated in view of the independence of the Philippines; and WHEREAS, the volunteer organizations established in other countries which have ratified or adhered to the Geneva Conventions assist in promoting the health and welfare of their people in peace and

in war, and through their mutual assistance and cooperation directly and through their international organizations promote better understanding and sympathy among the people of the world; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines and pursuant to Proclamation No. 1081 dated September 21, 1972, and General Order No. 1 dated September 22, 1972, do hereby decree and order that Republic Act No. 95, Charter of the Philippine National Red Cross (PNRC) as amended by Republic Acts No. 855 and 6373, be further amended as follows: Section 1. There is hereby created in the Republic of the Philippines a body corporate and politic to be the voluntary organization officially designated to assist the Republic of the Philippines in discharging the obligations set forth in the Geneva Conventions and to perform such other duties as are inherent upon a national Red Cross Society. The national headquarters of this Corporation shall be located in Metropolitan Manila. (Emphasis supplied.)

The significant public service rendered by the PNRC can be gleaned from Section 3 of its Charter, which provides: Section 3. That the purposes of this Corporation shall be as follows: (a) To provide volunteer aid to the sick and wounded of armed forces in time of war, in accordance with the spirit of and under the conditions prescribed by the Geneva Conventions to which the Republic of the Philippines proclaimed its adherence; (b) For the purposes mentioned in the preceding sub-section, to perform all duties devolving upon the Corporation as a result of the adherence of the Republic of the Philippines to the said Convention; (c) To act in matters of voluntary relief and in accordance with the authorities of the armed forces as a medium of communication between people of the Republic of the Philippines and their Armed Forces, in time of peace and in time of war, and to act in such matters between similar national societies of other governments and the

Governments and people and the Armed Forces of the Republic of the Philippines; (d) To establish and maintain a system of national and international relief in time of peace and in time of war and apply the same in meeting and emergency needs caused by typhoons, flood, fires, earthquakes, and other natural disasters and to devise and carry on measures for minimizing the suffering caused by such disasters; (e) To devise and promote such other services in time of peace and in time of war as may be found desirable in improving the health, safety and welfare of the Filipino people; (f) To devise such means as to make every citizen and/or resident of the Philippines a member of the Red Cross. The PNRC is one of the National Red Cross and Red Crescent Societies, which, together with the International Committee of the Red Cross (ICRC) and the IFRC and RCS, make up the International Red Cross and Red Crescent Movement (the Movement). They constitute a worldwide humanitarian movement, whose mission is: [T]o prevent and alleviate human suffering wherever it may be found, to protect life and health and ensure respect for the human being, in particular in times of armed conflict and other emergencies, to work for the prevention of disease and for the promotion of health and social welfare, to encourage voluntary service and a constant readiness to give help by the members of the Movement, and a universal sense of solidarity towards all those in need of its protection and assistance.[15]

The PNRC works closely with the ICRC and has been involved in humanitarian activities in the Philippines since 1982. Among others, these activities in the country include: 1. Giving protection and assistance to civilians displaced or otherwise affected by armed clashes between the government and armed opposition groups, primarily in Mindanao; 2. Working to minimize the effects of armed hostilities and violence on the population;

3.

Visiting detainees; and

4. Promoting awareness of international humanitarian law in the public and private sectors.[16] National Societies such as the PNRC act as auxiliaries to the public authorities of their own countries in the humanitarian field and provide a range of services including disaster relief and health and social programmes. The International Federation of Red Cross (IFRC) and Red Crescent Societies (RCS) Position Paper,[17] submitted by the PNRC, is instructive with regard to the elements of the specific nature of the National Societies such as the PNRC, to wit: National Societies, such as the Philippine National Red Cross and its sister Red Cross and Red Crescent Societies, have certain specificities deriving from the 1949 Geneva Convention and the Statutes of the International Red Cross and Red Crescent Movement (the Movement). They are also guided by the seven Fundamental Principles of the Red Cross and Red Crescent Movement: Humanity, Impartiality, Neutrality, Independence, Voluntary Service, Unity and Universality. A National Society partakes of a sui generis character. It is a protected component of the Red Cross movement under Articles 24 and 26 of the First Geneva Convention, especially in times of armed conflict. These provisions require that the staff of a National Society shall be respected and protected in all circumstances. Such protection is not ordinarily afforded by an international treaty to ordinary private entities or even non-governmental organisations (NGOs). This sui generis character is also emphasized by the Fourth Geneva Convention which holds that an Occupying Power cannot require any change in the personnel or structure of a National Society. National societies are therefore organizations that are directly regulated by international humanitarian law, in contrast to other ordinary private entities, including NGOs. xxxx In addition, National Societies are not only officially recognized by their public authorities as voluntary aid societies, auxiliary to the public authorities in the humanitarian field, but also benefit from recognition at the International level. This is considered to be an

element distinguishing National Societies from other organisations (mainly NGOs) and other forms of humanitarian response. x x x. No other organisation belongs to a world-wide Movement in which all Societies have equal status and share equal responsibilities and duties in helping each other. This is considered to be the essence of the Fundamental Principle of Universality. Furthermore, the National Societies are considered to be auxiliaries to the public authorities in the humanitarian field. x x x. The auxiliary status of [a] Red Cross Society means that it is at one and the same time a private institution and a public service organization because the very nature of its work implies cooperation with the authorities, a link with the State. In carrying out their major functions, Red Cross Societies give their humanitarian support to official bodies, in general having larger resources than the Societies, working towards comparable ends in a given sector. x x x No other organization has a duty to be its governments humanitarian partner while remaining independent.[18] (Emphases ours.)

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. In the Decision, the Court, citing Feliciano v. Commission on Audit,[19] explained that the purpose of the constitutional provision prohibiting Congress from creating private corporations was to prevent the granting of special privileges to certain individuals, families, or groups, which were denied to other groups. Based on the above discussion, it can be seen that the PNRC Charter does not come within the spirit of this constitutional provision, as it does not grant special privileges to a

particular individual, family, or group, but creates an entity that strives to serve the common good. Furthermore, a strict and mechanical interpretation of Article XII, Section 16 of the 1987 Constitution will hinder the State in adopting measures that will serve the public good or national interest. It should be noted that a special law, R.A. No. 9520, the Philippine Cooperative Code of 2008, and not the general corporation code, vests corporate power and capacities upon cooperatives which are private corporations, in order to implement the States avowed policy. In the Decision of July 15, 2009, the Court recognized the public service rendered by the PNRC as the governments partner in the observance of its international commitments, to wit: The PNRC is a non-profit, donor-funded, voluntary, humanitarian organization, whose mission is to bring timely, effective, and compassionate humanitarian assistance for the most vulnerable without consideration of nationality, race, religion, gender, social status, or political affiliation. The PNRC provides six major services: Blood Services, Disaster Management, Safety Services, Community Health and Nursing, Social Services and Voluntary Service. The Republic of the Philippines, adhering to the Geneva Conventions, established the PNRC as a voluntary organization for the purpose contemplated in the Geneva Convention of 27 July 1929. x x x.[20] (Citations omitted.)

So must this Court recognize too the countrys 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.[21] Under the Constitution, the Philippines adopts the generally accepted principles of international law as part of the law of the land.[22] 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 PNRCs 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. Although the PNRC is

called to be independent under its Fundamental Principles, it interprets such independence as inclusive of its duty to be the governments humanitarian partner. To be recognized in the International Committee, the PNRC must have an autonomous status, and carry out its humanitarian mission in a neutral and impartial manner. However, in accordance with the Fundamental Principle of Voluntary Service of National Societies of the Movement, the PNRC must be distinguished from private and profit-making entities. It is the main characteristic of National Societies that they are not inspired by the desire for financial gain but by individual commitment and devotion to a humanitarian purpose freely chosen or accepted as part of the service that National Societies through its volunteers and/or members render to the Community.[23] 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.[24] Based on the above, the sui generis status of the PNRC is now sufficiently established. Although it is neither a subdivision, agency, or instrumentality of the government, nor a government-owned or -controlled corporation or a subsidiary thereof, as succinctly explained in the Decision of July 15, 2009, 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. As correctly mentioned by Justice Roberto A. Abad, the 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 countrys 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. WHEREFORE, premises considered, respondent Richard J. Gordons Motion for Clarification and/or for Reconsideration and movantintervenor PNRCs Motion for Partial Reconsideration of the Decision in G.R. No. 175352 dated July 15, 2009 are GRANTED. The constitutionality of R.A. No. 95, as amended, the charter of the Philippine National Red Cross, was not raised by the parties as an issue and should not have been passed upon by this Court. The structure of the PNRC is sui generis being neither strictly private nor public in nature. R.A. No. 95 remains valid and constitutional in its entirety. The dispositive portion of the Decision should therefore be MODIFIED 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. SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO Associate Justice

G.R. No. 175352 DANTE V. LIBAN, REYNALDO M. BERNARDO, and SALVADOR M. VIARI, Petitioners, vs. RICHARD J. GORDON, Respondent. DECISION CARPIO, J.:

The Case This is a petition to declare Senator Richard J. Gordon (respondent) as having forfeited his seat in the Senate. The Facts Petitioners Dante V. Liban, Reynaldo M. Bernardo, and Salvador M. Viari (petitioners) filed with this Court a Petition to Declare Richard J. Gordon as Having Forfeited His Seat in the Senate. Petitioners are officers of the Board of Directors of the Quezon City Red Cross Chapter while respondent is Chairman of the Philippine National Red Cross (PNRC) Board of Governors. During respondents incumbency as a member of the Senate of the Philippines,1 he was elected Chairman of the PNRC during the 23 February 2006 meeting of the PNRC Board of Governors. Petitioners allege that by accepting the chairmanship of the PNRC Board of Governors, respondent has ceased to be a member of the Senate as provided in Section 13, Article VI of the Constitution, which reads: SEC. 13. No Senator or Member of the House of Representatives 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. Neither shall he be appointed to any office which may have been created or the emoluments thereof increased during the term for which he was elected. Petitioners cite Camporedondo v. NLRC,2 which held that the PNRC is a governmentowned or controlled corporation. Petitioners claim that in accepting and holding the position of Chairman of the PNRC Board of Governors, respondent has automatically forfeited his seat in the Senate, pursuant to Flores v. Drilon,3 which held that incumbent national legislators lose their elective posts upon their appointment to another government office. In his Comment, respondent asserts that petitioners have no standing to file this petition which appears to be an action for quo warranto, since the petition alleges that respondent committed an act which, by provision of law, constitutes a ground for forfeiture of his public office. Petitioners do not claim to be entitled to the Senate office of respondent. Under Section 5, Rule 66 of the Rules of Civil Procedure, only a person claiming to be entitled to a public office usurped or unlawfully held by another may bring an action for quo warranto in his own name. If the petition is one for quo warranto, it is already barred by prescription since under Section 11, Rule 66 of the Rules of Civil Procedure, the action should be commenced within one year after the cause of the public officers forfeiture of office. In this case, respondent has been working as a Red Cross volunteer for the past 40 years. Respondent was already Chairman of the PNRC Board of Governors when he was elected Senator in May 2004, having been elected Chairman in 2003 and re-elected in 2005.

Respondent contends that even if the present petition is treated as a taxpayers suit, petitioners cannot be allowed to raise a constitutional question in the absence of any claim that they suffered some actual damage or threatened injury as a result of the allegedly illegal act of respondent. Furthermore, taxpayers are allowed to sue only when there is a claim of illegal disbursement of public funds, or that public money is being diverted to any improper purpose, or where petitioners seek to restrain respondent from enforcing an invalid law that results in wastage of public funds. Respondent also maintains that if the petition is treated as one for declaratory relief, this Court would have no jurisdiction since original jurisdiction for declaratory relief lies with the Regional Trial Court. Respondent further insists that the PNRC is not a government-owned or controlled corporation and that the prohibition under Section 13, Article VI of the Constitution does not apply in the present case since volunteer service to the PNRC is neither an office nor an employment. In their Reply, petitioners claim that their petition is neither an action for quo warranto nor an action for declaratory relief. Petitioners maintain that the present petition is a taxpayers suit questioning the unlawful disbursement of funds, considering that respondent has been drawing his salaries and other compensation as a Senator even if he is no longer entitled to his office. Petitioners point out that this Court has jurisdiction over this petition since it involves a legal or constitutional issue which is of transcendental importance. The Issues Petitioners raise the following issues: 1. Whether the Philippine National Red Cross (PNRC) is a government- owned or controlled corporation; 2. Whether Section 13, Article VI of the Philippine Constitution applies to the case of respondent who is Chairman of the PNRC and at the same time a Member of the Senate; 3. Whether respondent should be automatically removed as a Senator pursuant to Section 13, Article VI of the Philippine Constitution; and 4. Whether petitioners may legally institute this petition against respondent.4 The substantial issue boils down to whether the office of the PNRC Chairman is 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 Constitution. The Courts Ruling

We find the petition without merit. Petitioners Have No Standing to File this Petition A careful reading of the petition reveals that it is an action for quo warranto. Section 1, Rule 66 of the Rules of Court provides: Section 1. Action by Government against individuals. An action for the usurpation of a public office, position or franchise may be commenced by a verified petition brought in the name of the Republic of the Philippines against: (a) A person who usurps, intrudes into, or unlawfully holds or exercises a public office, position or franchise; (b) A public officer who does or suffers an act which by provision of law, constitutes a ground for the forfeiture of his office; or (c) An association which acts as a corporation within the Philippines without being legally incorporated or without lawful authority so to act. (Emphasis supplied) Petitioners allege in their petition that: 4. Respondent became the Chairman of the PNRC when he was elected as such during the First Regular Luncheon-Meeting of the Board of Governors of the PNRC held on February 23, 2006, the minutes of which is hereto attached and made integral part hereof as Annex "A." 5. Respondent was elected as Chairman of the PNRC Board of Governors, during his incumbency as a Member of the House of Senate of the Congress of the Philippines, having been elected as such during the national elections last May 2004. 6. Since his election as Chairman of the PNRC Board of Governors, which position he duly accepted, respondent has been exercising the powers and discharging the functions and duties of said office, despite the fact that he is still a senator. 7. It is the respectful submission of the petitioner[s] that by accepting the chairmanship of the Board of Governors of the PNRC, respondent has ceased to be a Member of the House of Senate as provided in Section 13, Article VI of the Philippine Constitution, x x x xxxx

10. It is respectfully submitted that in accepting the position of Chairman of the Board of Governors of the PNRC on February 23, 2006, respondent has automatically forfeited his seat in the House of Senate and, therefore, has long ceased to be a Senator, pursuant to the ruling of this Honorable Court in the case of FLORES, ET AL. VS. DRILON AND GORDON, G.R. No. 104732, x x x 11. Despite the fact that he is no longer a senator, respondent continues to act as such and still performs the powers, functions and duties of a senator, contrary to the constitution, law and jurisprudence. 12. Unless restrained, therefore, respondent will continue to falsely act and represent himself as a senator or member of the House of Senate, collecting the salaries, emoluments and other compensations, benefits and privileges appertaining and due only to the legitimate senators, to the damage, great and irreparable injury of the Government and the Filipino people.5 (Emphasis supplied) Thus, petitioners are alleging that by accepting the position of Chairman of the PNRC Board of Governors, respondent has automatically forfeited his seat in the Senate. In short, petitioners filed an action for usurpation of public office against respondent, a public officer who allegedly committed an act which constitutes a ground for the forfeiture of his public office. Clearly, such an action is for quo warranto, specifically under Section 1(b), Rule 66 of the Rules of Court. Quo warranto is generally commenced by the Government as the proper party plaintiff. However, under Section 5, Rule 66 of the Rules of Court, an individual may commence such an action if he claims to be entitled to the public office allegedly usurped by another, in which case he can bring the action in his own name. The person instituting quo warranto proceedings in his own behalf must claim and be able to show that he is entitled to the office in dispute, otherwise the action may be dismissed at any stage.6 In the present case, petitioners do not claim to be entitled to the Senate office of respondent. Clearly, petitioners have no standing to file the present petition. Even if the Court disregards the infirmities of the petition and treats it as a taxpayers suit, the petition would still fail on the merits. PNRC is a Private Organization Performing Public Functions On 22 March 1947, President Manuel A. Roxas signed Republic Act No. 95,7 otherwise known as the PNRC Charter. The PNRC is a non-profit, donor-funded, voluntary, humanitarian organization, whose mission is to bring timely, effective, and compassionate humanitarian assistance for the most vulnerable without consideration of nationality, race, religion, gender, social status, or political affiliation.8 The PNRC provides six major services: Blood Services, Disaster Management, Safety Services, Community Health and Nursing, Social Services and Voluntary Service.9

The Republic of the Philippines, adhering to the Geneva Conventions, established the PNRC as a voluntary organization for the purpose contemplated in the Geneva Convention of 27 July 1929.10 The Whereas clauses of the PNRC Charter read: WHEREAS, there was developed at Geneva, Switzerland, on August 22, 1864, a convention by which the nations of the world were invited to join together in diminishing, so far lies within their power, the evils inherent in war; WHEREAS, more than sixty nations of the world have ratified or adhered to the subsequent revision of said convention, namely the "Convention of Geneva of July 29 [sic], 1929 for the Amelioration of the Condition of the Wounded and Sick of Armies in the Field" (referred to in this Charter as the Geneva Red Cross Convention); WHEREAS, the Geneva Red Cross Convention envisages the establishment in each country of a voluntary organization to assist in caring for the wounded and sick of the armed forces and to furnish supplies for that purpose; WHEREAS, the Republic of the Philippines became an independent nation on July 4, 1946 and proclaimed its adherence to the Geneva Red Cross Convention on February 14, 1947, and by that action indicated its desire to participate with the nations of the world in mitigating the suffering caused by war and to establish in the Philippines a voluntary organization for that purpose as contemplated by the Geneva Red Cross Convention; WHEREAS, there existed in the Philippines since 1917 a Charter of the American National Red Cross which must be terminated in view of the independence of the Philippines; and WHEREAS, the volunteer organizations established in the other countries which have ratified or adhered to the Geneva Red Cross Convention assist in promoting the health and welfare of their people in peace and in war, and through their mutual assistance and cooperation directly and through their international organizations promote better understanding and sympathy among the peoples of the world. (Emphasis supplied) The PNRC is a member National Society of the International Red Cross and Red Crescent Movement (Movement), which is composed of the International Committee of the Red Cross (ICRC), the International Federation of Red Cross and Red Crescent Societies (International Federation), and the National Red Cross and Red Crescent Societies (National Societies). The Movement is united and guided by its seven Fundamental Principles: 1. HUMANITY The International Red Cross and Red Crescent Movement, born of a desire to bring assistance without discrimination to the wounded on the battlefield, endeavors, in its international and national capacity, to prevent and alleviate human suffering wherever it may be found. Its purpose is to protect life and health and to ensure respect for the human being. It promotes mutual understanding, friendship, cooperation and lasting peace amongst all peoples.

2. IMPARTIALITY It makes no discrimination as to nationality, race, religious beliefs, class or political opinions. It endeavors to relieve the suffering of individuals, being guided solely by their needs, and to give priority to the most urgent cases of distress. 3. NEUTRALITY In order to continue to enjoy the confidence of all, the Movement may not take sides in hostilities or engage at any time in controversies of a political, racial, religious or ideological nature. 4. INDEPENDENCE The Movement is independent. The National Societies, while auxiliaries in the humanitarian services of their governments and subject to the laws of their respective countries, must always maintain their autonomy so that they may be able at all times to act in accordance with the principles of the Movement. 5. VOLUNTARY SERVICE It is a voluntary relief movement not prompted in any manner by desire for gain. 6. UNITY There can be only one Red Cross or one Red Crescent Society in any one country. It must be open to all. It must carry on its humanitarian work throughout its territory. 7. UNIVERSALITY The International Red Cross and Red Crescent Movement, in which all Societies have equal status and share equal responsibilities and duties in helping each other, is worldwide. (Emphasis supplied) The Fundamental Principles provide a universal standard of reference for all members of the Movement. The PNRC, as a member National Society of the Movement, has the duty to uphold the Fundamental Principles and ideals of the Movement. In order to be recognized as a National Society, the PNRC has to be autonomous and must operate in conformity with the Fundamental Principles of the Movement.11 The reason for this autonomy is fundamental. To be accepted by warring belligerents as neutral workers during international or internal armed conflicts, the PNRC volunteers must not be seen as belonging to any side of the armed conflict. In the Philippines where there is a communist insurgency and a Muslim separatist rebellion, the PNRC cannot be seen as government-owned or controlled, and neither can the PNRC volunteers be identified as government personnel or as instruments of government policy. Otherwise, the insurgents or separatists will treat PNRC volunteers as enemies when the volunteers tend to the wounded in the battlefield or the displaced civilians in conflict areas. Thus, the PNRC must not only be, but must also be seen to be, autonomous, neutral and independent in order to conduct its activities in accordance with the Fundamental Principles. The PNRC must not appear to be an instrument or agency that implements government policy; otherwise, it cannot merit the trust of all and cannot effectively carry

out its mission as a National Red Cross Society.12 It is imperative that the PNRC must be autonomous, neutral, and independent in relation to the State. To ensure and maintain its autonomy, neutrality, and independence, the PNRC cannot be owned or controlled by the government. Indeed, the Philippine government does not own the PNRC. The PNRC does not have government assets and does not receive any appropriation from the Philippine Congress.13 The PNRC is financed primarily by contributions from private individuals and private entities obtained through solicitation campaigns organized by its Board of Governors, as provided under Section 11 of the PNRC Charter: SECTION 11. As a national voluntary organization, the Philippine National Red Cross shall be financed primarily by contributions obtained through solicitation campaigns throughout the year which shall be organized by the Board of Governors and conducted by the Chapters in their respective jurisdictions. These fund raising campaigns shall be conducted independently of other fund drives by other organizations. (Emphasis supplied) The government does not control the PNRC. Under the PNRC Charter, as amended, only six of the thirty members of the PNRC Board of Governors are appointed by the President of the Philippines. Thus, twenty-four members, or four-fifths (4/5), of the PNRC Board of Governors are not appointed by the President. Section 6 of the PNRC Charter, as amended, provides: SECTION 6. The governing powers and authority shall be vested in a Board of Governors composed of thirty members, six of whom shall be appointed by the President of the Philippines, eighteen shall be elected by chapter delegates in biennial conventions and the remaining six shall be selected by the twenty-four members of the Board already chosen. x x x. Thus, of the twenty-four members of the PNRC Board, eighteen are elected by the chapter delegates of the PNRC, and six are elected by the twenty-four members already chosen a select group where the private sector members have three-fourths majority. Clearly, an overwhelming majority of four-fifths of the PNRC Board are elected or chosen by the private sector members of the PNRC. The PNRC Board of Governors, which exercises all corporate powers of the PNRC, elects the PNRC Chairman and all other officers of the PNRC. The incumbent Chairman of PNRC, respondent Senator Gordon, was elected, as all PNRC Chairmen are elected, by a private sector-controlled PNRC Board four-fifths of whom are private sector members of the PNRC. The PNRC Chairman is not appointed by the President or by any subordinate government official. Under Section 16, Article VII of the Constitution,14 the President appoints all officials and employees in the Executive branch whose appointments are vested in the President by the Constitution or by law. The President also appoints those whose appointments are

not otherwise provided by law. Under this Section 16, the law may also authorize the "heads of departments, agencies, commissions, or boards" to appoint officers lower in rank than such heads of departments, agencies, commissions or boards.15 In Rufino v. Endriga,16 the Court explained appointments under Section 16 in this wise: Under Section 16, Article VII of the 1987 Constitution, the President appoints three groups of officers. The first group refers to the heads of the Executive departments, ambassadors, other public ministers and consuls, officers of the armed forces from the rank of colonel or naval captain, and other officers whose appointments are vested in the President by the Constitution. The second group refers to those whom the President may be authorized by law to appoint. The third group refers to all other officers of the Government whose appointments are not otherwise provided by law. Under the same Section 16, there is a fourth group of lower-ranked officers whose appointments Congress may by law vest in the heads of departments, agencies, commissions, or boards. x x x xxx In a department in the Executive branch, the head is the Secretary. The law may not authorize the Undersecretary, acting as such Undersecretary, to appoint lower-ranked officers in the Executive department. In an agency, the power is vested in the head of the agency for it would be preposterous to vest it in the agency itself. In a commission, the head is the chairperson of the commission. In a board, the head is also the chairperson of the board. In the last three situations, the law may not also authorize officers other than the heads of the agency, commission, or board to appoint lower-ranked officers. xxx The Constitution authorizes Congress to vest the power to appoint lower-ranked officers specifically in the "heads" of the specified offices, and in no other person. The word "heads" refers to the chairpersons of the commissions or boards and not to their members, for several reasons. The President does not appoint the Chairman of the PNRC. Neither does the head of any department, agency, commission or board appoint the PNRC Chairman. Thus, the PNRC Chairman is not an official or employee of the Executive branch since his appointment does not fall under Section 16, Article VII of the Constitution. Certainly, the PNRC Chairman is not an official or employee of the Judiciary or Legislature. This leads us to the obvious conclusion that the PNRC Chairman is not an official or employee of the Philippine Government. Not being a government official or employee, the PNRC Chairman, as such, does not hold a government office or employment. Under Section 17, Article VII of the Constitution,17 the President exercises control over all government offices in the Executive branch. If an office is legally not under the control of the President, then such office is not part of the Executive branch. In

Rufino v. Endriga,18 the Court explained the Presidents power of control over all government offices as follows: Every government office, entity, or agency must fall under the Executive, Legislative, or Judicial branches, or must belong to one of the independent constitutional bodies, or must be a quasi-judicial body or local government unit. Otherwise, such government office, entity, or agency has no legal and constitutional basis for its existence. The CCP does not fall under the Legislative or Judicial branches of government. The CCP is also not one of the independent constitutional bodies. Neither is the CCP a quasijudicial body nor a local government unit. Thus, the CCP must fall under the Executive branch. Under the Revised Administrative Code of 1987, any agency "not placed by law or order creating them under any specific department" falls "under the Office of the President." Since the President exercises control over "all the executive departments, bureaus, and offices," the President necessarily exercises control over the CCP which is an office in the Executive branch. In mandating that the President "shall have control of all executive . . . offices," Section 17, Article VII of the 1987 Constitution does not exempt any executive office one performing executive functions outside of the independent constitutional bodies from the Presidents power of control. There is no dispute that the CCP performs executive, and not legislative, judicial, or quasi-judicial functions. The Presidents power of control applies to the acts or decisions of all officers in the Executive branch. This is true whether such officers are appointed by the President or by heads of departments, agencies, commissions, or boards. The power of control means the power to revise or reverse the acts or decisions of a subordinate officer involving the exercise of discretion. In short, the President sits at the apex of the Executive branch, and exercises "control of all the executive departments, bureaus, and offices." There can be no instance under the Constitution where an officer of the Executive branch is outside the control of the President. The Executive branch is unitary since there is only one President vested with executive power exercising control over the entire Executive branch. Any office in the Executive branch that is not under the control of the President is a lost command whose existence is without any legal or constitutional basis. (Emphasis supplied) An overwhelming four-fifths majority of the PNRC Board are private sector individuals elected to the PNRC Board by the private sector members of the PNRC. The PNRC Board exercises all corporate powers of the PNRC. The PNRC is controlled by private sector individuals. Decisions or actions of the PNRC Board are not reviewable by the President. The President cannot reverse or modify the decisions or actions of the PNRC Board. Neither can the President reverse or modify the decisions or actions of the PNRC Chairman. It is the PNRC Board that can review, reverse or modify the decisions or actions of the PNRC Chairman. This proves again that the office of the PNRC Chairman is a private office, not a government office.1avvphi1

Although the State is often represented in the governing bodies of a National Society, this can be justified by the need for proper coordination with the public authorities, and the government representatives may take part in decision-making within a National Society. However, the freely-elected representatives of a National Societys active members must remain in a large majority in a National Societys governing bodies.19 The PNRC is not government-owned but privately owned. The vast majority of the thousands of PNRC members are private individuals, including students. Under the PNRC Charter, those who contribute to the annual fund campaign of the PNRC are entitled to membership in the PNRC for one year. Thus, any one between 6 and 65 years of age can be a PNRC member for one year upon contributing P35, P100, P300, P500 or P1,000 for the year.20 Even foreigners, whether residents or not, can be members of the PNRC. Section 5 of the PNRC Charter, as amended by Presidential Decree No. 1264,21 reads: SEC. 5. Membership in the Philippine National Red Cross shall be open to the entire population in the Philippines regardless of citizenship. Any contribution to the Philippine National Red Cross Annual Fund Campaign shall entitle the contributor to membership for one year and said contribution shall be deductible in full for taxation purposes. Thus, the PNRC is a privately owned, privately funded, and privately run charitable organization. The PNRC is not a government-owned or controlled corporation. Petitioners anchor their petition on the 1999 case of Camporedondo v. NLRC,22 which ruled that the PNRC is a government-owned or controlled corporation. In ruling that the PNRC is a government-owned or controlled corporation, the simple test used was whether the corporation was created by its own special charter for the exercise of a public function or by incorporation under the general corporation law. Since the PNRC was created under a special charter, the Court then ruled that it is a government corporation. However, the Camporedondo ruling failed to consider the definition of a governmentowned or controlled corporation as provided under Section 2(13) of the Introductory Provisions of the Administrative Code of 1987: SEC. 2. General Terms Defined. x x x (13) Government-owned or controlled corporation refers to any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock: Provided, That government-owned or controlled corporations may be further categorized by the Department of the Budget, the Civil Service Commission, and the Commission on Audit for purposes of the exercise and discharge of their respective powers, functions and responsibilities with respect to such corporations.(Boldfacing and underscoring supplied)

A government-owned or controlled corporation must be owned by the government, and in the case of a stock corporation, at least a majority of its capital stock must be owned by the government. In the case of a non-stock corporation, by analogy at least a majority of the members must be government officials holding such membership by appointment or designation by the government. Under this criterion, and as discussed earlier, the government does not own or control PNRC. The PNRC Charter is Violative of the Constitutional Proscription against the Creation of Private Corporations by Special Law The 1935 Constitution, as amended, was in force when the PNRC was created by special charter on 22 March 1947. Section 7, Article XIV of the 1935 Constitution, as amended, reads: SEC. 7. The 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 subsequent 1973 and 1987 Constitutions contain similar provisions prohibiting Congress from creating private corporations except by general law. Section 1 of the PNRC Charter, as amended, creates the PNRC as a "body corporate and politic," thus: SECTION 1. There is hereby created in the Republic of the Philippines a body corporate and politic to be the voluntary organization officially designated to assist the Republic of the Philippines in discharging the obligations set forth in the Geneva Conventions and to perform such other duties as are inherent upon a National Red Cross Society. The national headquarters of this Corporation shall be located in Metropolitan Manila. (Emphasis supplied) In Feliciano v. Commission on Audit,23 the Court explained the constitutional provision prohibiting Congress from creating private corporations in this wise: We begin by explaining the general framework under the fundamental law. The Constitution recognizes two classes of corporations. The first refers to private corporations created under a general law. The second refers to government-owned or controlled corporations created by special charters. Section 16, Article XII of the Constitution provides: Sec. 16. The Congress shall not, except by general law, provide for the formation, organization, or regulation of private corporations. Government-owned or controlled corporations may be created or established by special charters in the interest of the common good and subject to the test of economic viability. The Constitution emphatically prohibits the creation of private corporations except by general law applicable to all citizens. The purpose of this constitutional provision is to

ban private corporations created by special charters, which historically gave certain individuals, families or groups special privileges denied to other citizens. In short, Congress cannot enact a law creating a private corporation with a special charter. Such legislation would be unconstitutional. Private corporations may exist only under a general law. If the corporation is private, it must necessarily exist under a general law. Stated differently, only corporations created under a general law can qualify as private corporations. Under existing laws, the general law is the Corporation Code, except that the Cooperative Code governs the incorporation of cooperatives. The Constitution authorizes Congress to create government-owned or controlled corporations through special charters. Since private corporations cannot have special charters, it follows that Congress can create corporations with special charters only if such corporations are government-owned or controlled.24 (Emphasis supplied) In Feliciano, the Court held that the Local Water Districts are government-owned or controlled corporations since they exist by virtue of Presidential Decree No. 198, which constitutes their special charter. The seed capital assets of the Local Water Districts, such as waterworks and sewerage facilities, were public property which were managed, operated by or under the control of the city, municipality or province before the assets were transferred to the Local Water Districts. The Local Water Districts also receive subsidies and loans from the Local Water Utilities Administration (LWUA). In fact, under the 2009 General Appropriations Act,25 the LWUA has a budget amounting to P400,000,000 for its subsidy requirements.26 There is no private capital invested in the Local Water Districts. The capital assets and operating funds of the Local Water Districts all come from the government, either through transfer of assets, loans, subsidies or the income from such assets or funds. The government also controls the Local Water Districts because the municipal or city mayor, or the provincial governor, appoints all the board directors of the Local Water Districts. Furthermore, the board directors and other personnel of the Local Water Districts are government employees subject to civil service laws and anti-graft laws. Clearly, the Local Water Districts are considered government-owned or controlled corporations not only because of their creation by special charter but also because the government in fact owns and controls the Local Water Districts. Just like the Local Water Districts, the PNRC was created through a special charter. However, unlike the Local Water Districts, the elements of government ownership and control are clearly lacking in the PNRC. Thus, although the PNRC is created by a special charter, it cannot be considered a government-owned or controlled corporation in the absence of the essential elements of ownership and control by the government. In creating the PNRC as a corporate entity, Congress was in fact creating a private corporation. However, the constitutional prohibition against the creation of private corporations by special charters provides no exception even for non-profit or charitable corporations. Consequently, the PNRC Charter, insofar as it creates the PNRC as a private corporation and grants it corporate powers,27 is void for being unconstitutional.

Thus, Sections 1,28 2,29 3,30 4(a),31 5,32 6,33 7,34 8,35 9,36 10,37 11,38 12,39 and 1340 of the PNRC Charter, as amended, are void. The other provisions41 of the PNRC Charter remain valid as they can be considered as a recognition by the State that the unincorporated PNRC is the local National Society of the International Red Cross and Red Crescent Movement, and thus entitled to the benefits, exemptions and privileges set forth in the PNRC Charter. The other provisions of the PNRC Charter implement the Philippine Governments treaty obligations under Article 4(5) of the Statutes of the International Red Cross and Red Crescent Movement, which provides that to be recognized as a National Society, the Society must be "duly recognized by the legal government of its country on the basis of the Geneva Conventions and of the national legislation as a voluntary aid society, auxiliary to the public authorities in the humanitarian field." In sum, we hold that the office of the PNRC Chairman 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. However, since the PNRC Charter is void insofar as it creates the PNRC as a private corporation, the PNRC should incorporate under the Corporation Code and register with the Securities and Exchange Commission if it wants to be a private corporation. 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. SO ORDERED. ANTONIO T. CARPIO Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice LEONARDO A. QUISUMBING Associate Justice RENATO C. CORONA Associate Justice CONSUELO YNARESSANTIAGO Associate Justice CONCHITA CARPIO MORALES Associate Justice

MINITA V. CHICO-NAZARIO Associate Justice ANTONIO EDUARDO B. NACHURA Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice

PRESBITERO J. VELASCO, JR. Associate Justice ARTURO D. BRION Associate Justice DIOSDADO M. PERALTA Associate Justice

LUCAS P. BERSAMIN Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court. REYNATO S. PUNO Chief Justice DISSENTING OPINION NACHURA, J.: I am constrained to register my dissent because the ponencia does not only endorse an unmistakably flagrant transgression of the Constitution but also unwittingly espouses the destruction of the Philippine National Red Cross (PNRC) as an institution. With all due respect, I disagree with the principal arguments advanced in the ponencia to justify Senator Richard J. Gordons unconstitutional holding of the chairmanship of the PNRC Board of Governors while concurrently sitting as a member of the Senate of the Philippines. Procedurally, I maintain that the petition is one for prohibition and that petitioners have standing to file the same. On the merits, I remain earnestly convinced that PNRC is a government owned or controlled corporation (GOCC), if not a government instrumentality; that its charter does not violate the constitutional proscription against the creation of private corporations by special law; and that Senator Gordons continuous occupancy of two incompatible positions is a clear violation of the Constitution. Allow me to elucidate.

22.
BANAT v. COMELEC GR Nos. 179271 & 179295, 21 April 2009 Carpio, J. Facts: COMELEC applied the Veterans Federation Party v. COMELEC formula upon the completion of the canvass and party-list results, thereby proclaiming 15 party-lists to have obtained 21 seats in Congress. Barangay Association for National Advancement and Transparency (BANAT) filed a petition to proclaim the full number of party-list representatives (all 55 seats have to be proclaimed) provided by the Constitution before the COMELEC en banc. The COMELEC denied the said petition, stating that it had already become moot and academic. Issues and Ruling: 1. W/N the three-seat limit provided in Section 11(b) of RA 7941 is constitutional. YES. The three-seat cap, as a limitation to the number of seats that a qualified party-list organization may occupy, remains a valid statutory device that prevents any party from dominating the party-list elections. 2. W/N the 2% threshold and qualifier votes prescribed in Section 11(b) of RA 7941 is constitutional. NO. In computing the allocation of additional seats, the continued operation of the 2% threshold for the distribution of the additional seats as found in the second clause of Section 11(b) of RA 7941 is unconstitutional. The Court finds that the 2% threshold makes it mathematically impossible to achieve the maximum number of available party list seats when the number of available party list seats exceeds 50. The continued operation of the 2% threshold in the distribution of the additional seats frustrates the attainment of the permissive ceiling that 20% of the members of the House of Representatives shall consist of party-list representatives. The Court strikes down the 2% threshold only in relation to the distribution of the additional seats as found in the second clause of Section 11(b) of RA 7941.1 The 2% threshold presents an unwarranted obstacle to the full implementation of Section 5(2), Article VI of the Constitution and prevents the attainment of the broadest possible representation of party, sectoral or group interests in the House of Representatives. 3. How shall the party-list representatives be allocated? In determining the allocation of seats for party-list representatives under Section 11 of RA 7941, the following

procedure shall be observed: (1)The parties, organizations, and coalitions shall be ranked from the highest to the lowest based on the number of votes they garnered during the elections. (2) The parties, organizations, and coalitions receiving at least 2% of the total votes cast for the party-list system shall be entitled to one guaranteed seat each. (3) Those garnering sufficient number of votes, according to the ranking in paragraph 1, shall be entitled to additional seats in proportion to their total number of votes until all the additional seats are allocated. (4) Each party, organization, or coalition shall be entitled to not more than 3 seats. In computing the additional seats, the guaranteed seats shall no longer be included because they have already been allocated, at one seat each, to every two-percenter. Thus, the remaining available seats for allocation as additional seats are the maximum seats reserved under the Party List System less the guaranteed seats. Fractional seats are disregarded in the absence of a provision in RA 7941 allowing for a rounding off of fractional seats. 4. Does the Constitution prohibit the major political parties from participating in the party-list elections? If not, can the major political parties be barred from participating in the party-list elections? 1 Section 11. Number of Party-List Representatives. In determining the allocation of seats for the second vote, the following procedure shall be observed: (a) The parties, organizations, and coalitions shall be ranked from the highest to the lowest based on the number of votes they garnered during the elections. (b) The parties, organizations, and coalitions receiving at least 2% of the total votes cast for the party-list system shall be entitled to one seat each: Provided, that those garnering more than 2% of the votes shall be entitled to additional seats in proportion to their total number of votes: Provided, finally, that each party, organization, or coalition shall be entitled to not more than three seats.

NO. Political parties, particularly minority political parties, are not prohibited to participate in the party list election if they can prove that they are also organized along sectoral lines. Neither the Constitution nor RA 7941 prohibits major political parties from participating in party-list elections through their sectoral wings. In fact, the members of the Constitutional Commission voted down any permanent sectoral seats, and in the alternative the reservation of the party-list system to the sectoral groups. In defining a party that participates in party-list elections as either a political party or a sectoral party, RA 7941 also clearly intended that major political parties will participate in the

party-list elections. Excluding the major political parties in party-list elections is manifestly against the Constitution, the intent of the Constitutional Commission, and RA 7941. Furthermore, under Section 9 of RA 7941, it is not necessary that the party-list organizations nominee wallow in poverty, destitution, and infirmity as there is no financial status required in law. It is enough that the nominee of the sectoral party/organization/coalition belongs to the marginalized and underrepresented sectors. However, by a vote of 8-7, the Court decided to continue the ruling in Veterans disallowing major political parties from participating in the party-list elections, directly or indirectly. According to Chief Justice Punos dissent, the party-list representatives are no match to our traditional political parties in the political arena; and that if major political parties are allowed to participate in the party-list system electoral process, the voices of the marginalized would be surely suffocated, and that the democratic spirit of the Constitution would be betrayed. He cited the 2001 party-list elections where the major political parties figured in the disproportionate distribution of votes. 8 Justices concurred. Additional Note: Justice Nachura concurs with Justice Carpio and further adds that the 2% threshold vote required for entitlement by a political party-list group to a seat in the HR in RA 7941 is unconstitutional because, according to him, there will never be a situation where the number of party-list representatives will exceed 50, regardless of the number of district representatives. He then submits the standard of proportional representation and the adoption of a gradually regressive threshold vote requirement, inversely proportional to the increase in the number of party-list seats. He proposes this new formula for the threshold: 100% (total number of votes cast for party-list) --------------------------------------------------------=1.818% 55 party-list seats And that the minimum vote requirement should gradually lessen as the number of partylist seats increases. Doctrines: A Philippine-style party-list election has at least four inviolable parameters: 1.20% allocation. The combined number of all party-list congressmen shall not exceed 20% of the total membership of the House of Representatives, including those elected under the party list; 2.2% threshold. Only those parties garnering a minimum of 2% of the total valid votes cast for the party-list system are qualified to have a seat in the House of Representatives; 3.Three-seat limit. Each qualified party, regardless of the number of votes it actually obtained, is entitled to a maximum of three seats; that is, one qualifying and two additional seats;

4.Proportional representation. The additional seats which a qualified party is entitled to shall be computed in proportion to their total number of votes. In declaring the 2% threshold unconstitutional, the Court does not limit the allocation of additional seats to the two- percenters. The percentage of votes garnered by each partylist candidate is arrived at by dividing the number of votes garnered by each party by the total number of votes cast for party-list candidates. There are two steps in the second round of seat allocation. First, the percentage is multiplied by the remaining available seats (the difference between the maximum seats reserved under the Party-List System and the guaranteed seats of the two-percenters). The whole integer of the product of the percentage and of the remaining available seats corresponds to a partys share in the remaining available seats. Second, one party-list seat is assigned to each of the parties next in rank until all available seats are completely distributed. Finally, the three-seat cap is applied to determine the number of seats each qualified party-list candidate is entitled. The 20% allocation of party-list representatives is merely a ceiling; party-list representatives cannot be more than 20% of the members of the House of Representatives. Obiter: It is the intent of the sovereign people that matters in interpreting the Constitution. It is ironic, therefore, that the marginalized and underrepresented in our midst are the majority who wallow in poverty, destitution, and infirmity. It was for them the party-list system was enactedto give them not only genuine hope, but genuine power; to give them the opportunity to be elected and to represent the specific concerns of their constituencies; and simply to give them a direct voice in Congress and in the larger affairs of the State. Time changes and the laws change with it. Justice Nachura

29.
G.R. No. 192935 December 7, 2010 LOUIS "BAROK" C. BIRAOGO, Petitioner, vs. THE PHILIPPINE TRUTH COMMISSION OF 2010, Respondent.

G.R. No. 193036 REP. EDCEL C. LAGMAN, REP. RODOLFO B. ALBANO, JR., REP. SIMEON A. DATUMANONG, and REP. ORLANDO B. FUA, SR., Petitioners, vs. EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. and DEPARTMENT OF BUDGET AND MANAGEMENT SECRETARY FLORENCIO B. ABAD, Respondents. DECISION MENDOZA, J.: When the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them. --- Justice Jose P. Laurel1 The role of the Constitution cannot be overlooked. It is through the Constitution that the fundamental powers of government are established, limited and defined, and by which these powers are distributed among the several departments.2 The Constitution is the basic and paramount law to which all other laws must conform and to which all persons, including the highest officials of the land, must defer.3 Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be simply made to sway and accommodate the call of situations and much more tailor itself to the whims and caprices of government and the people who run it.4 For consideration before the Court are two consolidated cases5 both of which essentially assail the validity and constitutionality of Executive Order No. 1, dated July 30, 2010, entitled "Creating the Philippine Truth Commission of 2010." The first case is G.R. No. 192935, a special civil action for prohibition instituted by petitioner Louis Biraogo (Biraogo) in his capacity as a citizen and taxpayer. Biraogo assails Executive Order No. 1 for being violative of the legislative power of Congress under Section 1, Article VI of the Constitution6 as it usurps the constitutional authority of the legislature to create a public office and to appropriate funds therefor.7 The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition filed by petitioners Edcel C. Lagman, Rodolfo B. Albano Jr., Simeon A. Datumanong, and Orlando B. Fua, Sr. (petitioners-legislators) as incumbent members of the House of Representatives.

The genesis of the foregoing cases can be traced to the events prior to the historic May 2010 elections, when then Senator Benigno Simeon Aquino III declared his staunch condemnation of graft and corruption with his slogan, "Kung walang corrupt, walang mahirap." The Filipino people, convinced of his sincerity and of his ability to carry out this noble objective, catapulted the good senator to the presidency. To transform his campaign slogan into reality, President Aquino found a need for a special body to investigate reported cases of graft and corruption allegedly committed during the previous administration. Thus, at the dawn of his administration, the President on July 30, 2010, signed Executive Order No. 1 establishing the Philippine Truth Commission of 2010 (Truth Commission). Pertinent provisions of said executive order read: EXECUTIVE ORDER NO. 1 CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010 WHEREAS, Article XI, Section 1 of the 1987 Constitution of the Philippines solemnly enshrines the principle that a public office is a public trust and mandates that public officers and employees, who are servants of the people, must at all times be accountable to the latter, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice, and lead modest lives; WHEREAS, corruption is among the most despicable acts of defiance of this principle and notorious violation of this mandate; WHEREAS, corruption is an evil and scourge which seriously affects the political, economic, and social life of a nation; in a very special way it inflicts untold misfortune and misery on the poor, the marginalized and underprivileged sector of society; WHEREAS, corruption in the Philippines has reached very alarming levels, and undermined the peoples trust and confidence in the Government and its institutions; WHEREAS, there is an urgent call for the determination of the truth regarding certain reports of large scale graft and corruption in the government and to put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to deter others from committing the evil, restore the peoples faith and confidence in the Government and in their public servants; WHEREAS, the Presidents battlecry during his campaign for the Presidency in the last elections "kung walang corrupt, walang mahirap" expresses a solemn pledge that if elected, he would end corruption and the evil it breeds; WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported cases of graft and corruption during the

previous administration, and which will recommend the prosecution of the offenders and secure justice for all; WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No. 292, otherwise known as the Revised Administrative Code of the Philippines, gives the President the continuing authority to reorganize the Office of the President. NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby order: SECTION 1. Creation of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as the "COMMISSION," which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people, committed by public officers and employees, their coprincipals, accomplices and accessories from the private sector, if any, during the previous administration; and thereafter recommend the appropriate action or measure to be taken thereon to ensure that the full measure of justice shall be served without fear or favor. The Commission shall be composed of a Chairman and four (4) members who will act as an independent collegial body. SECTION 2. Powers and Functions. The Commission, which shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration and thereafter submit its finding and recommendations to the President, Congress and the Ombudsman. In particular, it shall: a) Identify and determine the reported cases of such graft and corruption which it will investigate; b) Collect, receive, review and evaluate evidence related to or regarding the cases of large scale corruption which it has chosen to investigate, and to this end require any agency, official or employee of the Executive Branch, including governmentowned or controlled corporations, to produce documents, books, records and other papers; c) Upon proper request or representation, obtain information and documents from the Senate and the House of Representatives records of investigations conducted

by committees thereof relating to matters or subjects being investigated by the Commission; d) Upon proper request and representation, obtain information from the courts, including the Sandiganbayan and the Office of the Court Administrator, information or documents in respect to corruption cases filed with the Sandiganbayan or the regular courts, as the case may be; e) Invite or subpoena witnesses and take their testimonies and for that purpose, administer oaths or affirmations as the case may be; f) Recommend, in cases where there is a need to utilize any person as a state witness to ensure that the ends of justice be fully served, that such person who qualifies as a state witness under the Revised Rules of Court of the Philippines be admitted for that purpose; g) Turn over from time to time, for expeditious prosecution, to the appropriate prosecutorial authorities, by means of a special or interim report and recommendation, all evidence on corruption of public officers and employees and their private sector co-principals, accomplices or accessories, if any, when in the course of its investigation the Commission finds that there is reasonable ground to believe that they are liable for graft and corruption under pertinent applicable laws; h) Call upon any government investigative or prosecutorial agency such as the Department of Justice or any of the agencies under it, and the Presidential AntiGraft Commission, for such assistance and cooperation as it may require in the discharge of its functions and duties; i) Engage or contract the services of resource persons, professionals and other personnel determined by it as necessary to carry out its mandate; j) Promulgate its rules and regulations or rules of procedure it deems necessary to effectively and efficiently carry out the objectives of this Executive Order and to ensure the orderly conduct of its investigations, proceedings and hearings, including the presentation of evidence; k) Exercise such other acts incident to or are appropriate and necessary in connection with the objectives and purposes of this Order. SECTION 3. Staffing Requirements. x x x. SECTION 4. Detail of Employees. x x x. SECTION 5. Engagement of Experts. x x x

SECTION 6. Conduct of Proceedings. x x x. SECTION 7. Right to Counsel of Witnesses/Resource Persons. x x x. SECTION 8. Protection of Witnesses/Resource Persons. x x x. SECTION 9. Refusal to Obey Subpoena, Take Oath or Give Testimony. Any government official or personnel who, without lawful excuse, fails to appear upon subpoena issued by the Commission or who, appearing before the Commission refuses to take oath or affirmation, give testimony or produce documents for inspection, when required, shall be subject to administrative disciplinary action. Any private person who does the same may be dealt with in accordance with law. SECTION 10. Duty to Extend Assistance to the Commission. x x x. SECTION 11. Budget for the Commission. The Office of the President shall provide the necessary funds for the Commission to ensure that it can exercise its powers, execute its functions, and perform its duties and responsibilities as effectively, efficiently, and expeditiously as possible. SECTION 12. Office. x x x. SECTION 13. Furniture/Equipment. x x x. SECTION 14. Term of the Commission. The Commission shall accomplish its mission on or before December 31, 2012. SECTION 15. Publication of Final Report. x x x. SECTION 16. Transfer of Records and Facilities of the Commission. x x x. SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and corruption during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive Order. SECTION 18. Separability Clause. If any provision of this Order is declared unconstitutional, the same shall not affect the validity and effectivity of the other provisions hereof. SECTION 19. Effectivity. This Executive Order shall take effect immediately. DONE in the City of Manila, Philippines, this 30th day of July 2010.

(SGD.) BENIGNO S. AQUINO III By the President: (SGD.) PAQUITO N. OCHOA, JR. Executive Secretary Nature of the Truth Commission As can be gleaned from the above-quoted provisions, the Philippine Truth Commission (PTC) is a mere ad hoc body formed under the Office of the President with the primary task to investigate reports of graft and corruption committed by third-level public officers and employees, their co-principals, accomplices and accessories during the previous administration, and thereafter to submit its finding and recommendations to the President, Congress and the Ombudsman. Though it has been described as an "independent collegial body," it is essentially an entity within the Office of the President Proper and subject to his control. Doubtless, it constitutes a public office, as an ad hoc body is one.8 To accomplish its task, the PTC shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987. It is not, however, a quasi-judicial body as it cannot adjudicate, arbitrate, resolve, settle, or render awards in disputes between contending parties. All it can do is gather, collect and assess evidence of graft and corruption and make recommendations. It may have subpoena powers but it has no power to cite people in contempt, much less order their arrest. Although it is a fact-finding body, it cannot determine from such facts if probable cause exists as to warrant the filing of an information in our courts of law. Needless to state, it cannot impose criminal, civil or administrative penalties or sanctions. The PTC is different from the truth commissions in other countries which have been created as official, transitory and non-judicial fact-finding bodies "to establish the facts and context of serious violations of human rights or of international humanitarian law in a countrys past."9 They are usually established by states emerging from periods of internal unrest, civil strife or authoritarianism to serve as mechanisms for transitional justice. Truth commissions have been described as bodies that share the following characteristics: (1) they examine only past events; (2) they investigate patterns of abuse committed over a period of time, as opposed to a particular event; (3) they are temporary bodies that finish their work with the submission of a report containing conclusions and recommendations; and (4) they are officially sanctioned, authorized or empowered by the State.10 "Commissions members are usually empowered to conduct research, support victims, and propose policy recommendations to prevent recurrence of crimes. Through their investigations, the commissions may aim to discover and learn more about past abuses, or formally acknowledge them. They may aim to prepare the way for prosecutions and recommend institutional reforms."11 Thus, their main goals range from retribution to reconciliation. The Nuremburg and Tokyo war crime tribunals are examples of a retributory or vindicatory body set up to try

and punish those responsible for crimes against humanity. A form of a reconciliatory tribunal is the Truth and Reconciliation Commission of South Africa, the principal function of which was to heal the wounds of past violence and to prevent future conflict by providing a cathartic experience for victims. The PTC is a far cry from South Africas model. The latter placed more emphasis on reconciliation than on judicial retribution, while the marching order of the PTC is the identification and punishment of perpetrators. As one writer12 puts it: The order ruled out reconciliation. It translated the Draconian code spelled out by Aquino in his inaugural speech: "To those who talk about reconciliation, if they mean that they would like us to simply forget about the wrongs that they have committed in the past, we have this to say: There can be no reconciliation without justice. When we allow crimes to go unpunished, we give consent to their occurring over and over again." The Thrusts of the Petitions Barely a month after the issuance of Executive Order No. 1, the petitioners asked the Court to declare it unconstitutional and to enjoin the PTC from performing its functions. A perusal of the arguments of the petitioners in both cases shows that they are essentially the same. The petitioners-legislators summarized them in the following manner: (a) E.O. No. 1 violates the separation of powers as it arrogates the power of the Congress to create a public office and appropriate funds for its operation. (b) The provision of Book III, Chapter 10, Section 31 of the Administrative Code of 1987 cannot legitimize E.O. No. 1 because the delegated authority of the President to structurally reorganize the Office of the President to achieve economy, simplicity and efficiency does not include the power to create an entirely new public office which was hitherto inexistent like the "Truth Commission." (c) E.O. No. 1 illegally amended the Constitution and pertinent statutes when it vested the "Truth Commission" with quasi-judicial powers duplicating, if not superseding, those of the Office of the Ombudsman created under the 1987 Constitution and the Department of Justice created under the Administrative Code of 1987. (d) E.O. No. 1 violates the equal protection clause as it selectively targets for investigation and prosecution officials and personnel of the previous administration as if corruption is their peculiar species even as it excludes those of the other administrations, past and present, who may be indictable. (e) The creation of the "Philippine Truth Commission of 2010" violates the consistent and general international practice of four decades wherein States constitute truth commissions to exclusively investigate human rights violations,

which customary practice forms part of the generally accepted principles of international law which the Philippines is mandated to adhere to pursuant to the Declaration of Principles enshrined in the Constitution. (f) The creation of the "Truth Commission" is an exercise in futility, an adventure in partisan hostility, a launching pad for trial/conviction by publicity and a mere populist propaganda to mistakenly impress the people that widespread poverty will altogether vanish if corruption is eliminated without even addressing the other major causes of poverty. (g) The mere fact that previous commissions were not constitutionally challenged is of no moment because neither laches nor estoppel can bar an eventual question on the constitutionality and validity of an executive issuance or even a statute."13 In their Consolidated Comment,14 the respondents, through the Office of the Solicitor General (OSG), essentially questioned the legal standing of petitioners and defended the assailed executive order with the following arguments: 1] E.O. No. 1 does not arrogate the powers of Congress to create a public office because the Presidents executive power and power of control necessarily include the inherent power to conduct investigations to ensure that laws are faithfully executed and that, in any event, the Constitution, Revised Administrative Code of 1987 (E.O. No. 292), 15 Presidential Decree (P.D.) No. 141616 (as amended by P.D. No. 1772), R.A. No. 9970,17 and settled jurisprudence that authorize the President to create or form such bodies. 2] E.O. No. 1 does not usurp the power of Congress to appropriate funds because there is no appropriation but a mere allocation of funds already appropriated by Congress. 3] The Truth Commission does not duplicate or supersede the functions of the Office of the Ombudsman (Ombudsman) and the Department of Justice (DOJ), because it is a fact-finding body and not a quasi-judicial body and its functions do not duplicate, supplant or erode the latters jurisdiction. 4] The Truth Commission does not violate the equal protection clause because it was validly created for laudable purposes. The OSG then points to the continued existence and validity of other executive orders and presidential issuances creating similar bodies to justify the creation of the PTC such as Presidential Complaint and Action Commission (PCAC) by President Ramon B. Magsaysay, Presidential Committee on Administrative Performance Efficiency (PCAPE) by President Carlos P. Garcia and Presidential Agency on Reform and Government Operations (PARGO) by President Ferdinand E. Marcos.18

From the petitions, pleadings, transcripts, and memoranda, the following are the principal issues to be resolved: 1. Whether or not the petitioners have the legal standing to file their respective petitions and question Executive Order No. 1; 2. Whether or not Executive Order No. 1 violates the principle of separation of powers by usurping the powers of Congress to create and to appropriate funds for public offices, agencies and commissions; 3. Whether or not Executive Order No. 1 supplants the powers of the Ombudsman and the DOJ; 4. Whether or not Executive Order No. 1 violates the equal protection clause; and 5. Whether or not petitioners are entitled to injunctive relief. Essential requisites for judicial review Before proceeding to resolve the issue of the constitutionality of Executive Order No. 1, the Court needs to ascertain whether the requisites for a valid exercise of its power of judicial review are present. Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there must be an actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the standing to question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be raised at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.19 Among all these limitations, only the legal standing of the petitioners has been put at issue. Legal Standing of the Petitioners The OSG attacks the legal personality of the petitioners-legislators to file their petition for failure to demonstrate their personal stake in the outcome of the case. It argues that the petitioners have not shown that they have sustained or are in danger of sustaining any personal injury attributable to the creation of the PTC. Not claiming to be the subject of the commissions investigations, petitioners will not sustain injury in its creation or as a result of its proceedings.20 The Court disagrees with the OSG in questioning the legal standing of the petitionerslegislators to assail Executive Order No. 1. Evidently, their petition primarily invokes

usurpation of the power of the Congress as a body to which they belong as members. This certainly justifies their resolve to take the cudgels for Congress as an institution and present the complaints on the usurpation of their power and rights as members of the legislature before the Court. As held in Philippine Constitution Association v. Enriquez,21 To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office confers a right to participate in the exercise of the powers of that institution. An act of the Executive which injures the institution of Congress causes a derivative but nonetheless substantial injury, which can be questioned by a member of Congress. In such a case, any member of Congress can have a resort to the courts. Indeed, legislators have a legal standing to see to it that the prerogative, powers and privileges vested by the Constitution in their office remain inviolate. Thus, they are allowed to question the validity of any official action which, to their mind, infringes on their prerogatives as legislators.22 With regard to Biraogo, the OSG argues that, as a taxpayer, he has no standing to question the creation of the PTC and the budget for its operations.23 It emphasizes that the funds to be used for the creation and operation of the commission are to be taken from those funds already appropriated by Congress. Thus, the allocation and disbursement of funds for the commission will not entail congressional action but will simply be an exercise of the Presidents power over contingent funds. As correctly pointed out by the OSG, Biraogo has not shown that he sustained, or is in danger of sustaining, any personal and direct injury attributable to the implementation of Executive Order No. 1. Nowhere in his petition is an assertion of a clear right that may justify his clamor for the Court to exercise judicial power and to wield the axe over presidential issuances in defense of the Constitution. The case of David v. Arroyo24 explained the deep-seated rules on locus standi. Thus: Locus standi is defined as "a right of appearance in a court of justice on a given question." In private suits, standing is governed by the "real-parties-in interest" rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that "every action must be prosecuted or defended in the name of the real party in interest." Accordingly, the "real-party-in interest" is "the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit." Succinctly put, the plaintiffs standing is based on his own right to the relief sought. The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public right" in assailing an allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any other person. He could be suing as a "stranger," or in the category of a "citizen," or taxpayer." In either case, he has to adequately show that he is entitled to seek judicial

protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a "citizen" or "taxpayer. Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public actions. The distinction was first laid down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayers suit is in a different category from the plaintiff in a citizens suit. In the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York Supreme Court in People ex rel Case v. Collins: "In matter of mere public right, howeverthe people are the real partiesIt is at least the right, if not the duty, of every citizen to interfere and see that a public offence be properly pursued and punished, and that a public grievance be remedied." With respect to taxpayers suits, Terr v. Jordan held that "the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds to his injury cannot be denied." However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United State Supreme Court laid down the more stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The same Court ruled that for a private individual to invoke the judicial power to determine the validity of an executive or legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of the public. This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that the person who impugns the validity of a statute must have "a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result." The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate, Manila Race Horse Trainers Association v. De la Fuente, Pascual v. Secretary of Public Works and Anti-Chinese League of the Philippines v. Felix. [Emphases included. Citations omitted] Notwithstanding, the Court leans on the doctrine that "the rule on standing is a matter of procedure, hence, can be relaxed for nontraditional plaintiffs like ordinary citizens, taxpayers, and legislators when the public interest so requires, such as when the matter is of transcendental importance, of overreaching significance to society, or of paramount public interest."25 Thus, in Coconut Oil Refiners Association, Inc. v. Torres,26 the Court held that in cases of paramount importance where serious constitutional questions are involved, the standing requirements may be relaxed and a suit may be allowed to prosper even where there is no direct injury to the party claiming the right of judicial review. In the first Emergency Powers Cases,27 ordinary citizens and taxpayers were allowed to question the constitutionality of several executive orders although they had only an indirect and general interest shared in common with the public.

The OSG claims that the determinants of transcendental importance28 laid down in CREBA v. ERC and Meralco29 are non-existent in this case. The Court, however, finds reason in Biraogos assertion that the petition covers matters of transcendental importance to justify the exercise of jurisdiction by the Court. There are constitutional issues in the petition which deserve the attention of this Court in view of their seriousness, novelty and weight as precedents. Where the issues are of transcendental and paramount importance not only to the public but also to the Bench and the Bar, they should be resolved for the guidance of all.30 Undoubtedly, the Filipino people are more than interested to know the status of the Presidents first effort to bring about a promised change to the country. The Court takes cognizance of the petition not due to overwhelming political undertones that clothe the issue in the eyes of the public, but because the Court stands firm in its oath to perform its constitutional duty to settle legal controversies with overreaching significance to society. Power of the President to Create the Truth Commission In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth Commission is a public office and not merely an adjunct body of the Office of the President.31 Thus, in order that the President may create a public office he must be empowered by the Constitution, a statute or an authorization vested in him by law. According to petitioner, such power cannot be presumed32 since there is no provision in the Constitution or any specific law that authorizes the President to create a truth commission.33 He adds that Section 31 of the Administrative Code of 1987, granting the President the continuing authority to reorganize his office, cannot serve as basis for the creation of a truth commission considering the aforesaid provision merely uses verbs such as "reorganize," "transfer," "consolidate," "merge," and "abolish."34 Insofar as it vests in the President the plenary power to reorganize the Office of the President to the extent of creating a public office, Section 31 is inconsistent with the principle of separation of powers enshrined in the Constitution and must be deemed repealed upon the effectivity thereof.35 Similarly, in G.R. No. 193036, petitioners-legislators argue that the creation of a public office lies within the province of Congress and not with the executive branch of government. They maintain that the delegated authority of the President to reorganize under Section 31 of the Revised Administrative Code: 1) does not permit the President to create a public office, much less a truth commission; 2) is limited to the reorganization of the administrative structure of the Office of the President; 3) is limited to the restructuring of the internal organs of the Office of the President Proper, transfer of functions and transfer of agencies; and 4) only to achieve simplicity, economy and efficiency.36 Such continuing authority of the President to reorganize his office is limited, and by issuing Executive Order No. 1, the President overstepped the limits of this delegated authority. The OSG counters that there is nothing exclusively legislative about the creation by the President of a fact-finding body such as a truth commission. Pointing to numerous offices created by past presidents, it argues that the authority of the President to create public offices within the Office of the President Proper has long been recognized.37 According to

the OSG, the Executive, just like the other two branches of government, possesses the inherent authority to create fact-finding committees to assist it in the performance of its constitutionally mandated functions and in the exercise of its administrative functions.38 This power, as the OSG explains it, is but an adjunct of the plenary powers wielded by the President under Section 1 and his power of control under Section 17, both of Article VII of the Constitution.39 It contends that the President is necessarily vested with the power to conduct fact-finding investigations, pursuant to his duty to ensure that all laws are enforced by public officials and employees of his department and in the exercise of his authority to assume directly the functions of the executive department, bureau and office, or interfere with the discretion of his officials.40 The power of the President to investigate is not limited to the exercise of his power of control over his subordinates in the executive branch, but extends further in the exercise of his other powers, such as his power to discipline subordinates,41 his power for rule making, adjudication and licensing purposes42 and in order to be informed on matters which he is entitled to know.43 The OSG also cites the recent case of Banda v. Ermita,44 where it was held that the President has the power to reorganize the offices and agencies in the executive department in line with his constitutionally granted power of control and by virtue of a valid delegation of the legislative power to reorganize executive offices under existing statutes. Thus, the OSG concludes that the power of control necessarily includes the power to create offices. For the OSG, the President may create the PTC in order to, among others, put a closure to the reported large scale graft and corruption in the government.45 The question, therefore, before the Court is this: Does the creation of the PTC fall within the ambit of the power to reorganize as expressed in Section 31 of the Revised Administrative Code? Section 31 contemplates "reorganization" as limited by the following functional and structural lines: (1) restructuring the internal organization of the Office of the President Proper by abolishing, consolidating or merging units thereof or transferring functions from one unit to another; (2) transferring any function under the Office of the President to any other Department/Agency or vice versa; or (3) transferring any agency under the Office of the President to any other Department/Agency or vice versa. Clearly, the provision refers to reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions. These point to situations where a body or an office is already existent but a modification or alteration thereof has to be effected. The creation of an office is nowhere mentioned, much less envisioned in said provision. Accordingly, the answer to the question is in the negative. To say that the PTC is borne out of a restructuring of the Office of the President under Section 31 is a misplaced supposition, even in the plainest meaning attributable to the term "restructure" an "alteration of an existing structure." Evidently, the PTC was not part of the structure of the Office of the President prior to the enactment of Executive Order No. 1. As held in Buklod ng Kawaning EIIB v. Hon. Executive Secretary,46

But of course, the list of legal basis authorizing the President to reorganize any department or agency in the executive branch does not have to end here. We must not lose sight of the very source of the power that which constitutes an express grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of 1987), "the President, subject to the policy in the Executive Office and in order to achieve simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of the Office of the President." For this purpose, he may transfer the functions of other Departments or Agencies to the Office of the President. In Canonizado v. Aguirre [323 SCRA 312 (2000)], we ruled that reorganization "involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions." It takes place when there is an alteration of the existing structure of government offices or units therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to the Department of Finance. It falls under the Office of the President. Hence, it is subject to the Presidents continuing authority to reorganize. [Emphasis Supplied] In the same vein, the creation of the PTC is not justified by the Presidents power of control. Control is essentially the power to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former with that of the latter.47 Clearly, the power of control is entirely different from the power to create public offices. The former is inherent in the Executive, while the latter finds basis from either a valid delegation from Congress, or his inherent duty to faithfully execute the laws. The question is this, is there a valid delegation of power from Congress, empowering the President to create a public office? According to the OSG, the power to create a truth commission pursuant to the above provision finds statutory basis under P.D. 1416, as amended by P.D. No. 1772.48 The said law granted the President the continuing authority to reorganize the national government, including the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and classify functions, services and activities, transfer appropriations, and to standardize salaries and materials. This decree, in relation to Section 20, Title I, Book III of E.O. 292 has been invoked in several cases such as Larin v. Executive Secretary.49 The Court, however, declines to recognize P.D. No. 1416 as a justification for the President to create a public office. Said decree is already stale, anachronistic and inoperable. P.D. No. 1416 was a delegation to then President Marcos of the authority to reorganize the administrative structure of the national government including the power to create offices and transfer appropriations pursuant to one of the purposes of the decree, embodied in its last "Whereas" clause: WHEREAS, the transition towards the parliamentary form of government will necessitate flexibility in the organization of the national government.

Clearly, as it was only for the purpose of providing manageability and resiliency during the interim, P.D. No. 1416, as amended by P.D. No. 1772, became functus oficio upon the convening of the First Congress, as expressly provided in Section 6, Article XVIII of the 1987 Constitution. In fact, even the Solicitor General agrees with this view. Thus: ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was enacted was the last whereas clause of P.D. 1416 says "it was enacted to prepare the transition from presidential to parliamentary. Now, in a parliamentary form of government, the legislative and executive powers are fused, correct? SOLICITOR GENERAL CADIZ: Yes, Your Honor. ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416 was issued. Now would you agree with me that P.D. 1416 should not be considered effective anymore upon the promulgation, adoption, ratification of the 1987 Constitution. SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.] 1416, Your Honor. ASSOCIATE JUSTICE CARPIO: The power of the President to reorganize the entire National Government is deemed repealed, at least, upon the adoption of the 1987 Constitution, correct. SOLICITOR GENERAL CADIZ: Yes, Your Honor.50 While the power to create a truth commission cannot pass muster on the basis of P.D. No. 1416 as amended by P.D. No. 1772, the creation of the PTC finds justification under Section 17, Article VII of the Constitution, imposing upon the President the duty to ensure that the laws are faithfully executed. Section 17 reads: Section 17. The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the laws be faithfully executed. (Emphasis supplied). As correctly pointed out by the respondents, the allocation of power in the three principal branches of government is a grant of all powers inherent in them. The Presidents power to conduct investigations to aid him in ensuring the faithful execution of laws in this case, fundamental laws on public accountability and transparency is inherent in the Presidents powers as the Chief Executive. That the authority of the President to conduct investigations and to create bodies to execute this power is not explicitly mentioned in the Constitution or in statutes does not mean that he is bereft of such authority.51 As explained in the landmark case of Marcos v. Manglapus:52 x x x. The 1987 Constitution, however, brought back the presidential system of government and restored the separation of legislative, executive and judicial powers by their actual distribution among three distinct branches of government with provision for checks and balances.

It would not be accurate, however, to state that "executive power" is the power to enforce the laws, for the President is head of state as well as head of government and whatever powers inhere in such positions pertain to the office unless the Constitution itself withholds it. Furthermore, the Constitution itself provides that the execution of the laws is only one of the powers of the President. It also grants the President other powers that do not involve the execution of any provision of law, e.g., his power over the country's foreign relations. On these premises, we hold the view that although the 1987 Constitution imposes limitations on the exercise of specific powers of the President, it maintains intact what is traditionally considered as within the scope of "executive power." Corollarily, the powers of the President cannot be said to be limited only to the specific powers enumerated in the Constitution. In other words, executive power is more than the sum of specific powers so enumerated. It has been advanced that whatever power inherent in the government that is neither legislative nor judicial has to be executive. x x x. Indeed, the Executive is given much leeway in ensuring that our laws are faithfully executed. As stated above, the powers of the President are not limited to those specific powers under the Constitution.53 One of the recognized powers of the President granted pursuant to this constitutionally-mandated duty is the power to create ad hoc committees. This flows from the obvious need to ascertain facts and determine if laws have been faithfully executed. Thus, in Department of Health v. Camposano,54 the authority of the President to issue Administrative Order No. 298, creating an investigative committee to look into the administrative charges filed against the employees of the Department of Health for the anomalous purchase of medicines was upheld. In said case, it was ruled: The Chief Executives power to create the Ad hoc Investigating Committee cannot be doubted. Having been constitutionally granted full control of the Executive Department, to which respondents belong, the President has the obligation to ensure that all executive officials and employees faithfully comply with the law. With AO 298 as mandate, the legality of the investigation is sustained. Such validity is not affected by the fact that the investigating team and the PCAGC had the same composition, or that the former used the offices and facilities of the latter in conducting the inquiry. [Emphasis supplied] It should be stressed that the purpose of allowing ad hoc investigating bodies to exist is to allow an inquiry into matters which the President is entitled to know so that he can be properly advised and guided in the performance of his duties relative to the execution and enforcement of the laws of the land. And if history is to be revisited, this was also the objective of the investigative bodies created in the past like the PCAC, PCAPE, PARGO, the Feliciano Commission, the Melo Commission and the Zenarosa Commission. There being no changes in the government structure, the Court is not inclined to declare such executive power as non-existent just because the direction of the political winds have changed.

On the charge that Executive Order No. 1 transgresses the power of Congress to appropriate funds for the operation of a public office, suffice it to say that there will be no appropriation but only an allotment or allocations of existing funds already appropriated. Accordingly, there is no usurpation on the part of the Executive of the power of Congress to appropriate funds. Further, there is no need to specify the amount to be earmarked for the operation of the commission because, in the words of the Solicitor General, "whatever funds the Congress has provided for the Office of the President will be the very source of the funds for the commission."55 Moreover, since the amount that would be allocated to the PTC shall be subject to existing auditing rules and regulations, there is no impropriety in the funding. Power of the Truth Commission to Investigate The Presidents power to conduct investigations to ensure that laws are faithfully executed is well recognized. It flows from the faithful-execution clause of the Constitution under Article VII, Section 17 thereof.56 As the Chief Executive, the president represents the government as a whole and sees to it that all laws are enforced by the officials and employees of his department. He has the authority to directly assume the functions of the executive department.57 Invoking this authority, the President constituted the PTC to primarily investigate reports of graft and corruption and to recommend the appropriate action. As previously stated, no quasi-judicial powers have been vested in the said body as it cannot adjudicate rights of persons who come before it. It has been said that "Quasi-judicial powers involve the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by law itself in enforcing and administering the same law."58 In simpler terms, judicial discretion is involved in the exercise of these quasi-judicial power, such that it is exclusively vested in the judiciary and must be clearly authorized by the legislature in the case of administrative agencies. The distinction between the power to investigate and the power to adjudicate was delineated by the Court in Cario v. Commission on Human Rights.59 Thus: "Investigate," commonly understood, means to examine, explore, inquire or delve or probe into, research on, study. The dictionary definition of "investigate" is "to observe or study closely: inquire into systematically: "to search or inquire into: x x to subject to an official probe x x: to conduct an official inquiry." The purpose of investigation, of course, is to discover, to find out, to learn, obtain information. Nowhere included or intimated is the notion of settling, deciding or resolving a controversy involved in the facts inquired into by application of the law to the facts established by the inquiry. The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or observation. To trace or track; to search into; to examine and inquire into with care and accuracy; to find out by careful inquisition; examination; the taking of evidence; a legal inquiry;" "to inquire; to make an investigation," "investigation" being in turn described as "(a)n administrative function, the exercise of which ordinarily does not

require a hearing. 2 Am J2d Adm L Sec. 257; x x an inquiry, judicial or otherwise, for the discovery and collection of facts concerning a certain matter or matters." "Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine, resolve, rule on, settle. The dictionary defines the term as "to settle finally (the rights and duties of the parties to a court case) on the merits of issues raised: x x to pass judgment on: settle judicially: x x act as judge." And "adjudge" means "to decide or rule upon as a judge or with judicial or quasi-judicial powers: x x to award or grant judicially in a case of controversy x x." In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally. Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or decree, or to sentence or condemn. x x. Implies a judicial determination of a fact, and the entry of a judgment." [Italics included. Citations Omitted] Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of justice, or even a quasi-judicial agency or office. The function of receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function. To be considered as such, the act of receiving evidence and arriving at factual conclusions in a controversy must be accompanied by the authority of applying the law to the factual conclusions to the end that the controversy may be decided or resolved authoritatively, finally and definitively, subject to appeals or modes of review as may be provided by law.60 Even respondents themselves admit that the commission is bereft of any quasijudicial power.61 Contrary to petitioners apprehension, the PTC will not supplant the Ombudsman or the DOJ or erode their respective powers. If at all, the investigative function of the commission will complement those of the two offices. As pointed out by the Solicitor General, the recommendation to prosecute is but a consequence of the overall task of the commission to conduct a fact-finding investigation."62 The actual prosecution of suspected offenders, much less adjudication on the merits of the charges against them,63 is certainly not a function given to the commission. The phrase, "when in the course of its investigation," under Section 2(g), highlights this fact and gives credence to a contrary interpretation from that of the petitioners. The function of determining probable cause for the filing of the appropriate complaints before the courts remains to be with the DOJ and the Ombudsman.64 At any rate, the Ombudsmans power to investigate under R.A. No. 6770 is not exclusive but is shared with other similarly authorized government agencies. Thus, in the case of Ombudsman v. Galicia,65 it was written: This power of investigation granted to the Ombudsman by the 1987 Constitution and The Ombudsman Act is not exclusive but is shared with other similarly authorized government agencies such as the PCGG and judges of municipal trial courts and municipal circuit trial courts. The power to conduct preliminary investigation on charges

against public employees and officials is likewise concurrently shared with the Department of Justice. Despite the passage of the Local Government Code in 1991, the Ombudsman retains concurrent jurisdiction with the Office of the President and the local Sanggunians to investigate complaints against local elective officials. [Emphasis supplied]. Also, Executive Order No. 1 cannot contravene the power of the Ombudsman to investigate criminal cases under Section 15 (1) of R.A. No. 6770, which states: (1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any public officer or employee, office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient. It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in the exercise of its primary jurisdiction, it may take over, at any stage, from any investigatory agency of government, the investigation of such cases. [Emphases supplied] The act of investigation by the Ombudsman as enunciated above contemplates the conduct of a preliminary investigation or the determination of the existence of probable cause. This is categorically out of the PTCs sphere of functions. Its power to investigate is limited to obtaining facts so that it can advise and guide the President in the performance of his duties relative to the execution and enforcement of the laws of the land. In this regard, the PTC commits no act of usurpation of the Ombudsmans primordial duties. The same holds true with respect to the DOJ. Its authority under Section 3 (2), Chapter 1, Title III, Book IV in the Revised Administrative Code is by no means exclusive and, thus, can be shared with a body likewise tasked to investigate the commission of crimes. Finally, nowhere in Executive Order No. 1 can it be inferred that the findings of the PTC are to be accorded conclusiveness. Much like its predecessors, the Davide Commission, the Feliciano Commission and the Zenarosa Commission, its findings would, at best, be recommendatory in nature. And being so, the Ombudsman and the DOJ have a wider degree of latitude to decide whether or not to reject the recommendation. These offices, therefore, are not deprived of their mandated duties but will instead be aided by the reports of the PTC for possible indictments for violations of graft laws. Violation of the Equal Protection Clause Although the purpose of the Truth Commission falls within the investigative power of the President, the Court finds difficulty in upholding the constitutionality of Executive Order No. 1 in view of its apparent transgression of the equal protection clause enshrined in Section 1, Article III (Bill of Rights) of the 1987 Constitution. Section 1 reads: Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.

The petitioners assail Executive Order No. 1 because it is violative of this constitutional safeguard. They contend that it does not apply equally to all members of the same class such that the intent of singling out the "previous administration" as its sole object makes the PTC an "adventure in partisan hostility."66 Thus, in order to be accorded with validity, the commission must also cover reports of graft and corruption in virtually all administrations previous to that of former President Arroyo.67 The petitioners argue that the search for truth behind the reported cases of graft and corruption must encompass acts committed not only during the administration of former President Arroyo but also during prior administrations where the "same magnitude of controversies and anomalies"68 were reported to have been committed against the Filipino people. They assail the classification formulated by the respondents as it does not fall under the recognized exceptions because first, "there is no substantial distinction between the group of officials targeted for investigation by Executive Order No. 1 and other groups or persons who abused their public office for personal gain; and second, the selective classification is not germane to the purpose of Executive Order No. 1 to end corruption."69 In order to attain constitutional permission, the petitioners advocate that the commission should deal with "graft and grafters prior and subsequent to the Arroyo administration with the strong arm of the law with equal force."70 Position of respondents According to respondents, while Executive Order No. 1 identifies the "previous administration" as the initial subject of the investigation, following Section 17 thereof, the PTC will not confine itself to cases of large scale graft and corruption solely during the said administration.71 Assuming arguendo that the commission would confine its proceedings to officials of the previous administration, the petitioners argue that no offense is committed against the equal protection clause for "the segregation of the transactions of public officers during the previous administration as possible subjects of investigation is a valid classification based on substantial distinctions and is germane to the evils which the Executive Order seeks to correct."72 To distinguish the Arroyo administration from past administrations, it recited the following: First. E.O. No. 1 was issued in view of widespread reports of large scale graft and corruption in the previous administration which have eroded public confidence in public institutions. There is, therefore, an urgent call for the determination of the truth regarding certain reports of large scale graft and corruption in the government and to put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to deter others from committing the evil, restore the peoples faith and confidence in the Government and in their public servants. Second. The segregation of the preceding administration as the object of fact-finding is warranted by the reality that unlike with administrations long gone, the current administration will most likely bear the immediate consequence of the policies of the previous administration.

Third. The classification of the previous administration as a separate class for investigation lies in the reality that the evidence of possible criminal activity, the evidence that could lead to recovery of public monies illegally dissipated, the policy lessons to be learned to ensure that anti-corruption laws are faithfully executed, are more easily established in the regime that immediately precede the current administration. Fourth. Many administrations subject the transactions of their predecessors to investigations to provide closure to issues that are pivotal to national life or even as a routine measure of due diligence and good housekeeping by a nascent administration like the Presidential Commission on Good Government (PCGG), created by the late President Corazon C. Aquino under Executive Order No. 1 to pursue the recovery of ill-gotten wealth of her predecessor former President Ferdinand Marcos and his cronies, and the Saguisag Commission created by former President Joseph Estrada under Administrative Order No, 53, to form an ad-hoc and independent citizens committee to investigate all the facts and circumstances surrounding "Philippine Centennial projects" of his predecessor, former President Fidel V. Ramos.73 [Emphases supplied] Concept of the Equal Protection Clause One of the basic principles on which this government was founded is that of the equality of right which is embodied in Section 1, Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process, as every unfair discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause, however, to provide for a more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may be challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause.74 "According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed."75 It "requires public bodies and institutions to treat similarly situated individuals in a similar manner."76 "The purpose of the equal protection clause is to secure every person within a states jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statue or by its improper execution through the states duly constituted authorities."77 "In other words, the concept of equal justice under the law requires the state to govern impartially, and it may not draw distinctions between individuals solely on differences that are irrelevant to a legitimate governmental objective."78 The equal protection clause is aimed at all official state actions, not just those of the legislature.79 Its inhibitions cover all the departments of the government including the political and executive departments, and extend to all actions of a state denying equal protection of the laws, through whatever agency or whatever guise is taken. 80

It, however, does not require the universal application of the laws to all persons or things without distinction. What it simply requires is equality among equals as determined according to a valid classification. Indeed, the equal protection clause permits classification. Such classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1) The classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to existing conditions only; and (4) It applies equally to all members of the same class.81 "Superficial differences do not make for a valid classification."82 For a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong to the class.83 "The classification will be regarded as invalid if all the members of the class are not similarly treated, both as to rights conferred and obligations imposed. It is not necessary that the classification be made with absolute symmetry, in the sense that the members of the class should possess the same characteristics in equal degree. Substantial similarity will suffice; and as long as this is achieved, all those covered by the classification are to be treated equally. The mere fact that an individual belonging to a class differs from the other members, as long as that class is substantially distinguishable from all others, does not justify the non-application of the law to him."84 The classification must not be based on existing circumstances only, or so constituted as to preclude addition to the number included in the class. It must be of such a nature as to embrace all those who may thereafter be in similar circumstances and conditions. It must not leave out or "underinclude" those that should otherwise fall into a certain classification. As elucidated in Victoriano v. Elizalde Rope Workers' Union85 and reiterated in a long line of cases,86 The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity of rights. The Constitution does not require that things which are different in fact be treated in law as though they were the same. The equal protection clause does not forbid discrimination as to things that are different. It does not prohibit legislation which is limited either in the object to which it is directed or by the territory within which it is to operate. The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars. A law is not invalid because of simple inequality. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. All that is required of

a valid classification is that it be reasonable, which means that the classification should be based on substantial distinctions which make for real differences, that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it must apply equally to each member of the class. This Court has held that the standard is satisfied if the classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary. [Citations omitted] Applying these precepts to this case, Executive Order No. 1 should be struck down as violative of the equal protection clause. The clear mandate of the envisioned truth commission is to investigate and find out the truth "concerning the reported cases of graft and corruption during the previous administration"87 only. The intent to single out the previous administration is plain, patent and manifest. Mention of it has been made in at least three portions of the questioned executive order. Specifically, these are: WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported cases of graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and secure justice for all; SECTION 1. Creation of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as the "COMMISSION," which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people, committed by public officers and employees, their coprincipals, accomplices and accessories from the private sector, if any, during the previous administration; and thereafter recommend the appropriate action or measure to be taken thereon to ensure that the full measure of justice shall be served without fear or favor. SECTION 2. Powers and Functions. The Commission, which shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration and thereafter submit its finding and recommendations to the President, Congress and the Ombudsman. [Emphases supplied] In this regard, it must be borne in mind that the Arroyo administration is but just a member of a class, that is, a class of past administrations. It is not a class of its own. Not to include past administrations similarly situated constitutes arbitrariness which the equal protection clause cannot sanction. Such discriminating differentiation clearly reverberates to label the commission as a vehicle for vindictiveness and selective retribution. Though the OSG enumerates several differences between the Arroyo administration and other past administrations, these distinctions are not substantial enough to merit the

restriction of the investigation to the "previous administration" only. The reports of widespread corruption in the Arroyo administration cannot be taken as basis for distinguishing said administration from earlier administrations which were also blemished by similar widespread reports of impropriety. They are not inherent in, and do not inure solely to, the Arroyo administration. As Justice Isagani Cruz put it, "Superficial differences do not make for a valid classification."88 The public needs to be enlightened why Executive Order No. 1 chooses to limit the scope of the intended investigation to the previous administration only. The OSG ventures to opine that "to include other past administrations, at this point, may unnecessarily overburden the commission and lead it to lose its effectiveness."89 The reason given is specious. It is without doubt irrelevant to the legitimate and noble objective of the PTC to stamp out or "end corruption and the evil it breeds."90 The probability that there would be difficulty in unearthing evidence or that the earlier reports involving the earlier administrations were already inquired into is beside the point. Obviously, deceased presidents and cases which have already prescribed can no longer be the subjects of inquiry by the PTC. Neither is the PTC expected to conduct simultaneous investigations of previous administrations, given the bodys limited time and resources. "The law does not require the impossible" (Lex non cogit ad impossibilia).91 Given the foregoing physical and legal impossibility, the Court logically recognizes the unfeasibility of investigating almost a centurys worth of graft cases. However, the fact remains that Executive Order No. 1 suffers from arbitrary classification. The PTC, to be true to its mandate of searching for the truth, must not exclude the other past administrations. The PTC must, at least, have the authority to investigate all past administrations. While reasonable prioritization is permitted, it should not be arbitrary lest it be struck down for being unconstitutional. In the often quoted language of Yick Wo v. Hopkins,92 Though the law itself be fair on its face and impartial in appearance, yet, if applied and administered by public authority with an evil eye and an unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances, material to their rights, the denial of equal justice is still within the prohibition of the constitution. [Emphasis supplied] It could be argued that considering that the PTC is an ad hoc body, its scope is limited. The Court, however, is of the considered view that although its focus is restricted, the constitutional guarantee of equal protection under the laws should not in any way be circumvented. The Constitution is the fundamental and paramount law of the nation to which all other laws must conform and in accordance with which all private rights determined and all public authority administered.93 Laws that do not conform to the Constitution should be stricken down for being unconstitutional.94 While the thrust of the PTC is specific, that is, for investigation of acts of graft and corruption, Executive Order No. 1, to survive, must be read together with the provisions of the Constitution. To

exclude the earlier administrations in the guise of "substantial distinctions" would only confirm the petitioners lament that the subject executive order is only an "adventure in partisan hostility." In the case of US v. Cyprian,95 it was written: "A rather limited number of such classifications have routinely been held or assumed to be arbitrary; those include: race, national origin, gender, political activity or membership in a political party, union activity or membership in a labor union, or more generally the exercise of first amendment rights." To reiterate, in order for a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong to the class.96 "Such a classification must not be based on existing circumstances only, or so constituted as to preclude additions to the number included within a class, but must be of such a nature as to embrace all those who may thereafter be in similar circumstances and conditions. Furthermore, all who are in situations and circumstances which are relative to the discriminatory legislation and which are indistinguishable from those of the members of the class must be brought under the influence of the law and treated by it in the same way as are the members of the class."97 The Court is not unaware that "mere underinclusiveness is not fatal to the validity of a law under the equal protection clause."98 "Legislation is not unconstitutional merely because it is not all-embracing and does not include all the evils within its reach."99 It has been written that a regulation challenged under the equal protection clause is not devoid of a rational predicate simply because it happens to be incomplete.100 In several instances, the underinclusiveness was not considered a valid reason to strike down a law or regulation where the purpose can be attained in future legislations or regulations. These cases refer to the "step by step" process.101 "With regard to equal protection claims, a legislature does not run the risk of losing the entire remedial scheme simply because it fails, through inadvertence or otherwise, to cover every evil that might conceivably have been attacked."102 In Executive Order No. 1, however, there is no inadvertence. That the previous administration was picked out was deliberate and intentional as can be gleaned from the fact that it was underscored at least three times in the assailed executive order. It must be noted that Executive Order No. 1 does not even mention any particular act, event or report to be focused on unlike the investigative commissions created in the past. "The equal protection clause is violated by purposeful and intentional discrimination."103 To disprove petitioners contention that there is deliberate discrimination, the OSG clarifies that the commission does not only confine itself to cases of large scale graft and corruption committed during the previous administration.104 The OSG points to Section 17 of Executive Order No. 1, which provides: SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and

corruption during the prior administrations, such mandate may be so extended accordingly by way of a supplemental Executive Order. The Court is not convinced. Although Section 17 allows the President the discretion to expand the scope of investigations of the PTC so as to include the acts of graft and corruption committed in other past administrations, it does not guarantee that they would be covered in the future. Such expanded mandate of the commission will still depend on the whim and caprice of the President. If he would decide not to include them, the section would then be meaningless. This will only fortify the fears of the petitioners that the Executive Order No. 1 was "crafted to tailor-fit the prosecution of officials and personalities of the Arroyo administration."105 The Court tried to seek guidance from the pronouncement in the case of Virata v. Sandiganbayan,106 that the "PCGG Charter (composed of Executive Orders Nos. 1, 2 and 14) does not violate the equal protection clause." The decision, however, was devoid of any discussion on how such conclusory statement was arrived at, the principal issue in said case being only the sufficiency of a cause of action. A final word The issue that seems to take center stage at present is - whether or not the Supreme Court, in the exercise of its constitutionally mandated power of Judicial Review with respect to recent initiatives of the legislature and the executive department, is exercising undue interference. Is the Highest Tribunal, which is expected to be the protector of the Constitution, itself guilty of violating fundamental tenets like the doctrine of separation of powers? Time and again, this issue has been addressed by the Court, but it seems that the present political situation calls for it to once again explain the legal basis of its action lest it continually be accused of being a hindrance to the nations thrust to progress. The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987 Constitution, is vested with Judicial Power that "includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave of abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government." Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review which is the power to declare a treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation unconstitutional. This power also includes the duty to rule on the constitutionality of the application, or operation of presidential decrees, proclamations, orders, instructions, ordinances, and other regulations. These provisions, however, have been fertile grounds of conflict between the Supreme Court, on one hand, and the two co-equal bodies of government, on the other. Many times the Court has been accused of asserting superiority over the other departments.

To answer this accusation, the words of Justice Laurel would be a good source of enlightenment, to wit: "And when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to them."107 Thus, the Court, in exercising its power of judicial review, is not imposing its own will upon a co-equal body but rather simply making sure that any act of government is done in consonance with the authorities and rights allocated to it by the Constitution. And, if after said review, the Court finds no constitutional violations of any sort, then, it has no more authority of proscribing the actions under review. Otherwise, the Court will not be deterred to pronounce said act as void and unconstitutional. It cannot be denied that most government actions are inspired with noble intentions, all geared towards the betterment of the nation and its people. But then again, it is important to remember this ethical principle: "The end does not justify the means." No matter how noble and worthy of admiration the purpose of an act, but if the means to be employed in accomplishing it is simply irreconcilable with constitutional parameters, then it cannot still be allowed.108 The Court cannot just turn a blind eye and simply let it pass. It will continue to uphold the Constitution and its enshrined principles. "The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be allowed to sap its strength nor greed for power debase its rectitude."109 Lest it be misunderstood, this is not the death knell for a truth commission as nobly envisioned by the present administration. Perhaps a revision of the executive issuance so as to include the earlier past administrations would allow it to pass the test of reasonableness and not be an affront to the Constitution. Of all the branches of the government, it is the judiciary which is the most interested in knowing the truth and so it will not allow itself to be a hindrance or obstacle to its attainment. It must, however, be emphasized that the search for the truth must be within constitutional bounds for "ours is still a government of laws and not of men."110 WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared UNCONSTITUTIONAL insofar as it is violative of the equal protection clause of the Constitution. As also prayed for, the respondents are hereby ordered to cease and desist from carrying out the provisions of Executive Order No. 1. SO ORDERED.

JOSE CATRAL MENDOZA Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice ANTONIO T. CARPIO Associate Justice PRESBITERO J. VELASCO, JR. Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice DIOSDADO M. PERALTA Associate Justice MARIANO C. DEL CASTILLO Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice CONCHITA CARPIO MORALES Associate Justice ANTONIO EDUARDO B. NACHURA Associate Justice ARTURO D. BRION Associate Justice LUCAS P. BERSAMIN Associate Justice ROBERTO A. ABAD Associate Justice JOSE PORTUGAL PEREZ Associate Justice

MARIA LOURDES P.A. SERENO Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court. RENATO C. CORONA Chief Justice

SEPARATE OPINION CORONA, C.J.:

Of Truth and Truth Commissions The fundamental base upon which a truth commission is created is the right to the truth.1 While the right to the truth is yet to be established as a right under customary law2 or as a general principle of international law,3 it has nevertheless emerged as a "legal concept at the national, regional and international levels, and relates to the obligation of the state to provide information to victims or to their families or even society as a whole about the circumstances surrounding serious violations of human rights."4 A truth commission has been generally defined5 as a "body set up to investigate a past history of violations of human rights in a particular country ...,"6 and includes four elements: ... First, a truth commission focuses on the past. Second, a truth commission is not focused on a specific event, but attempts to paint the overall picture of certain human rights abuses, or violations of international humanitarian law, over a period of time. Third, a truth commission usually exists temporarily and for a pre-defined period of time, ceasing to exist with the submission of a report of its findings. Finally, a truth commission is always vested with some sort of authority, by way of its sponsor, that allows it greater access to information, greater security or protection to dig into sensitive issues, and a greater impact with its report.7 As reported by Amnesty International,8 there are at least 33 truth commissions established in 28 countries from 1974 to 2007 and this includes the Philippines, which created the Presidential Committee on Human Rights (PCHR) in 1986 under the postMarcos administration of Pres. Corazon C. Aquino. The Philippine Experience Notably, Pres. Corazon C. Aquino created not one but two truth commissions.9 Aside from the PCHR, which was created to address human rights violations, the Presidential Commission on Good Government or PCGG was also established. The PCGG was tasked with assisting the President in the "recovery of all in-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 or 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," among others.10 Unlike the present embattled and controversial Truth Commission, however, the PCGG was created by Pres. Corazon C. Aquino pursuant to her legislative powers under Executive Order No. 1,11 which in turn, was sanctioned by Proclamation No. 3.12 And unlike the PCGG, the present Truth Commission suffers from both legal and constitutional infirmities and must be struck down as unconstitutional.

Power To Create Public Offices: Inherently Legislative The separation of powers is a fundamental principle in our system of government.13 This principle is one of the cornerstones of our constitutional democracy and it cannot be eroded without endangering our government.14 The 1987 Constitution divides governmental power into three co-equal branches: the executive, the legislative and the judicial. It delineates the powers of the three branches: the legislature is generally limited to the enactment of laws, the executive department to the enforcement of laws and the judiciary to their interpretation and application to cases and controversies.15 Each branch is independent and supreme within its own sphere and the encroachment by one branch on another is to be avoided at all costs. The power under scrutiny in this case is the creation of a public office. It is settled that, except for the offices created by the Constitution, the creation of a public office is primarily a legislative function. The legislature decides what offices are suitable, necessary or convenient for the administration of government.16 The question is whether Congress, by law, has delegated to the Chief Executive this power to create a public office. In creating the Truth Commission, Executive Order No. 1 (E.O. No. 1) points to Section 31, Chapter 10, Book III of E.O. No. 292 or the Administrative Code of 1987 as its legal basis: Section 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 and 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. (Emphasis supplied) This provision pertains to the Presidents continuing delegated power to reorganize the Office of the President. The well-settled principle is that the President has the power to reorganize the offices and agencies in the executive department in line with his

constitutionally granted power of control over executive offices and by virtue of his delegated legislative power to reorganize them under existing statutes.17 Needless to state, such power must always be in accordance with the Constitution, relevant laws and prevailing jurisprudence.18 In creating the Truth Commission, did the President merely exercise his continuing authority to reorganize the executive department? No. Considering that the President was exercising a delegated power, his actions should have conformed to the standards set by the law, that is, that the reorganization be in the interest of "simplicity, economy and efficiency." Were such objectives met? They were not. The Truth Commission clearly duplicates and supplants the functions and powers of the Office of the Ombudsman and/or the Department of Justice, as will be discussed in detail later. How can the creation of a new commission with the same duplicative functions as those of already existing offices result in economy or a more efficient bureaucracy?19 Such a creation becomes even more questionable considering that the 1987 Constitution itself mandates the Ombudsman to investigate graft and corruption cases.20 The Truth Commission in the Light of The Equal Protection Clause Equal protection is a fundamental right guaranteed by the Constitution. Section 1, Article III of the 1987 Constitution reads: ... nor shall any person be denied the equal protection of the laws. It is a right afforded every man. The right to equal protection does not require a universal application of the laws to all persons or things without distinction.21 It requires simply that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed.22 In certain cases, however, as when things or persons are different in fact or circumstance, they may be treated in law differently.23 In Victoriano vs. Elizalde Rope Workers Union,24 the Court declared: The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars. A law is not invalid because of simple inequality. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. All that is required of a valid classification is that it be reasonable, which means that the classification should be based on substantial distinctions which make for real differences, that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it must apply equally to each member of the class. This Court has held that the standard is satisfied if the classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary.

Thus, for a classification to be valid it must pass the test of reasonableness,25 which requires that: (1) it be based on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to present conditions; and (4) it must apply equally to all members of the same class. All four requisites must be complied with for the classification to be valid and constitutional. The constitutionality of E. O. No. 1 is being attacked on the ground that it violates the equal protection clause. Petitioners argue that E.O. No. 1 violates the equal protection clause as it deliberately vests the Truth Commission with jurisdiction and authority to solely target officials and employees of the Arroyo Administration.26 Moreover, they claim that there is no substantial distinction of graft reportedly committed under the Arroyo administration and graft committed under previous administrations to warrant the creation of a Truth Commission which will investigate for prosecution officials and employees of the past administration.27 Respondents, on the other hand, argue that the creation of the Truth Commission does not violate the equal protection clause. According to them, while E.O. No. 1 names the previous administration as the initial subject of the investigation, it does not confine itself to cases of graft and corruption committed solely during the past administration. Section 17 of E.O. No. 1 clearly speaks of the Presidents power to expand its coverage to previous administrations. Moreover, respondents argue that the segregation of the transactions of public officers during the previous administration as possible subjects of investigation is a valid classification based on substantial distinctions and is germane to the evils which the executive order seeks to correct.28 On its face, E.O. No. 1 clearly singles out the previous administration as the Truth Commissions sole subject of investigation. Section 1. Creation of a Commission There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as the "COMMISSION", which shall primarily seek and find the truth on, and toward this end, investigate reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities of the people committed by public officers and employees, their co-principals, accomplices and accessories from the private sector, if any during the previous administration; and thereafter recommend the appropriate action to be taken to ensure that the full measure of justice shall be served without fear or favor.

Section 2. Powers and Functions. The Commission, which shall have the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public officers and higher, their co-principals, accomplices and accessories from the private sector, if any during the previous administration and thereafter submit its findings and recommendations to the President, Congress and the Ombudsman. x x x" (Emphasis supplied) Notwithstanding Section 17, which provides: If and when in the judgment of the President there is a need to expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and instances of graft and corruption during the prior administration, such mandate may be so extended accordingly by way of supplemental Executive Order." (Emphasis supplied), such expanded mandate of the Truth Commission will still depend on the whim and caprice of the President. If the President decides not to expand the coverage of the investigation, then the Truth Commissions sole directive is the investigation of officials and employees of the Arroyo administration. Given the indubitably clear mandate of E.O. No. 1, does the identification of the Arroyo administration as the subject of the Truth Commissions investigation pass the jurisprudential test of reasonableness? Stated differently, does the mandate of E.O. No. 1 violate the equal protection clause of the Constitution? Yes. I rule in favor of petitioners. (1) No Substantial Distinction There is no substantial distinction between the corruption which occurred during the past administration and the corruption of the administrations prior to it. Allegations of graft and corruption in the government are unfortunately prevalent regardless of who the President happens to be. Respondents claim of widespread systemic corruption is not unique only to the past administration. (2) Not Germane to the Purpose of the Law The purpose of E.O. No. 1 (to put an end to corruption in the government) is stated clearly in the preamble of the aforesaid order: WHEREAS, the Presidents battle-cry during his campaign for the Presidency in the last elections "kung walang corrupt, walang mahirap" expresses a solemn pledge that if elected, he would end corruption and the evil it breeds; xxx

In the light of the unmistakable purpose of E.O. No. 1, the classification of the past regime as separate from the past administrations is not germane to the purpose of the law. Corruption did not occur only in the past administration. To stamp out corruption, we must go beyond the faade of each administration and investigate all public officials and employees alleged to have committed graft in any previous administration. (3) E.O. No. 1 does Not Apply to Future Conditions As correctly pointed out by petitioners, the classification does not even refer to present conditions, much more to future conditions vis-avis the commission of graft and corruption. It is limited to a particular past administration and not to all past administrations.29 We go back to the text of the executive order in question. xxx Whereas, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning the reported cases if graft and corruption during the previous administration, and which will recommend the prosecution of the offenders and secure justice for all; xxx Section 1. Creating of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter referred to as the "COMMISSION", which shall primarily seek and find the truth on, and toward this end investigate reports of graft and corruption, x x x if any, during the previous administration; xxx Section 2. Power and Functions. Powers and Functions. The Commission, which shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft and corruption x x x, if any, during the previous administration and thereafter submit its findings and recommendations to the President, Congress and the Ombudsman. x x x The above-quoted provisions show that the sole subject of the investigation will be public officers and employees of the previous administration only, that is, until such time if and when the President decides to expand the Truth Commissions mandate to include other administrations (if he does so at all). (4) E.O. No. 1 Does Not Apply to the Same Class Lastly, E.O. No. 1 does not apply to all of those belonging to the same class for it only applies to the public officers and employees of the past administration. It excludes from its purview the graft and the grafters of administrations prior to the last one. Graft is not

exclusive to the previous presidency alone, hence there is no justification to limit the scope of the mandate only to the previous administration. Fact-Finding or Investigation? The nature of the powers and functions allocated by the President to the Truth Commission by virtue of E.O. No. 1 is investigatory,30 with the purposes of determining probable cause of the commission of "graft and corruption under pertinent applicable laws" and referring such finding and evidence to the proper authorities for prosecution.31 The respondents pass off these powers and functions as merely fact-finding, short of investigatory. I do not think so. Sugar-coating the description of the Truth Commissions processes and functions so as to make it "sound harmless" falls short of constitutional requirements. It has in its hands the vast arsenal of the government to intimidate, harass and humiliate its perceived political enemies outside the lawful prosecutorial avenues provided by law in the Ombudsman or the Department of Justice. The scope of the investigatory powers and functions assigned by the President to the Truth Commission encompasses all "public officers and employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration."32 There is no doubt in my mind that what the President granted the Truth Commission is the authority to conduct preliminary investigation of complaints of graft and corruption against his immediate predecessor and her associates. The respondents see nothing wrong with that. They believe that, pursuant to his power of control and general supervision under Article VII of the Constitution,33 the President can create an ad-hoc committee like the Truth Commission to investigate graft and corruption cases. And the President can endow it with authority parallel to that of the Ombudsman to conduct preliminary investigations. Citing Ombudsman v. Galicia34 the power of the Ombudsman to conduct preliminary investigations is not exclusive but shared with other similarly authorized government agencies. I take a different view. The operative word is "authorized". Indeed, the power of control and supervision of the President includes the power to discipline which in turn implies the power to investigate.35 No Congress or Court can derogate from that power36 but the Constitution itself may set certain limits.37 And the Constitution has in fact carved out the preliminary investigatory aspect of the control power and allocated the same to the following: (a) to Congress over presidential appointees who are impeachable officers (Article XI, Sections 2 and 3);

(b) to the Supreme Court over members of the courts and the personnel thereof (Article VIII, Section 6); and (c) to the Ombudsman over any other public official, employee, office or agency (Article XI, Section 13 (1)). However, even as the Constitution has granted to the Ombudsman the power to investigate other public officials and employees, such power is not absolute and exclusive. Congress has the power to further define the powers of the Ombudsman and, impliedly, to authorize other offices to conduct such investigation over their respective officials and personnel.38 The Constitution has vested in Congress alone the power to grant to any office concurrent jurisdiction with the Ombudsman to conduct preliminary investigation of cases of graft and corruption. In a myriad of cases, this Court has recognized the concurrent jurisdiction of other bodies vis--vis the Ombudsman to conduct preliminary investigation of complaints of graft and corruption as authorized by law, meaning, for any other person or agency to be able to conduct such investigations, there must be a law authorizing him or it to do so. In Ombudsman v. Galicia (cited in the ponencia) as well as Ombudsman v. Estandarte,39 the Court recognized the concurrent jurisdiction of the Division School Superintendent vis--vis the Ombudsman to conduct preliminary investigation of complaints of graft and corruption committed by public school teachers. Such concurrent jurisdiction of the Division School Superintendent was granted by law, specifically RA 4670 or the Magna Carta for Public School Teachers.40 Likewise, in Ombudsman v. Medrano41 the Court held that by virtue of RA 4670 the Department of Education Investigating Committee has concurrent jurisdiction with the Ombudsman to conduct a preliminary investigation of complaints against public school teachers. Even the Sangguniang Panlungsod has concurrent jurisdiction with the Ombudsman to look into complaints against the punong barangay.42 Such concurrent authority is found in RA 7160 or the Local Government Code. The Department of Justice is another agency with jurisdiction concurrent with the Ombudsman to conduct preliminary investigation of public officials and employees.43 Its concurrent jurisdiction is based on the 1987 Administrative Code. Certainly, there is a law, the Administrative Code, which authorized the Office of the President to exercise jurisdiction concurrent with the Ombudsman to conduct preliminary investigation of graft and corruption cases. However, the scope and focus of its preliminary investigation are restricted. Under the principle that the power to appoint includes the power to remove, each President has had his or her own version of a

presidential committee to investigate graft and corruption, the last being President Gloria Macapagal Arroyos Presidential Anti-Graft Commission (PAGC) under E.O. No. 268. The PAGC exercised concurrent authority with the Ombudsman to investigate complaints of graft and corruption against presidential appointees who are not impeachable officers and non-presidential appointees in conspiracy with the latter. It is in this light that DOH v. Camposano, et al.44 as cited in the ponencia should be understood. At that time, the PCAGC (now defunct) had no investigatory power over non-presidential appointees; hence the President created an ad-hoc committee to investigate both the principal respondent who was a presidential appointee and her co-conspirators who were nonpresidential appointees. The PAGC (now also defunct), however, was authorized to investigate both presidential appointees and non-presidential appointees who were in conspiracy with each other. However, although pursuant to his power of control the President may supplant and directly exercise the investigatory functions of departments and agencies within the executive department,45 his power of control under the Constitution and the Administrative Code is confined only to the executive department.46 Without any law authorizing him, the President cannot legally create a committee to extend his investigatory reach across the boundaries of the executive department to "public officers and employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration" without setting apart those who are still in the executive department from those who are not. Only the Ombudsman has the investigatory jurisdiction over them under Article XI, Section 13. There is no law granting to the President the authority to create a committee with concurrent investigatory jurisdiction of this nature. The President acted in violation of the Constitution and without authority of law when he created a Truth Commission under E.O. No. 1 to exercise concurrent jurisdiction with the Ombudsman to conduct the preliminary investigation of complaints of graft and corruption against public officers and employees, their co-principals, accomplices and accessories from the private sector, if any, during the previous administration. Investigation or Quasi-Adjudication? Respondents argue that the Truth Commission is merely an investigative and fact-finding body tasked to gather facts, draw conclusions therefrom and recommend the appropriate actions or measures to be taken. Petitioners, however, argue that the Truth Commission is vested with quasi-judicial powers. Offices with such awesome powers cannot be legally created by the President through mere executive orders. Petitioners are correct. The definition of investigation was extensively discussed in Cario v. Commission on Human Rights:47

"Investigate," commonly understood, means to examine, explore, inquire or delve or probe into, research on, study. The dictionary definition of "investigate" is "to observe or study closely: inquire into systematically: "to search or inquire into: . . . to subject to an official probe . . .: to conduct an official inquiry." The purpose of investigation, of course, is to discover, to find out, to learn, obtain information. Nowhere included or intimated is the notion of settling, deciding or resolving a controversy involved in the facts inquired into by application of the law to the facts established by the inquiry. The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or observation. To trace or track; to search into; to examine and inquire into with care and accuracy; to find out by careful inquisition; examination; the taking of evidence; a legal inquiry;" "to inquire; to make an investigation," "investigation" being in turn described as "(a)n administrative function, the exercise of which ordinarily does not require a hearing. 2 Am J2d Adm L Sec. 257; . . . an inquiry, judicial or otherwise, for the discovery and collection of facts concerning a certain matter or matters."48 (Italics in the original) The exercise of quasi-judicial power goes beyond mere investigation and fact-finding. Quasi-judicial power has been defined as the power of the administrative agency to adjudicate the rights of persons before it. It is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The administrative body exercises its quasijudicial power when it performs in a judicial manner an act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.49 (Emphasis supplied) Despite respondents denial that the Truth Commission is infused with quasi-judicial powers, it is patent from the provisions of E.O. No. 1 itself that such powers are indeed vested in the Truth Commission, particularly in Section 2, paragraphs (b) and (g): b) Collect, receive, review, and evaluate evidence related to or regarding the cases of large scale corruption which it has chosen to investigate, xxx g) Turn over from time to time, for expeditious prosecution, to the appropriate prosecutorial authorities, by means of a special or interim report and recommendation, all evidence on corruption of public officers and employees and their private sector coprincipals, accomplices or accessories, if any, when in the course of its investigation the

Commission finds that there is reasonable ground to believe they are liable for graft and corruption under pertinent applicable laws; xxx The powers to "evaluate evidence" and "find reasonable ground to believe that someone is liable for graft and corruption" are not merely fact-finding or investigatory. These are quasi-judicial in nature because they actually go into the weighing of evidence, drawing up of legal conclusions from them as basis for their official action and the exercise of discretion of a judicial or quasi-judicial nature. The evaluation of the sufficiency of the evidence is a quasi-judicial/judicial function. It involves an assessment of the evidence which is an exercise of judicial discretion. We have defined discretion as the ability to make decisions which represent a responsible choice and for which an understanding of what is lawful, right or wise may be presupposed.50 It is the "the act or the liberty to decide, according to the principles of justice and ones ideas of what is right and proper under the circumstances, without willfulness or favor."51 Likewise, the power to establish if there is reasonable ground to believe that certain persons are liable for graft and corruption under pertinent applicable laws is quasijudicial in nature because it is akin to the discretion exercised by a prosecutor in the determination of probable cause during a preliminary investigation. It involves a judicial (or quasi-judicial) appraisal of the facts for the purpose of determining if a violation has in fact been committed. Although such a preliminary investigation is not a trial and is not intended to usurp the function of the trial court, it is not a casual affair. The officer conducting the same investigates or inquires into the facts concerning the commission of the crime with the end in view of determining whether or not an information may be prepared against the accused. Indeed, a preliminary investigation is in effect a realistic judicial appraisal of the merits of the case. Sufficient proof of the guilt of the accused must be adduced so that when the case is tried, the trial court may not be bound as a matter of law to order an acquittal. A preliminary investigation has then been called a judicial inquiry. It is a judicial proceeding. An act becomes judicial when there is opportunity to be heard and for, the production and weighing of evidence, and a decision is rendered thereon. The authority of a prosecutor or investigating officer duly empowered to preside or to conduct a preliminary investigation is no less than that of a municipal judge or even a regional trial court judge. While the investigating officer, strictly speaking is not a "judge," by the nature of his functions he is and must be considered to be a quasi judicial officer.52

Hence, the Truth Commission is vested with quasi-judicial discretion in the discharge of its functions. As a mere creation of the executive and without a law granting it the power to investigate person and agencies outside the executive department, the Truth Commission can only perform administrative functions, not quasi-judicial functions. "Administrative agencies are not considered courts; they are neither part of the judicial system nor are they deemed judicial tribunals."53 Executive Order No. 1 and the Philippine Truth Commission of 2010, being contrary to the Constitution, should be nullified. I therefore vote that the petitions be GRANTED. RENATO C. CORONA Chief Justice

32.
G.R. No. 166715 August 14, 2008 ABAKADA GURO PARTY LIST (formerly AASJS)1 OFFICERS/MEMBERS SAMSON S. ALCANTARA, ED VINCENT S. ALBANO, ROMEO R. ROBISO, RENE B. GOROSPE and EDWIN R. SANDOVAL, petitioners, vs. HON. CESAR V. PURISIMA, in his capacity as Secretary of Finance, HON. GUILLERMO L. PARAYNO, JR., in his capacity as Commissioner of the Bureau of Internal Revenue, and HON. ALBERTO D. LINA, in his Capacity as Commissioner of Bureau of Customs, respondents. DECISION CORONA, J.: This petition for prohibition1 seeks to prevent respondents from implementing and enforcing Republic Act (RA) 93352 (Attrition Act of 2005). RA 9335 was enacted to optimize the revenue-generation capability and collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). The law intends to encourage BIR and BOC officials and employees to exceed their revenue targets by providing a system of rewards and sanctions through the creation of a Rewards and Incentives Fund (Fund) and a Revenue Performance Evaluation Board (Board).3 It covers all officials and employees of the BIR and the BOC with at least six months of service, regardless of employment status.4

The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue targets for the year, as determined by the Development Budget and Coordinating Committee (DBCC). Any incentive or reward is taken from the fund and allocated to the BIR and the BOC in proportion to their contribution in the excess collection of the targeted amount of tax revenue.5 The Boards in the BIR and the BOC are composed of the Secretary of the Department of Finance (DOF) or his/her Undersecretary, the Secretary of the Department of Budget and Management (DBM) or his/her Undersecretary, the Director General of the National Economic Development Authority (NEDA) or his/her Deputy Director General, the Commissioners of the BIR and the BOC or their Deputy Commissioners, two representatives from the rank-and-file employees and a representative from the officials nominated by their recognized organization.6 Each Board has the duty to (1) prescribe the rules and guidelines for the allocation, distribution and release of the Fund; (2) set criteria and procedures for removing from the service officials and employees whose revenue collection falls short of the target; (3) terminate personnel in accordance with the criteria adopted by the Board; (4) prescribe a system for performance evaluation; (5) perform other functions, including the issuance of rules and regulations and (6) submit an annual report to Congress.7 The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were tasked to promulgate and issue the implementing rules and regulations of RA 9335,8 to be approved by a Joint Congressional Oversight Committee created for such purpose.9 Petitioners, invoking their right as taxpayers filed this petition challenging the constitutionality of RA 9335, a tax reform legislation. They contend that, by establishing a system of rewards and incentives, the law "transform[s] the officials and employees of the BIR and the BOC into mercenaries and bounty hunters" as they will do their best only in consideration of such rewards. Thus, the system of rewards and incentives invites corruption and undermines the constitutionally mandated duty of these officials and employees to serve the people with utmost responsibility, integrity, loyalty and efficiency. Petitioners also claim that limiting the scope of the system of rewards and incentives only to officials and employees of the BIR and the BOC violates the constitutional guarantee of equal protection. There is no valid basis for classification or distinction as to why such a system should not apply to officials and employees of all other government agencies. In addition, petitioners assert that the law unduly delegates the power to fix revenue targets to the President as it lacks a sufficient standard on that matter. While Section 7(b) and (c) of RA 9335 provides that BIR and BOC officials may be dismissed from the service if their revenue collections fall short of the target by at least 7.5%, the law does not, however, fix the revenue targets to be achieved. Instead, the fixing of revenue targets has been delegated to the President without sufficient standards. It will therefore be easy

for the President to fix an unrealistic and unattainable target in order to dismiss BIR or BOC personnel. Finally, petitioners assail the creation of a congressional oversight committee on the ground that it violates the doctrine of separation of powers. While the legislative function is deemed accomplished and completed upon the enactment and approval of the law, the creation of the congressional oversight committee permits legislative participation in the implementation and enforcement of the law. In their comment, respondents, through the Office of the Solicitor General, question the petition for being premature as there is no actual case or controversy yet. Petitioners have not asserted any right or claim that will necessitate the exercise of this Courts jurisdiction. Nevertheless, respondents acknowledge that public policy requires the resolution of the constitutional issues involved in this case. They assert that the allegation that the reward system will breed mercenaries is mere speculation and does not suffice to invalidate the law. Seen in conjunction with the declared objective of RA 9335, the law validly classifies the BIR and the BOC because the functions they perform are distinct from those of the other government agencies and instrumentalities. Moreover, the law provides a sufficient standard that will guide the executive in the implementation of its provisions. Lastly, the creation of the congressional oversight committee under the law enhances, rather than violates, separation of powers. It ensures the fulfillment of the legislative policy and serves as a check to any over-accumulation of power on the part of the executive and the implementing agencies. After a careful consideration of the conflicting contentions of the parties, the Court finds that petitioners have failed to overcome the presumption of constitutionality in favor of RA 9335, except as shall hereafter be discussed. Actual Case And Ripeness An actual case or controversy involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial adjudication.10 A closely related requirement is ripeness, that is, the question must be ripe for adjudication. And a constitutional question is ripe for adjudication when the governmental act being challenged has a direct adverse effect on the individual challenging it.11 Thus, to be ripe for judicial adjudication, the petitioner must show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable decision of the Court.12 In this case, aside from the general claim that the dispute has ripened into a judicial controversy by the mere enactment of the law even without any further overt act,13 petitioners fail either to assert any specific and concrete legal claim or to demonstrate any direct adverse effect of the law on them. They are unable to show a personal stake in the outcome of this case or an injury to themselves. On this account, their petition is procedurally infirm.

This notwithstanding, public interest requires the resolution of the constitutional issues raised by petitioners. The grave nature of their allegations tends to cast a cloud on the presumption of constitutionality in favor of the law. And where an action of the legislative branch is alleged to have infringed the Constitution, it becomes not only the right but in fact the duty of the judiciary to settle the dispute.14 Accountability of Public Officers Section 1, Article 11 of the Constitution states: Sec. 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. Public office is a public trust. It must be discharged by its holder not for his own personal gain but for the benefit of the public for whom he holds it in trust. By demanding accountability and service with responsibility, integrity, loyalty, efficiency, patriotism and justice, all government officials and employees have the duty to be responsive to the needs of the people they are called upon to serve. Public officers enjoy the presumption of regularity in the performance of their duties. This presumption necessarily obtains in favor of BIR and BOC officials and employees. RA 9335 operates on the basis thereof and reinforces it by providing a system of rewards and sanctions for the purpose of encouraging the officials and employees of the BIR and the BOC to exceed their revenue targets and optimize their revenue-generation capability and collection.15 The presumption is disputable but proof to the contrary is required to rebut it. It cannot be overturned by mere conjecture or denied in advance (as petitioners would have the Court do) specially in this case where it is an underlying principle to advance a declared public policy. Petitioners claim that the implementation of RA 9335 will turn BIR and BOC officials and employees into "bounty hunters and mercenaries" is not only without any factual and legal basis; it is also purely speculative. A law enacted by Congress enjoys the strong presumption of constitutionality. To justify its nullification, there must be a clear and unequivocal breach of the Constitution, not a doubtful and equivocal one.16 To invalidate RA 9335 based on petitioners baseless supposition is an affront to the wisdom not only of the legislature that passed it but also of the executive which approved it. Public service is its own reward. Nevertheless, public officers may by law be rewarded for exemplary and exceptional performance. A system of incentives for exceeding the set

expectations of a public office is not anathema to the concept of public accountability. In fact, it recognizes and reinforces dedication to duty, industry, efficiency and loyalty to public service of deserving government personnel. In United States v. Matthews,17 the U.S. Supreme Court validated a law which awards to officers of the customs as well as other parties an amount not exceeding one-half of the net proceeds of forfeitures in violation of the laws against smuggling. Citing Dorsheimer v. United States,18 the U.S. Supreme Court said: The offer of a portion of such penalties to the collectors is to stimulate and reward their zeal and industry in detecting fraudulent attempts to evade payment of duties and taxes. In the same vein, employees of the BIR and the BOC may by law be entitled to a reward when, as a consequence of their zeal in the enforcement of tax and customs laws, they exceed their revenue targets. In addition, RA 9335 establishes safeguards to ensure that the reward will not be claimed if it will be either the fruit of "bounty hunting or mercenary activity" or the product of the irregular performance of official duties. One of these precautionary measures is embodied in Section 8 of the law: SEC. 8. Liability of Officials, Examiners and Employees of the BIR and the BOC. The officials, examiners, and employees of the [BIR] and the [BOC] who violate this Act or who are guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to exercise extraordinary diligence in the performance of their duties shall be held liable for any loss or injury suffered by any business establishment or taxpayer as a result of such violation, negligence, abuse, malfeasance, misfeasance or failure to exercise extraordinary diligence. Equal Protection Equality guaranteed under the equal protection clause is equality under the same conditions and among persons similarly situated; it is equality among equals, not similarity of treatment of persons who are classified based on substantial differences in relation to the object to be accomplished.19 When things or persons are different in fact or circumstance, they may be treated in law differently. In Victoriano v. Elizalde Rope Workers Union,20 this Court declared: The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the [S]tate. It is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity of rights. The Constitution does not require that things which are different in fact be treated in law as though they were the same. The equal protection clause does not forbid discrimination as to

things that are different. It does not prohibit legislation which is limited either in the object to which it is directed or by the territory within which it is to operate. The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars. A law is not invalid because of simple inequality. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. All that is required of a valid classification is that it be reasonable, which means that the classification should be based on substantial distinctions which make for real differences, that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it must apply equally to each member of the class. This Court has held that the standard is satisfied if the classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary. In the exercise of its power to make classifications for the purpose of enacting laws over matters within its jurisdiction, the state is recognized as enjoying a wide range of discretion. It is not necessary that the classification be based on scientific or marked differences of things or in their relation. Neither is it necessary that the classification be made with mathematical nicety. Hence, legislative classification may in many cases properly rest on narrow distinctions, for the equal protection guaranty does not preclude the legislature from recognizing degrees of evil or harm, and legislation is addressed to evils as they may appear.21 (emphasis supplied) The equal protection clause recognizes a valid classification, that is, a classification that has a reasonable foundation or rational basis and not arbitrary.22 With respect to RA 9335, its expressed public policy is the optimization of the revenue-generation capability and collection of the BIR and the BOC.23 Since the subject of the law is the revenuegeneration capability and collection of the BIR and the BOC, the incentives and/or sanctions provided in the law should logically pertain to the said agencies. Moreover, the law concerns only the BIR and the BOC because they have the common distinct primary function of generating revenues for the national government through the collection of taxes, customs duties, fees and charges. The BIR performs the following functions: Sec. 18. The Bureau of Internal Revenue. The Bureau of Internal Revenue, which shall be headed by and subject to the supervision and control of the Commissioner of Internal Revenue, who shall be appointed by the President upon the recommendation of the Secretary [of the DOF], shall have the following functions:

(1) Assess and collect all taxes, fees and charges and account for all revenues collected; (2) Exercise duly delegated police powers for the proper performance of its functions and duties; (3) Prevent and prosecute tax evasions and all other illegal economic activities; (4) Exercise supervision and control over its constituent and subordinate units; and (5) Perform such other functions as may be provided by law.24 xxx xxx xxx (emphasis supplied)

On the other hand, the BOC has the following functions: Sec. 23. The Bureau of Customs. The Bureau of Customs which shall be headed and subject to the management and control of the Commissioner of Customs, who shall be appointed by the President upon the recommendation of the Secretary[of the DOF] and hereinafter referred to as Commissioner, shall have the following functions: (1) Collect custom duties, taxes and the corresponding fees, charges and penalties; (2) Account for all customs revenues collected; (3) Exercise police authority for the enforcement of tariff and customs laws; (4) Prevent and suppress smuggling, pilferage and all other economic frauds within all ports of entry; (5) Supervise and control exports, imports, foreign mails and the clearance of vessels and aircrafts in all ports of entry; (6) Administer all legal requirements that are appropriate; (7) Prevent and prosecute smuggling and other illegal activities in all ports under its jurisdiction; (8) Exercise supervision and control over its constituent units; (9) Perform such other functions as may be provided by law.25 xxx xxx xxx (emphasis supplied)

Both the BIR and the BOC are bureaus under the DOF. They principally perform the special function of being the instrumentalities through which the State exercises one of its great inherent functions taxation. Indubitably, such substantial distinction is germane and intimately related to the purpose of the law. Hence, the classification and treatment accorded to the BIR and the BOC under RA 9335 fully satisfy the demands of equal protection. Undue Delegation Two tests determine the validity of delegation of legislative power: (1) the completeness test and (2) the sufficient standard test. A law is complete when it sets forth therein the policy to be executed, carried out or implemented by the delegate.26 It lays down a sufficient standard when it provides adequate guidelines or limitations in the law to map out the boundaries of the delegates authority and prevent the delegation from running riot.27 To be sufficient, the standard must specify the limits of the delegates authority, announce the legislative policy and identify the conditions under which it is to be implemented.28 RA 9335 adequately states the policy and standards to guide the President in fixing revenue targets and the implementing agencies in carrying out the provisions of the law. Section 2 spells out the policy of the law: SEC. 2. Declaration of Policy. It is the policy of the State to optimize the revenue-generation capability and collection of the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) by providing for a system of rewards and sanctions through the creation of a Rewards and Incentives Fund and a Revenue Performance Evaluation Board in the above agencies for the purpose of encouraging their officials and employees to exceed their revenue targets. Section 4 "canalized within banks that keep it from overflowing"29 the delegated power to the President to fix revenue targets: SEC. 4. Rewards and Incentives Fund. A Rewards and Incentives Fund, hereinafter referred to as the Fund, is hereby created, to be sourced from the collection of the BIR and the BOC in excess of their respective revenue targets of the year, as determined by the Development Budget and Coordinating Committee (DBCC), in the following percentages: Excess of Collection of the Excess the Revenue Targets 30% or below More than 30% Percent (%) of the Excess Collection to Accrue to the Fund 15% 15% of the first 30% plus 20% of the remaining excess

The Fund shall be deemed automatically appropriated the year immediately following the year when the revenue collection target was exceeded and shall be released on the same fiscal year. Revenue targets shall refer to the original estimated revenue collection expected of the BIR and the BOC for a given fiscal year as stated in the Budget of Expenditures and Sources of Financing (BESF) submitted by the President to Congress. The BIR and the BOC shall submit to the DBCC the distribution of the agencies revenue targets as allocated among its revenue districts in the case of the BIR, and the collection districts in the case of the BOC. xxx xxx xxx (emphasis supplied)

Revenue targets are based on the original estimated revenue collection expected respectively of the BIR and the BOC for a given fiscal year as approved by the DBCC and stated in the BESF submitted by the President to Congress.30 Thus, the determination of revenue targets does not rest solely on the President as it also undergoes the scrutiny of the DBCC. On the other hand, Section 7 specifies the limits of the Boards authority and identifies the conditions under which officials and employees whose revenue collection falls short of the target by at least 7.5% may be removed from the service: SEC. 7. Powers and Functions of the Board. The Board in the agency shall have the following powers and functions: xxx xxx xxx

(b) To set the criteria and procedures for removing from service officials and employees whose revenue collection falls short of the target by at least seven and a half percent (7.5%), with due consideration of all relevant factors affecting the level of collection as provided in the rules and regulations promulgated under this Act, subject to civil service laws, rules and regulations and compliance with substantive and procedural due process: Provided, That the following exemptions shall apply: 1. Where the district or area of responsibility is newly-created, not exceeding two years in operation, as has no historical record of collection performance that can be used as basis for evaluation; and 2. Where the revenue or customs official or employee is a recent transferee in the middle of the period under consideration unless the transfer was due to nonperformance of revenue targets or potential nonperformance of revenue targets: Provided, however, That when the district or area of responsibility covered by revenue or customs officials or employees has suffered from economic difficulties brought about by

natural calamities or force majeure or economic causes as may be determined by the Board, termination shall be considered only after careful and proper review by the Board. (c) To terminate personnel in accordance with the criteria adopted in the preceding paragraph: Provided, That such decision shall be immediately executory: Provided, further, That the application of the criteria for the separation of an official or employee from service under this Act shall be without prejudice to the application of other relevant laws on accountability of public officers and employees, such as the Code of Conduct and Ethical Standards of Public Officers and Employees and the Anti-Graft and Corrupt Practices Act; xxx xxx xxx (emphasis supplied)

Clearly, RA 9335 in no way violates the security of tenure of officials and employees of the BIR and the BOC. The guarantee of security of tenure only means that an employee cannot be dismissed from the service for causes other than those provided by law and only after due process is accorded the employee.31 In the case of RA 9335, it lays down a reasonable yardstick for removal (when the revenue collection falls short of the target by at least 7.5%) with due consideration of all relevant factors affecting the level of collection. This standard is analogous to inefficiency and incompetence in the performance of official duties, a ground for disciplinary action under civil service laws.32 The action for removal is also subject to civil service laws, rules and regulations and compliance with substantive and procedural due process. At any rate, this Court has recognized the following as sufficient standards: "public interest," "justice and equity," "public convenience and welfare" and "simplicity, economy and welfare."33 In this case, the declared policy of optimization of the revenuegeneration capability and collection of the BIR and the BOC is infused with public interest. Separation Of Powers Section 12 of RA 9335 provides: SEC. 12. Joint Congressional Oversight Committee. There is hereby created a Joint Congressional Oversight Committee composed of seven Members from the Senate and seven Members from the House of Representatives. The Members from the Senate shall be appointed by the Senate President, with at least two senators representing the minority. The Members from the House of Representatives shall be appointed by the Speaker with at least two members representing the minority. After the Oversight Committee will have approved the implementing rules and regulations (IRR) it shall thereafter become functus officio and therefore cease to exist.

The Joint Congressional Oversight Committee in RA 9335 was created for the purpose of approving the implementing rules and regulations (IRR) formulated by the DOF, DBM, NEDA, BIR, BOC and CSC. On May 22, 2006, it approved the said IRR. From then on, it became functus officio and ceased to exist. Hence, the issue of its alleged encroachment on the executive function of implementing and enforcing the law may be considered moot and academic. This notwithstanding, this might be as good a time as any for the Court to confront the issue of the constitutionality of the Joint Congressional Oversight Committee created under RA 9335 (or other similar laws for that matter). The scholarly discourse of Mr. Justice (now Chief Justice) Puno on the concept of congressional oversight in Macalintal v. Commission on Elections34 is illuminating: Concept and bases of congressional oversight Broadly defined, the power of oversight embraces all activities undertaken by Congress to enhance its understanding of and influence over the implementation of legislation it has enacted. Clearly, oversight concerns postenactment measures undertaken by Congress: (a) to monitor bureaucratic compliance with program objectives, (b) to determine whether agencies are properly administered, (c) to eliminate executive waste and dishonesty, (d) to prevent executive usurpation of legislative authority, and (d) to assess executive conformity with the congressional perception of public interest. The power of oversight has been held to be intrinsic in the grant of legislative power itself and integral to the checks and balances inherent in a democratic system of government. x x x x x x x x x Over the years, Congress has invoked its oversight power with increased frequency to check the perceived "exponential accumulation of power" by the executive branch. By the beginning of the 20th century, Congress has delegated an enormous amount of legislative authority to the executive branch and the administrative agencies. Congress, thus, uses its oversight power to make sure that the administrative agencies perform their functions within the authority delegated to them. x x x x x x x x x Categories of congressional oversight functions The acts done by Congress purportedly in the exercise of its oversight powers may be divided into three categories, namely: scrutiny, investigation and supervision. a. Scrutiny

Congressional scrutiny implies a lesser intensity and continuity of attention to administrative operations. Its primary purpose is to determine economy and efficiency of the operation of government activities. In the exercise of legislative scrutiny, Congress may request information and report from the other branches of government. It can give recommendations or pass resolutions for consideration of the agency involved. xxx b. Congressional investigation While congressional scrutiny is regarded as a passive process of looking at the facts that are readily available, congressional investigation involves a more intense digging of facts. The power of Congress to conduct investigation is recognized by the 1987 Constitution under section 21, Article VI, xxx xxx xxx c. Legislative supervision The third and most encompassing form by which Congress exercises its oversight power is thru legislative supervision. "Supervision" connotes a continuing and informed awareness on the part of a congressional committee regarding executive operations in a given administrative area. While both congressional scrutiny and investigation involve inquiry into past executive branch actions in order to influence future executive branch performance, congressional supervision allows Congress to scrutinize the exercise of delegated law-making authority, and permits Congress to retain part of that delegated authority. Congress exercises supervision over the executive agencies through its veto power. It typically utilizes veto provisions when granting the President or an executive agency the power to promulgate regulations with the force of law. These provisions require the President or an agency to present the proposed regulations to Congress, which retains a "right" to approve or disapprove any regulation before it takes effect. Such legislative veto provisions usually provide that a proposed regulation will become a law after the expiration of a certain period of time, only if Congress does not affirmatively disapprove of the regulation in the meantime. Less frequently, the statute provides that a proposed regulation will become law if Congress affirmatively approves it. Supporters of legislative veto stress that it is necessary to maintain the balance of power between the legislative and the executive branches of government as it offers lawmakers a way to delegate vast power to the executive branch or to independent agencies while retaining the option to cancel particular exercise of such power without having to pass new legislation or to repeal existing law. They contend that this arrangement promotes democratic accountability as it provides xxx xxx

legislative check on the activities of unelected administrative agencies. One proponent thus explains: It is too late to debate the merits of this delegation policy: the policy is too deeply embedded in our law and practice. It suffices to say that the complexities of modern government have often led Congress-whether by actual or perceived necessity- to legislate by declaring broad policy goals and general statutory standards, leaving the choice of policy options to the discretion of an executive officer. Congress articulates legislative aims, but leaves their implementation to the judgment of parties who may or may not have participated in or agreed with the development of those aims. Consequently, absent safeguards, in many instances the reverse of our constitutional scheme could be effected: Congress proposes, the Executive disposes. One safeguard, of course, is the legislative power to enact new legislation or to change existing law. But without some means of overseeing post enactment activities of the executive branch, Congress would be unable to determine whether its policies have been implemented in accordance with legislative intent and thus whether legislative intervention is appropriate. Its opponents, however, criticize the legislative veto as undue encroachment upon the executive prerogatives. They urge that any post-enactment measures undertaken by the legislative branch should be limited to scrutiny and investigation; any measure beyond that would undermine the separation of powers guaranteed by the Constitution. They contend that legislative veto constitutes an impermissible evasion of the Presidents veto authority and intrusion into the powers vested in the executive or judicial branches of government. Proponents counter that legislative veto enhances separation of powers as it prevents the executive branch and independent agencies from accumulating too much power. They submit that reporting requirements and congressional committee investigations allow Congress to scrutinize only the exercise of delegated law-making authority. They do not allow Congress to review executive proposals before they take effect and they do not afford the opportunity for ongoing and binding expressions of congressional intent. In contrast, legislative veto permits Congress to participate prospectively in the approval or disapproval of "subordinate law" or those enacted by the executive branch pursuant to a delegation of authority by Congress. They further argue that legislative veto "is a necessary response by Congress to the accretion of policy control by forces outside its chambers." In an era of delegated authority, they point out that legislative veto "is the most efficient means Congress has yet devised to retain control over the evolution and implementation of its policy as declared by statute." In Immigration and Naturalization Service v. Chadha, the U.S. Supreme Court resolved the validity of legislative veto provisions. The case arose from the order of the immigration judge suspending the deportation of Chadha pursuant to

 244(c)(1) of the Immigration and Nationality Act. The United States House of Representatives passed a resolution vetoing the suspension pursuant to 244(c) (2) authorizing either House of Congress, by resolution, to invalidate the decision of the executive branch to allow a particular deportable alien to remain in the United States. The immigration judge reopened the deportation proceedings to implement the House order and the alien was ordered deported. The Board of Immigration Appeals dismissed the aliens appeal, holding that it had no power to declare unconstitutional an act of Congress. The United States Court of Appeals for Ninth Circuit held that the House was without constitutional authority to order the aliens deportation and that 244(c)(2) violated the constitutional doctrine on separation of powers. On appeal, the U.S. Supreme Court declared 244(c)(2) unconstitutional. But the Court shied away from the issue of separation of powers and instead held that the provision violates the presentment clause and bicameralism. It held that the one-house veto was essentially legislative in purpose and effect. As such, it is subject to the procedures set out in Article I of the Constitution requiring the passage by a majority of both Houses and presentment to the President. x x x x x xxxx Two weeks after the Chadha decision, the Court upheld, in memorandum decision, two lower court decisions invalidating the legislative veto provisions in the Natural Gas Policy Act of 1978 and the Federal Trade Commission Improvement Act of 1980. Following this precedence, lower courts invalidated statutes containing legislative veto provisions although some of these provisions required the approval of both Houses of Congress and thus met the bicameralism requirement of Article I. Indeed, some of these veto provisions were not even exercised.35 (emphasis supplied) In Macalintal, given the concept and configuration of the power of congressional oversight and considering the nature and powers of a constitutional body like the Commission on Elections, the Court struck down the provision in RA 9189 (The Overseas Absentee Voting Act of 2003) creating a Joint Congressional Committee. The committee was tasked not only to monitor and evaluate the implementation of the said law but also to review, revise, amend and approve the IRR promulgated by the Commission on Elections. The Court held that these functions infringed on the constitutional independence of the Commission on Elections.36 With this backdrop, it is clear that congressional oversight is not unconstitutional per se, meaning, it neither necessarily constitutes an encroachment on the executive power to implement laws nor undermines the constitutional separation of powers. Rather, it is integral to the checks and balances inherent in a democratic system of government. It may in fact even enhance the separation of powers as it prevents the over-accumulation of power in the executive branch.

However, to forestall the danger of congressional encroachment "beyond the legislative sphere," the Constitution imposes two basic and related constraints on Congress.37 It may not vest itself, any of its committees or its members with either executive or judicial power.38 And, when it exercises its legislative power, it must follow the "single, finely wrought and exhaustively considered, procedures" specified under the Constitution,39 including the procedure for enactment of laws and presentment. Thus, any post-enactment congressional measure such as this should be limited to scrutiny and investigation. 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 confirmation40 and (2) investigation and monitoring41 of the implementation of laws pursuant to the power of Congress to conduct inquiries in aid of legislation.42 Any action or step beyond that will undermine the separation of powers guaranteed by the Constitution. Legislative vetoes fall in this class. Legislative veto is a statutory provision requiring the President or an administrative agency to present the proposed implementing rules and regulations of a law to Congress which, by itself or through a committee formed by it, retains a "right" or "power" to approve or disapprove such regulations before they take effect. As such, a legislative veto in the form of a congressional oversight committee is in the form of an inward-turning delegation designed to attach a congressional leash (other than through scrutiny and investigation) to an agency to which Congress has by law initially delegated broad powers.43 It radically changes the design or structure of the Constitutions diagram of power as it entrusts to Congress a direct role in enforcing, applying or implementing its own laws.44 Congress has two options when enacting legislation to define national policy within the broad horizons of its legislative competence.45 It can itself formulate the details or it can assign to the executive branch the responsibility for making necessary managerial decisions in conformity with those standards.46 In the latter case, the law must be complete in all its essential terms and conditions when it leaves the hands of the legislature.47 Thus, what is left for the executive branch or the concerned administrative agency when it formulates rules and regulations implementing the law is to fill up details (supplementary rule-making) or ascertain facts necessary to bring the law into actual operation (contingent rule-making).48 Administrative regulations enacted by administrative agencies to implement and interpret the law which they are entrusted to enforce have the force of law and are entitled to respect.49 Such rules and regulations partake of the nature of a statute50 and are just as

binding as if they have been written in the statute itself. As such, they have the force and effect of law and enjoy the presumption of constitutionality and legality until they are set aside with finality in an appropriate case by a competent court.51 Congress, in the guise of assuming the role of an overseer, may not pass upon their legality by subjecting them to its stamp of approval without disturbing the calculated balance of powers established by the Constitution. In exercising discretion to approve or disapprove the IRR based on a determination of whether or not they conformed with the provisions of RA 9335, Congress arrogated judicial power unto itself, a power exclusively vested in this Court by the Constitution. Considered Opinion of Mr. Justice Dante O. Tinga Moreover, the requirement that the implementing rules of a law be subjected to approval by Congress as a condition for their effectivity violates the cardinal constitutional principles of bicameralism and the rule on presentment.52 Section 1, Article VI of the Constitution states: Section 1. The legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives, except to the extent reserved to the people by the provision on initiative and referendum. (emphasis supplied) Legislative power (or the power to propose, enact, amend and repeal laws)53 is vested in Congress which consists of two chambers, the Senate and the House of Representatives. A valid exercise of legislative power requires the act of both chambers. Corrollarily, it can be exercised neither solely by one of the two chambers nor by a committee of either or both chambers. Thus, assuming the validity of a legislative veto, both a single-chamber legislative veto and a congressional committee legislative veto are invalid. Additionally, Section 27(1), Article VI of the Constitution provides: 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 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. (emphasis supplied)

Every bill passed by Congress must be presented to the President for approval or veto. In the absence of presentment to the President, no bill passed by Congress can become a law. In this sense, law-making under the Constitution is a joint act of the Legislature and of the Executive. Assuming that legislative veto is a valid legislative act with the force of law, it cannot take effect without such presentment even if approved by both chambers of Congress. In sum, two steps are required before a bill becomes a law. First, it must be approved by both Houses of Congress.54 Second, it must be presented to and approved by the President.55 As summarized by Justice Isagani Cruz56 and Fr. Joaquin G. Bernas, S.J.57, the following is the procedure for the approval of bills: A bill is introduced by any member of the House of Representatives or the Senate except for some measures that must originate only in the former chamber. The first reading involves only a reading of the number and title of the measure and its referral by the Senate President or the Speaker to the proper committee for study. The bill may be "killed" in the committee or it may be recommended for approval, with or without amendments, sometimes after public hearings are first held thereon. If there are other bills of the same nature or purpose, they may all be consolidated into one bill under common authorship or as a committee bill. Once reported out, the bill shall be calendared for second reading. It is at this stage that the bill is read in its entirety, scrutinized, debated upon and amended when desired. The second reading is the most important stage in the passage of a bill. The bill as approved on second reading is printed in its final form and copies thereof are distributed at least three days before the third reading. On the third reading, the members merely register their votes and explain them if they are allowed by the rules. No further debate is allowed. Once the bill passes third reading, it is sent to the other chamber, where it will also undergo the three readings. If there are differences between the versions approved by the two chambers, a conference committee58 representing both Houses will draft a compromise measure that if ratified by the Senate and the House of Representatives will then be submitted to the President for his consideration. The bill is enrolled when printed as finally approved by the Congress, thereafter authenticated with the signatures of the Senate President, the Speaker, and the Secretaries of their respective chambers59 The Presidents role in law-making.

The final step is submission to the President for approval. Once approved, it takes effect as law after the required publication.60 Where Congress delegates the formulation of rules to implement the law it has enacted pursuant to sufficient standards established in the said law, the law must be complete in all its essential terms and conditions when it leaves the hands of the legislature. And it may be deemed to have left the hands of the legislature when it becomes effective because it is only upon effectivity of the statute that legal rights and obligations become available to those entitled by the language of the statute. Subject to the indispensable requisite of publication under the due process clause,61 the determination as to when a law takes effect is wholly the prerogative of Congress.62 As such, it is only upon its effectivity that a law may be executed and the executive branch acquires the duties and powers to execute the said law. Before that point, the role of the executive branch, particularly of the President, is limited to approving or vetoing the law.63 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. Under this principle, a provision that requires Congress or its members to approve the implementing rules of a law after it has already taken effect shall be unconstitutional, as is a provision that allows Congress or its members to overturn any directive or ruling made by the members of the executive branch charged with the implementation of the law. Following this rationale, Section 12 of RA 9335 should be struck down as unconstitutional. While there may be similar provisions of other laws that may be invalidated for failure to pass this standard, the Court refrains from invalidating them wholesale but will do so at the proper time when an appropriate case assailing those provisions is brought before us.64 The next question to be resolved is: what is the effect of the unconstitutionality of Section 12 of RA 9335 on the other provisions of the law? Will it render the entire law unconstitutional? No. Section 13 of RA 9335 provides: SEC. 13. Separability Clause. If any provision of this Act is declared invalid by a competent court, the remainder of this Act or any provision not affected by such declaration of invalidity shall remain in force and effect. In Tatad v. Secretary of the Department of Energy,65 the Court laid down the following rules: The general rule is that where part of a statute is void as repugnant to the Constitution, while another part is valid, the valid portion, if separable from the invalid, may stand and be enforced. The presence of a separability clause in a

statute creates the presumption that the legislature intended separability, rather than complete nullity of the statute. To justify this result, the valid portion must be so far independent of the invalid portion that it is fair to presume that the legislature would have enacted it by itself if it had supposed that it could not constitutionally enact the other. Enough must remain to make a complete, intelligible and valid statute, which carries out the legislative intent. x x x The exception to the general rule is that when the parts of a statute are so mutually dependent and connected, as conditions, considerations, inducements, or compensations for each other, as to warrant a belief that the legislature intended them as a whole, the nullity of one part will vitiate the rest. In making the parts of the statute dependent, conditional, or connected with one another, the legislature intended the statute to be carried out as a whole and would not have enacted it if one part is void, in which case if some parts are unconstitutional, all the other provisions thus dependent, conditional, or connected must fall with them. The separability clause of RA 9335 reveals the intention of the legislature to isolate and detach any invalid provision from the other provisions so that the latter may continue in force and effect. The valid portions can stand independently of the invalid section. Without Section 12, the remaining provisions still constitute a complete, intelligible and valid law which carries out the legislative intent to optimize the revenue-generation capability and collection of the BIR and the BOC by providing for a system of rewards and sanctions through the Rewards and Incentives Fund and a Revenue Performance Evaluation Board. To be effective, administrative rules and regulations must be published in full if their purpose is to enforce or implement existing law pursuant to a valid delegation. The IRR of RA 9335 were published on May 30, 2006 in two newspapers of general circulation66 and became effective 15 days thereafter.67 Until and unless the contrary is shown, the IRR are presumed valid and effective even without the approval of the Joint Congressional Oversight Committee. WHEREFORE, the petition is hereby PARTIALLY GRANTED. Section 12 of RA 9335 creating a Joint Congressional Oversight Committee to approve the implementing rules and regulations of the law is declared UNCONSTITUTIONAL and therefore NULL and VOID. The constitutionality of the remaining provisions of RA 9335 is UPHELD. Pursuant to Section 13 of RA 9335, the rest of the provisions remain in force and effect. SO ORDERED. Puno, C.J., Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, CarpioMorales, Azcuna, Tinga, Chico-Nazario, Velasco, Jr., Nachura, Reyes, Leonardo-deCastro, Brion, JJ., concur.

31.

G.R. No. 186616

November 20, 2009

COMMISSION ON ELECTIONS, Petitioner, vs. CONRADO CRUZ, SANTIAGO P. GO, RENATO F. BORBON, LEVVINO CHING, CARLOS C. FLORENTINO, RUBEN G. BALLEGA, LOIDA ALCEDO, MARIO M. CAJUCOM, EMMANUEL M. CALMA, MANUEL A. RAYOS, WILMA L. CHUA, EUFEMIO S. ALFONSO, JESUS M. LACANILAO, BONIFACIO N. ALCAPA, JOSE H. SILVERIO, RODRIGO DEVELLES, NIDA R. PAUNAN, MARIANO B. ESTUYE, JR., RAFAEL C. AREVALO, ARTURO T. MANABAT, RICARDO O. LIZARONDO, LETICIA C. MATURAN, RODRIGO A. ALAYAN, LEONILO N. MIRANDA, DESEDERIO O. MONREAL, FRANCISCO M. BAHIA, NESTOR R. FORONDA, VICENTE B. QUE, JR., AURELIO A. BILUAN, DANILO R. GATCHALIAN, LOURDES R. DEL MUNDO, EMMA O. CALZADO, FELIMON DE LEON, TANY V. CATACUTAN, AND CONCEPCION P. JAO, Respondents. DECISION BRION, J.: We resolve in this Decision the constitutional challenge, originally filed before the Regional Trial Court of Caloocan City, Branch 128 (RTC), against the following highlighted portion of Section 2 of Republic Act (RA) No. 9164 (entitled "An Act Providing for Synchronized Barangay and Sangguniang Kabataan Elections, amending RA No. 7160, as amended, otherwise known as the Local Government Code of 1991"): Sec. 2. Term of Office. The term of office of all barangay and sangguniang kabataan officials after the effectivity of this Act shall be three (3) years. No barangay elective official shall serve for more than three (3) consecutive terms in the same position: Provided, however, That the term of office shall be reckoned from the 1994 barangay elections. Voluntary renunciation of office for any length of time shall not be considered as an interruption in the continuity of service for the full term for which the elective official was elected. The RTC granted the petition and declared the challenged proviso constitutionally infirm. The present petition, filed by the Commission on Elections (COMELEC), seeks a review of the RTC decision.1 THE ANTECEDENTS Before the October 29, 2007 Synchronized Barangay and Sangguniang Kabataan (SK) Elections, some of the then incumbent officials of several barangays of Caloocan City2 filed with the RTC a petition for declaratory relief to challenge the constitutionality of the above-highlighted proviso, based on the following arguments:

I. The term limit of Barangay officials should be applied prospectively and not retroactively. II. Implementation of paragraph 2 Section 2 of RA No. 9164 would be a violation of the equal protection of the law. III. Barangay officials have always been apolitical. The RTC agreed with the respondents contention that the challenged proviso retroactively applied the three-term limit for barangay officials under the following reasoning: When the Local Government Code of 1991 took effect abrogating all other laws inconsistent therewith, a different term was ordained. Here, this Court agrees with the position of the petitioners that Section 43 of the Code specifically exempted barangay elective officials from the coverage of the three (3) consecutive term limit rule considering that the provision applicable to these (sic) class of elective officials was significantly separated from the provisions of paragraphs (a) and (b) thereof. Paragraph (b) is indeed intended to qualify paragraph (a) of Section 43 as regards to (sic) all local elective officials except barangay officials. Had the intention of the framers of the Code is (sic) to include barangay elective officials, then no excepting proviso should have been expressly made in paragraph (a) thereof or, by implication, the contents of paragraph (c) should have been stated ahead of the contents of paragraph (b). xxxx Clearly, the intent of the framers of the constitution (sic) is to exempt the barangay officials from the three (3) term limits (sic) which are otherwise applicable to other elected public officials from the Members of the House of Representatives down to the members of the sangguniang bayan/panlungsod. It is up for the Congress whether the three (3) term limit should be applied by enacting a law for the purpose. The amendment introduced by R.A. No. 8524 merely increased the term of office of barangay elective officials from three (3) years to five (5) years. Like the Local Government Code, it can be noted that no consecutive term limit for the election of barangay elective officials was fixed therein. The advent of R.A. 9164 marked the revival of the consecutive term limit for the election of barangay elective officials after the Local Government Code took effect. Under the assailed provision of this Act, the term of office of barangay elective officials reverted back to three (3) years from five (5) years, and, this time, the legislators expressly declared that no barangay elective official shall serve for more than three (3) consecutive terms in the same position. The petitioners are very clear that they are not assailing the validity of such provision fixing the three (3) consecutive term limit rule for the election of barangay elective officials to the same position. The particular provision the constitutionality of which is under attack is that portion providing for the reckoning of the

three (3) consecutive term limit of barangay elective officials beginning from the 1994 barangay elections. xxx Section 2, paragraph 2 of R.A. 9164 is not a mere restatement of Section 43(c) of the Local Government Code. As discussed above, Section 43(c) of the Local Government Code does not provide for the consecutive term limit rule of barangay elective officials. Such specific provision of the Code has in fact amended the previous enactments (R.A. 6653 and R.A. 6679) providing for the consecutive term limit rule of barangay elective officials. But, such specific provision of the Local Government Code was amended by R.A. 9164, which reverted back to the previous policy of fixing consecutive term limits of barangay elective officials." 3 In declaring this retroactive application unconstitutional, the RTC explained that: By giving a retroactive reckoning of the three (3) consecutive term limit rule for barangay officials to the 1994 barangay elections, Congress has violated not only the principle of prospective application of statutes but also the equal protection clause of the Constitution inasmuch as the barangay elective officials were singled out that their consecutive term limit shall be counted retroactively. There is no rhyme or reason why the consecutive limit for these barangay officials shall be counted retroactively while the consecutive limit for other local and national elective officials are counted prospectively. For if the purpose of Congress is [sic] to classify elective barangay officials as belonging to the same class of public officers whose term of office are limited to three (3) consecutive terms, then to discriminate them by applying the proviso retroactively violates the constitutionally enshrined principle of equal protection of the laws. Although the Constitution grants Congress the power to determine such successive term limit of barangay elective officials, the exercise of the authority granted shall not otherwise transgress other constitutional and statutory privileges. This Court cannot subscribe to the position of the respondent that the legislature clearly intended that the provision of RA No. 9164 be made effective in 1994 and that such provision is valid and constitutional. If we allow such premise, then the term of office for those officials elected in the 1997 barangay elections should have ended in year 2000 and not year 2002 considering that RA No. 9164 provides for a three-year term of barangay elective officials. The amendment introduced by R.A. No. 8524 would be rendered nugatory in view of such retroactive application. This is absurd and illusory. True, no person has a vested right to a public office, the same not being property within the contemplation of constitutional guarantee. However, a cursory reading of the petition would show that the petitioners are not claiming vested right to their office but their right to be voted upon by the electorate without being burdened by the assailed provision of the law that, in effect, rendered them ineligible to run for their incumbent positions. Such

right to run for office and be voted for by the electorate is the right being sought to be protected by assailing the otherwise unconstitutional provision. Moreover, the Court likewise agrees with the petitioners that the law violated the one-actone subject rule embodied in the Constitution. x x x x The challenged laws title is "AN ACT PROVIDING FOR THE SYNCHRONIZED BARANGAY AND SANGGUNIANG KABATAAN ELECTIONS, AMENDING REPUBLIC ACT 7160 OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991 AND FOR OTHER PURPOSES." x x x x xxxx To this court, the non-inclusion in the title of the act on the retroactivity of the reckoning of the term limits posed a serious constitutional breach, particularly on the provision of the constitution [sic] that every bill must embrace only one subject to be expressed in the title thereof. x x x the Court is of the view that the affected barangay officials were not sufficiently given notice that they were already disqualified by a new act, when under the previous enactments no such restrictions were imposed. Even if this Court would apply the usual test in determining the sufficiency of the title of the bill, the challenged law would still be insufficient for how can a retroactivity of the term limits be germane to the synchronization of an election x x x x.4 The COMELEC moved to reconsider this decision but the RTC denied the motion. Hence, the present petition on a pure question of law. The Petition The COMELEC takes the position that the assailed law is valid and constitutional. RA No. 9164 is an amendatory law to RA No. 7160 (the Local Government Code of 1991 or LGC) and is not a penal law; hence, it cannot be considered an ex post facto law. The three-term limit, according to the COMELEC, has been specifically provided in RA No. 7160, and RA No. 9164 merely restated the three-term limitation. It further asserts that laws which are not penal in character may be applied retroactively when expressly so provided and when it does not impair vested rights. As there is no vested right to public office, much less to an elective post, there can be no valid objection to the alleged retroactive application of RA No. 9164. The COMELEC also argues that the RTCs invalidation of RA No. 9164 essentially involves the wisdom of the law the aspect of the law that the RTC has no right to inquire into under the constitutional separation of powers principle. The COMELEC lastly argues that there is no violation of the one subject-one title rule, as the matters covered by RA No. 9164 are related; the assailed provision is actually embraced within the title of the law.

THE COURTS RULING We find the petition meritorious. The RTC legally erred when it declared the challenged proviso unconstitutional. Preliminary Considerations We find it appropriate, as a preliminary matter, to hark back to the pre-1987 Constitution history of the barangay political system as outlined by this Court in David v. COMELEC,5 and we quote: As a unit of government, the barangay antedated the Spanish conquest of the Philippines. The word "barangay" is derived from the Malay "balangay," a boat which transported them (the Malays) to these shores. Quoting from Juan de Plasencia, a Franciscan missionary in 1577, Historian Conrado Benitez wrote that the barangay was ruled by a dato who exercised absolute powers of government. While the Spaniards kept the barangay as the basic structure of government, they stripped the dato or rajah of his powers. Instead, power was centralized nationally in the governor general and locally in the encomiendero and later, in the alcalde mayor and the gobernadorcillo. The dato or rajah was much later renamed cabeza de barangay, who was elected by the local citizens possessing property. The position degenerated from a title of honor to that of a "mere government employee. Only the poor who needed a salary, no matter how low, accepted the post." After the Americans colonized the Philippines, the barangays became known as "barrios." For some time, the laws governing barrio governments were found in the Revised Administrative Code of 1916 and later in the Revised Administrative Code of 1917. Barrios were granted autonomy by the original Barrio Charter, RA 2370, and formally recognized as quasi-municipal corporations by the Revised Barrio Charter, RA 3590. During the martial law regime, barrios were "declared" or renamed "barangays" -a reversion really to their pre-Spanish names -- by PD. No. 86 and PD No. 557. Their basic organization and functions under RA 3590, which was expressly "adopted as the Barangay Charter," were retained. However, the titles of the officials were changed to "barangay captain," "barangay councilman," "barangay secretary" and "barangay treasurer." Pursuant to Sec. 6 of Batas Pambansa Blg. 222, "a Punong Barangay (Barangay Captain) and six Kagawads ng Sangguniang Barangay (Barangay Councilmen), who shall constitute the presiding officer and members of the Sangguniang Barangay (Barangay Council) respectively" were first elected on May 17, 1982. They had a term of six years which began on June 7, 1982. The Local Government Code of 1983 also fixed the term of office of local elective officials at six years. Under this Code, the chief officials of the barangay were the punong barangay, six elective sangguniang barangay members, the kabataang barangay chairman, a barangay secretary and a barangay treasurer.

B.P. Blg. 881, the Omnibus Election Code, reiterated that barangay officials "shall hold office for six years," and stated that their election was to be held "on the second Monday of May nineteen hundred and eighty eight and on the same day every six years thereafter." [Emphasis supplied.] The 1987 Philippine Constitution extended constitutional recognition to barangays under Article X, Section 1 by specifying barangays as one of the territorial and political subdivisions of the country, supplemented by Section 8 of the same Article X, which provides: SEC. 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. [Emphasis supplied.] The Constitutional Commissions deliberations on Section 8 show that the authority of Congress to legislate relates not only to the fixing of the term of office of barangay officials, but also to the application of the three-term limit. The following deliberations of the Constitutional Commission are particularly instructive on this point: MR. NOLLEDO: One clarificatory question, Madam President. What will be the term of the office of barangay officials as provided for? MR. DAVIDE: As may be determined by law. MR. NOLLEDO: As provided for in the Local Government Code? MR. DAVIDE: Yes. xxx xxx xxx

THE PRESIDENT: Is there any other comment? Is there any objection to this proposed new section as submitted by Commissioner Davide and accepted by the Committee? MR. RODRIGO: Madam President, does this prohibition to serve for more than three consecutive terms apply to barangay officials? MR. DAVIDE: Madam President, the voting that we had on the terms of office did not include the barangay officials because it was then the stand of the Chairman of the Committee on Local Governments that the term of barangay officials must be determined by law. So it is now for the law to determine whether the restriction on the number of reelections will be included in the Local Government Code.

MR. RODRIGO: So that is up to Congress to decide. MR. DAVIDE: Yes. MR. RODRIGO: I just wanted that clear in the record."6 [Emphasis supplied.] After the effectivity of the 1987 Constitution, the barangay election originally scheduled by Batas Pambansa Blg. 8817 on the second Monday of May 1988 was reset to "the second Monday of November 1988 and every five years thereafter by RA No. 6653."8 Section 2 of RA No. 6653 changed the term of office of barangay officials and introduced a term limitation as follows: SEC. 2. The term of office of barangay officials shall be for five (5) years from the first day of January following their election. Provided, however, That no kagawad shall serve for more than two (2) consecutive terms. [Emphasis supplied] Under Section 5 of RA No. 6653, the punong barangay was to be chosen by seven kagawads from among themselves, and they in turn, were to be elected at large by the barangay electorate. The punong barangay, under Section 6 of the law, may be recalled for loss of confidence by an absolute majority vote of the Sangguniang Barangay, embodied in a resolution that shall necessarily include the punong barangays successor. The election date set by RA No. 6653 on the second Monday of November 1988 was postponed yet again to March 28, 1989 by RA No. 6679 whose pertinent provision states: SEC. 1. The elections of barangay officials set on the second Monday of November 1988 by Republic Act No. 6653 are hereby postponed and reset to March 28, 1989. They shall serve a term which shall begin on the first day of May 1989 and ending on the thirty-first day of May 1994. There shall be held a regular election of barangay officials on the second Monday of May 1994 and on the same day every five (5) years thereafter. Their term shall be for five (5) years which shall begin on the first day of June following the election and until their successors shall have been elected and qualified: Provided, That no barangay official shall serve for more than three (3) consecutive terms. The barangay elections shall be nonpartisan and shall be conducted in an expeditious and inexpensive manner. Significantly, the manner of election of the punong barangay was changed Section 5 of the law provided that while the seven kagawads were to be elected by the registered voters of the barangay, "(t)he candidate who obtains the highest number of votes shall be the punong barangay and in the event of a tie, there shall be a drawing of lots under the supervision of the Commission on Elections."

More than two (2) years after the 1989 barangay elections, RA No. 7160 (the LGC) introduced the following changes in the law: SEC. 41. Manner of Election. -- (a) The x x x punong barangay shall be elected at large x x x by the qualified voters" therein. SEC. 43. Term of Office. - (a) The term of office of all local elective officials elected after the effectivity of this Code shall be three (3) years, starting from noon of June 30, 1992 or such date as may be provided for by law, except that of elective barangay officials: Provided, That all local officials first elected during the local elections immediately following the ratification of the 1987 Constitution shall serve until noon of June 30, 1992. (b) No local elective official shall serve for more than three (3) consecutive terms in the same position. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of service for the full term for which the elective official concerned was elected. (c) The term of office of barangay officials and members of the sangguniang kabataan shall be for three (3) years, which shall begin after the regular election of barangay officials on the second Monday of May 1994. SEC. 387. Chief Officials and Offices. -- (a) There shall be in each barangay a punong barangay, seven (7) sangguniang barangay members, the sangguniang kabataan chairman, a barangay secretary and a barangay treasurer. xxxxxxxxx SEC. 390. Composition. -- The Sangguniang barangay, the legislative body of the barangay, shall be composed of the punong barangay as presiding officer, and the seven (7) regular sanguniang barangay members elected at large and the sanguniang kabataan chairman as members. [Emphasis supplied.] This law started the direct and separate election of the punong barangay by the "qualified voters" in the barangay and not by the seven (7) kagawads from among themselves.9 Subsequently or on February 14, 1998, RA No. 8524 changed the three-year term of office of barangay officials under Section 43 of the LGC to five (5) years. On March 19, 2002, RA No. 9164 introduced the following significant changes: (1) the term of office of barangay officials was again fixed at three years on the reasoning that the barangay officials should not serve a longer term than their supervisors;10 and (2) the challenged proviso, which states that the 1994 election shall be the reckoning point for the application of the three-term limit, was introduced. Yet another change was introduced three years after or on July 25, 2005 when RA No. 9340 extended the term of the then incumbent barangay officials due to expire at noon of November 30, 2005 under RA No. 9164 to noon of November 30, 2007. The three-year term limitation provision survived all these changes.

Congress Plenary Power to Legislate Term Limits for Barangay Officials and Judicial Power In passing upon the issues posed to us, we clarify at the outset the parameters of our powers. As reflected in the above-quoted deliberations of the 1987 Constitution, Congress has plenary authority under the Constitution to determine by legislation not only the duration of the term of barangay officials, but also the application to them of a consecutive term limit. Congress invariably exercised this authority when it enacted no less than six (6) barangay-related laws since 1987. Through all these statutory changes, Congress had determined at its discretion both the length of the term of office of barangay officials and their term limitation. Given the textually demonstrable commitment by the 1987 Constitution to Congress of the authority to determine the term duration and limition of barangay officials under the Constitution, we consider it established that whatever Congress, in its wisdom, decides on these matters are political questions beyond the pale of judicial scrutiny,11 subject only to the certiorari jurisdiction of the courts provided under Section 1, Article VIII of the Constitution and to the judicial authority to invalidate any law contrary to the Constitution.12 Political questions refer "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 legislative or executive branch of the government; it is concerned with issues dependent upon the wisdom, not legality of a particular measure."13 These questions, previously impervious to judicial scrutiny can now be inquired into under the limited window provided by Section 1, Article VIII. Estrada v. Desierto14 best describes this constitutional development, and we quote: To a great degree, the 1987 Constitution has narrowed the reach of the political 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 nots" 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. In sync and symmetry with this intent are other provisions of the 1987 Constitution trimming the so called political thicket. xxxx Thus, we can inquire into a congressional enactment despite the political question doctrine, although the window provided us is narrow; the challenge must show grave abuse of discretion to justify our intervention.

Other than the Section 1, Article VIII route, courts can declare a law invalid when it is contrary to any provision of the Constitution. This requires the appraisal of the challenged law against the legal standards provided by the Constitution, not on the basis of the wisdom of the enactment. To justify its nullification, the breach of the Constitution must be clear and unequivocal, not a doubtful or equivocal one, as every law enjoys a strong presumption of constitutionality.15 These are the hurdles that those challenging the constitutional validity of a law must overcome. The present case, as framed by the respondents, poses no challenge on the issue of grave abuse of discretion. The legal issues posed relate strictly to compliance with constitutional standards. It is from this prism that we shall therefore resolve this case. The Retroactive Application Issue a. Interpretative / Historical Consideration The respondents first objection to the challenged provisos constitutionality is its purported retroactive application of the three-term limit when it set the 1994 barangay elections as a reckoning point in the application of the three-term limit. The respondents argued that the term limit, although present in the previous laws, was not in RA No. 7160 when it amended all previous barangay election laws. Hence, it was reintroduced for the first time by RA No. 9164 (signed into law on March 19, 2002) and was applied retroactively when it made the term limitation effective from the 1994 barangay elections. As the appealed ruling quoted above shows, the RTC fully agreed with the respondents position. Our first point of disagreement with the respondents and with the RTC is on their position that a retroactive application of the term limitation was made under RA No. 9164. Our own reading shows that no retroactive application was made because the threeterm limit has been there all along as early as the second barangay law (RA No. 6679) after the 1987 Constitution took effect; it was continued under the LGC and can still be found in the current law. We find this obvious from a reading of the historical development of the law. The first law that provided a term limitation for barangay officials was RA No. 6653 (1988); it imposed a two-consecutive term limit. After only six months, Congress, under RA No. 6679 (1988), changed the two-term limit by providing for a three-consecutive term limit. This consistent imposition of the term limit gives no hint of any equivocation in the congressional intent to provide a term limitation. Thereafter, RA No. 7160 the LGC followed, bringing with it the issue of whether it provided, as originally worded, for a three-term limit for barangay officials. We differ with the RTC analysis of this issue. Section 43 is a provision under Title II of the LGC on Elective Officials. Title II is divided into several chapters dealing with a wide range of subject matters, all relating to

local elective officials, as follows: a. Qualifications and Election (Chapter I); b. Vacancies and Succession (Chapter II), c. Disciplinary Actions (Chapter IV) and d. Recall (Chapter V). Title II likewise contains a chapter on Local Legislation (Chapter III). These Title II provisions are intended to apply to all local elective officials, unless the contrary is clearly provided. A contrary application is provided with respect to the length of the term of office under Section 43(a); while it applies to all local elective officials, it does not apply to barangay officials whose length of term is specifically provided by Section 43(c). In contrast to this clear case of an exception to a general rule, the threeterm limit under Section 43(b) does not contain any exception; it applies to all local elective officials who must perforce include barangay officials. An alternative perspective is to view Sec. 43(a), (b) and (c) separately from one another as independently standing and self-contained provisions, except to the extent that they expressly relate to one another. Thus, Sec. 43(a) relates to the term of local elective officials, except barangay officials whose term of office is separately provided under Sec. 43(c). Sec. 43(b), by its express terms, relates to all local elective officials without any exception. Thus, the term limitation applies to all local elective officials without any exclusion or qualification. Either perspective, both of which speak of the same resulting interpretation, is the correct legal import of Section 43 in the context in which it is found in Title II of the LGC.1avvphi1 To be sure, it may be argued, as the respondents and the RTC did, that paragraphs (a) and (b) of Section 43 are the general law for elective officials (other than barangay officials); and paragraph (c) is the specific law on barangay officials, such that the silence of paragraph (c) on term limitation for barangay officials indicates the legislative intent to exclude barangay officials from the application of the three-term limit. This reading, however, is flawed for two reasons. First, reading Section 43(a) and (b) together to the exclusion of Section 43(c), is not justified by the plain texts of these provisions. Section 43(a) plainly refers to local elective officials, except elective barangay officials. In comparison, Section 43(b) refers to all local elective officials without exclusions or exceptions. Their respective coverages therefore vary so that one cannot be said to be of the same kind as the other. Their separate topics additionally strengthen their distinction; Section 43(a) refers to the term of office while Section 43(b) refers to the three-term limit. These differences alone indicate that Sections 43(a) and (b) cannot be read together as one organic whole in the way the RTC suggested. Significantly, these same distinctions apply between Sec. 43(b) and (c). Second, the RTC interpretation is flawed because of its total disregard of the historical background of Section 43(c) a backdrop that we painstakingly outlined above.

From a historical perspective of the law, the inclusion of Section 43(c) in the LGC is an absolute necessity to clarify the length of term of barangay officials. Recall that under RA No. 6679, the term of office of barangay officials was five (5) years. The real concern was how Section 43 would interface with RA No. 6679. Without a categorical statement on the length of the term of office of barangay officials, a general three-year term for all local elective officials under Section 43(a), standing alone, may not readily and completely erase doubts on the intended abrogation of the 5-year term for barangay officials under RA No. 6679. Thus, Congress added Section 43(c) which provided a categorical three-year term for these officials. History tells us, of course, that the unequivocal provision of Section 43(c) notwithstanding, an issue on what is the exact term of office of barangay officials was still brought to us via a petition filed by no less than the President of the Liga ng Mga Barangay in 1997. We fully resolved the issue in the cited David v. Comelec. Section 43(c) should therefore be understood in this context and not in the sense that it intended to provide the complete rule for the election of barangay officials, so that in the absence of any term limitation proviso under this subsection, no term limitation applies to barangay officials. That Congress had the LGCs three-term limit in mind when it enacted RA No. 9164 is clear from the following deliberations in the House of Representatives (House) on House Bill No. 4456 which later became RA No. 9164: MARCH 5, 2002: THE DEPUTY SPEAKER (Rep. Espinosa, E.R.). Majority Leader. REP. ESCUDERO. Mr. Speaker, next to interpellate is the Gentleman from Zamboanga City. I ask that the Honorable Lobregat be recognized. THE DEPUTY SPEAKER (Rep. Espinosa, E.R.). The Honorable Lobregat is recognized. REP. LOBREGAT. Thank you very much, Mr. Speaker. Mr. Speaker, this is just REP. MACIAS. Willingly to the Gentleman from Zamboanga City. REP. LOBREGAT. points of clarification, Mr. Speaker, the term of office. It says in Section 4, "The term of office of all Barangay and sangguniang kabataan officials after the effectivity of this Act shall be three years." Then it says, "No Barangay elective official shall serve for more than three (3) consecutive terms in the same position." Mr. Speaker, I think it is the position of the committee that the first term should be reckoned from election of what year, Mr. Speaker? REP. MACIAS. After the adoption of the Local Government Code, Your Honor. So that the first election is to be reckoned on, would be May 8, 1994, as far as the Barangay election is concerned.

REP. LOBREGAT. Yes, Mr. Speaker. So there was an election in 1994. REP. MACIAS. Then an election in 1997. REP. LOBREGAT. There was an election in 1997. And there will be an election this year REP. LOBREGAT. election this year. REP. MACIAS. That is correct. This will be the third. xxx REP. SUMULONG. Mr. Speaker. THE DEPUTY SPEAKER (Rep. Espinosa, E.R.) The Honorable Sumulong is recognized. REP. SUMULONG. Again, with the permission of my Chairman, I would like to address the question of Congressman Lobregat. THE DEPUTY SPEAKER (Rep. Espinosa, E.R.). Please proceed. REP. SUMULONG. With respect to the three-year consecutive term limits of Barangay Captains that is not provided for in the Constitution and that is why the election prior to 1991 during the enactment of the Local Government Code is not counted because it is not in the Constitution but in the Local Government Code where the three consecutive term limits has been placed. [Emphasis supplied.] which led to the following exchanges in the House Committee on Amendments: March 6, 2002 COMMITTEE ON AMENDMENTS REP. GONZALES. May we now proceed to committee amendment, if any, Mr. Speaker. THE DEPUTY SPEAKER (Rep. Gonzalez). The Chair recognizes the distinguished Chairman of the Committee on Suffrage and Electoral Reforms. REP. SYJUCO. Mr. Speaker, on page 2, line 7, after the word "position", substitute the period (.) and add the following: PROVIDED HOWEVER THAT THE TERM OF OFFICE SHALL BE RECKONED FROM THE 1994 BARANGAY ELECTIONS. So that the amended Section 4 now reads as follows: xxx xxx

"SEC. 4. Term of Office. The term of office of all barangay and sangguniang kabataan officials after the effectivity of this Act shall be three (3) years. No barangay elective local official shall serve for more than three (3) consecutive terms in the same position COLON (:) PROVIDED, HOWEVER, THAT THE TERM OF OFFICE SHALL BE RECKONED FROM THE 1994 BARANGAY ELECTIONS. Voluntary renunciation of office for any length of time shall not be considered as an interruption in the continuity of service for the full term for which the elective official was elected. The House therefore clearly operated on the premise that the LGC imposed a three-term limit for barangay officials, and the challenged proviso is its way of addressing any confusion that may arise from the numerous changes in the law. All these inevitably lead to the conclusion that the challenged proviso has been there all along and does not simply retroact the application of the three-term limit to the barangay elections of 1994. Congress merely integrated the past statutory changes into a seamless whole by coming up with the challenged proviso. With this conclusion, the respondents constitutional challenge to the proviso based on retroactivity must fail. b. No Involvement of Any Constitutional Standard Separately from the above reason, the constitutional challenge must fail for a more fundamental reason the respondents retroactivity objection does not involve a violation of any constitutional standard. Retroactivity of laws is a matter of civil law, not of a constitutional law, as its governing law is the Civil Code,16 not the Constitution. Article 4 of the Civil Code provides that laws shall have no retroactive effect unless the contrary is provided. The application of the Civil Code is of course self-explanatory laws enacted by Congress may permissibly provide that they shall have retroactive effect. The Civil Code established a statutory norm, not a constitutional standard. The closest the issue of retroactivity of laws can get to a genuine constitutional issue is if a laws retroactive application will impair vested rights. Otherwise stated, if a right has already vested in an individual and a subsequent law effectively takes it away, a genuine due process issue may arise. What should be involved, however, is a vested right to life, liberty or property, as these are the ones that may be considered protected by the due process clause of the Constitution.1 a vv p h i 1 In the present case, the respondents never raised due process as an issue. But even assuming that they did, the respondents themselves concede that there is no vested right to public office.17 As the COMELEC correctly pointed out, too, there is no vested right to an elective post in view of the uncertainty inherent in electoral exercises.

Aware of this legal reality, the respondents theorized instead that they had a right to be voted upon by the electorate without being burdened by a law that effectively rendered them ineligible to run for their incumbent positions. Again, the RTC agreed with this contention. We do not agree with the RTC, as we find no such right under the Constitution; if at all, this claimed right is merely a restatement of a claim of vested right to a public office. What the Constitution clearly provides is the power of Congress to prescribe the qualifications for elective local posts;18 thus, the question of eligibility for an elective local post is a matter for Congress, not for the courts, to decide. We dealt with a strikingly similar issue in Montesclaros v. Commission on Elections19 where we ruled that SK membership which was claimed as a property right within the meaning of the Constitution is a mere statutory right conferred by law. Montesclaros instructively tells us: Congress exercises the power to prescribe the qualifications for SK membership. One who is no longer qualified because of an amendment in the law cannot complain of being deprived of a proprietary right to SK membership. Only those who qualify as SK members can contest, based on a statutory right, any act disqualifying them from SK membership or from voting in the SK elections. SK membership is not a property right protected by the Constitution because it is a mere statutory right conferred by law. Congress may amend at any time the law to change or even withdraw the statutory right. A public office is not a property right. As the Constitution expressly states, a "[P]ublic office is a public trust." No one has a vested right to any public office, much less a vested right to an expectancy of holding a public office. In Cornejo v. Gabriel, decided in 1920, the Court already ruled: Again, for this petition to come under the due process of law prohibition, it would be necessary to consider an office a "property." It is, however, well settled x x x that a public office is not property within the sense of the constitutional guaranties of due process of law, but is a public trust or agency. x x x The basic idea of the government x x x is that of a popular representative government, the officers being mere agents and not rulers of the people, one where no one man or set of men has a proprietary or contractual right to an office, but where every officer accepts office pursuant to the provisions of the law and holds the office as a trust for the people he represents. Petitioners, who apparently desire to hold public office, should realize from the very start that no one has a proprietary right to public office. While the law makes an SK officer an ex-officio member of a local government legislative council, the law does not confer on petitioners a proprietary right or even a proprietary expectancy to sit in local legislative councils. The constitutional principle of a public office as a public trust precludes any proprietary claim to public office. Even the State policy directing "equal access to opportunities for public service" cannot bestow on petitioners a proprietary right to SK membership or a proprietary expectancy to ex-officio public offices.

Moreover, while the State policy is to encourage the youths involvement in public affairs, this policy refers to those who belong to the class of people defined as the youth. Congress has the power to define who are the youth qualified to join the SK, which itself is a creation of Congress. Those who do not qualify because they are past the age group defined as the youth cannot insist on being part of the youth. In government service, once an employee reaches mandatory retirement age, he cannot invoke any property right to cling to his office. In the same manner, since petitioners are now past the maximum age for membership in the SK, they cannot invoke any property right to cling to their SK membership. [Emphasis supplied.] To recapitulate, we find no merit in the respondents retroactivity arguments because: (1) the challenged proviso did not provide for the retroactive application to barangay officials of the three-term limit; Section 43(b) of RA No. 9164 simply continued what had been there before; and (2) the constitutional challenge based on retroactivity was not anchored on a constitutional standard but on a mere statutory norm. The Equal Protection Clause Issue The equal protection guarantee under the Constitution is found under its Section 2, Article III, which provides: "Nor shall any person be denied the equal protection of the laws." Essentially, the equality guaranteed under this clause is equality under the same conditions and among persons similarly situated. It is equality among equals, not similarity of treatment of persons who are different from one another on the basis of substantial distinctions related to the objective of the law; when things or persons are different in facts or circumstances, they may be treated differently in law.20 Appreciation of how the constitutional equality provision applies inevitably leads to the conclusion that no basis exists in the present case for an equal protection challenge. The law can treat barangay officials differently from other local elective officials because the Constitution itself provides a significant distinction between these elective officials with respect to length of term and term limitation. The clear distinction, expressed in the Constitution itself, is that while the Constitution provides for a three-year term and threeterm limit for local elective officials, it left the length of term and the application of the three-term limit or any form of term limitation for determination by Congress through legislation. Not only does this disparate treatment recognize substantial distinctions, it recognizes as well that the Constitution itself allows a non-uniform treatment. No equal protection violation can exist under these conditions. From another perspective, we see no reason to apply the equal protection clause as a standard because the challenged proviso did not result in any differential treatment between barangay officials and all other elective officials. This conclusion proceeds from our ruling on the retroactivity issue that the challenged proviso does not involve any retroactive application. Violation of the Constitutional

One Subject- One Title Rule Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof. Farias v. Executive Secretary21 provides the reasons for this constitutional requirement and the test for its application, as follows: The proscription is aimed against the evils of the so-called omnibus bills and log-rolling legislation as well as surreptitious and/or unconsidered encroaches. The provision merely calls for all parts of an act relating to its subject finding expression in its title. To determine whether there has been compliance with the constitutional requirement that the subject of an act shall be expressed in its title, the Court laid down the rule that Constitutional provisions relating to the subject matter and titles of statutes should not be so narrowly construed as to cripple or impede the power of legislation. The requirement that the subject of an act shall be expressed in its title should receive a reasonable and not a technical construction. It is sufficient if the title be comprehensive enough reasonably to include the general object which a statute seeks to effect, without expressing each and every end and means necessary or convenient for the accomplishing of that object. Mere details need not be set forth. The title need not be an abstract or index of the Act. xxxx x x x This Court has held that an act having a single general subject, indicated in the title, may contain any number of provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in furtherance of such subject by providing for the method and means of carrying out the general subject. xxxx x x x Moreover, the avowed purpose of the constitutional directive that the subject of a bill should be embraced in its title is to apprise the legislators of the purposes, the nature and scope of its provisions, and prevent the enactment into law of matters which have not received the notice, action and study of the legislators and the public. We find, under these settled parameters, that the challenged proviso does not violate the one subject-one title rule. First, the title of RA No. 9164, "An Act Providing for Synchronized Barangay and Sangguniang Kabataang Elections, amending Republic Act No. 7160, as amended, otherwise known as the Local Government Code of 1991," states the laws general subject matter the amendment of the LGC to synchronize the barangay and SK elections and for other purposes. To achieve synchronization of the barangay and SK elections, the reconciliation of the varying lengths of the terms of office of barangay officials and SK officials is necessary. Closely related with length of term is term

limitation which defines the total number of terms for which a barangay official may run for and hold office. This natural linkage demonstrates that term limitation is not foreign to the general subject expressed in the title of the law. Second, the congressional debates we cited above show that the legislators and the public they represent were fully informed of the purposes, nature and scope of the laws provisions. Term limitation therefore received the notice, consideration, and action from both the legislators and the public. Finally, to require the inclusion of term limitation in the title of RA No. 9164 is to make the title an index of all the subject matters dealt with by law; this is not what the constitutional requirement contemplates. WHEREFORE, premises considered, we GRANT the petition and accordingly AFFIRM the constitutionality of the challenged proviso under Section 2, paragraph 2 of Republic Act No. 9164. Costs against the respondents. SO ORDERED. ARTURO D. BRION Associate Justice WE CONCUR: REYNATO S. PUNO Chief Justice ANTONIO T. CARPIO Associate Justice CONCHITA CARPIO MORALES Associate Justice (On official leave) PRESBITERO J. VELASCO, JR.** Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice LUCAS P. BERSAMIN Associate Justice (On official leave) RENATO C. CORONA* Associate Justice MINITA V. CHICO-NAZARIO Associate Justice ANTONIO EDUARDO B. NACHURA Associate Justice (On official leave) DIOSDADO M. PERALTA*** Associate Justice Associate Justice

ROBERTO A. ABAD Associate Justice

MARIANO C. DEL CASTILLO Associate Justice

MARTIN S. VILLARAMA, JR. Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. REYNATO S. PUNO Chief Justice

38.
STRADEC vs. Radstock; G.R. No. 178158 and 180428; December 4, 2009; Natural Resources; Land Ownership; Public funds; Appropriation
Facts Construction Development Corporation of the Philippines (CDCP) was incorporated in 1966. It was granted a franchise to construct, operate and maintain toll facilities in the North and South Luzon Tollways and Metro Manila Expressway. CDCP Mining Corporation (CDCP Mining), an affiliate of CDCP, obtained loans from Marubeni Corporation of Japan (Marubeni). A CDCP official issued letters of guarantee for the loans although there was no CDCP Board Resolution authorizing the issuance of such letters of guarantee. CDCP Mining secured the Marubeni loans when CDCP and CDCP Mining were still privately owned and managed. In 1983, CDCPs name was changed to Philippine National Construction Corporation (PNCC) in order to reflect that the Government already owned 90.3% of PNCC and only 9.70% is under private ownership. Meanwhile, the Marubeni loans to CDCP Mining remained unpaid. On 20 October 2000 and 22 November 2000, the PNCC Board of Directors (PNCC Board) passed Board Resolutions admitting PNCCs liability to Marubeni. Previously, for two decades the PNCC Board consistently refused to admit any liability for the Marubeni loans. In January 2001, Marubeni assigned its entire credit to Radstock Securities Limited (Radstock), a foreign corporation. Radstock immediately sent a notice and demand letter

to PNCC. PNCC and Radstock entered into a Compromise Agreement. Under this agreement, PNCC shall pay Radstock the reduced amount of P6,185,000,000.00 in full settlement of PNCCs guarantee of CDCP Minings debt allegedly totaling P17,040,843,968.00 (judgment debt as of 31 July 2006). To satisfy its reduced obligation, PNCC undertakes to (1) "assign to a third party assignee to be designated by Radstock all its rights and interests" to the listed real properties of PNCC; (2) issue to Radstock or its assignee common shares of the capital stock of PNCC issued at par value which shall comprise 20% of the outstanding capital stock of PNCC; and (3) assign to Radstock or its assignee 50% of PNCCs 6% share, for the next 27 years, in the gross toll revenues of the Manila North Tollways Corporation. Strategic Alliance Development Corporation (STRADEC) moved for reconsideration. STRADEC alleged that it has a claim against PNCC as a bidder of the National Governments shares, receivables, securities and interests in PNCC. Issue Whether or not the Compromise Agreement between PNCC and Radstock is valid in relation to the Constitution, existing laws, and public policy Held The Compromise Agreement is contrary to the Constitution, existing laws and public policy. PNCCs toll fees are public funds. PNCC cannot use public funds like toll fees that indisputably form part of the General Fund, to pay a private debt of CDCP Mining to Radstock. Such payment cannot qualify as expenditure for a public purpose. The toll fees are merely held in trust by PNCC for the National Government, which is the owner of the toll fees. Considering that there is no appropriation law passed by Congress for the compromise amount, the Compromise Agreement is void for being contrary to law, specifically Section 29(1), Article VI of the Constitution. And since the payment pertains to CDCP Minings private debt to Radstock, the Compromise Agreement is also void for being contrary to the fundamental public policy that government funds or property shall be spent or used solely for public purposes. Radstock is not qualified to own land in the Philippines. Consequently, Radstock is also disqualified to own the rights to ownership of lands in the Philippines. Radstock cannot own the rights to ownership of any land in the Philippines because Radstock cannot lawfully own the land itself. Otherwise, there will be a blatant circumvention of the Constitution, which prohibits a foreign private corporation from owning land in the Philippines. In addition, Radstock cannot transfer the rights to ownership of land in the Philippines if it cannot own the land itself. It is basic that an assignor or seller cannot assign or sell something he does not own at the time the ownership, or the rights to the

ownership, are to be transferred to the assignee or buyer. The third party assignee under the Compromise Agreement who will be designated by Radstock can only acquire rights duplicating those which its assignor is entitled by law to exercise. Thus, the assignee can acquire ownership of the land only if its assignor owns the land. Clearly, the assignment by PNCC of the real properties to a nominee to be designated by Radstock is a circumvention of the Constitutional prohibition against a private foreign corporation owning lands in the Philippines. The said circumvention renders the Compromise Agreement void.

35.
Republic of the Philippines SUPREME COURT Manila
G.R. No. 168056 ' ABAKADA GURO PARTY LIST, ET AL. VS. EXECUTIVE SECRETARY EDUARDO ERMITA, ET AL.

G.R. No. 168207 ' AQUILINO PIMENTEL, JR., ET AL. VS. EXECUTIVE SECRETARY EDUARDO ERMITA, ET AL.

G.R. No. 168461 ' ASSOCIATION OF PILIPINAS SHELL DEALERS, INC., ET AL. VS. CESAR V. PURISIMA, ET AL.

G.R. No. 168463 ' FRANCIS JOSEPH G. ESCUDERO, ET AL. VS. CESAR V. PURISIMA, ET AL. Promulgated:

September 1, 2005 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

CONCURRING AND

DISSENTING OPINION

PUNO, J.: The main opinion of Madam Justice Martinez exhaustively discusses the numerous constitutional and legal issues raised by the petitioners. Be that as it may, I wish to raise the following points, viz: First. Petitioners assail sections 4 to 6 of Republic Act No. 9337 as violative of the principle of non-delegation of legislative power. These sections authorize the President, upon

recommendation of the Secretary of Finance, to raise the value-added tax (VAT) rate to 12% effective January 1, 2006, upon satisfaction of the following conditions: viz: (i) Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous year exceeds two and four-fifth percent (2 4/5%); or (ii) National government deficit as a percentage of GDP of the previous year exceeds one and one-half percent (1 '%).

The power of judicial review under Article VIII, section 5(2) of the 1987 Constitution is limited to the review of 'actual cases and controversies.[1] As rightly stressed by retired Justice Vicente V. Mendoza, this requirement gives the judiciary 'the opportunity, denied to the legislature, of seeing the actual operation of the statute as it is applied to actual facts and thus enables it to reach sounder judgment and 'enhances public acceptance of its role in our system of government.[2] It also assures that the judiciary does not intrude on areas committed to the other branches of government and is confined to its role as defined by the Constitution.[3] Apposite thereto is the doctrine of ripeness whose basic rationale is to prevent the courts, through premature adjudication, from entangling themselves in abstract disagreements.[4] Central to

the doctrine is the determination of 'whether the case involves uncertain or contingent future events that may not occur as anticipated, or indeed may not occur at all.[5] The ripeness requirement must be satisfied for each challenged legal provision and parts of a statute so that those which are 'not immediately involved are not thereby thrown open for a judicial determination of constitutionality.[6]

It is manifest that the constitutional challenge to sections 4 to 6 of R.A. No. 9337 cannot hurdle the requirement of ripeness. These sections give the President the power to raise the VAT rate to 12% on January 1, 2006 upon satisfaction of certain fact-based conditions. We are not endowed with the infallible gift of prophesy to know whether these conditions are certain to happen. The power to adjust the tax rate given to the President is futuristic and may or may not be exercised. The Court is therefore beseeched to render a conjectural judgment based on hypothetical facts. Such a supplication has to be rejected. Second. With due respect, I submit that the most important constitutional issue posed by the petitions at bar relates to the parameters of power of a Bicameral Conference Committee. Most of the issues in the petitions at bar arose because the Bicameral Conference Committee concerned exercised powers that went beyond reconciling the differences between Senate Bill No. 1950 and House Bill Nos. 3705 and 3555. In Tolentino v. Secretary of Finance,[7] I ventured the view that a Bicameral Conference Committee has limited powers and cannot be allowed to act as if it were a 'third house of Congress. I further warned that unless its roving powers are reigned in, a Bicameral Conference Committee can wreck the lawmaking process which is a cornerstone of the democratic, republican regime established in our Constitution. The passage of time fortifies my faith that there ought to be no legal u-turn on this preeminent principle. I wish, therefore, to reiterate my reasons for this unbending view, viz:[8]

Section 209, Rule XII of the Rules of the Senate provides:

In the event that the Senate does not agree with the House of Representatives on the provision of any bill or joint resolution, the differences shall be settled by a conference committee of both Houses which shall meet within ten days after their composition. Each Conference Committee Report shall contain a detailed and sufficiently explicit statement of the changes in or amendments to the subject measure, and shall be signed by the conferees. (Emphasis supplied) The counterpart rule of the House of Representatives is cast in near identical language. Section 85 of the Rules of the House of Representatives pertinently provides: In the event that the House does not agree with the Senate on the amendments to any bill or joint resolution, the differences may be settled by a conference committee of both chambers. x x x. Each report shall contain a detailed, sufficiently explicit statement of the changes in or amendments to the subject measure. (Emphasis supplied) The Jefferson's Manual has been adopted as a supplement to our parliamentary rules and practice. Section 456 of Jefferson's Manual similarly confines the powers of a conference committee, viz: The managers of a conference must confine themselves to the differences committed to them ' and may not include subjects not within the disagreements, even though germane to a question in issue. This rule of antiquity has been honed and honored in practice by the Congress of the United States. Thus, it is chronicled by Floyd Biddick, Parliamentarian Emeritus of the United States Senate, viz: Committees of conference are appointed for the sole purpose of compromising and adjusting the differing and conflicting opinions of the two Houses and the committees of conference alone can grant compromises and modify propositions of either Houses within the limits of the disagreement. Conferees are limited to the consideration of differences between the two Houses. Congress shall not insert in their report matters not committed to them by either House, nor shall they strike from the bill matters agreed to by both Houses. No matter on which there is nothing in either the Senate or House passed versions of a bill may be included in the conference report and actions to the

contrary would subject the report to a point of order. (Emphasis ours) In fine, there is neither a sound nor a syllable in the Rules of the Senate and the House of Representatives to support the thesis of the respondents that a bicameral conference committee is clothed with an ex post veto power. But the thesis that a Bicameral Conference Committee can wield ex post veto power does not only contravene the rules of both the Senate and the House. It wages war against our settled ideals of representative democracy. For the inevitable, catastrophic effect of the thesis is to install a Bicameral Conference Committee as the Third Chamber of our Congress, similarly vested with the power to make laws but with the dissimilarity that its laws are not the subject of a free and full discussion of both Houses of Congress. With such a vagrant power, a Bicameral Conference Committee acting as a Third Chamber will be a constitutional monstrosity. It needs no omniscience to perceive that our Constitution did not provide for a Congress composed of three chambers. On the contrary, section 1, Article VI of the Constitution provides in clear and certain language: 'The legislative power shall be vested in the Congress of the Philippines which shall consist of a Senate and a House of Representatives Note that in vesting legislative power exclusively to the Senate and the House, the Constitution used the word 'shall. Its command for a Congress of two houses is mandatory. It is not mandatory sometimes. In vesting legislative power to the Senate, the Constitution means the Senate composed of twenty-four Senators xxx elected at large by the qualified voters of the Philippines Similarly, when the Constitution vested the legislative power to the House, it means the House composed of not more than two hundred and fifty members xxx who shall be elected from legislative districts xxx and those who xxx shall be elected through a party-list system of registered national, regional, and sectoral parties or organizations. The Constitution thus, did not vest on a Bicameral Conference Committee with an ad hoc membership the power to legislate for it exclusively vested legislative power to the Senate and the House as co-equal bodies. To be sure, the Constitution does not mention the Bicameral Conference Committees of Congress. No constitutional status is accorded to them. They are not even statutory creations. They owe their existence from the internal rules of the two Houses of Congress. Yet, respondents peddle the disconcerting idea that they should be recognized as a Third Chamber of Congress and with ex post veto power at that. The thesis that a Bicameral Conference Committee can exercise law making power with ex post veto power is freighted with mischief. Law making is a power that can be used for good or for ill, hence, our Constitution carefully laid out a plan and a procedure for its exercise. Firstly, it vouchsafed that the power to make laws should be exercised by no other body except the Senate and the House. It ought to be indubitable that what is contemplated is the Senate acting as a full Senate and the House acting as a full House. It is only when the Senate and the House act as whole bodies that they truly represent the people. And it is only when they represent the people that they can legitimately pass

laws. Laws that are not enacted by the people's rightful representatives subvert the people's sovereignty. Bicameral Conference Committees, with their ad hoc character and limited membership, cannot pass laws for they do not represent the people. The Constitution does not allow the tyranny of the majority. Yet, the respondents will impose the worst kind of tyranny ' the tyranny of the minority over the majority. Secondly, the Constitution delineated in deft strokes the steps to be followed in making laws. The overriding purpose of these procedural rules is to assure that only bills that successfully survive the searching scrutiny of the proper committees of Congress and the full and unfettered deliberations of both Houses can become laws. For this reason, a bill has to undergo three (3) mandatory separate readings in each House. In the case at bench, the additions and deletions made by the Bicameral Conference Committee did not enjoy the enlightened studies of appropriate committees. It is meet to note that the complexities of modern day legislations have made our committee system a significant part of the legislative process. Thomas Reed called the committee system as 'the eye, the ear, the hand, and very often the brain of the house. President Woodrow Wilson of the United States once referred to the government of the United States as 'a government by the Chairmen of the Standing Committees of Congress Neither did these additions and deletions of the Bicameral Conference Committee pass through the coils of collective deliberation of the members of the two Houses acting separately. Due to this shortcircuiting of the constitutional procedure of making laws, confusion shrouds the enactment of R.A. No. 7716. Who inserted the additions and deletions remains a mystery. Why they were inserted is a riddle. To use a Churchillian phrase, lawmaking should not be a riddle wrapped in an enigma. It cannot be, for Article II, section 28 of the Constitution mandates the State to adopt and implement a 'policy of full public disclosure of all its transactions involving public interest. The Constitution could not have contemplated a Congress of invisible and unaccountable John and Mary Does. A law whose rationale is a riddle and whose authorship is obscure cannot bind the people. All these notwithstanding, respondents resort to the legal cosmetology that these additions and deletions should govern the people as laws because the Bicameral Conference Committee Report was anyway submitted to and approved by the Senate and the House of Representatives. The submission may have some merit with respect to provisions agreed upon by the Committee in the process of reconciling conflicts between S.B. No. 1630 and H.B. No. 11197. In these instances, the conflicting provisions had been previously screened by the proper committees, deliberated upon by both Houses and approved by them. It is, however, a different matter with respect to additions and deletions which were entirely new and which were made not to reconcile inconsistencies between S.B. No. 1630 and H.B. No. 11197. The members of the Bicameral Conference Committee did not have any authority to add new provisions or delete provisions already approved by both Houses as it was not necessary to discharge their limited task of reconciling differences in bills. At that late stage of law making, the Conference Committee cannot add/delete provisions which can become laws without undergoing the study and deliberation of both chambers given to bills on 1st, 2nd, and 3rd readings. Even the Senate and the House cannot enact a law which will not undergo these mandatory three (3) readings required by the Constitution. If the Senate and the House cannot enact such a law, neither can the lesser Bicameral Conference Committee.

Moreover, the so-called choice given to the members of both Houses to either approve or disapprove the said additions and deletions is more of an optical illusion. These additions and deletions are not submitted separately for approval. They are tucked to the entire bill. The vote is on the bill as a package, i.e., together with the insertions and deletions. And the vote is either 'aye or 'nay, without any further debate and deliberation. Quite often, legislators vote 'yes' because they approve of the bill as a whole although they may object to its amendments by the Conference Committee. This lack of real choice is well observed by Robert Luce: Their power lies chiefly in the fact that reports of conference committees must be accepted without amendment or else rejected in toto. The impulse is to get done with the matter and so the motion to accept has undue advantage, for some members are sure to prefer swallowing unpalatable provisions rather than prolong controversy. This is the more likely if the report comes in the rush of business toward the end of a session, when to seek further conference might result in the loss of the measure altogether. At any time in the session there is some risk of such a result following the rejection of a conference report, for it may not be possible to secure a second conference, or delay may give opposition to the main proposal chance to develop more strength. In a similar vein, Prof. Jack Davies commented that conference reports are returned to assembly and Senate on a take-it or leave-it-basis, and the bodies are generally placed in the position that to leave-it is a practical impossibility. Thus, he concludes that 'conference committee action is the most undemocratic procedure in the legislative process. The respondents also contend that the additions and deletions made by the Bicameral Conference Committee were in accord with legislative customs and usages. The argument does not persuade for it misappreciates the value of customs and usages in the hierarchy of sources of legislative rules of procedure. To be sure, every legislative assembly has the inherent right to promulgate its own internal rules. In our jurisdiction, Article VI, section 16(3) of the Constitution provides that 'Each House may determine the rules of its proceedings x x x. But it is hornbook law that the sources of Rules of Procedure are many and hierarchical in character. Mason laid them down as follows: xxx 1. Rules of Procedure are derived from several sources. The principal sources are as follows: a. Constitutional rules. b. Statutory rules or charter provisions. c. Adopted rules. d. Judicial decisions. e. Adopted parliamentary authority. f. Parliamentary law. g. Customs and usages.

2. The rules from the different sources take precedence in the order listed above except that judicial decisions, since they are interpretations of rules from one of the other sources, take the same precedence as the source interpreted. Thus, for example, an interpretation of a constitutional provision takes precedence over a statute. 3. Whenever there is conflict between rules from these sources the rule from the source listed earlier prevails over the rule from the source listed later. Thus, where the Constitution requires three readings of bills, this provision controls over any provision of statute, adopted rules, adopted manual, or of parliamentary law, and a rule of parliamentary law controls over a local usage but must give way to any rule from a higher source of authority. (Emphasis ours) As discussed above, the unauthorized additions and deletions made by the Bicameral Conference Committee violated the procedure fixed by the Constitution in the making of laws. It is reasonless for respondents therefore to justify these insertions as sanctioned by customs and usages. Finally, respondents seek sanctuary in the conclusiveness of an enrolled bill to bar any judicial inquiry on whether Congress observed our constitutional procedure in the passage of R.A. No. 7716. The enrolled bill theory is a historical relic that should not continuously rule us from the fossilized past. It should be immediately emphasized that the enrolled bill theory originated in England where there is no written constitution and where Parliament is supreme. In this jurisdiction, we have a written constitution and the legislature is a body of limited powers. Likewise, it must be pointed out that starting from the decade of the 40s, even American courts have veered away from the rigidity and unrealism of the conclusiveness of an enrolled bill. Prof. Sutherland observed: xxx Where the failure of constitutional compliance in the enactment of statutes is not discoverable from the face of the act itself but may be demonstrated by recourse to the legislative journals, debates, committee reports or papers of the governor, courts have used several conflicting theories with which to dispose of the issue. They have held: (1) that the enrolled bill is conclusive and like the sheriff's return cannot be attacked; (2) that the enrolled bill is prima facie correct and only in case the legislative journal shows affirmative contradiction of the constitutional requirement will the bill be held invalid; (3) that although the enrolled bill is prima facie correct, evidence from the journals, or other extrinsic sources is admissible to strike the bill down; (4) that the legislative journal is conclusive and the enrolled bills is valid only if it accords with the recital in the journal and the constitutional procedure.

Various jurisdictions have adopted these alternative approaches in view of strong dissent and dissatisfaction against the philosophical underpinnings of the conclusiveness of an enrolled bill. Prof. Sutherland further observed: x x x. Numerous reasons have been given for this rule. Traditionally, an enrolled bill was 'a record and as such was not subject to attack at common law. Likewise, the rule of conclusiveness was similar to the common law rule of the inviolability of the sheriff's return. Indeed, they had the same origin, that is, the sheriff was an officer of the king and likewise the parliamentary act was a regal act and no official might dispute the king's word. Transposed to our democratic system of government, courts held that as the legislature was an official branch of government the court must indulge every presumption that the legislative act was valid. The doctrine of separation of powers was advanced as a strong reason why the court should treat the acts of a co-ordinate branch of government with the same respect as it treats the action of its own officers; indeed, it was thought that it was entitled to even greater respect, else the court might be in the position of reviewing the work of a supposedly equal branch of government. When these arguments failed, as they frequently did, the doctrine of convenience was advanced, that is, that it was not only an undue burden upon the legislature to preserve its records to meet the attack of persons not affected by the procedure of enactment, but also that it unnecessarily complicated litigation and confused the trial of substantive issues. Although many of these arguments are persuasive and are indeed the basis for the rule in many states today, they are not invulnerable to attack. The rule most relied on ' the sheriff's return or sworn official rule ' did not in civil litigation deprive the injured party of an action, for always he could sue the sheriff upon his official bond. Likewise, although collateral attack was not permitted, direct attack permitted raising the issue of fraud, and at a later date attack in equity was also available; and that the evidence of the sheriff was not of unusual weight was demonstrated by the fact that in an action against the sheriff no presumption of its authenticity prevailed. The argument that the enrolled bill is a record and therefore unimpeachable is likewise misleading, for the correction of records is a matter of established judicial procedure. Apparently, the justification is either the historical one that the king's word could not be questioned or the separation of powers principle that one branch of the government must treat as valid the acts of another. Persuasive as these arguments are, the tendency today is to avoid reaching results by artificial presumptions and thus it would seem desirable to insist that the enrolled bill stand or fall

on the basis of the relevant evidence which may be submitted for or against it. (Emphasis ours) Thus, as far back as the 1940s, Prof. Sutherland confirmed that 'x x x the tendency seems to be toward the abandonment of the conclusive presumption rule and the adoption of the third rule leaving only a prima facie presumption of validity which may be attacked by any authoritative source of information.

Third. I respectfully submit that it is only by strictly following the contours of powers of a Bicameral Conference Committee, as delineated by the rules of the House and the Senate, that we can prevent said Committee from acting as a 'third chamber of Congress. Under the clear rules of both the Senate and House, its power can go no further than settling differences in their bills or joint resolutions. Sections 88 and 89, Rule XIV of the Rules of the House of Representatives provide as follows: Sec. 88. Conference Committee. ' In the event that the House does not agree with the Senate on the amendment to any bill or joint resolution, the differences may be settled by the conference committees of both chambers. In resolving the differences with the Senate, the House panel shall, as much as possible, adhere to and support the House Bill. If the differences with the Senate are so substantial that they materially impair the House Bill, the panel shall report such fact to the House for the latter's appropriate action. Sec. 89. Conference Committee Reports. - . . . Each report shall contain a detailed, sufficiently explicit statement of the changes in or amendments to the subject measure. ... The Chairman of the House panel may be interpellated on the Conference Committee Report prior to the voting thereon. The House shall vote on the Conference Committee Report in the same manner and procedure as it votes a bill on third and final reading.

Section 35, Rule XII of the Rules of the Senate states: Sec. 35. In the event that the Senate does not agree with the House of Representatives on the provision of any bill or joint resolution, the differences

shall be settled by a conference committee of both Houses which shall meet within ten (10) days after their composition. The President shall designate the members of the Senate Panel in the conference committee with the approval of the Senate. Each Conference Committee Report shall contain a detailed and sufficiently explicit statement of the changes in, or amendments to the subject measure, and shall be signed by a majority of the members of each House panel, voting separately.

The House rule brightlines the following: (1) the power of the Conference Committee is limited . . . it is only to settle differences with the Senate; (2) if the differences are substantial, the Committee must report to the House for the latter's appropriate action; and (3) the Committee report has to be voted upon in the same manner and procedure as a bill on third and final reading. Similarly, the Senate rule underscores in crimson that (1) the power of the Committee is limited - - - to settle differences with the House; (2) it can make changes or amendments only in the discharge of this limited power to settle differences with the House; and (3) the changes or amendments are merely recommendatory for they still have to be approved by the Senate. Under both rules, it is obvious that a Bicameral Conference Committee is a mere agent of the House or the Senate with limited powers. The House contingent in the Committee cannot, on its own, settle differences which are substantial in character. If it is confronted with substantial differences, it has to go back to the chamber that created it 'for the latter's appropriate action. In other words, it must take the proper instructions from the chambers that created it. It cannot exercise its unbridled discretion. Where there is no difference between the bills, it cannot make any change. Where the difference is substantial, it has to return to the chamber of its origin and ask for appropriate instructions. It ought to be indubitable that it cannot create a new law, i.e., that which has never been discussed in either chamber of Congress. Its parameters of power are not porous, for they are hedged by the clear limitation that its only power is to settle differences in bills and joint resolutions of the two chambers of Congress. '

Fourth. Prescinding from these premises, I respectfully submit that the following acts of the Bicameral Conference Committee constitute grave abuse of discretion amounting to lack or excess of jurisdiction and should be struck down as unconstitutional nullities, viz: a. Its deletion of the pro poor 'no pass on provision which is

common in both Senate Bill No. 1950 and House Bill No. 3705. Sec. 1 of House Bill No. 3705[9] provides: Section 106 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows: SEC. 106. Value-added Tax on Sale of Goods or Properties. ' xxx Provided, further, that notwithstanding the provision of the second paragraph of Section 105 of this Code, the Value-added Tax herein levied on the sale of petroleum products under Subparagraph (1) hereof shall be paid and absorbed by the sellers of petroleum products who shall be prohibited from passing on the cost of such tax payments, either directly or indirectly[,] to any consumer in whatever form or manner, it being the express intent of this act that the Value-added Tax shall be borne and absorbed exclusively by the sellers of petroleum products x x x. Sec. 3 of the same House bill provides: Section 108 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows: Sec. 108. Value-added Tax on Sale of Goods or Properties. ' Provided, further, that notwithstanding the provision of the second paragraph of Section 105 of this Code, the Value-added Tax imposed under this paragraph shall be paid and absorbed by the subject generation companies who shall be prohibited from passing on the cost of such tax payments, either directly or indirectly[,] to any consumer in whatever form or manner, it being the express intent of this act that the Value-added Tax shall be borne and absorbed exclusively [by] the power-generating companies.

In contrast and comparison, Sec. 5 of Senate Bill No. 1950 provides: Value-added Tax on sale of Services and Use or Lease of Properties. '

x x x Provided, that the VAT on sales of electricity by generation companies, and services of transmission companies and distribution companies, as well as those of franchise grantees of electrical utilities shall not apply to residential end-users: Provided, that the Value-added Tax herein levied shall be absorbed and paid by the generation, transmission and distribution companies concerned. The said companies shall not pass on such tax payments to NAPOCOR or ultimately to the consumers, including but not limited to residential end users, either as costs or in any other form whatsoever, directly or indirectly. x x x.

Even the faintest eye contact with the above provisions will reveal that: (a) both the House bill and the Senate bill prohibited the passing on to consumers of the VAT on sales of electricity and (b) the House bill prohibited the passing on to consumers of the VAT on sales of petroleum products while the Senate bill is silent on the prohibition. In the guise of reconciling disagreeing provisions of the House and the Senate bills on the matter, the Bicameral Conference Committee deleted the 'no pass on provision on both the sales of electricity and petroleum products. This action by the Committee is not warranted by the rules of either the Senate or the House. As aforediscussed, the only power of a Bicameral Conference Committee is to reconcile disagreeing provisions in the bills or joint resolutions of the two houses of Congress. The House and the Senate bills both prohibited the passing on to consumers of the VAT on sales of electricity. 'The Bicameral Conference Committee cannot override this unequivocal decision of the Senate and the House. Nor is it clear that there is a conflict between the House and Senate versions on the 'no pass on provisions' of the VAT on sales of petroleum products. The House version contained a 'no pass on provision but the Senate had none. Elementary logic will tell us that while there may be a difference in the two versions, it does not necessarily mean that there is a disagreement or conflict between the Senate and the House. The silence of the Senate on the issue cannot be interpreted as an outright opposition to the House decision prohibiting the passing on of the VAT to the consumers on sales of petroleum products. Silence can even be conformity, albeit implicit in nature. But granting for the

nonce that there is conflict between the two versions, the conflict cannot escape the characterization as a substantial difference. The seismic consequence of the deletion of the 'no pass on provision of the VAT on sales of petroleum products on the ability of our consumers, especially on the roofless and the shirtless of our society, to survive the onslaught of spiraling prices ought to be beyond quibble. The rules require that the Bicameral Conference Committee should not, on its own, act on this substantial conflict. It has to seek guidance from the chamber that created it. It must receive proper instructions from its principal, for it is the law of nature that no spring can rise higher than its source. The records of both the Senate and the House do not reveal that this step was taken by the members of the Bicameral Conference Committee. They bypassed their principal and ran riot with the exercise of powers that the rules never bestowed on them. b. Even more constitutionally obnoxious are the added restrictions on local government's use of incremental revenue from the VAT in Section 21 of R.A. No. 9337 which were not present in the Senate or House Bills. Section 21 of R.A. No. 9337 provides: Fifty percent of the local government unit's share from VAT shall be allocated and used exclusively for the following purposes: 1. Fifteen percent (15%) for public elementary and secondary education to finance the construction of buildings, purchases of school furniture and in-service teacher trainings; Ten percent (10%) for health insurance premiums of enrolled indigents as a counterpart contribution of the local government to sustain the universal coverage of the national health insurance program; Fifteen percent (15%) for environmental conservation to fully implement a comprehensive national reforestation program; and Ten percent (10%) for agricultural modernization to finance the construction of farm-to-market roads and irrigation facilities.

2.

3.

4.

Such allocations shall be segregated as separate trust funds by the national treasury and shall be over and above the annual appropriation for similar purposes.

These amendments did not harmonize conflicting provisions between the constituent bills of R.A. No. 9337 but are entirely new and extraneous concepts which fall beyond the median thereof. They transgress the limits of the Bicameral Conference Committee's authority and must be struck down. I cannot therefore subscribe to the thesis of the majority that 'the changes introduced by the Bicameral Conference Committee on disagreeing provisions were meant only to reconcile and harmonize the disagreeing provisions for it did not inject any idea or intent that is wholly foreign to the subject embraced by the original provisions. Fifth. The majority further defends the constitutionality of the above provisions by holding that 'all the changes or modifications were germane to subjects of the provisions referred to it for reconciliation. With due respect, it is high time to re-examine the test of germaneness proffered in Tolentino. The test of germaneness is overly broad and is the fountainhead of mischief for it allows the Bicameral Conference Committee to change provisions in the bills of the House and the Senate when they are not even in disagreement. Worse still, it enables the Committee to introduce amendments which are entirely new and have not previously passed through the coils of scrutiny of the members of both houses. The Constitution did not establish a Bicameral Conference Committee that can act as a 'third house of Congress with super veto power over bills passed by the Senate and the House. We cannot concede that super veto power without wrecking the delicate architecture of legislative power so carefully laid down in our Constitution. The clear

intent of our fundamental law is to install a lawmaking structure composed only of two houses whose members would thoroughly debate proposed legislations in representation of the will of their respective constituents. The institution of this lawmaking structure is unmistakable from the following provisions: (1) requiring that legislative power shall be vested in a bicameral legislature;[10] (2) providing for quorum requirements;[11] (3) requiring that appropriation, revenue or tariff bills, bills authorizing increase of public debt, bills of local application, and private bills originate exclusively in the House of Representatives;[12] (4) requiring

that bills embrace one subject expressed in the title thereof;[13] and (5) mandating that bills undergo three readings on separate days in each House prior to passage into law and prohibiting amendments on the last reading thereof.[14] A Bicameral Conference Committee with untrammeled powers will destroy this lawmaking structure. At the very least, it will diminish the free and open debate of proposed legislations and facilitate the smuggling of what purports to be laws. On this point, Mr. Robert Luce's disconcerting observations are apropos: Their power lies chiefly in the fact that reports of conference committees must be accepted without amendment or else rejected in toto. The impulse is to get done with the matters and so the motion to accept has undue advantage, for some members are sure to prefer swallowing unpalatable provisions rather than prolong controversy. This is more likely if the report comes in the rush of business toward the end of the session, when to seek further conference might result in the loss of the measure altogether. At any time in the session there is some risk of such a result following the rejection of a conference report, for it may not be possible to secure a second conference, or delay may give opposition to the main proposal chance to develop more strength. xxx xxx xxx Entangled in a network of rule and custom, the Representative who resents and would resist this theft of his rights, finds himself helpless. Rarely can be vote, rarely can he voice his mind, in the matter of any fraction of the bill. Usually he cannot even record himself as protesting against some one feature while accepting the measure as whole. Worst of all, he cannot by argument or suggested change, try to improve what the other branch has done. This means more than the subversion of individual rights. It means to a degree the abandonment of whatever advantage the bicameral system may have. By so much it in effect transfers the lawmaking power to small group of members who work out in private a decision that almost always prevails. What is worse, these men are not chosen in a way to ensure the wisest choice. It has become the practice to name as conferees the ranking members of the committee, so that the accident of seniority determines. Exceptions are made, but in general it is not a question of who are most competent to serve. Chance governs, sometimes giving way to favor, rarely to merit. xxx xxx xxx Speaking broadly, the system of legislating by conference committee is unscientific and therefore defective. Usually it forfeits the benefit of scrutiny

and judgment by all the wisdom available. Uncontrolled, it is inferior to that process by which every amendment is secured independent discussion and vote. . . .[15]

It cannot be overemphasized that in a republican form of government, laws can only be enacted by all the duly elected representatives of the people. It cuts against conventional wisdom in democracy to lodge this power in the hands of a few or in the claws of a committee. It is for these reasons that the argument that we should overlook the excesses of the Bicameral Conference Committee because its report is anyway approved by both houses' is a futile attempt to square the circle for an unconstitutional act is void and cannot be redeemed by any subsequent ratification. Neither can we shut our eyes to the unconstitutional acts of the Bicameral Conference Committee by holding that the Court cannot interpose its checking powers over mere violations of the internal rules of Congress. In Arroyo, et al. v. de Venecia, et al.,[16] we ruled that when the violations affect private rights or impair the Constitution, the Court has all the power, nay, the duty to strike them down. In conclusion, I wish to stress that this is not the first time nor will it be last that arguments will be foisted for the Court to merely wink at assaults

on the Constitution on the ground of some national interest, sometimes clear and at other times inchoate. To be sure, it cannot be gainsaid that the country is in the vortex of a financial crisis. The broadsheets scream the disconcerting news that our debt payments for the year 2006 will exceed Pph1 billion daily for interest alone. Experts underscore some factors that will further drive up the debt service expenses such as the devaluation of the peso, credit downgrades and a spike in interest rates.[17] But no doomsday scenario will ever justify the thrashing of the Constitution. The Constitution is meant to be our rule both in good times as in bad times. 'It is the Court's uncompromising obligation to defend the Constitution at all times lest it be condemned as an irrelevant relic. WHEREFORE, I concur with the majority but dissent on the following points: a) I vote to withhold judgment on the constitutionality of the 'standby authority in Sections 4 to 6 of Republic Act No. 9337 as this issue is not ripe for adjudication.; b) I vote to declare unconstitutional the deletion by the Bicameral Conference Committee of the pro poor 'no pass on provision on electricity to residential consumers as it contravened the unequivocal intent of both Houses of Congress; and c) I vote to declare Section 21 of Republic Act No. 9337 as unconstitutional as it contains extraneous provisions not found in its constituent bills. REYNATO S. PUNO Associate Justice

39.
G.R. No. 166910 October 19, 2010

ERNESTO B. FRANCISCO, JR. and JOSE MA. O. HIZON, Petitioners, vs. TOLL REGULATORY BOARD, PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, MANILA NORTH TOLLWAYS CORPORATION, BENPRES HOLDINGS CORPORATION, FIRST PHILIPPINE INFRASTRUCTURE DEVELOPMENT CORPORATION, TOLLWAY MANAGEMENT CORPORATION, PNCC SKYWAY CORPORATION, CITRA METRO MANILA TOLLWAYS CORPORATION and HOPEWELL CROWN INFRASTRUCTURE, INC., Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 169917 HON. IMEE R. MARCOS, RONALDO B. ZAMORA, CONSUMERS UNION OF THE PHILIPPINES, INC., QUIRINO A. MARQUINEZ, HON. LUIS A. ASISTIO, HON. ERICO BASILIO A. FABIAN, HON. RENATO "KA RENE" B. MAGTUBO, HON. RODOLFO G. PLAZA, HON. ANTONIO M. SERAPIO, HON. EMMANUEL JOEL J. VILLANUEVA, HON. ANIBAN NG MGA MANGGAGAWA SA AGRIKULTURA (AMA), INC., ANIBAN NG MGA MAGSASAKA, MANGINGISDA AT MANGGAGAWA SA AGRIKULTURAKATIPUNAN, INC., KAISAHAN NG MGA MAGSASAKA SA AGRIKULTURA, INC., KILUSAN NG MANGAGAWANG MAKABAYAN, Petitioners, vs. The REPUBLIC OF THE PHILIPPINES, acting by and through the TOLL REGULATORY BOARD, MANILA NORTH TOLLWAYS CORPORATION, PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, and FIRST PHILIPPINE INFRASTRUCTURE DEVELOPMENT CORP., Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 173630 GISING KABATAAN MOVEMENT, INC., BARANGAY COUNCIL OF SAN ANTONIO, MUNICIPALITY OF SAN PEDRO, LAGUNA [as Represented by COUNCILOR CARLON G. AMBAYEC], and YOUNG PROFESSIONALS AND ENTREPRENEURS OF SAN PEDRO, LAGUNA Petitioners, vs. THE REPUBLIC OF THE PHILIPPINES, acting through the TOLL REGULATORY BOARD (TRB), PHILIPPINE NATIONAL CONSTRUCTION CORPORATION (PNCC), Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 183599

THE REPUBLIC OF THE PHILIPPINES, represented by the TOLL REGULATORY BOARD, Petitioner, vs. YOUNG PROFESSIONALS AND ENTREPRENEURS OF SAN PEDRO, LAGUNA, Respondent. DECISION VELASCO, JR., J.: Before us are four petitions; the first three are special civil actions under Rule 65, assailing and seeking to nullify certain statutory provisions, presidential actions and implementing orders, toll operation-related contracts and issuances on the construction, maintenance and operation of the major tollway systems in Luzon. The petitions likewise seek to restrain and permanently prohibit the implementation of the allegedly illegal toll fee rate hikes for the use of the North Luzon Expressway ("NLEX"), South Luzon Expressway ("SLEX") and the South Metro Manila Skyway ("SMMS"). The fourth, a petition for review under Rule 45, seeks to annul and set aside the decision dated June 23, 2008 of the Regional Trial Court ("RTC") of Pasig, in SCA No. 3138-PSG, enjoining the original toll operating franchisee from collecting toll fees in the SLEX. By Resolution of March 20, 2007, the Court ordered the consolidation of the first three petitions, docketed as G.R. Nos. 166910, 169917 and 173630, respectively. The fourth petition, G.R. No. 183599, would later be ordered consolidated with the earlier three petitions. The Facts The antecedent facts are as follows On March 31, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. ("P.D.") 1112, authorizing the establishment of toll facilities on public improvements.1 This issuance, in its preamble, explicitly acknowledged "the huge financial requirements" and the necessity of tapping "the resources of the private sector" to implement the governments infrastructure programs. In order to attract private sector involvement, P.D. 1112 allowed "the collection of toll fees for the use of certain public improvements that would allow a reasonable rate of return on investments." The same decree created the Toll Regulatory Board ("TRB") and invested it under Section 3 (a) (d) and (e) with the power to enter, for the Republic, into contracts for the construction, maintenance and operation of tollways, grant authority to operate a toll facility, issue therefor the necessary Toll Operation Certificate ("TOC") and fix initial toll rates, and, from time to time, adjust the same after due notice and hearing. On the same date, P.D. 1113 was issued, granting to the Philippine National Construction Corporation ("PNCC"), then known as the Construction and Development Corporation of the Philippines ("CDCP"), for a period of thirty years from May 1977 or up to May

2007 a franchise to construct, maintain and operate toll facilities in the North Luzon and South Luzon Expressways, with the right to collect toll fees at such rates as the TRB may fix and/or authorize. Particularly, Section 1 of P.D. 1113 delineates the coverage of the expressways from Balintawak, Caloocan City to Carmen, Rosales, Pangasinan and from Nichols, Pasay City to Lucena, Quezon. And because the franchise is not selfexecuting, as it was in fact made subject, under Section 3 of P.D. 1113, to "such conditions as may be imposed by the Board in an appropriate contract to be executed for such purpose," TRB and PNCC signed in October 1977, a Toll Operation Agreement ("TOA") on the North Luzon and South Luzon Tollways, providing for the detailed terms and conditions for the construction, maintenance and operation of the expressway.2 On December 22, 1983, P.D. 1894 was issued therein further granting PNCC a franchise over the Metro Manila Expressway ("MMEX"), and the expanded and delineated NLEX and SLEX. Particularly, PNCC was granted the "right, privilege and authority to construct, maintain and operate any and all such extensions, linkages or stretches, together with the toll facilities appurtenant thereto, from any part of the North Luzon Expressway, South Luzon Expressway and/or Metro Manila Expressway and/or to divert the original route and change the original end-points of the North Luzon Expressway and/or South Luzon Expressway as may be approved by the [TRB]."3 Under Section 2 of P.D. 1894, "the franchise granted the [MMEX] and all extensions, linkages, stretches and diversions after the approval of the decree that may be constructed after the approval of this decree [on December 22, 1983] shall likewise have a term of thirty (30) years, commencing from the date of completion of the project." As expressly set out in P.D. 1113 and reiterated in P.D. 1894, PNCC may sell or assign its franchise thereunder granted or cede the usufruct4 thereof upon the Presidents approval.5 This same provision on franchise transfer and cession of usufruct is likewise found in P.D. 1112.6 Then came the 1987 Constitution with its franchise provision.7 In 1993, the Government Corporate Counsel ("GCC"), acting on PNCCs request, issued Opinion No. 224, s. 1993,8 later affirmed by the Secretary of Justice,9 holding that PNCC may, subject to certain clearance and approval requirements, enter into a joint venture ("JV") agreement ("JVA") with private entities without going into public bidding in the selection of its JV partners. PNCCs query was evidently prompted by the need to seek out alternative sources of financing for expanding and improving existing expressways, and to link them to economic zones in the north and to the CALABARZON area in the south. MOU for the construction, rehabilitation and expansion of expressways On February 8, 1994, the Department of Public Works and Highways ("DPWH"), TRB, PNCC, Benpres Holdings Corporation ("Benpres") and First Philippine Holdings Corporation ("FPHC"), among other private and government entities/agencies, executed a

Memorandum of Understanding ("MOU") envisaged to open the door for the entry of private capital in the rehabilitation, expansion (to Subic and Clark) and extension, as flagship projects, of the expressways north of Manila, over which PNCC has a franchise. To carry out their undertakings under the MOU, Benpres and FPHC formed, as their infrastructure holding arm, the First Philippine Infrastructure and Development Corporation ("FPIDC"). Consequent to the MOU execution, PNCC entered into financial and/or technical JVAs with private entities/investors for the toll operation of its franchised areas following what may be considered as a standard pattern, viz.: (a) after a JVA is concluded and the usual government approval of the assignment by PNCC of the usufruct in the franchise under P.D. 1113, as amended, secured, a new JV company is specifically formed to undertake a defined toll road project; (b) the Republic of the Philippines, through the TRB, as grantor, PNCC, as operator, and the new corporation, as investor/concessionaire, with its lender, as the case may be, then execute a Supplemental Toll Operation Agreement ("STOA") to implement the TOA previously issued; and (c) once the requisite STOA approval is given, project prosecution starts and upon the completion of the toll road project or of a divisible phase thereof, the TRB fixes or approves the initial toll rate after which, it passes a board resolution prescribing the periodic toll rate adjustment. The STOA defines the scope of the road project coverage, the terminal date of the concession, and includes provisions on initial toll rate and a built-in formula for adjustment of toll rates, investment recovery clauses and contract termination in the event of the concessionaires, PNCCs or TRBs default, as the case may be. The following events or transactions, involving the personalities as indicated, transpired with respect to the following projects: The South Metro Manila Skyway (SMMS) (Buendia Bicutan elevated stretch) Project PNCC entered into a JV partnership arrangement with P.T. Citra, an Indonesian company, and created, for the SMMS project, the Citra Metro Manila Tollways Corporation ("CMMTC"). On November 27, 1995, TRB, PNCC and CMMTC executed a STOA for the SMMS project ("CITRA STOA"). And on April 7, 1996, then President Fidel V. Ramos approved the CITRA STOA. Phase I of the SMMS project the Bicutan to Buendia elevated expressway stretch was completed in December 1998, and the consequent initial toll rates for its use implemented a month after. On November 26, 2004, the TRB passed Resolution No. 2004-53, approving the periodic toll rate adjustment for the SMMS. The NLEX Expansion Project (Rehabilitated and Widened NLEX, Subic Expressway, Circumferential Road C-5)

In reply to the query of the then TRB Chairman, the Department of Justice ("DOJ") issued DOJ Opinion No. 79, s. of 1994, echoing an earlier opinion of the GCC, that the TRB can implement the NLEX expansion project through a JV scheme with private investors possessing the requisite technical and financial capabilities. On May 16, 1995, then President Ramos approved the assignment of PNCCs usufructuary rights as franchise holder to a JV company to be formed by PNCC and FPIDC. PNCC and FPIDC would later ink a JVA for the rehabilitation and modernization of the NLEX referred in certain pleadings as the North Luzon Tollway project.10 The Manila North Tollways Corporation ("MNTC") was formed for the purpose. On April 30, 1998, the Republic, through the TRB, PNCC and MNTC, executed a STOA for the North Luzon Tollway project ("MNTC STOA") in which MNTC was authorized, inter alia, to subcontract the operation and maintenance of the project, provided that the majority of the outstanding shares of the contractor shall be owned by MNTC. The MNTC STOA covers three phases comprising of ten segments, including the rehabilitated and widened NLEX, the Subic Expressway and the circumferential Road C5.11 The STOA is to be effective for thirty years, reckoned from the issuance of the toll operation permit for the last completed phase or until December 31, 2030, whichever is earlier. The Office of the President ("OP") approved the STOA on June 15, 1998. On August 2, 2000, pursuant to the MNTC STOA, the Tollways Management Corporation ("TMC")formerly known as the Manila North Tollways Operation and Maintenance Corporationwas created to undertake the operation and maintenance of the NLEX tollway facilities, interchanges and related works. On January 27, 2005, the TRB issued Resolution No. 2005-04 approving the initial authorized toll rates for the closed and flat toll systems applicable to the new NLEX. The South Luzon Expressway Project (Nichols to Lucena City) For the SLEX expansion project, PNCC and Hopewell Holdings Limited ("HHL"), as JV partners, executed a Memorandum of Agreement ("MOA"),12 which eventually led to the formation of a JV company Hopewell Crown Infrastructure, Inc. ("HCII"), now MTD Manila Expressways, Inc., ("MTDME"). And pursuant to the PNCC-MTDME JVA, the South Luzon Tollway Corporation ("SLTC") and the Manila Toll Expressway Systems, Inc. ("MATES") were incorporated to undertake the financing, construction, operation and maintenance of the resulting Project Toll Roads forming part of the SLEX. The toll road projects are divisible toll sections or segments, each segment defined as to its starting and end points and each with the corresponding distance coverage. The proposed JVA, as later amended, between PNCC and MTDME was approved by the OP on June 30, 2000. Eventually, or on February 1, 2006, a STOA13 for the financing, design, construction, lane expansion and maintenance of the Project Toll Roads (PTR) of the rehabilitated and improved SLEX was executed by and among the Republic, PNCC, SLTC, as investor,

and MATES, as operator. To be precise, the PTRs, under the STOA, comprise and contemplated the full rehabilitation and/or roadway widening of the following existing toll roads or facilities: PTR 1 that portion of the tollway commencing at the end of South MM Skyway to the Filinvest exit at Alabang (1-242 km); PTR 2 the tollway from Alabang to Calamba, Laguna (27.28 km); PTR 3 the tollway from Calamba to Sto. Tomas, Batangas (7.6 km) and PTR 4 the tollway from Sto. Tomas to Lucena City (54.27 km).14 Under Clause 6.03 of the STOA, the Operator, after substantially completing a TPR, shall file an application for a Toll Operation Permit over the relevant completed TPR or segment, which shall include a request for a review and approval by the TRB of the calculation of the new current authorized toll rate. G.R. No. 166910 Petitioners Francisco and Hizon, as taxpayers and expressway users, seek to nullify the various STOAs adverted to above and the corresponding TRB resolutions, i.e. Res. Nos. 2004-53 and 2005-04, fixing initial rates and/or approving periodic toll rate adjustments therefor. To the petitioners, the STOAs and the toll rate-fixing resolutions violate the Constitution in that they veritably impose on the public the burden of financing tollways by way of exorbitant fees and thus depriving the public of property without due process. These STOAs are also alleged to be infirm as they effectively awarded purported "buildoperate-transfer" ("BOT") projects without public bidding in violation of the BOT Law (R.A. 6957, as amended by R.A. 7718). Petitioners likewise assail the constitutionality of Sections 3 (a) and (d) of P.D. 1112 in relation to Section 8 (b) of P.D. 1894 insofar as they vested the TRB, on one hand, toll operation awarding power while, on the other hand, granting it also the power to issue, modify and promulgate toll rate charges. The TRB, so petitioners bemoan, cannot be an awarding party of a TOA and, at the same time, be the regulator of the tollway industry and an adjudicator of rate exactions disputes. Additionally, petitioners also seek to nullify certain provisions of P.D. 1113 and P.D. 1894, which uniformly grant the President the power to approve the transfer or assignment of usufruct or the rights and privileges thereunder by the tollway operator to third parties, particularly the transfer effected by PNCC to MNTC. As argued, the authority to approve partakes of an exercise of legislative power under Article VI, Section 1 of the Constitution.15 In the meantime, or on April 8, 2010, the TRB issued a Certificate of Substantial Completion16 with respect to PTR 1 (Alabang-Filinvest stretch) and PTR 2 (AlabangCalamba segments) of SLEX, signifying the completion of the full rehabilitation/expansion of both segments and the linkages/interchanges in between pursuant to the requirements of the corresponding STOA. TRB on even date issued a Toll Operation Permit in favor of MATES over said PTRs 1 and 2.17 Accordingly, upon due application, the TRB approved the publication of the toll rate matrix for PTRs 1 and 2,

the rate to take effect on June 30, 2010.18 The implementation of the published rate would, however, be postponed to August 2010. On July 5, 2010, petitioner Francisco filed a Supplemental Petition with prayer for the issuance of a temporary restraining order ("TRO") and/or status quo order focused on the impending collection of what was perceived to be toll rate increases in the SLEX. The assailed adjustments were made public in a TRB notice of toll rate increases for the SLEX from Alabang to Calamba on June 6, 2010, and were supposed to have been implemented on June 30, 2010. On August 13, 2010, the Court granted the desired TRO, enjoining the respondents in the consolidated cases from implementing the toll rate increases in the SLEX. In their Consolidated Comment/Opposition to the Supplemental Petition, respondents SLTC et al., aver that the disputed rates are actually initial and opening rates, not an increase or adjustment of the prevailing rate, for the new expanded and rehabilitated SLEX. In fine, the new toll rates are, per SLTC, for a new and upgraded facility, i.e. the aforementioned Project Toll Roads 1 and 2 put up pursuant to the 2006 Republic-PNCCSLTC-MATES STOA adverted to. G.R. No. 169917 While they raise, for the most part, the same issues articulated in G.R. No. 166910, such as the public bidding requirement, the power of the President to approve the assignment of PNCCs usufructuary rights to cover (as petitioners Imee R. Marcos, et al., would stress) even the assignment of the expressway from Balintawak to Tabang, the virtual amendment and extension of a statutory franchise by way of administrative action (e.g., the execution of a STOA or issuance of a TOC), petitioners in G.R. No. 169917 some of them then and still are members of the House of Representatives have, as their main focus, the North Luzon Tollway project and the agreements and devices entered in relation therewith. Petitioners also assail the MNTC STOA on the ground that it granted the lenders (Asian Development Bank/World Bank) of MNTC, as project concessionaire, the unrestricted rights to appoint a substitute entity to replace MNTC in case of an MNTC Default before prepayment of the loans, while also granting said lenders, in appropriate cases, the option to extend the "concession or franchise" for a period not exceeding fifty years coinciding with the full payment of the loans. G.R. No. 173630 Apart from those taken up in the other petitions for certiorari and prohibition, petitioners, in G.R. No. 173630, whose members and constituents allegedly traverse SLEX daily, aver that TRB ought to have applied the provisions of R.A. 6957 [BOT Law] and R.A. 9184 [Government Procurement Reform Act], which require public bidding for the prosecution of the SLEX project.

G.R. No. 183599 Civil Case SCA No. 3138-PSG before the RTC On September 14, 2007, the Young Professionals and Entrepreneurs of San Pedro, Laguna ("YPES"), one of the petitioners in G.R. No. 173630, filed before the RTC, Branch 155, in Pasig City, a special civil action for certiorari, etc., against the TRB, docketed as SCA No. 3138-PSG, containing practically identical issues raised in G.R. No. 173630. Like its petition in G.R. No. 173630, YPES, before the RTC, assailed and sought to nullify the April 27, 2007 TOC, which TRB issued to PNCC inasmuch as the TOC worked to extend PNCCs tollway operation franchise for the SLEX. As YPES argued, only the Congress can extend the term of PNCCs franchise which expired on May 1, 2007. Ruling of the RTC in SCA No. 3138-PSG By Decision19 dated June 23, 2008, the RTC, for the main stated reason that the authority to grant or renew franchises belongs only to Congress, granted YPES petition, disposing as follows: ACCORDINGLY, the instant Petition for Certiorari, Prohibition and Mandamus is hereby GRANTED and the questioned Toll Operation Certificate (TOC) covering the [SLEX] issued by respondent TRB in April, 2007, is hereby ordered ANNULLED and SET ASIDE. FURTHER, respondent PNCC is hereby immediately PROHIBITED from collecting toll fess along the SLEX facilities as it no longer has the power and authority to do so. FINALLY, as mandated under Section 9 of PD No. 1113, respondent PNCC is hereby COMMANDED to turn over without further delay the physical assets and facilities of the SLEX including improvements thereon, together with the equipment and appurtenances directly related to their operations, without any cost, to the Government through the Toll Regulatory Board x x x.20 Thus, the instant petition for review on certiorari under Rule 45, filed by the TRB on pure questions of law, docketed as G.R. No. 183599. In their separate comments, public and private respondents uniformly seek the dismissal of the three special civil actions on the threshold issue of the absence of a justiciable case and lack of locus standi on the part of the petitioners therein. Other grounds raised range from the impropriety of certiorari to nullify toll operation agreements; the inapplicability of the public bidding rules in the selection by PNCC of its JV partners and the authority of the President to approve TOAs and the transfer of usufructuary rights. PNCC argues, in esse, that its continuous toll operations did not constitute an extension of its franchise, its authority to operate after the expiry date thereof in May 2007 being based on the valid authority of TRB to issue TOC.

The Issues The principal consolidated but interrelated issues tendered before the Court, most of which with constitutional undertones, may be reduced into six (6) and formulated in the following wise: first, whether or not an actual case or controversy exists and, relevantly, whether petitioners in the first three petitions have locus standi; second, whether the TRB is vested with the power and authority to grant what amounts to a franchise over tollway facilities; third, corollary to the second, whether the TRB can enter into TOAs and, at the same time, promulgate toll rates and rule on petitions for toll rate adjustments; fourth, whether the President is duly authorized to approve contracts, inclusive of assignment of contracts, entered into by the TRB relative to tollway operations; fifth, whether the subject STOAs covering the NLEX, SLEX and SMMS and their respective extensions, linkages, etc. are valid; sixth, whether a public bidding is required or mandatory for these tollway projects. Expressly prayed, if not subsumed, in the first three petitions, is to prohibit TRB and its concessionaires from collecting toll fees along the Skyway and Luzon Tollways. Preliminary Issues Existence of an Actual Controversy, its Ripeness and the Locus Standi to Sue The power of judicial review can only be exercised in connection with a bona fide controversy involving a statute, its implementation or a government action.21 Withal, courts will decline to pass upon constitutional issues through advisory opinions, bereft as they are of authority to resolve hypothetical or moot questions.22 The limitation on the power of judicial review to actual cases and controversies defines the role assigned to the judiciary in a tripartite allocation of power, to assure that the courts will not intrude into areas committed to the other branches of government.23 In The Province of North Cotabato v. The Government of the Republic of the Philippines Peace Panel on Ancestral Domain (GRP), the Court has expounded anew on the concept of actual case or controversy and the requirement of ripeness for judicial review, thus: An actual case or controversy 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. There must be a contrariety of legal rights x x x. The Court can decide the constitutionality of an act x x x only when a proper case between opposing parties is submitted for judicial determination. Related to the requirement of an actual case or controversy is the requirement of ripeness. A question is ripe for adjudication when the act being challenged has had a direct adverse effect on the individual challenging it. x x x [I]t 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. He must show that he has sustained or is immediately in danger of sustaining some direct injury as a result of the act complained of.24 But even with the presence of an actual case or controversy, the Court may refuse judicial review unless the constitutional question or the assailed illegal government act is brought before it by a party who possesses what in Latin is technically called locus standi or the standing to challenge it.25 To have standing, one must establish that he has a "personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement."26 Particularly, he must show that (1) he has suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.27 Petitions for certiorari and prohibition are, as here, appropriate remedies to raise constitutional issues and to review and/or prohibit or nullify, when proper, acts of legislative and executive officials.28 The present petitions allege that then President Ramos had exercised vis--vis an assignment of franchise, a function legislative in character. As alleged, too, the TRB, in the guise of entering into contracts or agreements with PNCC and other juridical entities, virtually enlarged, modified to the core and/or extended the statutory franchise of PNCC, thereby usurping a legislative prerogative. The usurpation came in the form of executing the assailed STOAs and the issuance of TOCs. Grave abuse of discretion is also laid on the doorstep of the TRB for its act of entering into these same contracts or agreements without the required public bidding mandated by law, specifically the BOT Law (R.A. 6957, as amended) and the Government Procurement Reform Act (R.A. 9184). In fine, the certiorari petitions impute on then President Ramos and the TRB, the commission of acts that translate inter alia into usurpation of the congressional authority to grant franchises and violation of extant statutes. The petitions make a prima facie case for certiorari and prohibition; an actual case or controversy ripe for judicial review exists. Verily, when an act of a branch of government 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 doing so, the judiciary merely defends the sanctity of its duties and powers under the Constitution.29 In any case, the rule on standing is a matter of procedural technicality, which may be relaxed when the subject in issue or the legal question to be resolved is of transcendental importance to the public.30 Hence, even absent any direct injury to the suitor, the Court can relax the application of legal standing or altogether set it aside for non-traditional plaintiffs, like ordinary citizens, when the public interest so requires.31 There is no doubt that individual petitioners, Marcos, et al., in G.R. No. 169917, as then members of the House of Representatives, possess the requisite legal standing since they assail acts of the executive they perceive to injure the institution of Congress. On the other hand, petitioners Francisco, Hizon, and the other petitioning associations, as taxpayers and/or mere users of the tollways or representatives of such users, would ordinarily not be

clothed with the requisite standing. While this is so, the Court is wont to presently relax the rule on locus standi owing primarily to the transcendental importance and the paramount public interest involved in the implementation of the laws on the Luzon tollways, a roadway complex used daily by hundreds of thousands of motorists. What we said a century ago in Severino v. Governor General is just as apropos today: When the relief is sought merely for the protection of private rights, x x x [the relators] right must clearly appear. On the other hand, when the question is one of public right and the object of the mandamus is to procure the enforcement of a public duty, the people are regarded as the real party in interest, and the relator at whose instigation the proceedings are instituted need not show that he has any legal or special interest in the result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws.32 (Words in bracket and emphasis added.) Accordingly, We take cognizance of the present case on account of its transcendental importance to the public. Second Issue: TRB Empowered to Grant Authority to Operate Toll Facility /System It is abundantly clear that Sections 3 (a) and (e) of P.D. 1112 in relation to Section 4 of P.D. 1894 have invested the TRB with sufficient power to grant a qualified person or entity with authority to construct, maintain, and operate a toll facility and to issue the corresponding toll operating permit or TOC. Sections 3 (a) and (e) of P.D. 1112 and Section 4 of P.D. 1894 amply provide the power to grant authority to operate toll facilities: Section 3. Powers and Duties of the Board. The Board shall have in addition to its general powers of administration the following powers and duties: (a) Subject to the approval of the President of the Philippines, to enter into contracts in behalf of the Republic of the Philippines with persons, natural or juridical, for the construction, operation and maintenance of toll facilities such as but not limited to national highways, roads, bridges, and public thoroughfares. Said contract shall be open to citizens of the Philippines and/or to corporations or associations qualified under the Constitution and authorized by law to engage in toll operations; xxxx (e) To grant authority to operate a toll facility and to issue therefore the necessary "Toll Operation Certificate" subject to such conditions as shall be imposed by the Board including inter alia the following: (1) That the Operator shall desist from collecting toll upon the expiration of the Toll Operation Certificate.

(2) That the entire facility operated as a toll system including all operation and maintenance equipment directly related thereto shall be turned over to the government immediately upon the expiration of the Toll Operation Certificate. (3) That the toll operator shall not lease, transfer, grant the usufruct of, sell or assign the rights or privileges acquired under the Toll Operation Certificate to any person, firm, company, corporation or other commercial or legal entity, nor merge with any other company or corporation organized for the same purpose, without the prior approval of the President of the Philippines. In the event of any valid transfer of the Toll Operation Certificate, the Transferee shall be subject to all the conditions, terms, restrictions and limitations of this Decree as fully and completely and to the same extent as if the Toll Operation Certificate has been granted to the same person, firm, company, corporation or other commercial or legal entity. (4) That in time of war, rebellion, public peril, emergency, calamity, disaster or disturbance of peace and order, the President of the Philippines may cause the total or partial closing of the toll facility or order to take over thereof by the Government without prejudice to the payment of just compensation. (5) That no guarantee, Certificate of Indebtedness, collateral, securities, or bonds shall be issued by any government agency or government-owned or controlled corporation on any financing program of the toll operator in connection with his undertaking under the Toll Operation Certificate. (6) The Toll Operation Certificate may be amended, modified or revoked whenever the public interest so requires. (a) The Board shall promulgate rules and regulations governing the procedures for the grant of Toll Certificates. The rights and privileges of a grantee under a Toll Operation Certificate shall be defined by the Board. (b) To issue rules and regulations to carry out the purposes of this Decree. SECTION 4. The Toll Regulatory Board is hereby given jurisdiction and supervision over the GRANTEE with respect to the Expressways, the toll facilities necessarily appurtenant thereto and, subject to the provisions of Section 8 and 9 hereof, the toll that the GRANTEE will charge the users thereof. By explicit provision of law, the TRB was given the power to grant administrative franchise for toll facility projects. The concerned petitioners would argue, however, that PNCCs [then CDCPs] franchise, as toll operator, was granted via P.D. 1113, on the same day P.D. 1112, creating the TRB, was issued. It is thus pointed out that P.D. 1112 could not have plausibly granted the TRB with the power and jurisdiction to issue a similar franchise. Pushing the point, they

maintain that only Congress has, under the 1987 Constitution, the exclusive prerogative to grant franchise to operate public utilities. We are unable to agree with petitioners stance and their undue reliance on Article XII, Section 11 of the Constitution, which states that: SEC. 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 x x x. The limiting thrust of the foregoing constitutional provision on the grant of franchise or other forms of authorization to operate public utilities may, in context, be stated as follows: (a) the grant shall be made only in favor of qualified Filipino citizens or corporations; (b) Congress can impair the obligation of franchises, as contracts; and (c) no such authorization shall be exclusive or exceed fifty years. A franchise is basically a legislative grant of a special privilege to a person.33 Particularly, the term, franchise, "includes not only authorizations issuing directly from Congress in the form of statute, but also those granted by administrative agencies to which the power to grant franchise has been delegated by Congress."34 The power to authorize and control a public utility is admittedly a prerogative that stems from the Legislature. Any suggestion, however, that only Congress has the authority to grant a public utility franchise is less than accurate. As stressed in Albano v. Reyesa case decided under the aegis of the 1987 Constitutionthere is nothing in the Constitution remotely indicating the necessity of a congressional franchise before "each and every public utility may operate," thus: That the Constitution provides x x x that the issuance of a franchise, certificate or other form of authorization for the operation of a public utility shall be subject to amendment, alteration or repeal by Congress does not necessarily imply x x x that only Congress has the power to grant such authorization. Our statute books are replete with laws granting specified agencies in the Executive Branch the power to issue such authorization for certain classes of public utilities.35 (Emphasis ours.) In such a case, therefore, a special franchise directly emanating from Congress is not necessary if the law already specifically authorizes an administrative body to grant a franchise or to award a contract.36 This is the same view espoused by the Secretary of Justice in his opinion dated January 9, 2006, when he stated: That the administrative agencies may be vested with the authority to grant administrative franchises or concessions over the operation of public utilities under their respective

jurisdiction and regulation, without need of the grant of a separate legislative franchise, has been upheld by the Supreme Court x x x.37 Under the 1987 Constitution, Congress has an explicit authority to grant a public utility franchise. However, it may validly delegate its legislative authority, under the power of subordinate legislation,38 to issue franchises of certain public utilities to some administrative agencies. In Kilusang Mayo Uno Labor Center v. Garcia, Jr., We explained the reason for the validity of subordinate legislation, thus: Such delegation of legislative power to an administrative agency is permitted in order to adapt to the increasing complexity of modern life. As subjects for governmental regulation multiply, so does the difficulty of administering the laws. Hence, specialization even in legislation has become necessary.39 (Emphasis ours.) As aptly pointed out by the TRB and other private respondents, the Land Transportation Franchising and Regulatory Board ("LTFRB"), the Civil Aeronautics Board ("CAB"), the National Telecommunications Commission ("NTC"), and the Philippine Ports Authority ("PPA"), to name a few, have been such delegates. The TRB may very well be added to the growing list, having been statutorily endowed, as earlier indicated, the power to grant to qualified persons, authority to construct road projects and operate thereon toll facilities. Such grant, as evidenced by the corresponding TOC or set out in a TOA, "may be amended, modified, or revoked [by the TRB] whenever the public interest so requires."40 In Philippine Airlines, Inc. v. Civil Aeronautics Board,41 the Court reiterated its holding in Albano that the CAB, like the PPA, has sufficient statutory powers under R.A. 776 to issue a Certificate of Public Convenience and Necessity, or Temporary Operating Permit to a domestic air transport operator who, although not possessing a legislative franchise, meets all the other requirements prescribed by law. We held therein that "there is nothing in the law nor in the Constitution which indicates that a legislative franchise is an indispensable requirement for an entity to operate as a domestic air transport operator."42 We further explicated: Congress has granted certain administrative agencies the power to grant licenses for, or to authorize the operation of certain public utilities. With the growing complexity of modern life, the multiplication of the subjects of governmental regulation, and the increased difficulty of administering the laws, there is a constantly growing tendency towards the delegation of greater powers by the legislature, and towards the approval of the practice by the courts. It is generally recognized that a franchise may be derived indirectly from the state through a duly designated agency, and to this extent, even the power to grant franchises has frequently been delegated, even to agencies other than those of a legislative nature. In pursuance of this, it has been held that privileges conferred by grant by local authorities as agents for the state constitute as much a legislative franchise as though the grant had been made by an act of the Legislature.43 (Emphasis ours.)

The validity of the delegation by Congress of its franchising prerogative is beyond cavil. So it was that in Tatad v. Secretary of the Department of Energy,44 We again ruled that the delegation of legislative power to administrative agencies is valid. In the instant case, the certiorari petitioners assume and harp on the lack of authority of PNCC to continue with its NLEX, SLEX, MMEX operations, in joint venture with private investors, after the lapse of its P.D. 1113 franchise. None of these petitioners seemed to have taken due stock of and appreciated the valid delegation of the appropriate power to TRB under P.D. 1112, as enlarged in P.D. 1894. To be sure, a franchise may be derived indirectly from the state through a duly designated agency, and to this extent, the power to grant franchises has frequently been delegated, even to agencies other than those of a legislative nature.45 Consequently, it has been held that privileges conferred by grant by administrative agencies as agents for the state constitute as much a legislative franchise as though the grant had been made by an act of the Legislature.46 While it may be, as held in Strategic Alliance Development Corporation v. Radstock Securities Limited,47 that PNCCs P.D. 1113 franchise had already expired effective May 1, 2007, this fact of expiration did not, however, carry with it the cancellation of PNCCs authority and that of its JV partners granted under P.D. 1112 in relation to Section 1 of P.D. 1894 to construct, operate and maintain "any and all such extensions, linkages or stretches, together with the toll facilities appurtenant thereto, from any part of the North Luzon Expressway, South Luzon Expressway and/or Metro Manila Expressway and/or to divert the original route and change the original end-points of the [NLEX]and/or [SLEX] as may be approved by the [TRB]. And to highlight the point, the succeeding Section 2 of P.D. 1894 specifically provides that the franchise for the extension and toll road projects constructed after the approval of P.D. 1894 shall be thirty years, counted from project completion. Indeed, prior to the expiration of PNCCs original franchise in May 2007, the TRB, in the exercise of its special powers under P.D. 1112, signed supplemental TOAs with PNCC and its JV partners. These STOAs covered the expansion and rehabilitation of NLEX and SLEX, as the case may be, and/or the construction, operation and maintenance of toll road projects contemplated in P.D.1894. And there can be no denying that the corresponding toll operation permits have been issued. In fine, the STOAs48 TRB entered with PNCC and its JV partners had the effect of granting authorities to construct, operate and maintain toll facilities, but with the injection of additional private sector investments consistent with the intent of P.D. Nos. 1112, 1113 and 1894.49 The execution of these STOAs came in 1995, 1998 and 2006, or before the expiration of PNCCs original franchise on May 1, 2007. In accordance with applicable laws, these transactions have actually been authorized and approved by the President of the Philippines.50 And as a measure to ensure the legality of the said transactions and in line with due diligence requirements, a review thereof was secured from the GCC and the DOJ, prior to their execution. Inasmuch as its charter empowered the TRB to authorize the PNCC and like entities to maintain and operate toll facilities, it may be stated as a corollary that the TRB, subject to certain qualifications, infra, can alter the conditions of such authorization. Well settled is the rule that a legislative franchise cannot be modified or amended by an administrative

body with general delegated powers to grant authorities or franchises. However, in the instant case, the law granting a direct franchise to PNCC51 evidently and specifically conferred upon the TRB the power to impose conditions in an appropriate contract.52 And to reiterate, Section 3 of P.D. 1113 provides that "[t]his [PNCC] franchise is granted subject to such conditions as may be imposed by the [TRB] in an appropriate contract to be executed for this purpose, and with the understanding and upon the condition that it shall be subject to amendment, alteration or repeal when public interest so requires."53 A similarly worded proviso is found in Section 6 of P.D. 1894. It is in this light that the TRB entered into the subject STOAs in order to allow the infusion of additional investments in the subject infrastructure projects. Prior to the expiration of PNCCs franchise on May 1, 2007, the STOAs merely imposed additional conditionalities, or as aptly pointed out by SLTC et al., obviously having in mind par. 16.06 of its STOA with TRB,54 served as supplement, to the existing TOA of PNCC with TRB. We have carefully gone over the different STOAs and discovered that the tollway projects covered thereby were all undertaken under the P.D. 1113 franchise of PNCC. And it cannot be over-emphasized that the respective STOAs of MNTC and SLTC each contain provisions addressing the eventual expiration of PNCCs P.D. 1113 franchise and authorizing, thru the issuance by the TRB of a TOC, the implementation of a given toll project even after May 1, 2007. Thus: MNTC STOA 2.6 CONCESSION PERIOD. In order to sustain the financial viability and integrity of the Project, GRANTOR [TRB] hereby grants MNTC the CONCESSION for the PROJECT ROADS for a period commencing upon the date that this [STOA] comes into effect under Clause 4.1 until 31 December 2030 or thirty years after the issuance of the corresponding TOLL OPERATION PERMIT for the last completed phase. Accordingly, unless the PNCC FRANCHISE is further extended beyond its expiry on 01 May 2007, GRANTOR undertakes to issue the necessary [TOC] for the rehabilitated and refurbished [NLEX] six months prior to the expiry of the PNCC FRANCHISE on 01 May 2007. SLTC STOA 2.03 Authority of Investor and Operator to Undertake the Project (1) The GRANTOR [TRB] has determined that the Project Toll Roads are within the existing SLEX and are thus covered by the PNCC Franchise that is due to expire on May 1, 2007. PNCC has committed to exert its best efforts to obtain an extension x x x It is understood and agreed that in the event the PNCC Franchise is not renewed beyond the said expiry date, this [STOA] and the Concession granted x x x will stand in place of the PNCC Franchise and serve as a new concession, or authority, pursuant to Section 3 (a) of the TRB Charter, for the Investor to undertake the Project and for the Operator to Operate and Maintain the Project Toll Roads immediately upon the expiration of the PNCC Franchise, without need of the execution x x x of any other document to effect the same.

(2) x x x in the event it is subsequently decreed by competent authority that the issuance by the Grantor of a [TOC] is necessary x x x the Grantor shall x x x cause the TRB x x x to issue such [TOC] in favor of the Operator, embodying the terms and conditions of this Agreement. The foregoing notwithstanding, there are to be sure certain aspects in PNCCs legislative franchise beyond the altering reach of TRB. We refer to the coverage area of the tollways and the expiry date of PNCCs original franchise, which is May 1, 2007, as expressly stated under Sections 1 and 2 of P.D. 1894, respectively. The fact that these two items were specifically and expressly defined by law, i.e. P.D. 1113, indicates an intention that any alteration, modification or repeal thereof should only be done through the same medium. We said as much in Radstock, thus: "[T]he term of the x x x franchise, which is 30 years from 1 May 1977, shall remain the same, as expressly provided in the first sentence of x x x Section 2 of P.D. 1894."55 It is likewise worth noting what We further held in that case: The TRB does not have the power to give back to PNCC the toll assets and facilities which were automatically turned over to the Government, by operation of law, upon the expiration of the franchise of the PNCC on 1 May 2007. Whatever power the TRB may have to grant authority to operate a toll facility or to issue a "[TOC]," such power does not obviously include the authority to transfer back to PNCC ownership of National Government assets, like the toll assets and facilities, which have become National Government property upon the expiry of PNCCs franchise x x x.56 (Emphasis in the original.) Verily, upon the expiration of PNCCs legislative franchise on May 1, 2007, the new authorities to construct, maintain and operate the subject tollways and toll facilities granted by the TRB pursuant to the validly executed STOAs and TOCs, shall begin to operate and be treated as administrative franchises or authorities. Pursuant to Section 3 (e) P.D. 1112, TRB possesses the power and duty, inter alia to: x x x grant authority to operate a toll facility and to issue therefore the necessary "Toll Operation Certificate" subject to such conditions as shall be imposed by the [TRB] including inter alia x x x. This is likewise consistent with the position of the Secretary of Justice in Opinion No. 122 on November 24, 1995,57 thus: TRB has no authority to extend the legislative franchise of PNCC over the existing NSLE (North and South Luzon Expressways). However, TRB is not precluded under Section 3 (e) of P.D. No. 1112 (TRB Charter) to grant PNCC and its joint venture partner the authority to operate the existing toll facility of the NSLE and to issue therefore the necessary "Toll Operation Certificate x x x. It should be noted that the existing franchise of PNCC over the NSLE, which will expire on May 1, 2007, gives it the "right, privilege and authority to construct, maintain and

operate" the NSLE. The Toll Operation Certificate which TRB may issue to the PNCC and its joint venture partner after the expiration of its franchise on May 1, 2007 is an entirely new authorization, this time for the operation and maintenance of the NSLE x x x. In other words, the right of PNCC and its joint venture partner, after May 7, 2007 [sic] to operate and maintain the existing NSLE will no longer be founded on its legislative franchise which is not thereby extended, but on the new authorization to be granted by the TRB pursuant to Section 3 (e), above quoted, of P.D. No. 1112. (Emphasis ours.) The same opinion was thereafter made by the Secretary of Justice on January 9, 2006, in Opinion No. 1,58 stating that: The existing franchise of PNCC over the NSLE, which will expire on May 1, 2007, gives it the "right, privilege and authority to construct, maintain and operate the NSLE." The Toll Operation Certificate which the TRB may issue to the PNCC and its joint venture partner after the expiration of its franchise on May 1, 2007 is an entirely new authorization, this time for the operation and maintenance of the NSLE. [T]he right of PNCC and its joint venture partner, after May 1, 2007, to operate and maintain the existing NSLE will no longer be founded on its legislative franchise which is not thereby extended, but on the new authorization to be granted by the TRB pursuant to Section 3 (e) of PD No. 1112. It appears therefore, that the effect of the STOA is not to extend the Franchise of PNCC, but rather, to grant a new Concession over the SLEX Project and the OMCo., entities which are separate and distinct from PNCC. While initially, the authority of SLTC and OMCo. to enter into the STOA with the TRB and thereby become grantees of the Concession, will stem from and be based on the JVA and the assignment by PNCC to the OMCo. of the Usufruct in the Franchise, we submit that upon the execution by SLTC and the TRB of the STOA, the right to the Concession will emanate from the STOA itself and from the authority of the TRB under Section 3 (a) of the TRB Charter. Such being the case, the expiration of the Franchise on 1 May 2007, since such Concession is an entirely new and distinct concession from the Franchise and is, as stated, granted to entities other than PNCC. Finally, with regards (sic) the authority of the TRB this Office in Secretary of Justice Opinion No. 92, s. 2000, stated that: "Suffice it to say that official acts of the President enjoy full faith and confidence of the Government of the Republic of the Philippines which he represents. Furthermore, considering that the queries raised herein relates to the exercise by the TRB of its regulatory powers over toll road project, the same falls squarely within the exclusive jurisdiction of TRB pursuant to P.D. No. 1112. Consequently, it is, therefore, solely within TRBs prerogative and determination as to what rule shall govern and is made applicable to a specific toll road project proposal." The STOA is an explicit grant of the Concession by the Republic of the Philippines, through the TRB pursuant to P.D. (No.) 1112 and as approved by the President xxx. The

foregoing grant is in full accord with the provisions of P.D. (No.) 1112 which authorizes TRB to enter into contracts on behalf of the Republic of the Philippines for the construction, operation and maintenance of toll facilities. Such being the case, we opine that no other legal requirement is necessary to make the STOA effective of to confirm MNTCs (In this case, SLTC and the OMCO) rights and privileges granted therein." (Emphasis in the original.) Considering, however, that all toll assets and facilities pertaining to PNCC pursuant to its P.D. 1113 franchise are deemed to have already been turned over to the National Government on May 1, 2007,59 whatever participation that PNCC may have in the new authorities to construct, maintain and operate the subject tollways, shall be limited to doing the same in trust for the National Government. In Radstock, the Court held that "[w]ith the expiration of PNCCs franchise, [its] assets and facilities were automatically turned over, by operation of law, to the government at no cost."60 The Court went on further to state that the Governments ownership of PNCCs toll assets inevitably resulted in its owning too of the toll fees and the net income derived, after May 1, 2007, from the toll assets and facilities.61 But as We have earlier discussed, the tollways and toll facilities should remain functioning in accordance with the validly executed STOAs and TOCs. However, PNCCs assets and facilities, or, in short, its very share/participation in the JVAs and the STOAs, inclusive of its percentage share in the toll fees collected by the JV companies currently operating the tollways shall likewise automatically accrue to the Government. In fine, petitioners claim about PNCCs franchise being amenable to an amendment only by an act of Congress, or, what practically amounts to the same thing, that the TRB is without authority at all to modify the terms and conditions of PNCCs franchise, i.e. by amending its TOA/TOC, has to be rejected. Their lament then that the TRB, through the instrumentality of mere contracts and an administrative operating certificate, or STOAs and TOC, to be precise, effectively, but invalidly amended PNCC legislative franchise, are untenable. For, the bottom line is, the TRB has, through the interplay of the pertinent provisions of P.D. Nos. 1112, 1113 and 1894, the power to grant the authority to construct and operate toll road projects and toll facilities by way of a TOA and the corresponding TOC. What is otherwise a legislative power to grant or renew a franchise is not usurped by the issuance by the TRB of a TOC. But to emphasize, the case of the TRB is quite peculiarly unique as the special law conferring the legislative franchise likewise vested the TRB with the power to impose conditions on the franchise, albeit in a limited sense, by excluding from the investiture the power to amend or modify the stated lifetime of the franchise, its coverage and the ownership arrangement of the toll assets following the expiration of the legislative franchise.62 At this juncture, the Court wishes to express the observation that P.D. Nos. 1112, 1113 and 1894, as couched and considered as a package, very well endowed the TRB with extraordinary powers. For, subject to well-defined limitations and approval requirements, the TRB can, by way of STOAs, allow and authorize, as it has allowed and authorized, a legislative franchisee, PNCC, to share its concession with another entity or JV partners, the authorization effectively covering periods beyond May 2007. However, this

unpalatable reality, a leftover of the martial law regime, presents issues on the merits and the wisdom of the economic programs, which properly belong to the legislature or the executive to address. The TRB is not precluded from granting PNCC and its joint venture partners authority, through a TOC for a period following the term of the proposed SMMS, with the said TOC serving as an entirely new authorization upon the expiration of PNCCs franchise on May 1, 2007. In short, after May 1, 2007, the operation and maintenance of the NLEX and the other subject tollways will no longer be founded on P.D. 1113 or portions of P.D. 1894 (PNCCs original franchise) but on an entirely new authorization, i.e. a TOC, granted by the TRB pursuant to its statutory authority under Sections 3 (a) and (e) of P.D. 1112. Likewise needing no extended belaboring, in the light of the foregoing dispositions, is the untenable holding of the RTC in SCA No. 3138-PSG that the TRB is without power to issue a TOC to PNCC, amend or renew its authority over the SLEX tollways without separate legislative enactment. And lest it be overlooked, the TRB may validly issue an entirely new authorization to a JV company after the lapse of PNCCs franchise under P.D. 1113. Its thirty-year concession under P.D. 1894, however, does not have the quality of definiteness as to its start, as by the terms of the issuance, it commences and is to be counted "from the date of approval of the project," the term project obviously referring to "Metro Manila Expressways and all extensions, linkages, stretches and diversions refurbishing and rehabilitation of the existing NLEX and SLEX constructed after the approval of the decree in December 1983." The suggestion, therefore, of the petitioners in G.R. No. 169917, citing a 1989 Court of Appeals ("CA") decision in CA-G.R. 13235 (Republic v. Guerrero, et al.), that the Balintawak to Tabang portion of the expressway no longer forms part of PNCCs franchise and, therefore, PNCC is without any right to assign the same to MNTC via a JVA, is specious. Firstly, in its Decision63 in G.R. No. 89557, a certiorari proceeding commenced by PNCC to nullify the CA decision adverted to, the Court approved a compromise agreement, which referred to (1) the PNCCs authority to collect toll and maintenance fees; and (2) the supervision, approval and control by the DPWH64 of the construction of additional facilities, on the questioned portion of the NLEX.65 And still in another Decision,66 the Court ruled that the Balintawak to Tabang stretch was recognized as "part of the franchise of, or otherwise restored as toll facilities to be operated by x x x PNCC."67 Once stamped with judicial imprimatur, and unless amended, modified or revoked by the parties, a compromise agreement becomes more than a mere binding contract; as thus sanctioned, the agreement constitutes the courts determination of the controversy, enjoining the parties to faithfully comply thereto.68 Verily, like any other judgment, it has the effect and authority of res judicata.69 At any rate, the PNCC was likewise granted temporary or interim authority by the TRB to operate the SLEX,70 to ensure the continued development, operations and progress of the projects. We have ruled in Oroport Cargohandling Services, Inc. v. Phividec Industrial Authority that an administrative agency vested by law with the power to grant franchises or authority to operate can validly grant the same in the interim when it is necessary, temporary and beneficial to the public.71 The grant by the TRB to PNCC as interim operator of the SLEX was certainly intended to guarantee the continued operation

of the said tollway facility, and to ensure the want of any delay and inconvenience to the motoring public. All given, the cited CA holding is not a binding precedent. The time limitation on PNCCs franchise under either P.D. 1113 or P.D. 1894 does not detract from or diminish the TRBs delegated authority under P.D. 1112 to enter into separate toll concessions apart and distinct from PNCCs original legislative franchise. Third Issue: TRBs Power to Enter into Contracts; Issue, Modify And Promulgate Toll Rates; and to Rule on Petitions Relative to Toll Rates Level and Increases Valid The petitioners in the special civil actions cases would have the Court declare as invalid (a) Section 3 (a) and (d) of P.D. 1112 (which accord the TRB, on one hand, the power to enter into contracts for the construction, and operation of toll facilities, while, on the other hand, granting it the power to issue and promulgate toll rates) and (b) Section 8 (b) of P.D. 1894 (granting TRB adjudicatory jurisdiction over matters involving toll rate movements). As submitted, granting the TRB the power to award toll contracts is inconsistent with its quasi-judicial function of adjudicating petitions for initial toll and periodic toll rate adjustments. There cannot, so petitioners would postulate, be impartiality in such a situation. The assailed provisions of P.D. 1112 and P.D. 1894 read: P.D. 1112 Section 3. Powers and Duties of the Board. The Board shall have in addition to its general powers of administration the following powers and duties: (a) Subject to the approval of the President of the Philippines, to enter into contracts in behalf of the Republic of the Philippines with persons, natural or juridical, for the construction, operation and maintenance of toll facilities such as but not limited to national highways, roads, bridges, and public thoroughfares. Said contract shall be open to citizens of the Philippines and/or to corporations or associations qualified under the Constitution and authorized by law to engage in toll operations; (d) Issue, modify and promulgate from time to time the rates of toll that will be charged the direct users of toll facilities and upon notice and hearing, to approve or disapprove petitions for the increase thereof. Decisions of the Board on petitions for the increase of toll rate shall be appealable to the Office of the President within ten (10) days from the promulgation thereof. Such appeal shall not suspend the imposition of the new rates, provided however, that pending the resolution of the appeal, the petitioner for increased rates in such case shall deposit in a trust fund such amounts as may be necessary to reimburse toll payers affected in case a reversal of the decision. (Emphasis ours.)

P.D. 1894 SECTION 8. x x x (b) For the Metro Manila Expressway and such extensions, linkages, stretches and diversions of the Expressways which may henceforth be constructed, maintained and operated by the GRANTEE, the GRANTEE shall collect toll at such rates as shall initially be approved by the Toll Regulatory Board. The Toll Regulatory Board shall have the authority to approve such initial toll rates without the necessity of any notice and hearing, except as provided in the immediately succeeding paragraph of this Section. For such purpose, the GRANTEE shall submit for the approval of the Toll Regulatory Board the toll proposed to be charged the users. After approval of the toll rate(s) by the Toll Regulatory Board and publication thereof by the GRANTEE once in a newspaper of general circulation, the toll shall immediately be enforceable and collectible upon opening of the expressway to traffic use. Any interested Expressways users shall have the right to file, within a period of ninety (90) days after the date of publication of the initial toll rate, a petition with the Toll Regulatory Board for a review of the initial toll rate; provided, however, that the filing of such petition and the pendency of the resolution thereof shall not suspend the enforceability and collection of the toll in question. The Toll Regulatory Board, at a public hearing called for the purpose after due notice, shall then conduct a review of the initial toll shall be appealable (sic) to the Office of the President within ten (10) days from the promulgation thereof. The GRANTEE may be required to post a bond in such amount and from such surety or sureties and under such terms and conditions as the Toll Regulatory Board shall fix in case of any petition for review of, or appeal from, decisions of the Toll Regulatory Board. In case it is finally determined, after a review by the Toll Regulatory Board or appeal therefrom, that the GRANTEE is not entitled, in whole or in part, to the initial toll, the GRANTEE shall deposit in the escrow account the amount collected under the approved initial toll fee and such amount shall be refunded to Expressways users who had paid said toll in accordance with the procedure as may be prescribed or promulgated by the Toll Regulatory Board. (Emphasis ours.) The petitioners are indulging in gratuitous, if not unfair, conclusion as to the capacity of the TRB to act as a fair and objective tribunal on matters of toll fee fixing. Administrative bodies have expertise in specific matters within the purview of their respective jurisdictions. Accordingly, the law concedes to them the power to promulgate implementing rules and regulations ("IRR") to carry out declared statutory policies provided that the IRR conforms to the terms and standards prescribed by that statute.72 The Court does not perceive an irreconcilable clash in the enumerated TRBs statutory powers, such that the exercise of one negates another. The ascription of impartiality on the part of the TRB cannot, under the premises, be accorded cogency. Petitioners have

not shown that the TRB lacks the expertise, competence and capacity to implement its mandate of balancing the interests of the toll-paying motoring public and the imperative of allowing the concessionaires to recoup their investment with reasonable profits. As it were, Section 9 of P.D. 1894 provides a parametric formula for adjustment of toll rates that takes into account the Peso-US Dollar exchange rate, interest rate and construction materials price index, among other verifiable and quantifiable variables. While not determinative of the issue immediately at hand, the grant to and the exercise by an administrative agency of regulating and allowing the operation of public utilities and, at the same time, fixing the fees that they may charge their customers is now commonplace. It must be presumed that the Congress, in creating said agencies and clothing them with both adjudicative powers and contract-making prerogatives, must have carefully studied such dual authority and found the same not breaching any constitutional principle or concept.73 So must it be for P.D. Nos. 1112 and 1894. The Court can take judicial cognizance of the exercise by the LTFRB and NTC both spin-off agencies of the now defunct Public Service Commission of similar concurrent powers. The LTFRB, under Executive Order No. ("E.O.") 202,74 series of 1987, is empowered,75 among others, to regulate the operation of public utilities or "for hire" vehicles and to grant franchises or certificates of public convenience ("CPC"); and to fix rates or fares, to approve petitions for fare rate increases and to resolve oppositions to such petitions. The NTC, on the other hand, has been granted similar powers of granting franchises, allocating areas of operations, rate-fixing and to rule on petitions for rate increases under E.O. 546,76 s. of 1979. The Energy Regulatory Commission ("ERC") likewise enjoys on the one hand, the power (a) to grant, modify or revoke an authority to operate facilities used in the generation of electricity, and on the other, (b) to determine, fix and approve rates and tariffs of transmission, and distribution retail wheeling charges and tariffs of franchise electric utilities and all electric power rates including that which is charged to end-users.77 In Chamber of Real Estate and Builders Association, Inc. v. ERC, We even categorically stated that the ERC is a "quasi-judicial and quasi-legislative regulatory body created under Section 38 of the EPIRA, [and] x x x an administrative agency vested with broad regulatory and monitoring functions over the Philippine electric industry to ensure its successful restructuring and modernization x x x."78 To summarize, the fact that an administrative agency is exercising its administrative or executive functions (such as the granting of franchises or awarding of contracts) and at the same time exercising its quasi-legislative (e.g. rule-making) and/or quasi-judicial functions (e.g. rate-fixing), does not support a finding of a violation of due process or the Constitution. In C.T. Torres Enterprises, Inc. v. Hibionada,79 We explained the rationale, thus:

It is by now commonplace learning that many administrative agencies exercise and perform adjudicatory powers and functions, though to a limited extent only. Limited delegation of judicial or quasi-judicial authority to administrative agencies (e.g. the Securities and Exchange Commission and the National Labor Relations Commission) is well recognized in our jurisdiction, basically because the need for special competence and experience has been recognized as essential in the resolution of questions of complex or specialized character and because of a companion recognition that the dockets of our regular courts have remained crowded and clogged. xxxx As a result of the growing complexity of the modern society, it has become necessary to create more and more administrative bodies to help in the regulation of its ramified activities. Specialized in the particular fields assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice. This is the reason for the increasing vesture of quasilegislative and quasi-judicial powers in what is now not unquestionably called the fourth department of the government. xxxx There is no question that a statute may vest exclusive original jurisdiction in an administrative agency over certain disputes and controversies falling within the agency's special expertise. The very definition of an administrative agency includes its being vested with quasi-judicial powers. The ever increasing variety of powers and functions given to administrative agencies recognizes the need for the active intervention of administrative agencies in matters calling for technical knowledge and speed in countless controversies which cannot possibly be handled by regular courts. (Emphasis ours.) Fourth Issue: President Amply Vested With Statutory Power To Approve TRB Contracts Just like their parallel stance on the grant to TRB of the power to enter into toll agreements, e.g., TOAs or STOAs, the petitioners in the first three petitions would assert that the grant to the President of the power to peremptorily authorize the assignment by PNCC, as franchise holder, of its franchise or the usufruct in its franchise is unconstitutional. It is unconstitutional, so petitioners would claim, for being an encroachment of legislative power. As earlier indicated, Section 3 (a) of P.D. 1112 requires approval by the President of any contract TRB may have entered into or effected for the construction and operation of toll facilities. Complementing Section 3 (a) is 3 (e) (3) of P.D. 1112 enjoining the transfer of the usufruct of PNCCs franchise without the Presidents prior approval. For perspective, Section 3 (e) (3) of P.D. 1112 provides:

That the toll operator shall not lease, transfer, grant the usufruct of, sell or assign the rights or privileges acquired under the [TOC] to any person x x x or legal entity nor merge with any other company or corporation organized for the same purpose without the prior approval of the President of the Philippines. In the event of any valid transfer of the TOC, the Transferee shall be subject to all the conditions, terms, restrictions and limitations of this Decree x x x.80 The Presidents approving authority is of statutory origin. To us, there is nothing illegal, let alone unconstitutional, with the delegation to the President of the authority to approve the assignment by PNCC of its rights and interest in its franchise, the assignment and delegation being circumscribed by restrictions in the delegating law itself. As the Court stressed in Kilosbayan v. Guingona, Jr.,81 the rights and privileges conferred under a franchise may be assigned if authorized by a statute, subject to such restrictions as may be provided by law, such as the prior approval of the grantor or a government agency.82 There can, therefore, be no serious challenge to this presidential- approving prerogative. Should grave abuse of discretion in some way infect the exercise of the prerogative, then the approval action may be nullified for that reason, but not on the ground that the underlying authority is constitutionally doubtful. If the TRB may validly be empowered to grant private entities the authority to operate toll facilities, would a delegation of a lesser authority to approve the grant to the head of the administrative machinery of the government be objectionable? The fact that P.D. 1112 partakes of a martial law issuance does not per se provide an objectionable feature to the decree, albeit it may be argued with some plausibility that then President Marcos intended to have the final say as to who shall act as the toll operators of the Luzon expressways. Be that as it may, "all proclamations, orders, decrees, instructions, and acts promulgated, issued, or done by the former President (Ferdinand E. Marcos) are part of the law of the land, and shall remain valid, legal, binding, and effective, unless modified, revoked or superseded by subsequent proclamations, orders, decrees, instructions, or other acts of the President."83 To emphasize, Padua v. Ranada cited Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, quoting that: The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was called, had the force and effect of law because it came from President Marcos. Such are the ways of despots. Hence, it is futile to argue that LOI 474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is that it was issued by President Marcos, whose word was law during that time.84 Fifth Issue: Assailed STOAs Validly Entered This brings us to the issue of the validity of certain provisions of the STOAs and related agreements entered into by the TRB, as duly approved by the President.

Relying on Clause 17.4.185 of the MNTC STOA that the lenders have the unrestricted right to appoint a substitute entity in case of default of MNTC or of the occurrence of an event of default in respect of the loans, petitioners argue that since MNTC is the assignee or transferee of PNCCs franchise, then it steps into the shoes of PNCC. They contend that the act of replacing MNTC as grantee is tantamount to an amendment or alteration of the PNCCs original franchise and hence unconstitutional, considering that the constitutional power to appoint a new franchise holder is reserved to Congress.86 This contention is bereft of merit. Petitioners presupposition that only Congress has the power to directly grant franchises is misplaced. Time and again, We have held that administrative agencies may be empowered by the Legislature by means of a law to grant franchises or similar authorizations.87 And this, We have sufficiently addressed in the present case.88 To reiterate, We discussed in Albano that our statute books are replete with laws granting administrative agencies the power to issue authorizations.89 This delegation of legislative power to administrative agencies is allowed "in order to adapt to the increasing complexity of modern life."90 Consequently, We have held that the "privileges conferred by grant by local authorities as agents for the state constitute as much a legislative franchise as though the grant had been made by an act of the Legislature."91 In this case, the TRBs charter itself, or Section 3 (e) of P.D. 1112, specifically empowers it to "grant authority to operate a toll facility and to issue therefore the necessary Toll Operation Certificate subject to such conditions as shall be imposed by the [TRB]x x x."92 Section 3 (a) of the same law permits the TRB to enter into contracts for the construction, operation and maintenance of toll facilities. Clearly, there is no question that the TRB is vested by the Legislature, through P.D. 1112, with the power not only to grant an authority to operate a toll facility, but also to enter into contracts for the construction, operation and maintenance thereof. Petitioners also contend that substituting MNTC as the grantee in case of its default with respect to its loans is tantamount to an amendment of PNCCs original franchise and is hence, unconstitutional. We also find this assertion to be without merit. Besides holding that the Legislature may properly empower administrative agencies to grant franchises pursuant to a law, We have also earlier explained in this case that P.D. 1113 and the amendatory P.D. 1894 both vested the TRB with the power to impose conditions on PNCCs franchise in an appropriate contract and may therefore amend or alter the same when public interest so requires;93 save for the conditions stated in Sections 1 and 2 of P.D. 1894, which relates to the coverage area of the tollways and the expiration of PNCCs original franchise.94 P.D. 1112 provided further that the TRB has the power to amend or modify a Toll Operation Certificate that it issued when public interest so requires.95 Accordingly, to Our mind, there is nothing infirm much less questionable about the provision in the STOA, allowing the substitution of MNTC in case it defaults in its loans.

Furthermore, in the subject provision (Clause 17.4.196), the "unrestricted right" of the lender to appoint a substituted entity is never intended to afford such lender a plenary power to do so. The subject clause states: 17.4.1 The PARTIES acknowledge that following a Notice of Substitution under clauses 17.2 or 17.3 the LENDERS have, subject to the provisions of Clause 17.4.3, the unrestricted right to appoint a SUBSTITUTED ENTITY in place of MNTC following the declaration of the occurrence of a MNTC DEFAULT prior to full repayment of the LOANS or of an event of default in respect of the LOANS. GRANTOR shall extend all reasonable assistance to the AGENT to put in place a SUBSTITUTED ENTITY. MNTC shall make available all necessary information to potential SUBSTITUTED ENTITY to enable such entity to evaluate the Project. (Emphasis ours.) It is clear from the above-quoted provision that Clause 17.4.1 should always be construed and read in conjunction with Clauses 17.2, 17.3, 17.4.2, 17.4.3 and 20.12. Clauses 17.2 and 17.3 discuss the procedures that must be followed and undertaken in case of MNTCs default prior to the full repayment of the loans, and before the substitution under Clause 17.4.1 could take place. These clauses provide the following process: Prior to Full Repayment of the LOANS: 17.2 Upon occurrence of an MNTC DEFAULT under Clause 17.1(a) and (e) prior to full repayment of the LOANS, GRANTOR shall serve a written Notice of Default to MNTC with copy to the AGENT giving a reasonable period of time to cure the MNTC DEFAULT, such period being three (3) months from receipt of the notice or such longer period as may be approved by GRANTOR, taking due consideration of the nature of the default and of the repair works required. If MNTC fails to remedy such default during such three (3) month or [sic] curing period, GRANTOR may issue a Notice of Substitution on MNTC, copy furnished to the AGENT, which shall take effect upon the assumption and take over by the SUBSTITUTED ENTITY pursuant to the provisions of Clause 17.4 hereof; Provided, However, that prior to such assumption and take over by the SUBSTITUTED ENTITY, MNTC shall continue to operate and maintain the project roads and shall place in an escrow account the toll revenues, save such amounts as may be needed to primarily cover the operating costs and as may be owing and due to the lenders under the loans and, secondarily, to cover the PNCC Gross Toll Revenue Share, Provided, Further, that upon the assumption and take over by the SUBSTITUTED ENTITY, such assumption and take over shall have the effect of revoking the rights, privileges and obligations of MNTC under this AGREEMENT in favor of the SUBSTITUTED ENTITY and MNTC shall cease to be a PARTY to this AGREEMENT. 17.3 If prior to full repayment of the LOANS MNTC fails to remedy MNTC DEFAULT under Clause 17.1 (b) or an MNTC DEFAULT occurs under Clause 17.1 (c), (d) or (f) prior to full repayment of the LOANS, GRANTOR shall serve a Notice of Substitution on MNTC, copy furnished to the AGENT, as provided under Clause 17.4.97 (Emphasis ours)

It is apparent from the above-quoted provision that it is the TRB representing the Republic of the Philippines as Grantor which has control over the situation before Clause 17.4.1 could come into place. To stress, following the condition under Clause 17.4.1, it is only when Clauses 17.2 and 17.3 have been complied with that the entire Clause 17.4 could begin to materialize. Clauses 17.4.2 and 17.4.3 also provide for certain parameters as to when a substituted entity could be considered acceptable, and enumerate the conditions that should be undertaken and complied with.98 Particularly, the subject provisions state: 17.4.2 The SUBSTITUTED ENTITY shall be required to provide evidence to GRANTOR that at the time of substitution: (i) it is legally and validly nominated by the AGENT as MNTCs substitute to continue the implementation of the PROJECT. (ii) it is legally and validly constituted and has the capability to enter into such agreement as may be required to give effect to the substitution; 17.4.3 The AGENT shall have one (1) year to effect a substitution under Clause 17.4; Provided, However, that during this time the AGENT shall not take any action which may jeopardize the continuity of the service and shall take the necessary action to ensure its continuation. To effect such substitution, the AGENT shall notify its intention to GRANTOR and shall, at the same time, give all necessary information to GRANTOR. GRANTOR shall, within one (1) month following such notification, inform the AGENT of its acceptance of the substitution, if the conditions set forth in Clause 17.4.2 have been satisfied. The SUBSTITUTED ENTITY shall be permitted a reasonable period to cure any MNTC DEFAULT under Clause 17.1 (a), (b) or (e). From the foregoing, it is clear that the lenders do not actually have an absolute or "unrestricted" right to appoint the SUBSTITUTED ENTITY in view of TRBs right to accept or reject the substitution within one (1) month from notice and such right to appoint comes into force only if and when the TRB decides to effectuate the substitution of MNTC as allowed in Clause 17.2 of the MNTC STOA. At the same time, Clause 17.4.4 particularizes the conditions upon which the substitution shall become effective, to wit: 17.4.4 The Substitution shall be effective upon: (a) the appointment of a SUBSTITUTED ENTITY in accordance with the provisions of this Clause 17.4; and, (b) assumption by the SUBSTITUTED ENTITY of all of the rights and obligations of MNTC under this AGREEMENT, including the payment of PNCCs Gross Toll Revenue Share under the JOINT VENTURE AGREEMENT

dated 29 August 1995 and all other agreements in connection with this agreement signed and executed by and between PNCC and MNTC. The afore-quoted Section (a) of Clause 17.4.4 reiterates the necessity of compliance by the substituted entity with all the conditions provided under Clause 17.4. Furthermore, following the above-quoted conditions veritably protects the interests of the Government. As previously discussed supra, PNCCs assets with respect to its legislative franchise under P.D. 1113, as amended, has already been automatically turned over to the Government. And whatever share PNCC has in relation to the currently implemented administrative authority granted by the TRB is merely being held in trust by it in favor of the Government. Accordingly, the fact that Section "b" of Clause 17.4.4 ensures that the obligation to pay PNCCs Gross Toll Revenue Share is assumed by the substituted entity, necessarily means that the Governments Gross Toll Revenue Share is safeguarded and kept intact. The MNTC STOA also states that only in case no substituted entity is established in accordance with Clause 17.4 that Clause 17.5 shall be applied. Clause 17.5 grants the lenders the power to extend the concession in case the Grantor (Republic of the Philippines) takes over the same, for a period not exceeding fifty years, until full payment of the loans.99 Petitioners contend that the option to extend the concession for that stated period is, however, unconstitutional. This assertion is impressed with merit. At the outset, Clause 17.5 does not actually grant the lenders of the defaulting concessionaire, the power to unilaterally extend the concession for a period not exceeding fifty years. For reference, the pertinent provision states: 17.5 Only if no SUBSTITUTE ENTITY is established shall the GRANTOR [TRB] be entitled to take-over the CONCESSION with no commitment on the LOANS in which case the OPERATION AND MAINTENANCE CONTRACT shall be assigned to any entity that the AGENT100 may designate provided such entity has a sufficient legal and technical capacity to perform and assume the obligations of the OPERATION AND MAINTENANCE CONTRACT under this AGREEMENT. The LENDERS shall receive all TOLL, excepting PNCCs revenue share provided for under the JOINT INVESTMENT PROPOSAL (vide: Annex "C" hereof), for as long as required until full repayment of the LOANS including if necessary an extension of the CONCESSION PERIOD which in no case shall exceed fifty (50) years; Provided that the LENDERS support all amounts payable under the OPERATION AND MAINTENANCE CONTRACT. For avoidance of doubt, the GRANTOR will have no obligation in relation to liabilities incurred by MNTC prior to such take-over.101 (Emphasis supplied) The afore-quoted provision should be read in conjunction with Clause 20.12, which expressly provides that the MNTC STOA is "made under and shall be governed by and construed in accordance with" the laws of the Philippines, and particularly, by the provisions of P.D. Nos. 1112, 1113 and 1894. Under the applicable laws, the TRB may very well amend, modify, alter or revoke the authority/franchise "whenever the public

interest so requires."102 In a word, the power to determine whether or not to continue or extend the authority granted to a concessionaire to operate and maintain a tollway is vested to the TRB by the applicable laws. The necessity of whether or not to extend the concession or the authority to construct, operate and maintain a tollway rests, by operation of law, with the TRB. As such, the lenders cannot unilaterally extend the concession period, or, with like effect, impose upon or demand that the TRB agree to extend such concession. Be that as it may, it must be noted, however, that while the TRB is vested by law with the power to extend the administrative franchise or authority that it granted, nevertheless, it cannot do so for an accumulated period exceeding fifty years. Otherwise, it would violate the proscription under Article XII, Section 11 of the 1987 Constitution, which states that:103 Sec. 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 associations must be citizens of the Philippines. (Emphasis Ours) In this case, the MNTC STOA already has an original stipulated period of thirty years.104 Clause 17.5 allows the extension of this period if necessary to fully repay the loans made by MNTC to the lenders, thus: x x x The LENDERS shall receive all TOLL, excepting PNCCs revenue share provided for under the JOINT INVESTMENT PROPOSAL (vide: Annex "C" hereof), for as long as required until full repayment of the LOANS including if necessary an extension of the CONCESSION PERIOD which in no case shall exceed a maximum period of fifty (50) years; x x x (Emphasis ours.) If the maximum extension as provided for in Clause 17.5, i.e. fifty years, shall be utilized, the accumulated concession period that would be granted in this case would effectively be eighty years. To Us, this is a clear violation of the fifty-year franchise threshold set by the Constitution. It is in this regard that we strike down the above-quoted clause, "including if necessary an extension of the CONCESSION PERIOD which in no case shall exceed a maximum period of fifty (50) years" in Clause 17.5 as void for being violative of the Constitution.105 It must be made abundantly clear, however, that the nullity shall be limited to such extension beyond the 50-year constitutional limit.

All told, petitioners allegations that the TRB acted with grave abuse of discretion and with gross disadvantage to the Government with respect to Clauses 17.4.1 and 17.5 of the MNTC STOA are unfounded and speculative. Petitioners also allege that the MNTC STOA is grossly disadvantageous to the Government since under Clause 11.7 thereof, the Government, through the TRB, guarantees the viability of the financing program of a toll operator. Under Clause 11.7 of the MNTC STOA, the TRB agreed to pay monthly, the difference in the toll fees actually collected by MNTC and that which it could have realized under the STOA. The pertinent provisions states: 11.7 To insure the viability and integrity of the Project, the Parties recognize the necessity for adjustments of the AUTHORIZED TOLL RATE . In the event that said adjustment are not effected as provided under this Agreement for reasons not attributable to MNTC, the GRANTOR [TRB] warrants and so undertakes to compensate, on a monthly basis, the resulting loss of revenue due to the difference between the AUTHORIZED TOLL RATE actually collected and the AUTHORIZED TOLL RATE which MNTC would have been able to collect had the adjustments been implemented. (Emphasis ours) As set out in the preamble of P.D. 1112, the need to encourage the infusion of private capital in tollway projects is the underlying rationale behind the enactment of said decree. Owing to the scarce capital available to bankroll a huge capital-intensive project, such as the North Luzon Tollway project, it is well-nigh inevitable that the financing of these types of projects is sourced from private investors. Quite naturally, the investors expect the regularity of the cash flow. It is perhaps in this broad context that the obligation of the Grantor under Clause 11.7 of the MNTC STOA was included in the STOA. To Us, Clause 11.7 is not only grossly disadvantageous to the Government but a manifest violation of the Constitution. Section 3 (e) (5) of P.D. 1112 explicitly states: [t]hat no guarantee, Certificate of Indebtedness, collateral securities, or bonds shall be issued by any government agency or government-owned or controlled corporation on any financing program of the toll operator in connection with his undertaking under the Toll Operation Certificate. What the law seeks to prevent in this situation is the eventuality that the Government, through any of its agencies, could be obligated to pay or secure, whether directly or indirectly, the financing by the private investor of the project. In this case, under Clause 11.7 of the MNTC STOA, the Republic of the Philippines (through the TRB) guaranteed the security of the project against revenue losses that could result, in case the TRB, based on its determination of a just and reasonable toll fee, decides not to effect a toll fee adjustment under the STOAs periodic/interim adjustment formula. The OSG, in its Comment, admitted that "the amounts the government undertook to pay in case of Clause 11.7 violation is an undertaking to pay compensatory damage for something akin to

a breach of contract."106 As P.D. 1112 itself expressly prohibits the guarantee of a security in the financing of the toll operator pursuant to its tollway project, Clause 11.7 cannot be a valid stipulation in the STOA. This is more so for being in violation of the Constitution. Article VI, Section 29 (1) of the Constitution mandates that "[n]o money shall be paid out of the Treasury except in pursuance of an appropriation made by law."107 We have held in Radstock that "government funds or property shall be spent or used solely for public purposes, as expressly mandated by Section 4 (2) of PD 1445 or the Government Auditing Code."108 Particularly, We held in Radstock case that: [t]he power to appropriate money from the General Funds of the Government belongs exclusively to the Legislature. Any act in violation of this iron-clad rule is unconstitutional. Reinforcing this Constitutional mandate, Sections 84 and 85 of PD 1445 require that before a government agency can enter into a contract involving the expenditure of government funds, there must be an appropriation law for such expenditure, thus: Section 84. Disbursement of government funds. 1. Revenue funds shall not be paid out of any public treasury or depository except in pursuance of an appropriation law or other specific statutory authority. xxxx Section 85. Appropriation before entering into contract. No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure. xxxx Section 86 of PD 1445, on the other hand, requires that the proper accounting official must certify that funds have been appropriated for the purpose. Section 87 of PD 1445 provides that any contract entered into contrary to the requirements of Sections 85 and 86 shall be void.109 (Emphasis ours.) In the instant case, the TRB, by warranting to compensate MNTC with the loss of revenue resulting from the non-implementation of the periodic and interim toll fee adjustments, violates the very constitutionally guaranteed power of the Legislature, to exclusively appropriate money for public purpose from the General Funds of the Government. The TRB veritably accorded unto itself the exclusive authority granted to Congress to appropriate money that comes from the General Funds, by making a warranty to compensate a revenue loss under Clause 11.7 of the MNTC STOA. There is

not even a badge of indication that the aforementioned requisites under the Constitution and P.D. 1445 in respect of appropriation of money from the General Funds of the Government have been properly complied with. Worse, P.D. 1112 expressly prohibits the guarantee of security of the financing of a toll operator in connection with his undertaking under the Toll Operation Certificate. Accordingly, Clause 11.7 of the MNTC STOA, under which the TRB warrants and undertakes to compensate MNTCs loss of revenue resulting from the non-implementation of the periodic and interim toll fee adjustments, is illegal, unconstitutional and hence void. Parenthetically, We also find a similar provision in the SLTC STOA under Clause 8.08 thereof, which states that:110 (2) In the event the Authorized Toll Rate and adjustments thereto are not implemented or made effective in accordance with the provisions of this Agreement, for reasons not attributable to the fault of the Investor and/or the Operator, including the reversal by the TRB or by any competent court or authority of any such adjustment in the Authorized Toll Rate previously approved by the TRB, except where such reversal is by reason of a determination of the misapplication of the Authorized Toll Rates, the Grantor shall compensate the Operator, on a monthly basis and within thirty (30) days of submission by the Operator of a notice thereof, without interest, for the resulting loss of revenue computed as the difference between: (a) the actual traffic volume for the month in question multiplied by the Current Authorized Toll Rate as escalated and/or adjusted, that should be in effect; and (b) the Gross Toll Revenue for the month in question. (3) The obligation of the Grantor to compensate the Operator shall continue until the applicable Current Authorized Toll Rate is implemented. Akin to what is contemplated in Clause 11.7 of the MNTC STOA, Clauses 8.08 (2) and (3) of the SLTC STOA, under which the TRB warrants or is obligated to compensate the Operator for its loss of revenue resulting from the non-implementation of the calculation/formula of authorized toll price and toll rate adjustments found in Clause 8 thereof, are illegal, unconstitutional and, hence, void. This ruling is consistent with the TRBs power to determine, without any influence or compulsion direct or indirect as to whether a change in the toll fee rates is warranted. We will discuss the same below. Petitioners argue that the CITRA, SLTC and MNTC STOAs tie the hands of the TRB as it is bound by the stipulated periodic and interim toll rate adjustments provided therein. Petitioners contend that the SMMS (CITRA STOA), the SLTC and the MNTC STOAs provisions on initial toll rates and periodic/interim toll rate adjustments, by using a builtin automatic toll rate adjustment formula,111 allegedly guaranteed fixed returns for the investors and negated the public hearing requirement.

This contention is erroneous. The requisite public hearings under Section 3 (d) of P.D. 1112 and Section 8 (b) of P.D. 1894 are not negated by the fixing of the initial toll rates and the periodic adjustments under the STOA. Prefatorily, a clear distinction must be made between the statutory prescription on the fixing of initial toll rates, on the one hand, and of periodic/interim or subsequent toll rates, on the other. First, the hearing required under the said provisos refers to notice and hearing for the approval or denial of petitions for toll rate adjustments or the subsequent toll rates, not to the fixing of initial toll rates. By express legal provision, the TRB is authorized to approve the initial toll rates without the necessity of a hearing. It is only when a challenge on the initial toll rates fixed ensues that public hearings are required. Section 8 of P.D. 1894 says so: x x x the GRANTEE shall collect toll at such rates as shall initially be approved by the [TRB]. The [TRB] shall have the authority to approve such initial toll rates without the necessity of any notice and hearing, except as provided in the immediately succeeding paragraph of this Section. For such purpose, the GRANTEE shall submit for the approval of the [TRB] the toll proposed to be charged the users. After approval of the toll rate(s) by the [TRB] and publication thereof by the GRANTEE once in a newspaper of general circulation, the toll shall immediately be enforceable and collectible upon opening of the expressway to traffic use. Any interested Expressways users shall have the right to file, within x x x (90) days after the date of publication of the initial toll rate, a petition with the [TRB] for a review of the initial toll rate; provided, however, that the filing of such petition and the pendency of the resolution thereof shall not suspend the enforceability and collection of the toll in question. The [TRB], at a public hearing called for the purpose shall then conduct a review of the initial toll (sic) shall be appealable to the [OP] within ten (10) days from the promulgation thereof. (Emphasis ours.) Of the same tenor is Section 3 (d) of P.D. 1112 stating that the TRB has the power and duty to: [i]ssue, modify and promulgate from time to time the rates of toll that will be charged the direct users of toll facilities and upon notice and hearing, to approve or disapprove petitions for the increase thereof. Decisions of the [TRB] on petitions for the increase of toll rate shall be appealable to the [OP] within ten (10) days from the promulgation thereof. Such appeal shall not suspend the imposition of the new rates, provided however, that pending the resolution of the appeal, the petitioner for increased rates in such case shall deposit in a trust fund such amounts as may be necessary to reimburse toll payers affected in case a (sic) reversal of the decision.112 (Emphasis Ours.) Similarly in Padua v. Ranada, the fixing of provisional toll rates by the TRB without a public hearing was held to be valid, such procedure being expressly provided by law.113 To be very clear, it is only the fixing of the initial and the provisional toll rates where a public hearing is not a vitiating requirement. Accordingly, subsequent toll rate

adjustments are mandated by law to undergo both the requirements of public hearing and publication. In Manila International Airport Authority ("MIAA") v. Blancaflor, the Court expounded on the necessity of a public hearing in rate fixing/increases scenario. There, the Court ruled that the MIAA, being an agency attached to the Department of Transportation and Communications ("DOTC"), is governed by Administrative Code of 1987,114 Book VII, Section 9 of which specifically mandates the conduct of a public hearing.115 Accordingly, the MIAAs resolutions, which increased the rates and charges for the use of its facilities without the required hearing, were struck down as void.116 Similarly, as We do concede, the TRB, being likewise an agency attached to the DOTC,117 is governed by the same Code and consequently requires public hearing in appropriate cases. It is, therefore, imperative that in implementing and imposing new, i.e. subsequent toll rates arrived at using the toll rate adjustment formula, the subject tollway operators and the TRB must necessarily comply not only with the requirement of publication but also with the equally important public hearing. Accordingly, any fixing of the toll rate, which did not or does not comply with the twin requirements of public hearing and publication, must therefore be struck down as void. In such case, the previously valid toll rate shall consequently apply, pending compliance with the twin requirements for the new toll rate. In the instant consolidated cases, the fixing of the initial toll rates may have indeed come to pass without any public hearing.118 Unfortunately for petitioners, and notwithstanding its presumptive validity, they did not assail the initial toll rates within the timeframe provided in P.D. 1112 and P.D. 1894.119 Besides, as earlier explicated, the STOA provisions on periodic rate adjustments are not a bar to a public hearing as the formula set forth therein remains constant, serving only as a guide in the determination of the level of toll rates that may be allowed. It is apropos to state at this juncture that, in determining the reasonableness of the subsequent toll rate increases, it behooves the TRB to seek out the Commission on Audit ("COA") for assistance in examining and auditing the financial books of the public utilities concerned. Section 22, Chapter 4, Subtitle B, Title 1, Book V of the Administrative Code of 1987 expressly authorizes the COA to examine the aforementioned documents in connection with the fixing of rates of every nature, including as in this case, the fixing of toll fees.120 We have on certain occasions applied this provision. Manila Electric Company, Inc. v. Lualhati easily comes to mind where this Court tasked the Energy Regulatory Commission to seek the assistance of the COA in determining the reasonableness of the rate increases that MERALCO intended to implement.121 We have consistently held that "the law is deemed written into every contract."122 Being a provision of law, this authority of the COA under the Administrative Code should therefore be deemed written in the subject contracts i.e. the STOAs. In this regard, during the examination and audit, the public utilities concerned are mandated to "produce all the reports, records, books of accounts and such other papers as may be required," and the COA is empowered to "examine under oath any official or employee of the said public utilit[ies]."123 Any public utility unreasonably denying COA

access to the aforementioned documents, unnecessarily obstructs the examination and audit and may be adjudged liable "of concealing any material information concerning its financial status, shall be subject to the penalties provided by law."124 Finally, the TRB is further obliged to take the appropriate action on the COA Report with respect to its finding of reasonableness of the proposed rate increases.125 Furthermore, while the periodic, interim and other toll rate adjustment formulas are indicated in the STOAs,126 it does not necessarily mean that the TRB should accept a rate adjustment predicated on the economic data, references or assumptions adopted by the toll operator. At the end of the day, the final figures should be those of the TRB based on its appreciation of the relevant rate-influencing data. In fine, the TRB should exercise its rate-fixing powers vested to it by law within the context of the agreed formula, but always having in mind that the rates should be just and reasonable. Conversely, it is very well within the power of the TRB under the law to approve the change in the current toll fees.127 Section 3 (d) of P.D. 1112 grants the TRB the power to "[i]ssue, modify and promulgate from time to time the rates of toll that will be charged the direct users of toll facilities." But the reasonableness of a possible increase in the fees must first be clearly and convincingly established by the petitioning entities, i.e. the toll operators. Otherwise, the same should not be granted by the approving authority concerned. In Philippine Communications Satellite Corporation v. Alcuaz,128 the Court had the opportunity to explain what is meant by a just and reasonable fixing of rates, thus: Hence, the inherent power and authority of the State, or its authorized agent, to regulate the rates charged by public utilities should be subject always to the requirement that the rates so fixed shall be reasonable and just. A commission has no power to fix rates which are unreasonable or to regulate them arbitrarily. This basic requirement of reasonableness comprehends such rates which must not be so low as to be confiscatory, or too high as to be oppressive. What is a just and reasonable rate is not a question of formula but of sound business judgment based upon the evidence it is a question of fact calling for the exercise of discretion, good sense, and a fair, enlightened and independent judgment. In determining whether a rate is confiscatory, it is essential also to consider the given situation, requirements and opportunities of the utility. A method often employed in determining reasonableness is the fair return upon the value of the property to the public utility x x x. (Emphasis ours.) If in case the TRB finds the change in the rates to be reasonable and therefore merited, the increase shall then be implemented after the formalities of public hearing and publication are complied with. In this case, it is clear that the change in the toll fees is immediately effective and implementable. This is notwithstanding that, in case of an increase in the toll fees, an appeal thereon is filed. The law is clear. Thus: x x x Decisions of the [TRB] on petitions for the increase of toll rate shall be appealable to the Office of the President within ten (10) days from the promulgation thereof. Such appeal shall not suspend the imposition of the new rates, provided however, that pending

the resolution of the appeal, the petitioner for increased rates in such case shall deposit in a trust fund such amounts as may be necessary to reimburse toll payers affected in case a reversal of the decision.129 (Emphasis ours.) Besides the settled rule under Section 3 (d) of P.D. 1112 that the power to issue, modify and promulgate toll fees rests with the TRB, it must also be underscored that the periodic and the interim adjustments found in Clauses 11.4 to 11.6 of the MNTC STOA do not necessarily guarantee an increase in the toll fees. To stress, the formula is based on many variable factors that could mean either an increase or a decrease in the toll fees, depending, inter alia, on how well certain economies are doing; and on the projections and figures published by the Bangko Sentral ng Pilipinas ("BSP").130 It is therefore arduous to contemplate a grossness in a disadvantage that could only possibly arise in case of a non-implementation of a change particularly, an increase in the toll rates. Petitioners have not incidentally shown that it is the traveling public, the users of the expressways, who shouldered or will shoulder the completion of the projects by way of exorbitant fees payment, with the investors ending up with a "killing" therefrom. This conclusion, for all its factual dimension, is too simplistic for acceptance. And it does not consider the reality that the Court is not a trier of facts. Neither does it take stock of the nature and function of toll roads and toll fees paid by motorists, as aptly elucidated in North Negros Sugar Co., Inc. v. Hidalgo,131 thus: "Toll" is the price of the privilege to travel over that particular highway, and it is a quid pro quo. It rests on the principle that he who, receives the toll does or has done something as an equivalent to him who pays it. Every traveler has the right to use the turnpike as any other highway, but he must pay the toll.132 A toll road is a public highway, differing from the ordinary public highways chiefly in this: that the cost of its construction in the first instance is borne by individuals, or by a corporation, having authority from the state to build it, and, further, in the right of the public to use the road after completion, subject only to the payment of toll.133 Toll roads are in a limited sense public roads, and are highways for travel, but we do not regard them as public roads in a just sense, since there is in them a private proprietary right x x x.134 (Emphasis ours.) Parenthetically, our review of Section 7 of the SMMS STOA readily yields the information that the level of the initial toll rates hinges on a mix of factors. Tax holidays that may be granted and the tax treatment of dividends may be mentioned. On the other hand, the subsequent periodic adjustments are provided to address factors that usually weigh on the financial condition of any business endeavor, such as currency devaluation, inflation and the usual increases in maintenance and operational costs incorporated into the formula provided therefor. Even with the existence of an automatic toll rate adjustment formula, compliance by the TRB and the other respondents with the twin requirements of public hearing and publication is still mandatory. To reiterate, laws always occupy a plane higher than mere contract provisions. In case the minimum

statutory requirements are stiffer than that of a contract, or when the contract does not expressly stipulate the minimum requirements of the law, then We rule that compliance with such minimum legal requirements should be done. To summarize, any toll fee increase should comply with the legal twin requirements of publication and public hearing, the absence of which will nullify the imposition and collection of the new toll fees. In all, the initial toll rates and periodic adjustments appear to Us as simply predicated on the basic rationale for investing in a toll project, which to repeat is: a reasonable rate of return for the investment. Section 2 (o) of the BOT Law, as amended, provides for a definition for a reasonable rate of return on investments and operating and maintenance cost.135 Running through the gamut of our statutes providing for and encouraging partnership of the public and private sector is the paramount common good for infrastructure projects and the equally important factor of giving a reasonable rate of return to private sectors investments. The viability of any infrastructure project depends on the returns which should be reasonable of the investment coming from the private sector. While the interests of the public are ideally to be accorded primacy in considering government contracts, the reality on the ground is that the tollway projects may not at all be possible or would be difficult to realize without the involvement of the investing private sector, which expects its usual share of profit. Thus, the Court is at a loss to understand how the level of the initial toll rates, which depended on several factors indicated above, and the subsequent adjustments resulted in the charging of exorbitant toll fees that, to petitioners, enabled the investors to shift the burden of financing the completion of the projects on the motoring public. Neither does the alleged drasticif we may characterize it as suchsteep increase in the level of toll rates for NLEX constitute a "killing" for PNCC and its partner MNTC. Petitioners make much of the amount of the toll fees vis--vis the then prevailing minimum wage. These plays of figures detract from the essential concern on the propriety of the level of the toll rates vis--vis the investments sunk in the NLEX project with a view, on the part of private investors, to a reasonable return on their investment. Where no substantial figures were provided on the investments, the projected operating and maintenance costs vis--vis the projected revenue from the toll fees, no substantial conclusions may reasonably be deduced therefrom. Besides, to be taken into account in relation to the costs of the construction and rehabilitation of the NLEX is the length of the tollway and for which motorists have to pay the corresponding toll. Certainly, the allegations and conclusions of petitioners as to the unreasonable increase of the toll rates are without adequate factual mooring. The use of a tollway is a privilege that comes at a cost. The toll is a price paid for the use of a privilege. There are to be sure alternative roads and routes, which motorists may fall back on if they are unwilling to pay the toll. The toll, as might be expected, is pegged at a level that makes the developmental projects and their maintenance viable; otherwise, no investment can be expected for the furtherance of the projects.

Petitioners Francisco and Hizon alleged that, per the minutes of the TRB meetings, the Board deliberately refrained, particularly with respect to the Skyway project, from conducting public hearings for the grant of the initial toll rates and on the rate adjustment formula to be used in order to accelerate the implementation of the projects. The allegation is far from correct. A perusal of the pertinent minutes of the TRB meetings, particularly that held on August 17, 1995,136 in fact would disclose a picture different from that depicted by said petitioners. Nothing in the minutes of said meeting tends to indicate that the TRB resolved to dispense with public hearings. We, therefore, find petitioners Francisco and Hizons attempt to mislead the Court by falsely citing supposed portions137 of the August 17, 1995 TRB meeting very unfortunate. They quoted a correction on the minutes of the Special Board Meeting No. 95-05 held on July 26, 1995, which was taken up in the August 17, 1995 meeting for the approval of the minutes of the previous meeting. In said special meeting of July 26, 1995,138 the Board deliberated on the recommendation of ADG Santos for the conduct of a public hearing or soliciting the endorsement of the Metro Manila Development Authority ("MMDA").139 But the TRB did not resolve to omit a public hearing with respect to the toll rates. In fact, the deliberations used the words "in the event the Board decides" and "if the Board conducts," clearly conveying the notion that the TRB had not decided or resolved the issue of public hearings. Be that as it may, We rule that the TRB is mandated to comply with the twin requirements of public hearing and publication. Petitioners Francisco and Hizons lament about the TRB merely relying on, if not yielding to, the recommendation and findings of the Technical Working Group ("TWG") of the DPWH on matters relative to STOA stipulations and toll-rate fixing cannot be accorded cogency. In the area involving big finance and complex project planning, banking on the data supplied by technicians and experts is at once practical as it is inevitable. The Court cannot see its way clear to understand why petitioners would begrudge the TRB for tapping the technical know-how of others. And it cannot be overemphasized that a recommendation is no more than an exhortation or an urging as to what is advisable or expedient, not binding on the person to which it is being made.140 To recommend involves the idea that another has the final decision.141 The ultimate decision still rests with the TRB whether or not to accept the findings of the TWG. The minutes of the TRB meetings show that its members went through the tedious process of deliberating on the formula to be used in computing the toll rates. The fact that the TRB might have adopted the TWGs recommendation would not, on that ground alone, vitiate the bona fides of the formers decision nor stain the proceedings leading to such decision. In any case, as earlier held, the toll rate adjustment formula does not and cannot contravene the legal twin requirements of public hearing and publication. In another bid to nullify the STOAs in question, petitioners would foist on the Court the arguments that, firstly, President Ramos twisted the arms of the TRB towards entering into the agreements in question and, secondly, that the CITRA STOA contained restrictive confidentiality provisions barring the public from knowing their contents and the details of the negotiations related thereto.

We are not persuaded by the first ground, not necessarily because the pressure brought to bear on TRB rendered the STOAs infirm, but because the allegations on pressure-tactics allegedly employed by President Ramos are too speculative for acceptance. On the second ground, We fail to see how the insertion of the alleged confidentiality clause in the CITRA STOA translates into grave abuse of discretion or a violation of the Constitution, particularly Article III, Section 7142 thereof. First off, the Court can take judicial notice that most commercial contracts, including finance-related project agreements carry the standard confidentiality clause to protect proprietary data and/or intellectual property rights. This protection angle appears to be the intent of Clause 14.04(l)143 of the CITRA STOA. And as may be noted, the succeeding Clause 14.04 (2)144 removes from the ambit of the confidentiality restriction the following: disclosure of any information: (a) not otherwise done by the parties; (b) which is required by law to be disclosed to any person who is authorized by law to receive the same; (c) to a tribunal hearing pertinent proceedings relative to the contract or agreement; and (d) to confidential entities and persons relative to the disclosing party like its banks, consultants, financiers and advisors. The second (item b) exception provides a reasonable dimension to the assailed confidentiality clause. Needless to stress, the obligation of the government to make information available cannot be exaggerated.145 The constitutional right to information does not mean that every day and every hour is open house in government offices having custody of the desired documents.146 Petitioners have not sufficiently shown, thus cannot really be heard to complain, that they had been unreasonably denied access to information with regard to the MNTC or SMMS STOA. Besides, the remedy for unreasonable denial of information that is a matter of public concern is by way of mandamus.147 Finally, as to petitioners catch-all claim that the STOAs are disadvantageous to the government, as therein represented by the TRB, suffice it to state for the nonce that behind these agreements are the Boards expertise and policy determination on technical, financial and operational matters involving expressways and tollways. It is not for courts to look into the wisdom and practicalities behind the exercise by the TRB of its contractmaking prerogatives under P.D. Nos. 1112, 1113 and 1894, absent proof of grave abuse of discretion which would justify judicial review. In this regard, the Court recalls what it wrote in G & S Transport Corporation v. Court of Appeals,148 to wit: x x x courts, as a rule, refuse to interfere with proceedings undertaken by administrative bodies or officials in the exercise of administrative functions. This is because such bodies are generally better equipped technically to decide administrative questions and that nonlegal factors, such as government policy on the matter are usually involved in the decision. Sixth Issue: Public Bidding Not Required Private petitioners would finally maintain that public bidding is required for the SMMS and the North Luzon/South Luzon Tollways, partaking as these projects allegedly do of

the nature of a BOT infrastructure undertaking under the BOT Law. Prescinding from this premise, they would conclude that the STOAs in question and related preliminary and post-STOA agreements are null and void for want of the necessary public bidding required for government infrastructure projects. The contention is patently flawed. The BOT Law does not squarely apply to the peculiar case of PNCC, which exercised its prerogatives and obligations under its franchise to pursue the construction, rehabilitation and expansion of the tollways with chosen partners. The tollway projects may very well qualify as a build-operate-transfer undertaking. However, given that the projects in the instant case have been undertaken by PNCC in the exercise of its franchise under P.D. Nos. 1113 and 1894, in joint partnership with its chosen partners at the time when it was held valid to do so by the OGCC and the DOJ, the public bidding provisions under the BOT Law do not strictly apply. For, as aptly noted by the OSG, the subject STOAs are not ordinary contracts for the construction of government infrastructure projects, which requires under the Government Procurement Reform Act or the now-repealed P.D. 1594,149 public bidding as the preferred mode of contract award. Neither are they contracts where financing or financial guarantees for the project are obtained from the government. Rather, the STOAs actually constitute a statutorily-authorized transfer or assignment of usufruct of PNCCs existing franchise to construct, maintain and operate expressways.150 The conclusion would perhaps be different if the tollway projects were to be prosecuted by an outfit completely different from, and not related to, PNCC. In such a scenario, the entity awarded the winning bid in a BOT-scheme infrastructure project will have to construct, operate and maintain the tollways through an automatic grant of a franchise or TOC, in which case, public bidding is required under the law. Where, in the instant case, a franchisee undertakes the tollway projects of construction, rehabilitation and expansion of the tollways under its franchise, there is no need for a public bidding. In pursuing the projects with the vast resource requirements, the franchisee can partner with other investors, which it may choose in the exercise of its management prerogatives. In this case, no public bidding is required upon the franchisee in choosing its partners as such process was done in the exercise of management prerogatives and in pursuit of its right of delectus personae.151 Thus, the subject tollway projects were undertaken by companies, which are the product of the joint ventures between PNCC and its chosen partners. Petitioners Francisco and Hizons assertions about the TRB awarding the tollway projects to favored companies, unsubstantiated as they are, need no belaboring. Suffice it to state that the discretion to choose who shall stand as critical JV partners remained all along with PNCC, at least theoretically. Needless to say, the records do not show that the TRB committed an oversight as an administrative body over any aspect of tollway operations with regard to PNCCs selection of partners.

The foregoing disquisitions considered, there is no more point in passing upon the propriety of prohibiting or enjoining, on the ground of unconstitutionality or grave abuse of discretion, the implementation of the initial toll rates and/or the adjusted toll rates for the SMSS, expanded NLEX and SLEX, as authorized by the separate TRB resolutions, subject of and originally challenged in these proceedings. These TRB resolutions and the STOAs upon which they are predicated have long been in effect. The parties have acted on these issuances and contracts whose existence, as an operative fact, cannot be ignored, let alone erased, even if the charge of unconstitutionality is given currency. While not exactly of governing applicability in this case, what the Court wrote in De Agbayani v. Philippine National Bank,152 on the operative fact doctrine is apropos: x x x 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." . 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 constitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration x x x." (Emphasis in the original.) The petitioners in the first three (3) petitions and the respondent in the fourth have not so said explicitly, but their brief is against the issuance of P.D. Nos. 1112, 1113 and 1894, which conferred a package of express and implied powers and discretion to the TRB and the President resulting in the execution of what is perceived to be offending STOAs and the runaway collection of illegal toll fees. And they have come to the Court to strike down all these issuances, agreements and exactions. While the Court is not insensitive to

their concerns, the rule is that all reasonable doubts should be resolved in favor of the constitutionality of a statute,153 and the validity of the acts taken in pursuant thereof. It follows, therefore, that the Court will not set aside a law as violative of the Constitution except in a clear case of breach154 and only as a last resort.155 And as the theory of separation of powers prescribes, the Court does not pass upon questions of wisdom, expediency and justice of legislation. To Us, petitioners and respondent YPES in the fourth petition have not discharged the heavy burden of demonstrating in a clear and convincing manner the unconstitutionality of the decrees challenged or the invalidity of assailed acts of the President and the TRB. Because they failed to do so, the Court must uphold the presumptive constitutionality and validity of the provisions of the three decrees in question, and the subject contracts and TOCs. Regarding petitioner Franciscos Supplemental Petition, the toll rates, the collection of which in the amount based on the formula and assumptions set forth in the law, and the adverted STOA dated February 1, 2006 and subject of the TRO issued on August 13, 2010, has been duly published156 and approved by the TRB, as required by Section 5 of P.D. 1112.157 And the party-concessionaires have adequately demonstrated, and the TRB has virtually acknowledged158 that the said rates subject of the TRO partake of the nature of opening or initial toll rates, which have not yet been implemented since the time the SLTC STOA took effect.159 To note, the toll rates subject of the TRO were approved and are to be implemented in connection with the new facility, such as Project Toll Roads 1 and 2 pursuant to the new SLTC STOA and the expanded and rehabilitated SLEX.160 As earlier discussed, public hearing is not required in the fixing and implementation of initial toll rates. But an interested party aggrieved by the initial rates imposed is not without any resource as he may, within the time frame provided by Section 8 (b) of P.D. 1894, repair to the TRB for review and thereafter to the OP.161 As expressly provided in the same section, however, the pendency of the petition for review, if there be any, shall not suspend the enforceability and collection of the toll in question. In net effect, the challenge before the Court of the SLEX toll rate imposition is premature. However, the Court treats this Supplemental Petition assailing the toll rates covered by the TRB Notice of Toll Rates published on June 6, 2010 as a petition for review filed under P.D. 1894, and hereby remands the same to the TRB for a review of the questioned rates to determine the propriety thereof. WHEREFORE, the petitions in G.R. Nos. 166910 and 173630 are hereby DENIED for lack of merit. Accordingly, We declare as VALID AND CONSTITUTIONAL the following: 1. the Supplemental Toll Operation Agreement dated April 30, 1998 covering the North Luzon Tollway Project and the TRB Board Resolution No. 2005-4 issued pursuant thereto; 2. the Supplemental Toll Operation Agreement dated November 27, 1995 covering the South Metro Manila Skyway and the TRB Board Resolution No. 2004-53 and previous TRB resolutions issued pursuant thereto;

3. the Supplemental Toll Operation Agreement covering the South Luzon Tollway Project or South Luzon Expressway and the TRB Board resolutions issued pursuant to the said agreement, particularly the TRB Board resolutions allowing the toll rate increases that are supposed to have been implemented on June 30, 2010; 4. Section 3, paragraph (a) of Presidential Decree No. 1112, otherwise known as the "Toll Operation Decree," in relation to Section 3, paragraph (d) thereof and Section 8, paragraph (b) of Presidential Decree No. 1894; and 5. Section 3, paragraph (e) 3 of P.D. No. 1112 and Section 13 of P.D. No. 1894. We however declare Clause 11.7 of the Supplemental Toll Operation Agreement between the Republic of the Philippines, represented by respondent TRB, as grantor, the Philippine National Construction Corporation, as franchisee, and the Manila North Tollways Corporation ("MNTC") dated April 30, 1998; and the clause "including if necessary an extension of the CONCESSION PERIOD which in no case shall exceed a maximum period of fifty (50) years" in Clause 17.5 of the same STOA, as VOID and UNCONSTITUTIONAL for being contrary to Section 2, Article XII of the 1987 Constitution. We likewise declare Clauses 8.08 (2) & (3) of the Supplemental Toll Operation Agreement between the Republic of the Philippines, represented by respondent TRB, as grantor, the Philippine National Construction Corporation as franchisee, the South Luzon Tollway Corporation as investor, and the Manila Toll Expressway Systems, Inc. as operator, dated February 1, 2006, as VOID and UNCONSTITUTIONAL. The petition in G.R. No. 169917 is likewise hereby DENIED for lack of merit. We declare as VALID and CONSTITUTIONAL the following: 1. Notice of Approval dated May 16, 1995 by former President Fidel V. Ramos on the assignment of PNCCs usufructuary rights; 2. the Joint Venture Agreement dated August 29, 1995; 3. the Joint Investment Proposal, etc. dated June 16, 1996; 4. the Supplemental Toll Operation Agreement ("STOA") dated April 30, 1998 and the Notice of Approval of said STOA dated June 15, 1998 by former President Fidel V. Ramos; and 5. the provisional toll rate increases published February 9, 2005, granted by the TRB. The petition in G.R. No. 183599 is GRANTED. Accordingly, the Decision dated June 23, 2008 of the Regional Trial Court, Branch 155 in Pasig City, docketed as SCA No. 3138-PSG, annulling the TOC covering the SLEX, enjoining the original toll operating franchisee from collecting toll fees in the SLEX, and ordering the turnover of related

assets to the Government, is hereby REVERSED and SET ASIDE, and the petition filed therein by the Young Professionals and Entrepreneurs of San Pedro, Laguna with the RTC of Pasig is DISMISSED for lack of merit. In view of the foregoing dispositions in the petitions at bar, the TRO issued by the Court on August 13, 2010 is hereby ordered lifted, with respect to the petitions in G.R. Nos. 166910, 169917, 173630 and 183599. The challenge contained in the Supplemental Petition in G.R. No. 166910 against the toll rates subject of the TRB Notice of Toll Rates published on June 6, 2010, for the SLEX projects, Toll Road Projects 1 and 2 of the new SLTC STOA, and the expanded and rehabilitated SLEX, is remanded to the TRB for a review of the assailed toll rates to determine whether SLTC and MATES are entitled to the toll fees. No Cost. SO ORDERED. PRESBITERO J. VELASCO, JR. Associate Justice WE CONCUR: RENATO C. CORONA Chief Justice ANTONIO T. CARPIO Associate Justice ANTONIO EDUARDO B. NACHURA Associate Justice ARTURO D. BRION Associate Justice LUCAS P. BERSAMIN Associate Justice (On leave) ROBERTO A. ABAD* Associate Justice JOSE PORTUGAL PEREZ (On leave) CONCHITA CARPIO MORALES* Associate Justice TERESITA J. LEONARDO-DE CASTRO Associate Justice DIOSDADO M. PERALTA Associate Justice MARIANO C. DEL CASTILLO Associate Justice MARTIN S. VILLARAMA, JR. Associate Justice JOSE CATRAL MENDOZA

Associate Justice

Associate Justice

MARIA LOURDES P.A. SERENO Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court En Banc. RENATO C. CORONA Chief Justice

40.
Lambino, et al. vs. COMELEC (G.R. No. 174153, 25 October 2006) Digest

On 15 February 2006, the group of Raul Lambino and Erico Aumentado (Lambino Group) commenced gathering signatures for an initiative petition to change the 1987 Constitution. On 25 August 2006, the Lambino Group filed a petition with the Commission on Elections (COMELEC) to hold a plebiscite that will ratify their initiative petition under Section 5(b) and (c) and Section 7 of Republic Act No. 6735 or the Initiative and Referendum Act. The proposed changes under the petition will shift the present Bicameral-Presidential system to a Unicameral-Parliamentary form of government. The Lambino Group claims that: (a) their petition had the support of 6,327,952 individuals constituting at least 12% of all registered voters, with each legislative district represented by at least 3% of its registered voters; and (b) COMELEC election registrars had verified the signatures of the 6.3 million individuals. The COMELEC, however, denied due course to the petition for lack of an enabling law governing initiative petitions to amend the Constitution, pursuant to the Supreme Courts ruling in Santiago vs. Commission on Elections. The Lambino Group elevated the matter to the Supreme Court, which also threw out the petition.

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 provision that allows a peoples initiative to propose amendments to the Constitution. While this provision does not expressly state that the petition must set forth the full text of the proposed amendments, the deliberations of the framers of our Constitution clearly show that: (a) the framers intended to adopt the relevant American jurisprudence on peoples initiative; and (b) in particular, 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. 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. 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 not after signing. 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. In the case of the Lambino Groups petition, theres not a single word, phrase, or sentence of text of the proposed changes in the signature sheet. Neither does the signature sheet state that the text of the proposed changes is attached to it. The signature sheet merely asks a question whether the people approve a shift from the BicameralPresidential 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. This omission is fatal. 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. Thats 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. 2. The initiative violates Section 2, Article XVII of the Constitution disallowing revision through initiatives 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 any amendment to, or revision of, this Constitution. In contrast, Section 2 of Article XVII, referring to the third mode, applies only to amendments to this Constitution. This distinction was intentional as shown by the deliberations of the Constitutional Commission. 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. Does the Lambino Groups initiative constitute an amendment or revision of the Constitution? Yes. By any legal test and under any jurisdiction, a shift from a BicameralPresidential 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. Courts have long recognized the distinction between an amendment and a revision of a constitution. 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 checksand-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. 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 is an amendment and not a revision. Similarly, a change reducing Filipino ownership of mass media companies from 100% to 60% is an amendment and not a revision. Also, a change requiring a college degree as an additional qualification for election to the Presidency is an amendment and not a revision. 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. 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 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. 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. 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. 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. 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. Under both the quantitative and qualitative tests, the Lambino Group initiative is a revision and not merely an amendment. Quantitatively, the Lambino Group 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. 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. 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. 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. The SC, however, ruled that 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. 3. A revisit of Santiago vs. COMELEC is not necessary The petition failed 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, therefore, 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. It settled that courts will not pass upon the constitutionality of a statute if the case can be resolved on some other grounds. Even assuming that RA 6735 is valid, this will not change the result here because the present petition violates Section 2, Article XVII of the Constitution, which provision must first be complied with even before complying with RA 6735. Worse, the petition violates the following provisions of RA 6735: a. Section 5(b), requiring that the people must sign the petition as signatories. The 6.3 million signatories did not sign the petition or the amended petition filed with the COMELEC. Only Attys. Lambino, Donato and Agra signed the petition and amended petition. b. Section 10(a), providing that no petition embracing more than one subject shall be submitted to the electorate. 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.