183.

PHIL COCONUT V REPUBLIC

GR No. 178193, January 24, 2012
FACTS:
This case questions the constitutionality of PD Nos. 755, 961 and 1468 in particular. As may be
recalled, P.D. No. 755, under the policy-declaring provision, authorized the distribution of UCPB
shares of stock free to coconut farmers. On the other hand, Section 2 of P.D. No. 755 authorized
the PCA to utilize portions of the CCSF to pay the financial commitment of the farmers to acquire
UCPB and to deposit portions of the CCSF levies with UCPB interest free. The CCSF, CIDF and like
levies that Philippine Coconut Authority is authorized to collect shall be considered as non-special
or fiduciary funds to be transferred to the general fund of the Government, meaning they shall
be deemed private funds.
ISSUE: Whether or not Section 1 of P.D. No. 755 is an invalid delegation of legislative power.
HELD:
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. 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. 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.
In this case, the requisite standards or criteria are absent in P.D. No. 755. This decree authorizes
PCA to distribute to coconut farmers, for free, the shares of stocks of UCPB and to pay from the
CCSF levy the financial commitments of the coconut farmers under the Agreement for the
acquisition of such bank. Yet, the decree does not even state who are to be considered as
coconut farmers. Would, say, one who plants a single coconut tree be already considered a
coconut farmer and, therefore, entitled to own UCPB shares? If so, how many shares shall be
given to him? The definition of a coconut farmer and the basis as to the number of shares a
farmer is entitled to receive for free are important variables to be determined by law and cannot
be left to the discretion of the implementing agency.
Moreover, P.D. No. 755 did not identify or delineate any clear condition as to how the disposition
of the UCPB shares or their conversion into private ownership will redound to the advancement
of the national policy declared under it. P.D. No. 755 seeks to accelerate the growth and
development of the coconut industry and achieve a vertical integration thereof so that coconut
farmers will become participants in, and beneficiaries of, such growth and development. The
said law gratuitously gave away public funds to private individuals, and converted them
exclusively into private property without any restriction as to its use that would reflect the
avowed national policy or public purpose. Conversely, the private individuals to whom the UCPB
shares were transferred are free to dispose of them by sale or any other mode from the moment
of their acquisition. P.D. No. 755 did not provide for any guideline, standard, condition or
restriction by which the said shares shall be distributed to the coconut farmers that would ensure
that the same will be undertaken to accelerate the growth and development of the coconut
industry pursuant to its national policy. Thus, P.D. No. 755, insofar as it grants PCA a veritable
carte blanche to distribute to coconut farmers UCPB shares at the level it may determine, as well
as the full disposition of such shares to private individuals in their private capacity without any
conditions or restrictions that would advance the laws national policy or public purpose, present
a case of undue delegation of legislative power.