EN BANC

AKBAYAN CITIZENS ACTION PARTY

(AKBAYAN), PAMBANSANG KATIPUNAN
NG MGA SAMAHAN SA KANAYUNAN
(PKSK), ALLIANCE OF PROGRESSIVE
LABOR (APL), VICENTE A. FABE,
ANGELITO R. MENDOZA, MANUEL P.
QUIAMBAO, ROSE BEATRIX CRUZANGELES, CONG. LORENZO R. TANADA
III, CONG. MARIO JOYO AGUJA, CONG.
LORETA ANN P. ROSALES, CONG. ANA
THERESIA HONTIVEROS-BARAQUEL,
AND CONG. EMMANUEL JOEL J.
VILLANUEVA,
Petitioners,

G.R. No. 170516

Present:
PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,

- versus

AZCUNA,
TINGA,

THOMAS G. AQUINO, in his capacity as

Undersecretary of the Department of
Trade and Industry (DTI) and Chairman
and Chief Delegate of the Philippine
Coordinating Committee (PCC) for the
Japan-Philippines Economic
Partnership Agreement, EDSEL T.
CUSTODIO, in his capacity as
Undersecretary of the Department of
Foreign Affairs (DFA) and Co-Chair of
the PCC for the JPEPA, EDGARDO
ABON, in his capacity as Chairman of
the Tariff Commission and lead
negotiator for Competition Policy and
Emergency Measures of the JPEPA,
MARGARITA SONGCO, in her capacity
as Assistant Director-General of the
National Economic Development
Authority (NEDA) and lead negotiator
for Trade in Services and Cooperation
of the JPEPA, MALOU MONTERO, in her
capacity as Foreign Service Officer I,
Office of the Undersecretary for
International Economic Relations of
the DFA and lead negotiator for the
General and Final Provisions of the
JPEPA, ERLINDA ARCELLANA, in her
capacity as Director of the Board of
Investments and lead negotiator for
Trade in Goods (General Rules) of the
JPEPA, RAQUEL ECHAGUE, in her
capacity as lead negotiator for Rules
of Origin of the JPEPA, GALLANT
SORIANO, in his official capacity as
Deputy Commissioner of the Bureau of
Customs and lead negotiator for
Customs Procedures and Paperless
Trading of the JPEPA, MA. LUISA

CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
REYES,
LEONARDO-DE CASTRO, &
BRION, JJ.

Promulgated:

July 16, 2008

GIGETTE IMPERIAL, in her capacity as

Director of the Bureau of Local
Employment of the Department of
Labor and Employment (DOLE) and
lead negotiator for Movement of
Natural Persons of the JPEPA,
PASCUAL DE GUZMAN, in his capacity
as Director of the Board of
Investments and lead negotiator for
Investment of the JPEPA, JESUS
MOTOOMULL, in his capacity as
Director for the Bureau of Product
Standards of the DTI and lead
negotiator for Mutual Recognition of
the JPEPA, LOUIE CALVARIO, in his
capacity as lead negotiator for
Intellectual Property of the JPEPA,
ELMER H. DORADO, in his capacity as
Officer-in-Charge of the Government
Procurement Policy Board Technical
Support Office, the government
agency that is leading the
negotiations on Government
Procurement of the JPEPA, RICARDO V.
PARAS, in his capacity as Chief State
Counsel of the Department of Justice
(DOJ) and lead negotiator for Dispute
Avoidance and Settlement of the
JPEPA, ADONIS SULIT, in his capacity
as lead negotiator for the General
and Final Provisions of the JPEPA,
EDUARDO R. ERMITA, in his capacity
as Executive Secretary, and ALBERTO
ROMULO, in his capacity as Secretary
of the DFA,*
Respondents.

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

DECISION

CARPIO MORALES, J.:

Petitioners non-government organizations, Congresspersons, citizens and taxpayers

seek via the present petition for mandamus and prohibition to obtain from
respondents the full text of the Japan-Philippines Economic Partnership Agreement
(JPEPA) including the Philippine and Japanese offers submitted during the
negotiation process and all pertinent attachments and annexes thereto.

Petitioners Congressmen Lorenzo R. Taada III and Mario Joyo Aguja filed on January
25, 2005 House Resolution No. 551 calling for an inquiry into the bilateral trade
agreements then being negotiated by the Philippine government, particularly the
JPEPA. The Resolution became the basis of an inquiry subsequently conducted by
the House Special Committee on Globalization (the House Committee) into the
negotiations of the JPEPA.

In the course of its inquiry, the House Committee requested herein respondent
Undersecretary Tomas Aquino (Usec. Aquino), Chairman of the Philippine
Coordinating Committee created under Executive Order No. 213 (CREATION OF A
PHILIPPINE COORDINATING COMMITTEE TO STUDY THE FEASIBILITY OF THE JAPANPHILIPPINES ECONOMIC PARTNERSHIP AGREEMENT)[1] to study and negotiate the
proposed JPEPA, and to furnish the Committee with a copy of the latest draft of the
JPEPA. Usec. Aquino did not heed the request, however.

Congressman Aguja later requested for the same document, but Usec. Aquino, by
letter of November 2, 2005, replied that the Congressman shall be provided with a
copy thereof once the negotiations are completed and as soon as a thorough legal
review of the proposed agreement has been conducted.

In a separate move, the House Committee, through

Congressman Herminio G. Teves, requested Executive Secretary Eduardo Ermita to
furnish it with all documents on the subject including the latest draft of the
proposed agreement, the requests and offers etc. [2] Acting on the request,
Secretary Ermita, by letter of June 23, 2005, wrote CongressmanTeves as follows:

In its letter dated 15 June 2005 (copy enclosed), [the] D[epartment of] F[oreign]
A[ffairs] explains that the Committees request to be furnished all documents
on the JPEPA may be difficult to accomplish at this time, since the
proposed Agreement has been a work in progress for about three years. A
copy of the draft JPEPA will however be forwarded to the Committee as soon as the
text thereof is settled and complete. (Emphasis supplied)

Congressman Aguja also requested NEDA Director-General Romulo Neri and Tariff
Commission Chairman Edgardo Abon, by letter of July 1, 2005, for copies of the
latest text of the JPEPA.

Chairman Abon replied, however, by letter of July 12, 2005 that the Tariff
Commission does not have a copy of the documents being requested, albeit he was
certain thatUsec. Aquino would provide the Congressman with a copy once the
negotiation is completed. And by letter of July 18, 2005, NEDA Assistant DirectorGeneral Margarita R.Songco informed the Congressman that his request addressed
to Director-General Neri had been forwarded to Usec. Aquino who would be in the
best position to respond to the request.

In its third hearing conducted on August 31, 2005, the House Committee resolved to
issue a subpoena for the most recent draft of the JPEPA, but the same was not
pursued because by Committee Chairman Congressman Teves information, then
House Speaker Jose de Venecia had requested him to hold in abeyance the issuance
of the subpoena until the President gives her consent to the disclosure of the
documents.[3]

Amid speculations that the JPEPA might be signed by the Philippine government
within December 2005, the present petition was filed on December 9, 2005.[4] The
agreement was to be later signed on September 9, 2006 by President
Gloria Macapagal-Arroyo and Japanese Prime Minister Junichiro Koizumi
in Helsinki, Finland, following which the President endorsed it to the Senate for its
concurrence pursuant to Article VII, Section 21 of the Constitution. To date, the
JPEPA is still being deliberated upon by the Senate.

The JPEPA, which will be the first bilateral free trade agreement to be entered into
by the Philippines with another country in the event the Senate grants its consent to
it, covers a broad range of topics which respondents enumerate as follows: trade in
goods, rules of origin, customs procedures, paperless trading, trade in services,
investment, intellectual property rights, government procurement, movement of
natural persons, cooperation, competition policy, mutual recognition, dispute
avoidance and settlement, improvement of the business environment, and general
and final provisions.[5]

While the final text of the JPEPA has now been made accessible to the public
since September 11, 2006,[6] respondents do not dispute that, at the time the
petition was filed up to the filing of petitioners Reply when the JPEPA was still being
negotiated the initial drafts thereof were kept from public view.

Before delving on the substantive grounds relied upon by petitioners in support of

the petition, the Court finds it necessary to first resolve some material procedural
issues.

Standing

For a petition for mandamus such as the one at bar to be given due course, it must
be instituted by a party aggrieved by the alleged inaction of any tribunal,
corporation, board or person which unlawfully excludes said party from the
enjoyment of a legal right.[7] Respondents deny that petitioners have such standing
to sue. [I]n the interest of a speedy and definitive resolution of the substantive
issues raised, however, respondents consider it sufficient to cite a portion of the
ruling in Pimentel v. Office of Executive Secretary [8]which emphasizes the need for a
personal stake in the outcome of the controversy on questions of standing.

In a petition anchored upon the right of the people to information on matters of

public concern, which is a public right by its very nature, petitioners need not show
that they have any legal or special interest in the result, it being sufficient to show
that they are citizens and, therefore, part of the general public which possesses the
right.[9] As the present petition is anchored on the right to information and
petitioners are all suing in their capacity as citizens and groups of citizens including
petitioners-members of the House of Representatives who additionally are suing in

their capacity as such, the standing of petitioners to file the present suit is grounded
in jurisprudence.

Mootness

Considering, however, that [t]he principal relief petitioners are praying for is the
disclosure of the contents of the JPEPA prior to its finalization between the two
States parties,[10] public disclosure of the text of the JPEPA after its signing by the
President, during the pendency of the present petition, has been largely rendered
moot and academic.

With the Senate deliberations on the JPEPA still pending, the agreement as it now
stands cannot yet be considered as final and binding between the two
States. Article 164 of the JPEPA itself provides that the agreement does not take
effect immediately upon the signing thereof. For it must still go through the
procedures required by the laws of each country for its entry into force, viz:

Article 164
Entry into Force

This Agreement shall enter into force on the thirtieth day after the date on which
the Governments of the Parties exchange diplomatic notes informing each
other that their respective legal procedures necessary for entry into force
of this Agreement have been completed. It shall remain in force unless
terminated as provided for in Article 165.[11] (Emphasis supplied)

President Arroyos endorsement of the JPEPA to the Senate for concurrence is part of
the legal procedures which must be met prior to the agreements entry into force.

The text of the JPEPA having then been made accessible to the public, the petition
has become moot and academic to the extent that it seeks the disclosure of the full
text thereof.

The petition is not entirely moot, however, because petitioners seek to obtain, not
merely the text of the JPEPA, but also the Philippine and Japanese offers in the
course of the negotiations.[12]

A discussion of the substantive issues, insofar as they impinge on petitioners

demand for access to the Philippine and Japanese offers, is thus in order.

Grounds relied upon by petitioners

Petitioners assert, first, that the refusal of the government to disclose the
documents bearing on the JPEPA negotiations violates their right to information
on matters of publicconcern[13] and contravenes other constitutional provisions on
transparency, such as that on the policy of full public disclosure of all transactions
involving public interest.[14]Second, they contend that non-disclosure of the same
documents undermines their right to effective and reasonable participation in all
levels of social, political, and economic decision-making. [15] Lastly, they proffer that
divulging the contents of the JPEPA only after the agreement has been concluded
will effectively make the Senate into a mere rubber stamp of the Executive, in
violation of the principle of separation of powers.

Significantly, the grounds relied upon by petitioners for the disclosure of the latest
text of the JPEPA are, except for the last, the same as those cited for the disclosure
of the Philippine and Japanese offers.

The first two grounds relied upon by petitioners which bear on the merits of
respondents claim of privilege shall be discussed. The last, being
purely speculatory given that the Senate is still deliberating on the JPEPA, shall not.

The JPEPA is a matter of public concern

To be covered by the right to information, the information sought must meet the
threshold requirement that it be a matter of public concern. Apropos is the teaching
of Legaspi v. Civil Service Commission:

In determining whether or not a particular information is of public concern there is

no rigid test which can be applied. Public concern like public interest is a term that
eludes exact definition.Both terms embrace a broad spectrum of subjects which the
public may want to know, either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an ordinary citizen. In the
final analysis, it is for the courts to determine on a case by case basis whether the
matter at issue is of interest or importance, as it relates to or affects the public.
[16]
(Underscoring supplied)

From the nature of the JPEPA as an international trade agreement, it is evident that
the Philippine and Japanese offers submitted during the negotiations towards its
execution are matters of public concern. This, respondents do not dispute. They
only claim that diplomatic negotiations are covered by the doctrine of executive
privilege, thus constituting an exception to the right to information and the policy
of full public disclosure.

Respondents claim of privilege

It is well-established in jurisprudence that neither the right to information nor the

policy of full public disclosure is absolute, there being matters which, albeit of public
concern or public interest, are recognized as privileged in nature. The types of
information which may be considered privileged have been elucidated in Almonte v.
Vasquez,[17] Chavez v. PCGG,[18] Chavez v. Public Estates Authority,[19] and most

recently in Senate v. Ermita[20] where the Court reaffirmed the validity of the
doctrine of executive privilege in this jurisdiction and dwelt on its scope.

Whether a claim of executive privilege is valid depends on the ground invoked to

justify it and the context in which it is made.[21] In the present case, the ground for
respondents claim of privilege is set forth in their Comment, viz:

x x x The categories of information that may be considered privileged includes

matters of diplomatic character and under negotiation and review. In this case, the
privileged character of thediplomatic negotiations has been categorically
invoked and clearly explained by respondents particularly respondent DTI Senior
Undersecretary.

The documents on the proposed JPEPA as well as the text which is subject to
negotiations and legal review by the parties fall under the exceptions to the right of
access to information on matters of public concern and policy of public
disclosure. They come within the coverage of executive privilege. At the time when
the Committee was requesting for copies of such documents, the negotiations were
ongoing as they are still now and the text of the proposed JPEPA is still uncertain
and subject to change. Considering the status and nature of such documents then
and now, these are evidently covered by executive privilege consistent with existing
legal provisions and settled jurisprudence.

Practical and strategic considerations likewise counsel against the disclosure of the
rolling texts which may undergo radical change or portions of which may be totally
abandoned. Furthermore, the negotiations of the representatives of the
Philippines as well as of Japan must be allowed to explore alternatives in
the course of the negotiations in the same manner as judicial
deliberations and working drafts of opinions are accorded strict
confidentiality.[22] (Emphasis and underscoring supplied)

The ground relied upon by respondents is thus not simply that the information
sought involves a diplomatic matter, but that it pertains to diplomatic
negotiations then in progress.

Privileged character of diplomatic negotiations

The privileged character of diplomatic negotiations has been recognized in this

jurisdiction. In discussing valid limitations on the right to information, the Court
in Chavez v. PCGG held that information on inter-government exchanges prior to the
conclusion of treaties and executive agreements may be subject to reasonable
safeguards for the sake of national interest. [23] Even earlier, the same privilege was
upheld in Peoples Movement for Press Freedom (PMPF) v. Manglapus[24] wherein the
Court discussed the reasons for the privilege in more precise terms.

In PMPF v. Manglapus, the therein petitioners were seeking information from the
Presidents representatives on the state of the then on-going negotiations of the RPUS Military Bases Agreement.[25] The Court denied the petition, stressing
that secrecy of negotiations with foreign countries is not violative of the

constitutional provisions of freedom of speech or of the press nor of the freedom

of access to information. The Resolution went on to state, thus:

The nature of diplomacy requires centralization of authority and

expedition of decision which are inherent in executive action. Another
essential characteristic of diplomacy is its confidential nature. Although
much has been said about open and secret diplomacy, with disparagement of the
latter, Secretaries of State Hughes and Stimson have clearly analyzed and justified
the practice. In the words of Mr. Stimson:

A complicated negotiation . . . cannot be carried through without many,

many private talks and discussion, man to man; many tentative
suggestions and proposals.Delegates from other countries come and tell
you in confidence of their troubles at home and of their differences with
other countries and with other delegates; they tell you of what they would
do under certain circumstances and would not do under other
circumstances. . . If these reports . . . should become public . . . who would
ever trust American Delegations in another conference? (United States
Department of State, Press Releases, June 7, 1930, pp. 282-284.).

xxxx

There is frequent criticism of the secrecy in which negotiation with foreign

powers on nearly all subjects is concerned. This, it is claimed, is
incompatible with the substance of democracy. As expressed by one writer, It
can be said that there is no more rigid system of silence anywhere in the world. (E.J.
Young, Looking Behind the Censorship, J. B. Lippincott Co., 1938) President Wilson in
starting his efforts for the conclusion of the World War declared that we must have
open covenants, openly arrived at. He quickly abandoned his thought.

No one who has studied the question believes that such a method of publicity is
possible. In the moment that negotiations are started, pressure groups
attempt to muscle in. An ill-timed speech by one of the parties or a frank
declaration of the concession which are exacted or offered on both sides
would quickly lead to widespread propaganda to block the
negotiations. After a treaty has been drafted and its terms are fully
published, there is ample opportunity for discussion before it is
approved. (The New American Government and Its Works, James T. Young,
4th Edition, p. 194) (Emphasis and underscoring supplied)

Still in PMPF v. Manglapus, the Court adopted the doctrine in U.S. v. Curtiss-Wright
Export Corp.[26] that the President is the sole organ of the nation in its negotiations
with foreign countries, viz:

x x x In this vast external realm, with its important, complicated, delicate and
manifold problems, the President alone has the power to speak or listen as a
representative of the nation. He makestreaties with the advice and consent of the
Senate; but he alone negotiates. Into the field of negotiation the Senate cannot
intrude; and Congress itself is powerless to invade it. As Marshall said in his great
argument of March 7, 1800, in the House of Representatives, The President is the
sole organ of the nation in its external relations, and its sole

representative with foreign nations. Annals, 6th Cong., col. 613. . . (Emphasis
supplied; underscoring in the original)

Applying the principles adopted in PMPF v. Manglapus, it is clear that while the final
text of the JPEPA may not be kept perpetually confidential since there should be
ample opportunity for discussion before [a treaty] is approved the offers exchanged
by the parties during the negotiations continue to be privileged even after the JPEPA
is published. It is reasonable to conclude that the Japanese representatives
submitted their offers with the understanding that historic
confidentiality[27] would govern the same. Disclosing these offers could impair the
ability of the Philippines to deal not only with Japan but with other foreign
governments in future negotiations.

A ruling that Philippine offers in treaty negotiations should now be open to public
scrutiny would discourage future Philippine representatives from frankly expressing
their views during negotiations. While, on first impression, it appears wise to deter
Philippine representatives from entering into compromises, it bears noting that
treaty negotiations, or any negotiation for that matter, normally involve a process
of quid pro quo, and oftentimes negotiators have to be willing to grant
concessions in an area of lesser importance in order to obtain more
favorable terms in an area of greater national interest. Apropos are the
following observations of Benjamin S. Duval, Jr.:

x x x [T]hose involved in the practice of negotiations appear to be in

agreement that publicity leads to grandstanding, tends to freeze
negotiating positions, and inhibits the give-and-take essential to
successful negotiation. As Sissela Bok points out, if negotiators have more to
gain from being approved by their own sides than by making a reasoned agreement
with competitors or adversaries, then they are inclined to 'play to the gallery . . .'' In
fact, the public reaction may leave them little option. It would be a brave, or
foolish, Arab leader who expressed publicly a willingness for peace with Israel that
did not involve the return of the entire West Bank, or Israeli leader who stated
publicly a willingness to remove Israel's existing settlements from Judea and
Samaria in return for peace.[28] (Emphasis supplied)

Indeed, by hampering the ability of our representatives to compromise, we may be

jeopardizing higher national goals for the sake of securing less critical ones.
Diplomatic negotiations, therefore, are recognized as privileged in this jurisdiction,
the JPEPA negotiations constituting no exception. It bears emphasis, however, that
such privilege is only presumptive. For as Senate v. Ermita holds, recognizing a
type of information as privileged does not mean that it will be considered privileged
in all instances.Only after a consideration of the context in which the claim is made
may it be determined if there is a public interest that calls for the disclosure of the
desired information, strong enough to overcome its traditionally privileged status.

Whether petitioners have established the presence of such a public interest shall be
discussed later. For now, the Court shall first pass upon the arguments raised by
petitioners against the application of PMPF v. Manglapus to the present case.

Arguments proffered by petitioners against the application of PMPF

v. Manglapus

Petitioners argue that PMPF v. Manglapus cannot be applied in toto to the present
case, there being substantial factual distinctions between the two.

To petitioners, the first and most fundamental distinction lies in the nature of the
treaty involved. They stress that PMPF v. Manglapus involved the Military Bases
Agreement which necessarily pertained to matters affecting national security;
whereas the present case involves an economic treaty that seeks to regulate trade
and commerce between the Philippines and Japan, matters which, unlike those
covered by the Military Bases Agreement, are not so vital to national security to
disallow their disclosure.

Petitioners argument betrays a faulty assumption that information, to be considered

privileged, must involve national security. The recognition in Senate v. Ermita[29] that
executive privilege has encompassed claims of varying kinds, such that it may even
be more accurate to speak of executive privileges, cautions against such
generalization.

While there certainly are privileges grounded on the necessity of safeguarding

national security such as those involving military secrets, not all are founded
thereon. One example is the informers privilege, or the privilege of the
Government not to disclose the identity of a person or persons who furnish
information of violations of law to officers charged with the enforcement of that law.
[30]
The suspect involved need not be so notorious as to be a threat to national
security for this privilege to apply in any given instance.Otherwise, the privilege
would be inapplicable in all but the most high-profile cases, in which case not only
would this be contrary to long-standing practice. It would also be highly prejudicial
to law enforcement efforts in general.

Also illustrative is the privilege accorded to presidential communications,

which are presumed privileged without distinguishing between those which involve
matters of national security and those which do not, the rationale for the privilege
being that

x x x [a] frank exchange of exploratory ideas and assessments, free from the glare
of publicity and pressure by interested parties, is essential to protect the
independence of decision-makingof those tasked to exercise Presidential,
Legislative and Judicial power. x x x[31] (Emphasis supplied)

In the same way that the privilege for judicial deliberations does not depend on the
nature of the case deliberated upon, so presidential communications are privileged
whether they involve matters of national security.
It bears emphasis, however, that the privilege accorded to presidential
communications is not absolute, one significant qualification being that the
Executive cannot, any more than the other branches of government, invoke a
general confidentiality privilege to shield its officials and employees from
investigations by the proper governmental institutions into possible criminal

wrongdoing. [32] This qualification applies whether the privilege is being invoked in
the context of a judicial trial or a congressional investigation conducted in aid of
legislation.[33]

Closely related to the presidential communications privilege is the deliberative

process privilege recognized in the United States. As discussed by the U.S.
Supreme Court inNLRB v. Sears, Roebuck & Co,[34] deliberative process
covers documents reflecting advisory opinions, recommendations and deliberations
comprising part of a process by which governmental decisions and policies are
formulated. Notably, the privileged status of such documents rests, not on the
need to protect national security but, on the obvious realization that officials
will not communicate candidly among themselves if each remark is a potential item
of discovery and front page news, the objective of the privilege being to enhance
the quality of agency decisions. [35]

The diplomatic negotiations privilege bears a close resemblance to the

deliberative process and presidential communications privilege. It may be readily
perceived that the rationale for the confidential character of diplomatic
negotiations, deliberative process, and presidential communications is similar, if not
identical.
The earlier discussion on PMPF v. Manglapus[36] shows that the privilege for
diplomatic negotiations is meant to encourage a frank exchange of exploratory
ideas between the negotiating parties by shielding such negotiations from public
view. Similar to the privilege for presidential communications, the diplomatic
negotiations privilege seeks, through the same means, to protect the independence
in decision-making of the President, particularly in its capacity as the sole organ of
the nation in its external relations, and its sole representative with foreign
nations. And, as with the deliberative process privilege, the privilege accorded to
diplomatic negotiations arises, not on account of the content of the information per
se, but because the information is part of a process of deliberation which, in pursuit
of the public interest, must be presumed confidential.

The decision of the U.S. District Court, District of Columbia in Fulbright & Jaworski v.
Department of the Treasury[37] enlightens on the close relation between diplomatic
negotiations and deliberative process privileges. The plaintiffs in that case sought
access to notes taken by a member of the U.S. negotiating team during the U.S.French taxtreaty negotiations. Among the points noted therein were the issues to
be discussed, positions which the French and U.S. teams took on some points, the
draft language agreed on, and articles which needed to be amended. Upholding the
confidentiality of those notes, Judge Green ruled, thus:

Negotiations between two countries to draft a treaty represent a true

example of a deliberative process. Much give-and-take must occur for the
countries to reach an accord. A description of the negotiations at any one point
would not provide an onlooker a summary of the discussions which could later be
relied on as law. It would not be working law as the points discussed and positions
agreed on would be subject to change at any date until the treaty was signed by the
President and ratified by the Senate.
The policies behind the deliberative process privilege support nondisclosure. Much harm could accrue to the negotiations process if these
notes were revealed. Exposure of the pre-agreement positions of the
French negotiators might well offend foreign governments and would lead
to less candor by the U. S. in recording the events of the negotiations
process.As several months pass in between negotiations, this lack of record could

hinder readily the U. S. negotiating team. Further disclosure would reveal

prematurely adopted policies. If these policies should be changed, public confusion
would result easily.
Finally, releasing these snapshot views of the negotiations would be
comparable to releasing drafts of the treaty, particularly when the notes
state the tentative provisions and language agreed on. As drafts of
regulations typically are protected by the deliberative process
privilege, Arthur Andersen & Co. v. Internal Revenue Service, C.A. No. 80-705
(D.C.Cir., May 21, 1982), drafts of treaties should be accorded the same
protection. (Emphasis and underscoring supplied)

Clearly, the privilege accorded to diplomatic negotiations follows as a

logical consequence from the privileged character of the deliberative
process.

The Court is not unaware that in Center for International Environmental Law (CIEL),
et al. v. Office of U.S. Trade Representative[38] where the plaintiffs sought information
relating to the just-completed negotiation of a United States-Chile Free Trade
Agreement the same district court, this time under Judge Friedman, consciously
refrained from applying the doctrine in Fulbright and ordered the disclosure of the
information being sought.

Since the factual milieu in CIEL seemed to call for the straight application of the
doctrine in Fulbright, a discussion of why the district court did not apply the same
would help illumine this Courts own reasons for deciding the present case along the
lines of Fulbright.

In both Fulbright and CIEL, the U.S. government cited a statutory basis for
withholding information, namely, Exemption 5 of the Freedom of Information Act
(FOIA).[39] In order to qualify for protection under Exemption 5, a document must
satisfy two conditions: (1) it must be either inter-agency or intra-agency in
nature, and (2) it must be bothpre-decisional and part of the agency's
deliberative or decision-making process.[40]

Judge Friedman, in CIEL, himself cognizant of a superficial similarity of context

between the two cases, based his decision on what he perceived to be a significant
distinction: he found the negotiators notes that were sought in Fulbright to be
clearly internal, whereas the documents being sought in CIEL were those produced
by or exchanged with an outside party, i.e. Chile. The documents subject
of Fulbright being clearly internal in character, the question of disclosure therein
turned not on the threshold requirement of Exemption 5 that the document be interagency, but on whether the documents were part of the agency's pre-decisional
deliberative process. On this basis, Judge Friedman found that Judge Green's
discussion [in Fulbright] of the harm that could result from disclosure therefore is
irrelevant, since the documents at issue [in CIEL] are not inter-agency, and
the Court does not reach the question of deliberative process. (Emphasis
supplied)

In fine, Fulbright was not overturned. The court in CIEL merely found the same to be
irrelevant in light of its distinct factual setting. Whether this conclusion was valid a
question on which this Court would not pass the ruling in Fulbright that
[n]egotiations between two countries to draft a treaty represent a true example of a

deliberative process was left standing, since the CIEL court explicitly stated that it
did not reach the question of deliberative process.

Going back to the present case, the Court recognizes that the information sought by
petitioners includes documents produced and communicated by a party external to
the Philippine government, namely, the Japanese representatives in the JPEPA
negotiations, and to that extent this case is closer to the factual circumstances
of CIEL than those ofFulbright.

Nonetheless, for reasons which shall be discussed shortly, this Court echoes the
principle articulated in Fulbright that the public policy underlying the deliberative
process privilege requires that diplomatic negotiations should also be accorded
privileged status, even if the documents subject of the present case cannot be
described as purely internal in character.

It need not be stressed that in CIEL, the court ordered the disclosure of information
based on its finding that the first requirement of FOIA Exemption 5 that the
documents be inter-agency was not met. In determining whether the government
may validly refuse disclosure of the exchanges between the U.S. and Chile, it
necessarily had to deal with this requirement, it being laid down by a statute
binding on them.

In this jurisdiction, however, there is no counterpart of the FOIA, nor is there any
statutory requirement similar to FOIA Exemption 5 in particular. Hence, Philippine
courts, when assessing a claim of privilege for diplomatic negotiations, are more
free to focus directly on the issue of whether the privilege being claimed is
indeed supported by public policy, without having to consider as the CIEL court
did if these negotiations fulfill a formal requirement of being inter-agency. Important
though that requirement may be in the context of domestic negotiations, it need not
be accorded the same significance when dealing with international negotiations.

There being a public policy supporting a privilege for diplomatic negotiations for the
reasons explained above, the Court sees no reason to modify, much less abandon,
the doctrine in PMPF v. Manglapus.

A second point petitioners proffer in their attempt to differentiate PMPF

v. Manglapus from the present case is the fact that the petitioners therein consisted
entirely of members of the mass media, while petitioners in the present case
include members of the House of Representatives who invoke their right to
information not just as citizens but as members of Congress.

Petitioners thus conclude that the present case involves the right of members of
Congress to demand information on negotiations of international trade agreements
from the Executive branch, a matter which was not raised in PMPF v. Manglapus.

While indeed the petitioners in PMPF v. Manglapus consisted only of members of the
mass media, it would be incorrect to claim that the doctrine laid down therein has

no bearing on a controversy such as the present, where the demand for information
has come from members of Congress, not only from private citizens.

The privileged character accorded to diplomatic negotiations does

not ipso facto lose all force and effect simply because the same privilege
is now being claimed under different circumstances. The probability of the
claim succeeding in the new context might differ, but to say that the privilege, as
such, has no validity at all in that context is another matter altogether.

The Courts statement in Senate v. Ermita that presidential refusals to furnish

information may be actuated by any of at least three distinct kinds of considerations
[state secrets privilege, informers privilege, and a generic privilege for internal
deliberations], and may be asserted, with differing degrees of success, in the
context of either judicial or legislative investigations, [41] implies that a privilege,
once recognized, may be invoked under different procedural settings. That this
principle holds true particularly with respect to diplomatic negotiations may be
inferred from PMPF v. Manglapus itself, where the Court held that it is the President
alone who negotiates treaties, and not even the Senate or the House of
Representatives, unless asked, may intrude upon that process.

Clearly, the privilege for diplomatic negotiations may be invoked not only against
citizens demands for information, but also in the context of legislative
investigations.

Hence, the recognition granted in PMPF v. Manglapus to the privileged character of

diplomatic negotiations cannot be considered irrelevant in resolving the present
case, the contextual differences between the two cases notwithstanding.
As third and last point raised against the application of PMPF v. Manglapus in this
case, petitioners proffer that the socio-political and historical contexts of the two
cases are worlds apart. They claim that the constitutional traditions and concepts
prevailing at the time PMPF v. Manglapus came about, particularly the school of
thought that the requirements of foreign policy and the ideals of transparency were
incompatible with each other or the incompatibility hypothesis, while valid when
international relations were still governed by power, politics and wars, are no longer
so in this age of international cooperation. [42]

Without delving into petitioners assertions respecting the incompatibility

hypothesis, the Court notes that the ruling in PMPF v. Manglapus is grounded more
on the nature of treaty negotiations as such than on a particular socio-political
school of thought. If petitioners are suggesting that the nature of treaty negotiations
have so changed that [a]n ill-timed speech by one of the parties or a frank
declaration of the concession which are exacted or offered on both sides no
longer lead[s] to widespread propaganda to block the negotiations, or that parties in
treaty negotiations no longer expect their communications to be governed by
historic confidentiality, the burden is on them to substantiate the same. This
petitioners failed to discharge.

Whether the privilege applies only at certain stages of the negotiation

process

Petitioners admit that diplomatic negotiations on the JPEPA are entitled to a

reasonable amount of confidentiality so as not to jeopardize the diplomatic
process. They argue, however, that the same is privileged only at certain stages of
the negotiating process, after which such information must necessarily be revealed
to the public.[43] They add that the duty to disclose this information was vested in
the government when the negotiations moved from the formulation and exploratory
stage to the firming up of definite propositions or official recommendations,
citing Chavez v. PCGG[44] and Chavez v. PEA.[45]

The following statement in Chavez v. PEA, however, suffices to show that the
doctrine in both that case and Chavez v. PCGG with regard to the duty to disclose
definite propositions of the government does not apply to diplomatic negotiations:

We rule, therefore, that the constitutional right to information includes official

information on on-going negotiations before a final contract. The information,
however, must constitutedefinite propositions by the government and
should not cover recognized exceptions like privileged information,
military and diplomatic secrets and similar matters affecting national
security and public order. x x x[46] (Emphasis and underscoring supplied)

It follows from this ruling that even definite propositions of the government may not
be disclosed if they fall under recognized exceptions. The privilege for diplomatic
negotiations is clearly among the recognized exceptions, for the footnote to the
immediately quoted ruling cites PMPF v. Manglapus itself as an authority.

Whether there is sufficient public interest to overcome the claim of

privilege

It being established that diplomatic negotiations enjoy a presumptive privilege

against disclosure, even against the demands of members of Congress for
information, the Court shall now determine whether petitioners have shown the
existence of a public interest sufficient to overcome the privilege in this instance.

To clarify, there are at least two kinds of public interest that must be taken into
account. One is the presumed public interest in favor of keeping the subject
information confidential, which is the reason for the privilege in the first place,
and the other is the public interest in favor of disclosure, the existence of which
must be shown by the party asking for information. [47]

The criteria to be employed in determining whether there is a sufficient public

interest in favor of disclosure may be gathered from cases such as U.S. v. Nixon,
[48]
Senate Select Committee on Presidential Campaign Activities v. Nixon,[49] and In
re Sealed Case.[50]

U.S. v. Nixon, which involved a claim of the presidential communications privilege

against the subpoena duces tecum of a district court in a criminal case,
emphasized the need to balance such claim of privilege against the constitutional
duty of courts to ensure a fair administration of criminal justice.

x x x the allowance of the privilege to withhold evidence that is demonstrably

relevant in a criminal trial would cut deeply into the guarantee of due process
of law and gravely impair the basic function of the courts. A Presidents
acknowledged need for confidentiality in the communications of his office
is general in nature, whereas the constitutional need for production of
relevant evidence in a criminal proceeding is specific and central to the
fair adjudication of a particular criminal case in the administration of
justice. Without access to specific facts a criminal prosecution may be totally
frustrated. The Presidents broad interest in confidentiality of communications will
not be vitiated by disclosure of a limited number of conversations preliminarily
shown to have some bearing on the pending criminal cases. (Emphasis, italics and
underscoring supplied)

Similarly, Senate Select Committee v. Nixon,[51] which involved a claim of the

presidential communications privilege against the subpoena duces tecum of a
Senate committee, spoke of the need to balance such claim with the duty of
Congress to perform its legislative functions.

The staged decisional structure established in Nixon v. Sirica was designed to

ensure that the President and those upon whom he directly relies in the
performance of his duties could continue to work under a general assurance that
their deliberations would remain confidential. So long as the presumption that
the public interest favors confidentiality can be defeated only by astrong
showing of need by another institution of government- a showing that the
responsibilities of that institution cannot responsibly be fulfilled without
access to records of the President's deliberations- we believed in Nixon
v. Sirica, and continue to believe, that the effective functioning of the presidential
office will not be impaired. x x x

xxxx

The sufficiency of the Committee's showing of need has come to depend,

therefore, entirely on whether the subpoenaed materials are critical to the
performance of its legislative functions. x x x (Emphasis and underscoring
supplied)

In re Sealed Case[52] involved a claim of the deliberative process and presidential

communications privileges against a subpoena duces tecum of a grand jury. On the
claim of deliberative process privilege, the court stated:

The deliberative process privilege is a qualified privilege and can be overcome

by a sufficient showing of need. This need determination is to be made
flexibly on a case-by-case, ad hoc basis. "[E]ach time [the deliberative process
privilege] is asserted the district court must undertake a fresh balancing of the
competing interests," taking into account factors such as "the relevance of
the evidence," "the availability of other evidence," "the seriousness of the
litigation," "the role of the government," and the "possibility of future
timidity by government employees. x x x (Emphasis, italics and underscoring
supplied)

Petitioners have failed to present the strong and sufficient showing of need referred
to in the immediately cited cases. The arguments they proffer to establish their
entitlement to the subject documents fall short of this standard.

Petitioners go on to assert that the non-involvement of the Filipino people in the

JPEPA negotiation process effectively results in the bargaining away of their
economic and property rights without their knowledge and participation, in violation
of the due process clause of the Constitution. They claim, moreover, that it is
essential for the people to have access to the initial offers exchanged during the
negotiations since only through such disclosure can their constitutional right to
effectively participate in decision-making be brought to life in the context of
international trade agreements.

Whether it can accurately be said that the Filipino people were not involved in the
JPEPA negotiations is a question of fact which this Court need not resolve. Suffice it
to state that respondents had presented documents purporting to show that public
consultations were conducted on the JPEPA. Parenthetically, petitioners consider
these alleged consultations as woefully selective and inadequate. [53]

AT ALL EVENTS, since it is not disputed that the offers exchanged by the Philippine
and Japanese representatives have not been disclosed to the public, the Court shall
pass upon the issue of whether access to the documents bearing on them is, as
petitioners claim, essential to their right to participate in decision-making.

The case for petitioners has, of course, been immensely weakened by the disclosure
of the full text of the JPEPA to the public since September 11, 2006, even as it is still
being deliberated upon by the Senate and, therefore, not yet binding on the
Philippines. Were the Senate to concur with the validity of the JPEPA at this moment,
there has already been, in the words of PMPF v. Manglapus, ample opportunity for
discussion before [the treaty] is approved.

The text of the JPEPA having been published, petitioners have failed to convince this
Court that they will not be able to meaningfully exercise their right to participate in
decision-making unless the initial offers are also published.

It is of public knowledge that various non-government sectors and private citizens

have already publicly expressed their views on the JPEPA, their comments not being
limited to general observations thereon but on its specific provisions. Numerous
articles and statements critical of the JPEPA have been posted on the Internet.
[54]
Given these developments, there is no basis for petitioners claim that access to
the Philippine and Japanese offers is essential to the exercise of their right to
participate in decision-making.

Petitioner-members of the House of Representatives additionally anchor their claim

to have a right to the subject documents on the basis of Congress inherent power to
regulate commerce, be it domestic or international. They allege that Congress
cannot meaningfully exercise the power to regulate international trade agreements
such as the JPEPA without being given copies of the initial offers exchanged during
the negotiations thereof. In the same vein, they argue that the President cannot
exclude Congress from the JPEPA negotiations since whatever power and authority
the President has to negotiate international trade agreements is derived only by

delegation of Congress, pursuant to Article VI, Section 28(2) of the Constitution and
Sections 401 and 402 of Presidential Decree No. 1464. [55]

The subject of Article VI Section 28(2) of the Constitution is not the power to
negotiate treaties and international agreements, but the power to fix tariff rates,
import and export quotas, and other taxes. Thus it provides:

(2) The Congress may, by law, authorize the President to fix within specified limits,
and subject to such limitations and restrictions as it may impose, tariff rates, import
and export quotas, tonnage and wharfage dues, and other duties or imposts within
the framework of the national development program of the Government.

As to the power to negotiate treaties, the constitutional basis thereof is Section 21

of Article VII the article on the Executive Department which states:

No treaty or international agreement shall be valid and effective unless concurred in

by at least two-thirds of all the Members of the Senate.

The doctrine in PMPF v. Manglapus that the treaty-making power is exclusive to the
President, being the sole organ of the nation in its external relations, was echoed
in BAYAN v. Executive Secretary[56] where the Court held:

By constitutional fiat and by the intrinsic nature of his office, the

President, as head of State, is the sole organ and authority in the external
affairs of the country. In many ways, the President is the chief architect of
the nation's foreign policy; his "dominance in the field of foreign relations
is (then) conceded." Wielding vast powers and influence, his conduct in
the external affairs of the nation, as Jefferson describes, is executive altogether.

As regards the power to enter into treaties or international agreements,

the Constitution vests the same in the President, subject only to the
concurrence of at least two thirds vote of all the members of the
Senate. In this light, the negotiation of the VFA and the subsequent ratification of
the agreement are exclusive acts which pertain solely to the President, in the lawful
exercise of his vast executive and diplomatic powers granted him no less
than by the fundamental law itself. Into the field of negotiation the Senate
cannot intrude, and Congress itself is powerless to invade it. x x x (Italics in
the original; emphasis and underscoring supplied)

The same doctrine was reiterated even more recently in Pimentel v. Executive
Secretary[57] where the Court ruled:

In our system of government, the President, being the head of state, is regarded
as the sole organ and authority in external relations and is the country's
sole representative with foreign nations. As the chief architect of foreign
policy, the President acts as the country's mouthpiece with respect to international
affairs. Hence, the President is vested with the authority to deal with foreign
states and governments, extend or withhold recognition, maintain diplomatic
relations, enter into treaties, and otherwise transact the business of foreign
relations. In the realm of treaty-making, the President has the sole
authority to negotiate with other states.

Nonetheless, while the President has the sole authority to negotiate and
enter into treaties, the Constitution provides a limitation to his power by
requiring the concurrence of 2/3 of all the members of the Senate for
the validity of the treaty entered into by him. x x x (Emphasis and
underscoring supplied)

While the power then to fix tariff rates and other taxes clearly belongs to Congress,
and is exercised by the President only by delegation of that body, it has long been
recognized that the power to enter into treaties is vested directly and exclusively in
the President, subject only to the concurrence of at least two-thirds of all the
Members of the Senate for the validity of the treaty. In this light, the authority of the
President to enter into trade agreements with foreign nations provided under P.D.
1464[58] may be interpreted as an acknowledgment of a power already inherent
in its office. It may not be used as basis to hold the President or its representatives
accountable to Congress for the conduct of treaty negotiations.
This is not to say, of course, that the Presidents power to enter into treaties is
unlimited but for the requirement of Senate concurrence, since the President must
still ensure that all treaties will substantively conform to all the relevant provisions
of the Constitution.

It follows from the above discussion that Congress, while possessing vast legislative
powers, may not interfere in the field of treaty negotiations. While Article VII,
Section 21 provides for Senate concurrence, such pertains only to the validity of the
treaty under consideration, not to the conduct of negotiations attendant to its
conclusion. Moreover, it is not even Congress as a whole that has
been given the authority to concur as a means of checking the treaty-making power
of the President, but only the Senate.

Thus, as in the case of petitioners suing in their capacity as private citizens,

petitioners-members of the House of Representatives fail to present a sufficient
showing of need that the information sought is critical to the performance of the
functions of Congress, functions that do not include treaty-negotiation.

Respondents alleged failure to timely claim executive privilege

On respondents invocation of executive privilege, petitioners find the same

defective, not having been done seasonably as it was raised only in their Comment
to the present petition and not during the House Committee hearings.
That respondents invoked the privilege for the first time only in their Comment to
the present petition does not mean that the claim of privilege should not be
credited.Petitioners position presupposes that an assertion of the privilege should

have been made during the House Committee investigations, failing which
respondents are deemed to have waived it.

When the House Committee and petitionerCongressman Aguja requested respondents for copies of the documents subject of
this case, respondents replied that the negotiations were still on-going and that the
draft of the JPEPA would be released once the text thereof is settled and
complete. There was no intimation that the requested copies are confidential in
nature by reason of public policy. The response may not thus be deemed a claim of
privilege by the standards of Senate v. Ermita, which recognizes as claims of
privilege only those which are accompanied by precise and certain reasons for
preserving the confidentiality of the information being sought.

Respondents failure to claim the privilege during the House Committee hearings
may not, however, be construed as a waiver thereof by the Executive branch. As the
immediately preceding paragraph indicates, what respondents received from the
House Committee and petitioner-Congressman Aguja were mere requests for
information. And as priorlystated, the House Committee itself refrained from
pursuing its earlier resolution to issue a subpoena duces tecum on account of then
Speaker Jose de Venecias alleged request to Committee Chairperson
Congressman Teves to hold the same in abeyance.

While it is a salutary and noble practice for Congress to refrain from issuing
subpoenas to executive officials out of respect for their office until resort to it
becomes necessary, the fact remains that such requests are not a compulsory
process. Being mere requests, they do not strictly call for an assertion of executive
privilege.
The privilege is an exemption to Congress power of inquiry. [59] So long as Congress
itself finds no cause to enforce such power, there is no strict necessity to assert the
privilege. In this light, respondents failure to invoke the privilege during the House
Committee investigations did not amount to a waiver thereof.

The Court observes, however, that the claim of privilege appearing in respondents
Comment to this petition fails to satisfy in full the requirement laid down in Senate
v. Ermitathat the claim should be invoked by the President or through the Executive
Secretary by order of the President.[60] Respondents claim of privilege is being
sustained, however, its flaw notwithstanding, because of circumstances peculiar to
the case.

The assertion of executive privilege by the Executive Secretary, who is one of the
respondents herein, without him adding the phrase by order of the President, shall
be considered as partially complying with the requirement laid down in Senate
v. Ermita. The requirement that the phrase by order of the President should
accompany the Executive Secretarys claim of privilege is a new rule laid down for
the first time in Senate v. Ermita, which was not yet final and executory at the time
respondents filed their Comment to the petition. [61] A strict application of this
requirement would thus be unwarranted in this case.

Response to the Dissenting Opinion of the Chief Justice

We are aware that behind the dissent of the Chief Justice lies a genuine zeal to
protect our peoples right to information against any abuse of executive privilege. It
is a zeal that We fully share.

The Court, however, in its endeavor to guard against the abuse of executive
privilege, should be careful not to veer towards the opposite extreme, to the point
that it would strike down as invalid even a legitimate exercise thereof.

We respond only to the salient arguments of the Dissenting Opinion which have not
yet been sufficiently addressed above.

1. After its historical discussion on the allocation of power over international trade
agreements in the United States, the dissent concludes that it will be turning
somersaults with history to contend that the President is the sole organ for external
relations in that jurisdiction. With regard to this opinion, We make only the following
observations:

There is, at least, a core meaning of the phrase sole organ of the nation in its
external relations which is not being disputed, namely, that the power
to directly negotiate treaties and international agreements is vested by our
Constitution only in the Executive. Thus, the dissent states that Congress has the
power to regulate commerce with foreign nationsbut does not have the power
to negotiate international agreements directly.[62]

What is disputed is how this principle applies to the case at bar.

The dissent opines that petitioner-members of the House of Representatives, by

asking for the subject JPEPA documents, are not seeking to directly participate in the
negotiations of the JPEPA, hence, they cannot be prevented from gaining access to
these documents.

On the other hand, We hold that this is one occasion where the following ruling
in Agan v. PIATCO[63] and in other cases both before and since should be applied:

This Court has long and consistently adhered to the legal maxim that
those that cannot be done directly cannot be done indirectly. To declare the
PIATCO contracts valid despite the clear statutory prohibition against a direct
government guarantee would not only make a mockery of what the BOT Law
seeks to prevent -- which is to expose the government to the risk of incurring a
monetary obligation resulting from a contract of loan between the project
proponent and its lenders and to which the Government is not a party to -- but
would also render the BOT Law useless for what it seeks to achieve - to
make use of the resources of the private sector in the financing, operation and
maintenance of infrastructure and development projects which are necessary for
national growth and development but which the government, unfortunately, could
ill-afford to finance at this point in time.[64]

Similarly, while herein petitioners-members of the House of Representatives may

not have been aiming to participate in the negotiations directly, opening the JPEPA
negotiations to their scrutiny even to the point of giving them access to the offers

exchanged between the Japanese and Philippine delegations would have made a
mockery of what the Constitution sought to prevent and rendered it useless for what
it sought to achieve when it vested the power of direct negotiation solely with the
President.

What the U.S. Constitution sought to prevent and aimed to achieve in defining the
treaty-making power of the President, which our Constitution similarly defines, may
be gathered from Hamiltons explanation of why the U.S. Constitution excludes the
House of Representatives from the treaty-making process:

x x x The fluctuating, and taking its future increase into account, the multitudinous
composition of that body, forbid us to expect in it those qualities which are essential
to the proper execution of such a trust. Accurate and comprehensive knowledge of
foreign politics; a steady and systematic adherence to the same views; a nice and
uniform sensibility to national character, decision,secrecy and dispatch; are
incompatible with a body so variable and so numerous. The very complication of the
business by introducing a necessity of the concurrence of so many different bodies,
would of itself afford a solid objection. The greater frequency of the calls upon the
house of representatives, and the greater length of time which it would often be
necessary to keep them together when convened, to obtain their sanction in the
progressive stages of a treaty, would be source of so great inconvenience and
expense, as alone ought to condemn the project.[65]

These considerations a fortiori apply in this jurisdiction, since the Philippine

Constitution, unlike that of the U.S., does not even grant the Senate the power to
advise the Executive in the making of treaties, but only vests in that body the power
to concur in the validity of the treaty after negotiations have been concluded.
[66]
Much less, therefore, should it be inferred that the House of Representatives has
this power.
Since allowing petitioner-members of the House of Representatives access to the
subject JPEPA documents would set a precedent for future negotiations, leading to
the contravention of the public interests articulated above which the Constitution
sought to protect, the subject documents should not be disclosed.

2. The dissent also asserts that respondents can no longer claim the diplomatic
secrets privilege over the subject JPEPA documents now that negotiations have been
concluded, since their reasons for nondisclosure cited in the June 23, 2005 letter of
Sec. Ermita, and later in their Comment, necessarily apply only for as long as the
negotiations were still pending;
In their Comment, respondents contend that the negotiations of the representatives
of the Philippines as well as of Japan must be allowed to explore alternatives in the
course of the negotiations in the same manner as judicial deliberations and working
drafts of opinions are accorded strict confidentiality. That respondents liken the
documents involved in the JPEPA negotiations to judicial deliberations and
working drafts of opinions evinces, by itself, that they were claiming
confidentiality not only until, but even after, the conclusion of the
negotiations.

Judicial deliberations do not lose their confidential character once a decision has
been promulgated by the courts. The same holds true with respect to working drafts
of opinions, which are comparable to intra-agency recommendations. Such intraagency recommendations are privileged even after the position under consideration
by the agency has developed into a definite proposition, hence, the rule in this
jurisdiction that agencies have the duty to disclose only definite propositions, and

not the inter-agency and intra-agency communications during the stage when
common assertions are still being formulated.[67]

3. The dissent claims that petitioner-members of the House of Representatives have

sufficiently shown their need for the same documents to overcome the
privilege. Again, We disagree.

The House Committee that initiated the investigations on the JPEPA did not pursue
its earlier intention to subpoena the documents. This strongly undermines the
assertion that access to the same documents by the House Committee is critical to
the performance of its legislative functions. If the documents were indeed critical,
the House Committee should have, at the very least, issued
a subpoena duces tecum or, like what the Senate did in Senate v. Ermita, filed the
present petition as a legislative body, rather than leaving it to the discretion of
individual Congressmen whether to pursue an action or not. Such acts would have
served as strong indicia that Congress itself finds the subject information to be
critical to its legislative functions.

Further, given that respondents have claimed executive privilege, petitionermembers of the House of Representatives should have, at least, shown how its lack
of access to the Philippine and Japanese offers would hinder the intelligent crafting
of legislation. Mere assertion that the JPEPA covers a subject matter over
which Congress has the power to legislate would not suffice. As Senate
Select Committee v. Nixon[68] held, the showing required to overcome the
presumption favoring confidentiality turns, not only on the nature and
appropriateness of the function in the performance of which the material was
sought, but also the degree to which the material was necessary to its
fulfillment.This petitioners failed to do.

Furthermore, from the time the final text of the JPEPA including its annexes and
attachments was published, petitioner-members of the House of Representatives
have been free to use it for any legislative purpose they may see fit. Since such
publication, petitioners need, if any, specifically for the Philippine and Japanese
offers leading to the final version of the JPEPA, has become even less apparent.

In asserting that the balance in this instance tilts in favor of disclosing the JPEPA
documents, the dissent contends that the Executive has failed to show how
disclosing them afterthe conclusion of negotiations would impair the performance of
its functions. The contention, with due respect, misplaces the onus probandi. While,
in keeping with the general presumption of transparency, the burden is initially on
the Executive to provide precise and certain reasons for upholding its claim of
privilege, once the Executive is able to show that the documents being sought are
covered by a recognized privilege, the burden shifts to the party seeking
information to overcome the privilege by a strong showing of need.

When it was thus established that the JPEPA documents are covered by the privilege
for diplomatic negotiations pursuant to PMPF v. Manglapus, the presumption arose
that their disclosure would impair the performance of executive functions. It was
then incumbent on petitioner- requesting parties to show that they have a strong
need for the information sufficient to overcome the privilege. They have not,
however.

4. Respecting the failure of the Executive Secretary to explicitly state that he is

claiming the privilege by order of the President, the same may not be strictly
applied to the privilege claim subject of this case.

When the Court in Senate v. Ermita limited the power of invoking the privilege to
the President alone, it was laying down a new rule for which there is no counterpart
even in theUnited States from which the concept of executive privilege was
adopted. As held in the 2004 case of Judicial Watch, Inc. v. Department of Justice,
[69]
citing In re Sealed Case,[70] the issue of whether a President must personally
invoke the [presidential communications] privilege remains an open question. U.S.
v. Reynolds,[71] on the other hand, held that [t]here must be a formal claim of
privilege, lodged by the head of the department which has control over the matter,
after actual personal consideration by that officer.

The rule was thus laid down by this Court, not in adherence to any established
precedent, but with the aim of preventing the abuse of the privilege in light of its
highly exceptional nature. The Courts recognition that the Executive Secretary also
bears the power to invoke the privilege, provided he does so by order of the
President, is meant to avoid laying down too rigid a rule, the Court being aware that
it was laying down a new restriction on executive privilege. It is with the same spirit
that the Court should not be overly strict with applying the same rule in this peculiar
instance, where the claim of executive privilege occurred before the judgment
in Senate v. Ermita became final.

5. To show that PMPF v. Manglapus may not be applied in the present case, the
dissent implies that the Court therein erred in citing US v. Curtiss Wright[72] and the
book entitled The New American Government and Its Work[73] since these
authorities, so the dissent claims, may not be used to calibrate the importance of
the right to information in the Philippine setting.

The dissent argues that since Curtiss-Wright referred to a conflict between the
executive and legislative branches of government, the factual setting thereof was
different from that of PMPF v. Manglapus which involved a collision between
governmental power over the conduct of foreign affairs and the citizens right to
information.

That the Court could freely cite Curtiss-Wright a case that upholds the secrecy of
diplomatic negotiations against congressional demands for information in the
course of laying down a ruling on the public right to information only serves to
underscore the principle mentioned earlier that the privileged character accorded to
diplomatic negotiations does not ipso facto lose all force and effect simply because
the same privilege is now being claimed under different circumstances.

PMPF v. Manglapus indeed involved a demand for information from private citizens
and not an executive-legislative conflict, but so did Chavez v. PEA[74] which held that
the [publics] right to information . . . does not extend to matters recognized as
privileged information under the separation of powers. What counts as privileged
information in an executive-legislative conflict is thus also recognized as such in
cases involving the publics right to information.

Chavez v. PCGG[75] also involved the publics right to information, yet the Court
recognized as a valid limitation to that right the same privileged information based

on separation of powers closed-door Cabinet meetings, executive sessions of either

house of Congress, and the internal deliberations of the Supreme Court.

These cases show that the Court has always regarded claims of privilege, whether
in the context of an executive-legislative conflict or a citizens demand for
information, as closely intertwined, such that the principles applicable to one are
also applicable to the other.

The reason is obvious. If the validity of claims of privilege were to be assessed by

entirely different criteria in each context, this may give rise to the absurd
result whereCongress would be denied access to a particular information because
of a claim of executive privilege, but the general public would have access to the
same information, the claim of privilege notwithstanding.

Absurdity would be the ultimate result if, for instance, the Court adopts the clear
and present danger test for the assessment of claims of privilege
against citizens demands for information. If executive information, when demanded
by a citizen, is privileged only when there is a clear and present danger of a
substantive evil that the State has a right to prevent, it would be very difficult for
the Executive to establish the validity of its claim in each instance. In contrast, if the
demand comes from Congress, the Executive merely has to show that the
information is covered by a recognized privilege in order to shift the burden on
Congress to present a strong showing of need. This would lead to a situation
where it would be more difficult for Congress to access executive
information than it would be for private citizens.

We maintain then that when the Executive has already shown that an information is
covered by executive privilege, the party demanding the information must present a
strong showing of need, whether that party is Congress or a private citizen.

The rule that the same showing of need test applies in both these contexts,
however, should not be construed as a denial of the importance of analyzing the
context in which an executive privilege controversy may happen to be
placed. Rather, it affirms it, for it means that the specific need being shown by the
party seeking information in every particularinstance is highly significant in
determining whether to uphold a claim of privilege. This need is, precisely, part
of the context in light of which every claim of privilege should be
assessed.

Since, as demonstrated above, there are common principles that should be applied
to executive privilege controversies across different contexts, the Court in PMPF
v. Manglapusdid not err when it cited the Curtiss-Wright case.

The claim that the book cited in PMPF v. Manglapus entitled The New American
Government and Its Work could not have taken into account the expanded statutory
right to information in the FOIA assumes that the observations in that book in
support of the confidentiality of treaty negotiations would be different had it been
written after the FOIA.Such assumption is, with due respect, at best, speculative.

As to the claim in the dissent that [i]t is more doubtful if the same book be used to
calibrate the importance of the right of access to information in the Philippine

setting considering its elevation as a constitutional right, we submit that the

elevation of such right as a constitutional right did not set it free from the legitimate
restrictions of executive privilege which is itself constitutionally-based.[76] Hence,
the comments in that book which were cited in PMPF v. Manglapus remain valid
doctrine.

6. The dissent further asserts that the Court has never used need as a test to
uphold or allow inroads into rights guaranteed under the Constitution. With due
respect, we assert otherwise. The Court has done so before, albeit without using the
term need.

In executive privilege controversies, the requirement that parties present a

sufficient showing of need only means, in substance, that they should show a public
interest in favor of disclosure sufficient in degree to overcome the claim of privilege.
[77]
Verily, the Court in such cases engages in a balancing of interests. Such a
balancing of interests is certainly not new in constitutional adjudication involving
fundamental rights. Secretary of Justice v. Lantion,[78] which was cited in the dissent,
applied just such a test.

Given that the dissent has clarified that it does not seek to apply the clear and
present danger test to the present controversy, but the balancing test, there seems
to be no substantial dispute between the position laid down in this ponencia and
that reflected in the dissent as to what test to apply. It would appear that the only
disagreement is on the results of applying that test in this instance.

The dissent, nonetheless, maintains that it suffices that information is of public

concern for it to be covered by the right, regardless of the publics need for the
information, and that the same would hold true even if they simply want to know it
because it interests them. As has been stated earlier, however, there is no dispute
that the information subject of this case is a matter of public concern. The Court has
earlier concluded that it is a matter of public concern, not on the basis of any
specific need shown by petitioners, but from the very nature of the JPEPA as an
international trade agreement.

However, when the Executive has as in this case invoked the privilege, and it has
been established that the subject information is indeed covered by the privilege
being claimed, can a party overcome the same by merely asserting that the
information being demanded is a matter of public concern, without any further
showing required? Certainly not, for that would render the doctrine of executive
privilege of no force and effect whatsoever as a limitation on the right to
information, because then the sole test in such controversies would be whether an
information is a matter of public concern.

Moreover, in view of the earlier discussions, we must bear in mind that, by

disclosing the documents of the JPEPA negotiations, the Philippine government runs
the grave risk of betraying the trust reposed in it by the Japanese representatives,
indeed, by the Japanese government itself. How would the Philippine government
then explain itself when that happens? Surely, it cannot bear to say that it
just had to release the information because certain persons simply wanted to know
it because it interests them.

Thus, the Court holds that, in determining whether an information is covered by the
right to information, a specific showing of need for such information is not a

relevant consideration, but only whether the same is a matter of public

concern. When, however, the government has claimed executive privilege, and it
has established that the information is indeed covered by the same, then the party
demanding it, if it is to overcome the privilege, must show that that the information
is vital, not simply for the satisfaction of its curiosity, but for its ability to effectively
and reasonably participate in social, political, and economic decision-making. [79]
7. The dissent maintains that [t]he treaty has thus entered the ultimate stage where
the people can exercise their right to participate in the discussion whether the
Senate should concur in its ratification or not. (Emphasis supplied) It adds that this
right will be diluted unless the people can have access to the subject JPEPA
documents. What, to the dissent, is a dilution of the right to participate in decisionmaking is, to Us, simply a recognition of the qualified nature of the publics right to
information. It is beyond dispute that the right to information is not absolute and
that the doctrine of executive privilege is a recognized limitation on that right.

Moreover, contrary to the submission that the right to participate in decisionmaking would be diluted, We reiterate that our people have been exercising their
right to participate in the discussion on the issue of the JPEPA, and they have been
able to articulate their different opinions without need of access to the JPEPA
negotiation documents.

Thus, we hold that the balance in this case tilts in favor of executive privilege.

8. Against our ruling that the principles applied in U.S. v. Nixon, the Senate Select
Committee case, and In re Sealed Case, are similarly applicable to the present
controversy, the dissent cites the caveat in the Nixon case that the U.S. Court was
there addressing only the Presidents assertion of privilege in the context of a
criminal trial, not a civil litigation nor a congressional demand for information. What
this caveat means, however, is only that courts must be careful not to hastily apply
the ruling therein to other contexts. It does not, however, absolutely mean that the
principles applied in that case may never be applied in such contexts.

Hence, U.S. courts have cited U.S. v. Nixon in support of their rulings on claims of
executive privilege in contexts other than a criminal trial, as in the case of Nixon v.
Administrator of General Services[80] which involved former President Nixons
invocation of executive privilege to challenge the constitutionality of the Presidential
Recordings and Materials Preservation Act[81] and the above-mentioned In re Sealed
Case which involved a claim of privilege against a subpoena duces tecum issued in
a grand jury investigation.

Indeed, in applying to the present case the principles found in U.S. v. Nixon and in
the other cases already mentioned, We are merely affirming what the Chief Justice
stated in his Dissenting Opinion in Neri v. Senate Committee on Accountability[82] a
case involving an executive-legislative conflict over executive privilege. That
dissenting opinion stated that, while Nixon was not concerned with the balance
between the Presidents generalized interest in confidentiality and congressional
demands for information, [n]onetheless the [U.S.] Court laid down principles
and procedures that can serve as torch lights to illumine us on the scope
and use of Presidential communication privilege in the case at bar. [83] While
the Court was divided in Neri, this opinion of the Chief Justice was not among the
points of disagreement, and We similarly hold now that the Nixon case is a useful
guide in the proper resolution of the present controversy, notwithstanding the
difference in context.

Verily, while the Court should guard against the abuse of executive
privilege, it should also give full recognition to the validity of the privilege
whenever it is claimed within the proper bounds of executive power, as in
this case. Otherwise, the Court would undermine its own credibility, for it would be
perceived as no longer aiming to strike a balance, but seeking merely to water
down executive privilege to the point of irrelevance.

Conclusion

To recapitulate, petitioners demand to be furnished with a copy of the full text of

the JPEPA has become moot and academic, it having been made accessible to the
public sinceSeptember 11, 2006. As for their demand for copies of the Philippine
and Japanese offers submitted during the JPEPA negotiations, the same must be
denied, respondents claim of executive privilege being valid.

Diplomatic negotiations have, since the Court promulgated its Resolution in PMPF
v. Manglapus on September 13, 1988, been recognized as privileged in this
jurisdiction and the reasons proffered by petitioners against the application of the
ruling therein to the present case have not persuaded the Court. Moreover,
petitioners both private citizens and members of the House of Representatives have
failed to present a sufficient showing of need to overcome the claim of privilege in
this case.

That the privilege was asserted for the first time in respondents Comment to the
present petition, and not during the hearings of the House Special Committee on
Globalization, is of no moment, since it cannot be interpreted as a waiver of the
privilege on the part of the Executive branch.

For reasons already explained, this Decision shall not be interpreted as departing
from the ruling in Senate v. Ermita that executive privilege should be invoked by the
President or through the Executive Secretary by order of the President.

WHEREFORE, the petition is DISMISSED.

SO ORDERED.

CONCHITA CARPIO MORALES

Associate Justice

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-6266

February 2, 1953

EULOGIO RODRIGUEZ, SR., ETC., ET AL., petitioners,

vs.
VICENTE GELLA, ETC., ET AL., respondents.
Eulogio Rodriguez, Sr., Lorenzo M. Taada, Claro M. Recto, Jose P. Laurel, Jesus Barrera and Leon
Ma. Guerrero for petitioner.
Office of the Solicitor General Juan R. Liwag and Solicitor Martiniano P. Vivo for respondents.
PARAS, C.J.:
As a fitting foreword, it may be recalled that on a previous occasion, on August 26, 1949 to be exact,
this court had already passed upon the status of Commonwealth Act No. 671, approved on
December 16, 1941, "declaring a state of total emergency as a result of war involving the Philippines
and authorizing the President to promulgate rules and regulations to meet such emergency." Five
members held that the Act ceased to be operative in its totality, on May 25, 1946 (when the
Congress convened in special session) according to Chief Justice Moran. Justice Bengzon, Padilla,
Montemayor, Reyes and Torres in effect concluded that the powers delegated to the President had
been withdrawn as to matters already legislated upon by the Congress or on which the latter had
demonstrated its readiness or ability to act. Executive Orders No. 62 (dated June 21, 1947)
regulating house and lot rentals, No. 192 (dated December 24, 1948) regulating exports, Nos. 225
and 226 (dated June 15,1949) the first appropriation funds for the operation of the Government from
July 1, 1949 to June 30, 1950, and the second appropriating funds for election expenses in
November 1949, were therefore declared null and void for having been issued after Act No. 671 had
lapsed and/or after the Congress had enacted legislation on the same subjects. 1
More or less the same considerations that influenced our pronouncement of August 26, 1949 are
and should be controlling in the case now before us, wherein the petitioners seek to invalidate
Executive Orders Nos. 545 and 546 issued on November 10, 1952, the first appropriating the sum of
P37,850,500 for urgent and essential public works, and the second setting aside the sum of
P11,367,600 for relief in the provinces and cities visited by typhoons, floods, droughts, earthquakes,
volcanic action and other calamities.
Section 26 of Article VI of the Constitution provides that "in times of war or other national emergency,
the Congress may by law authorize the President, for a limited period and subject to such
restrictions as it may prescribe, to promulgate rules and regulations to carry out a declared national
policy." Accordingly the National Assembly passed Commonwealth Act No. 671, declaring (in section
1) the national policy that "the existence of war between the United States and other countries of
Europe and Asia, which involves the Philippines makes it necessary to invest the President with

extraordinary powers in order to meet the resulting emergency," and (in section 2) authorizing the
President, "during the existence of the emergency, to promulgate such rules and regulations as he
may deem necessary to carry out the national policy declared in section 1."
As the Act was expressly in pursuance of the constitutional provision, it has to be assumed that the
National Assembly intended it to be only for a limited period. If it be contended that the Act has not
yet been duly repealed, and such step is necessary to a cessation of the emergency powers
delegated to the President, the result would be obvious unconstitutionality, since it may never be
repealed by the Congress, or if the latter ever attempts to do so, the President may wield his veto.
This eventuality has in fact taken place when the President disapproved House Bill No. 727,
repealing all Emergency Powers Acts. The situation will make the Congress and the President or
either as the principal authority to determine the indefinite duration of the delegation of legislative
powers, in palpable repugnance to the constitutional provision that any grant thereunder must be
for a limited period, necessarily to be fixed in the law itself and not dependent upon the arbitrary or
elastic will of either the Congress or the President.
Although House Bill No. 727, had been vetoed by the President and did not thereby become a
regular statute, it may at least be considered as a concurrent resolution of the Congress formally
declaring the termination of the emergency powers. To contend that the Bill needed presidential
acquiescence to produce effect, would lead to the anomalous, if not absurd, situation that, "while
Congress might delegate its power by a simple majority, it might not be able to recall them except by
two-third vote. In other words, it would be easier for Congress to delegate its powers than to take
them back. This is not right and is not, and ought not to be the law." 2
Act No. 671 may be likened to an ordinary contract of agency, whereby the consent of the agent is
necessary only in the sense that he cannot be compelled to accept the trust, in the same way that
the principal cannot be forced to keep the relation in eternity or at the will of the agent. Neither can it
be suggested that the agency created under the Act is coupled with interest.
The logical view consistent with constitutionality is to hold that the powers lasted only during the
emergency resulting from the last world war which factually involved the Philippines when Act No.
671 was passed on December 16, 1941. That emergency, which naturally terminated upon the
ending of the last world war, was contemplated by the members of the National Assembly on the
foresight that the actual state of war could prevent it from holding its next regular session. This is
confirmed by the following statement of President Quezon: "When it became evident that we were
completely helpless against air attack and that it was most unlikely the Philippine Legislature would
hold its next regular session which was to open on January 1, 1942, the National Assembly passed
into history approving a resolution which reaffirmed the abiding faith of the Filipino people in, and
their loyalty to, the United States. The Assembly also enacted a law granting the President of the
Philippines all the powers that under the Philippine Constitution may be delegated to him in time of
war."3 When President Quezon said "in time of war", he an doubtedly meant such factual war as that
then raging.
As early as July 26, 1948, the Congress categorically declared that "since liberation conditions have
gradually returned to normal, but not so with regard to those who have suffered the ravages of war
and who have not received any relief for the loss and destruction resulting therefrom," and that "the
emergency created by the last war as regards these war sufferers being still existent, it is the
declared policy of the state that as to them the debt moratorium should be continued in force in a
modified form."4 It is important to remember that Republic Act No. 342 in which this declaration was
made bore the approval of the President. Indeed, the latter in his speech delivered on July 4, 1949,
plainly proclaimed that "what emergencies it (the Republic) faces today are incidental passing rains
artificially created by seasonal partisanship, very common among democracies but will disappear
with the rains that follow the thunderclaps not later than November 8 of this year," an admission,
that such emergencies not only are not total but are not the result of the last war as envisaged in Act
No. 671.
If more is necessary to demonstrate the unmistakable stand of the legislative department on the
alleged existence of emergency, reference may be had to House Bill No. 727, hereinbefore referred
to, repealing all Emergency Powers Acts.

Moreover, section 26 of Article VI of the constitution, in virtue of which Act No. 671 was passed,
authorizes the delegation of powers by the Congress (1) in times of war or (2) other national
emergency. The emergency expressly spoken of in the title and in section 1 of the Act is one "in time
of war," as distinguished from "other national emergency" that may arise as an after-effect of war or
from natural causes such as widespread earthquakes, typhoons, floods, and the like. Certainly the
typhoons that hit some provinces and cities in 1952 not only did not result from the last world war but
were and could not have been contemplated by the legislators. At any rate, the Congress is available
for necessary special sessions, and it cannot let the people down without somehow being
answerable thereover.
As a matter of fact, the President, in returning to the Congress without his signature House Bill No.
727, did not invoke any emergency resulting from the last world war, but only called attention to an
impending emergency that may be brought about by present complicated and troubled world
conditions, and to the fact that our own soldiers are fighting and dying in Korea in defense of
democracy and freedom and for the preservation of our Republic. The emergency thus feared
cannot, however, be attributed to the war mentioned in Act No. 671 and fought between Germany
and Japan on one side and the Allied Powers on the other; and indications are that in the next world
war, if any, the communist countries will be aligned against the democracies. No departure can be
made from the national policy declared in section 1 of Act No. 671. New powers may be granted as
often as emergencies contemplated in the Constitution arise.
There is no point in the argument that the Philippines is still technically at war with Japan pending
the ratification of the peace treaty. In the first place, Act No. 671 referred to a factual war. In the
second place, the last world war was between the United States and Japan, the Philippines being
involved only because it was then under American sovereignty. In the third place, the United States
had already signed the peace treaty with Japan, and the Philippines has become an independent
country since July 4, 1946.
It is pointed out that the passage of House Bill No. 727 is inconsistent with the claim that the
emergency powers are non-existent. But, from the debates in the House, it is patent that the Bill had
to be approved merely to remove all doubts, especially because this Court had heretofore failed, for
lack of necessary majority, to declare Act No. 671 entirely inoperative.
Reliance is placed on the petition of about seventy Congressmen and Senators and on House
Resolution No. 99, urging the President to release and appropriate funds for essential and urgent
public works and for relief in the typhoon-stricken areas. It is enough to state, in reply, that the said
petition and resolution cannot prevail over the force and effect of House Bill No. 727 formally passed
by two chambers of the Congress. If faith can be accorded to the resolution of one house, there is
more reason for accepting the solemn declarations of two houses.
Even under the theory of some members of this court that insofar as the Congress had shown its
readiness or ability to act on a given matter, the emergency powers delegated to the President had
been pro tanto withdrawn, Executive Orders Nos. 545 and 546 must be declared as having no legal
anchorage. We can take judicial notice of the fact that the Congress has since liberation repeatedly
been approving acts appropriating funds for the operation of the Government, public works, and
many others purposes, with the result that as to such legislative task the Congress must be deemed
to have long decided to assume the corresponding power itself and to withdraw the same from the
President. If the President had ceased to have powers with regards to general appropriations, none
can remain in respect of special appropriations; otherwise he may accomplish indirectly what he
cannot do directly. Besides, it is significant that Act No. 671 expressly limited the power of the
President to that continuing "in force" appropriations which would lapse or otherwise become
inoperative, so that, even assuming that the Act is still effective, it is doubtful whether the President
can by executive orders make new appropriations. The specific power "to continue in force laws and
appropriations which would lapse or otherwise become inoperative" is a limitation on the general
power "to exercise such other powers as he may deem necessary to enable the Government to fulfill
its responsibilities and to maintain and enforce its authority." Indeed, to hold that although the
Congress has, for about seven years since liberation, been normally functioning and legislating on
every conceivable field, the President still has any residuary powers under the Act, would
necessarily lead to confusion and overlapping, if not conflict.

Shelter may not be sought in the proposition that the President should be allowed to exercise
emergency powers for the sake of speed and expediency in the interest and for the welfare of the
people, because we have the Constitution, designed to establish a government under a regime of
justice, liberty and democracy. In line with such primordial objective, our Government is democratic
in form and based on the system of separation of powers. Unless and until changed or amended, we
shall have to abide by the letter and spirit of the Constitution and be prepared to accept the
consequences resulting from or inherent in disagreements between, inaction or even refusal of the
legislative and executive departments. Much as it is imperative in some cases to have prompt official
action, deadlocks in and slowness of democratic processes must be preferred to concentration of
powers in any one man or group of men for obvious reasons. The framers of the Constitution,
however, had the vision of and were careful in allowing delegation of legislative powers to the
President for a limited period "in times of war or other national emergency." They had thus entrusted
to the good judgment of the Congress the duty of coping with any national emergency by a more
efficient procedure; but it alone must decide because emergency in itself cannot and should not
create power. In our democracy the hope and survival of the nation lie in the wisdom and unselfish
patriotism of all officials and in their faithful adherence to the Constitution.
Wherefore, Executive Orders Nos. 545 and 546 are hereby declared null and void, and the
respondents are ordered to desist from appropriating, releasing, allotting, and expending the public
funds set aside therein. So ordered, without costs.
Feria, Pablo and Tuason, JJ., concur.
Bengzon, J., concur in the result.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-2044

August 26, 1949

J. ANTONIO ARANETA, petitioner,

vs.
RAFAEL DINGLASAN, Judge of First Instance of Manila, and JOSE P. BENGZON, Fiscal of
City of Manila,respondents.
x---------------------------------------------------------x
G.R. No. L-2756

August 26, 1949

J. ANTONIO ARANETA and GREGORIO VILLAMOR, petitioners,

vs.
EUGENIO ANGELES, Fiscal of City of Manila, respondent.
x---------------------------------------------------------x
G.R. No. L-3054

August 26, 1949

EULOGIO RODRIGUEZ, Sr., por si y como Presidente del Partido Nacionalista, recurrente,
vs.
EL TESORERO DE FILIPINAS, recurrido.
x---------------------------------------------------------x
G.R. No. L-3055

August 26, 1949

LEON MA. GURRERO, petitioner,

vs.
THE COMMISSIONER OF CUSTOMS and THE ADMINISTRATOR, SUGAR QUOTA OFFICE,
DEPARTMENT OF COMMERCE AND INDUSTRY, respondents.
x---------------------------------------------------------x
G.R. No. L-3056

August 26, 1949

ANTONIO BARREDO, in his own behalf and on behalf of all taxpayers similarly
situated, petitioner,
vs.
THE COMMISSION ON ELECTIONS, THE AUDITOR GENERAL and THE INSULAR
TREASURER OF THE PHILIPPINES, respondents.
L-2044
Paredes, Diaz and Poblador, Jesus G. Barrera, Vicente Hilado, and Araneta and Araneta for
petitioner.
Office of the Solicitor General Felix Bautista Angelo, Assistant Solicitor General Ruperto Kapunan,
Jr., Solicitor Martiniano P. Vico and Assistant City Fiscal Julio Villamor for respondents.
Claro M. Recto and Padilla, Carlos and Fernando as amici curiae.
L-2756
Araneta and Araneta and Jesus G. Barrera for petitioners.
Assistant City Fiscal Luis B. Reyes for respondent.
Claro M. Recto as amici curiae.
L-3054
Claro M. Recto, Ramon Diokno, Jose O. Vera, Alejo Mabanag, Jose B. Laurel, Jr. and Antonio
Barredo for petitioner.
Office of the Solicitor General Felix Bautista Angelo for respondent.
Vicente de Vera, Chairman, Commission on Elections.
Alfonso Ponce Enrile, Alva J. Hill and Honorio Poblador, Jr. and Emiliano R. Navarro as amici curiae.
Jesus G. Barrera, Enrique M. Fernando, Ramon Sunico, and Francisco A. Rodrigo also as amici
curiae.
L-3055
Claro M. Recto and Leon Ma. Guerrero for petitioner.
Office of the Solicitor General Felix Bautista Angelo for respondents.
V. G. Bunuan, Administrator, Sugar Quota Office.
Jesus G. Barrera, Felixberto M. Serrano, Enrique; Honorio Poblador, Jr. and Emiliano R. Navarro as
amici curiae.
L-3056
Claro M. Recto and Antonio Barredo for petitioner.
Office of the Solicitor General Felix Bautista Angelo for respondents.
Vicente de Vera, Chairman, Commission on Elections.
Alfonso Ponce Enrile, Alva J. Hill, Jesus G. Barrera, Enrique M. Fernando, Ramon Sunico and
Francisco A. Rodrigo; Honorio Poblador, Jr. and Emiliano R. Navarro as amici curiae.
TUASON, J.:
Three of these cases were consolidated for argument and the other two were argued separately on
other dates. Inasmuch as all of them present the same fundamental question which, in our view, is
decisive, they will be disposed of jointly. For the same reason we will pass up the objection to the
personality or sufficiency of interest of the petitioners in case G. R. No. L-3054 and case G. R. No. L3056 and the question whether prohibition lies in cases Nos. L-2044 and L-2756. No practical benefit
can be gained from a discussion of the procedural matters since the decision in the cases wherein
the petitioners' cause of action or the propriety of the procedure followed is not in dispute, will be
controlling authority on the others. Above all, the transcendental importance to the public of these

cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities
of procedure. (Avelino vs. Cuenco, G. R. No. L-2821.) The petitions challenge the validity of
executive orders of the President avowedly issued in virtue of Commonwealth Act No. 671. Involved
in cases Nos. L-2044 and L-2756 is Executive Order No. 62, which regulates rentals for houses and
lots for residential buildings. The petitioner, J. Antonio Araneta, is under prosecution in the Court of
First Instance of Manila for violation of the provisions of this Executive Order, and prays for the
issuance of the writ of prohibition to the judge and the city fiscal. Involved in case L-3055 is
Executive Order No. 192, which aims to control exports from the Philippines. In this case, Leon Ma.
Guerrero seeks a writ of mandamus to compel the Administrator of the Sugar Quota Office and the
Commissioner of Customs to permit the exportation of shoes by the petitioner. Both official refuse to
issue the required export license on the ground that the exportation of shoes from the Philippines is
forbidden by this Executive Order. Case No. L-3054 relates to Executive Order No. 225, which
appropriates funds for the operation of the Government of the Republic of the Philippines during the
period from July 1, 1949 to June 30, 1950, and for other purposes. The petitioner Eulogio Rodriguez,
Sr., as a tax-payer, an elector, and president of the Nacionalista Party, applies for a writ of prohibition
to restrain the Treasurer of the Philippines from disbursing this Executive Order. Affected in case No.
L-3056 is Executive Order No. 226, which appropriates P6,000,000 to defray the expenses in
connection with, and incidental to, the hold lug of the national elections to be held in November,
1949. The petitioner, Antonio Barredo, as a citizen, tax-payer and voter, asks this Court to prevent
"the respondents from disbursing, spending or otherwise disposing of that amount or any part of it."
Notwithstanding allegations in the petitions assailing the constitutionally of Act No. 671, the
petitioners do not press the point in their oral argument and memorandum. They rest their case
chiefly on the proposition that the Emergency Powers Act (Commonwealth Act No. 671) has ceased
to have any force and effect. This is the basic question we have referred to, and it is to this question
that we will presently address ourselves and devote greater attention. For the purpose of this
decision, only, the constitutionality of Act No. 671 will be taken for granted, and any dictum or
statement herein which may appear contrary to that hypothesis should be understood as having
been made merely in furtherance of the main thesis.
Act No. 671 in full is as follows:
AN ACT DECLARING A STATE OF TOTAL EMERGENCY AS A RESULT OF WAR
INVOLVING THE PHILIPPINES AND AUTHORIZING THE PRESIDENT TO PROMULGATE
RULES AND REGULATIONS TO MEET SUCH EMERGENCY.
Be it enacted by the National Assembly of the Philippines:
SECTION 1. The existence of war between the United States and other countries of Europe
and Asia, which involves the Philippines, makes it necessary to invest the President with
extraordinary powers in order to meet the resulting emergency.
"SEC. 2. Pursuant to the provisions of Article VI, section 26, of the Constitution, the
President is hereby authorized, during the existence of the emergency, to promulgate such
rules and regulations as he may deem necessary to carry out the national policy declared in
section 1 hereof. Accordingly, he is, among other things, empowered (a) to transfer the seat
of the Government or any of its subdivisions, branches, departments, offices, agencies or
instrumentalities; (b) to reorganize the Government of the Commonwealth including the
determination of the order of precedence of the heads of the Executive Department; (c) to
create new subdivisions, branches, departments, agencies or instrumentalities of
government and to abolish any of those already existing; (d) to continue in force laws and
appropriations which would lapse or otherwise become inoperative, and to modify or
suspend the operation or application of those of an administrative character; (e) to impose
new taxes or to increase, reduce, suspend or abolish those in existence; (f) to raise funds
through the issuance of bonds or otherwise, and to authorize the expenditure of the
proceeds thereof; (g) to authorize the national, provincial, city or municipal governments to
incur in overdrafts for purposes that he may approve; (h) to declare the suspension of the
collection of credits or the payment of debts; and (i) to exercise such other powers as he may
deem to enable the Government to fulfill its responsibities and to maintain and enforce the
authority.

SEC. 3. The President of the Philippines shall as soon as practicable upon the convening of
the Congress of the Philippines report thereto all the rules and regulations promulgated by
him under the powers herein granted.
SEC. 4. This Act shall take effect upon its approval and the rules and regulations
promulgated hereunder shall be in force and effect until the Congress of the Philippines shall
otherwise provide.
Section 26 of Article VI of the Constitution provides:
In time of war or other national emergency, the Congress may by law authorize the
President, for a limited period and subject to such restrictions as it may prescribe, to
promulgate rules and regulations to carry out a declared national policy.
Commonwealth Act No. 671 does not in term fix the duration of its effectiveness. The intention of the
Act has to be sought for in its nature, the object to be accomplish, the purpose to be subserved, and
its relation to the Constitution. The consequences of the various constructions offered will also be
resorted to as additional aid to interpretation. We test a rule by its results.
Article VI of the Constitution provides that any law passed by virtue thereof should be "for a limited
period." "Limited" has been defined to mean "restricted; bounded; prescribed; confined within
positive bounds; restrictive in duration, extent or scope." (Encyclopedia Law Dictionary, 3rd ed., 669;
Black's Law Dictionary, 3rd ed., 1120.) The words "limited period" as used in the Constitution are
beyond question intended to mean restrictive in duration. Emergency, in order to justify the
delegation of emergency powers, "must be temporary or it can not be said to be an emergency."
(First Trust Joint Stock Land Bank of Chicago vs. Adolph P. Arp, et al., 120 A. L. R., 937, 938.).
It is to be presumed that Commonwealth Act No. 671 was approved with this limitation in view. The
opposite theory would make the law repugnant to the Constitution, and is contrary to the principle
that the legislature is deemed to have full knowledge of the constitutional scope of its powers. The
assertion that new legislation is needed to repeal the act would not be in harmony with the
Constitution either. If a new and different law were necessary to terminate the delegation, the period
for the delegation, it has been correctly pointed out, would be unlimited, indefinite, negative and
uncertain; "that which was intended to meet a temporary emergency may become permanent law,"
(Peck vs. Fink, 2 Fed. [2d], 912); for Congress might not enact the repeal, and even if it would, the
repeal might not meet the approval of the President, and the Congress might not be able to override
the veto. Furthermore, this would create the anomaly that, while Congress might delegate its powers
by simple majority, it might not be able to recall them except by a two-third vote. In other words, it
would be easier for Congress to delegate its powers than to take them back. This is not right and is
not, and ought not to be, the law. Corwin, President: Office and Powers, 1948 ed., p. 160, says:
It is generally agreed that the maxim that the legislature may not delegate its powers
signifies at the very least that the legislature may not abdicate its powers: Yet how, in view of
the scope that legislative delegations take nowadays, is the line between delegation and
abdication to be maintained? Only, I urge, by rendering the delegated powers recoverable
without the consent of the delegate; . . . .
Section 4 goes far to settle the legislative intention of this phase of Act No. 671. Section 4 stipulates
that "the rules and regulations promulgated thereunder shall be in full force and effect until the
Congress of the Philippines shall otherwise provide." The silence of the law regarding the repeal of
the authority itself, in the face of the express provision for the repeal of the rules and regulations
issued in pursuance of it, a clear manifestation of the belief held by the National Assembly that there
was no necessity to provide for the former. It would be strange if having no idea about the time the
Emergency Powers Act was to be effective the National Assemble failed to make a provision for this
termination in the same way that it did for the termination of the effects and incidents of the
delegation. There would be no point in repealing or annulling the rules and regulations promulgated
under a law if the law itself was to remain in force, since, in that case, the President could not only
make new rules and regulations but he could restore the ones already annulled by the legislature.

More anomalous than the exercise of legislative function by the Executive when Congress is in the
unobstructed exercise of its authority is the fact that there would be two legislative bodies operating
over the same field, legislating concurrently and simultaneously, mutually nullifying each other's
actions. Even if the emergency powers of the President, as suggested, be suspended while
Congress was in session and be revived after each adjournment, the anomaly would not be limited.
Congress by a two-third vote could repeal executive orders promulgated by the President during
congressional recess, and the President in turn could treat in the same manner, between sessions of
Congress, laws enacted by the latter. This is not a fantastic apprehension; in two instances it
materialized. In entire good faith, and inspired only by the best interests of the country as they saw
them, a former President promulgated an executive order regulating house rentals after he had
vetoed a bill on the subject enacted by Congress, and the present Chief Executive issued an
executive order on export control after Congress had refused to approve the measure.
Quiet apart from these anomalies, there is good basis in the language of Act No. 671 for the
inference that the National Assembly restricted the life of the emergency powers of the President to
the time the Legislature was prevented from holding sessions due to enemy action or other causes
brought on by the war. Section 3 provides:
The President of the Philippines shall as soon as practicable upon the convening of the
Congress of the Philippines report thereto all the rules and regulations promulgated by him
under the powers herein granted.
The clear tenor of this provision is that there was to be only one meeting of Congress at which the
President was to give an account of his trusteeship. The section did not say each meeting, which it
could very well have said if that had been the intention. If the National Assembly did not think that
the report in section 3 was to be the first and last Congress Act No. 671 would lapsed, what reason
could there be for its failure to provide in appropriate and clear terms for the filing of subsequent
reports? Such reports, if the President was expected to continue making laws in the forms of rules,
regulations and executive orders, were as important, of as unimportant, as the initial one.
As a contemporary construction, President Quezon's statement regarding the duration of Act No.
671 is enlightening and should carry much weight, considering his part in the passage and in the
carrying out of the law. Mr. Quezon, who called the National Assembly to a special session, who
recommended the enactment of the Emergency Powers Act, if indeed he was not its author, and who
was the very President to be entrusted with its execution, stated in his autobiography, "The Good
Fight," that Act No. 671 was only "for a certain period" and "would become invalid unless reenacted."
These phrases connote automatical extinction of the law upon the conclusion of a certain period.
Together they denote that a new legislation was necessary to keep alive (not to repeal) the law after
the expiration of that period. They signify that the same law, not a different one, had to be repassed if
the grant should be prolonged.
What then was the contemplated period? President Quezon in the same paragraph of his
autobiography furnished part of the answer. He said he issued the call for a special session of the
National Assembly "when it became evident that we were completely helpless against air attack, and
that it was most unlikely the Philippine Legislature would hold its next regular session which was to
open on January 1, 1942." (Emphasis ours.) It can easily be discerned in this statement that the
conferring of enormous powers upon the President was decided upon with specific view to the
inability of the National Assembly to meet. Indeed no other factor than this inability could have
motivated the delegation of powers so vast as to amount to an abdication by the National Assembly
of its authority. The enactment and continuation of a law so destructive of the foundations of
democratic institutions could not have been conceived under any circumstance short of a complete
disruption and dislocation of the normal processes of government. Anyway, if we are to uphold the
constitutionality of the act on the basis of its duration, we must start with the premise that it fixed a
definite, limited period. As we have indicated, the period that best comports with constitutional
requirements and limitations, with the general context of the law and with what we believe to be the
main if not the sole raison d'etre for its enactment, was a period coextensive with the inability of
Congress to function, a period ending with the conventing of that body.
It is our considered opinion, and we so hold, that Commonwealth Act No. 671 became inoperative
when Congress met in regular session on May 25, 1946, and that Executive Orders Nos. 62, 192,

225 and 226 were issued without authority of law. In setting the session of Congress instead of the
first special session preceded it as the point of expiration of the Act, we think giving effect to the
purpose and intention of the National Assembly. In a special session, the Congress may "consider
general legislation or only such as he (President) may designate." (Section 9, Article VI of the
Constitution.) In a regular session, the power Congress to legislate is not circumscribed except by
the limitations imposed by the organic law.
Having arrived at this conclusion, we are relieved of the necessity of deciding the question as to
which department of government is authorized to inquire whether the contingency on which the law
is predicated still exists. The right of one or another department to declare the emergency terminated
is not in issue. As a matter of fact, we have endeavored to find the will of the National Assembly
call that will, an exercise of the police power or the war power and, once ascertained, to apply it.
Of course, the function of interpreting statutes in proper cases, as in this, will not be denied the
courts as their constitutional prerogative and duty. In so far as it is insinuated that the Chief
Executive has the exclusive authority to say that war not ended, and may act on the strength of his
opinion and findings in contravention of the law as the courts have construed it, no legal principle
can be found to support the proposition. There is no pretense that the President has independent or
inherent power to issue such executive orders as those under review. we take it that the
respondents, in sustaining the validity of these executive orders rely on Act No. 600, Act No. 620, or
Act No. 671 of the former Commonwealth and on no other source. To put it differently, the
President's authority in this connection is purely statutory, in no sense political or directly derived
from the Constitution.
Act No. 671, as we have stressed, ended ex proprio vigore with the opening of the regular session of
Congress on May 25, 1946. Acts Nos. 600 and 620 contain stronger if not conclusive indication that
they were self-liquidating. By express provision the rules and regulations to be eventually made in
pursuance of Acts Nos. 600 and 620, respectively approved on August 19, 1940 and June 6, 1941,
were to be good only up to the corresponding dates of adjournment of the following sessions of the
Legislature, "unless sooner amended or repealed by the National Assembly." The logical deduction
to be drawn from this provision is that in the mind of the lawmakers the idea was fixed that the Acts
themselves would lapse not latter than the rules and regulations. The design to provide for the
automatic repeal of those rules and regulations necessarily was predicated on the consciousness of
a prior or at best simultaneous repeal of their source. Were not this the case, there would arise the
curious spectacle, already painted, and easily foreseen, of the Legislature amending or repealing
rules and regulations of the President while the latter was empowered to keep or return them into
force and to issue new ones independently of the National Assembly. For the rest, the reasoning
heretofore adduced against the asserted indefinite continuance of the operation of Act No. 671
equally applies to Acts Nos. 600 and 620.
The other corollary of the opinion we have reached is that the question whether war, in law or in fact,
continues, is irrelevant. If we were to that actual hostilities between the original belligerents are still
raging, the elusion would not be altered. After the convening of Congress new legislation had to be
approved if the continuation of the emergency powers, or some of them, was desired. In the light of
the conditions surrounding the approval of the Emergency Power Act, we are of the opinion that the
"state of total emergency as a result of war" envisaged in the preamble referred to the impending
invasion and occupation of the Philippines by the enemy and the consequent total disorganization of
the Government, principally the impossibility for the National Assembly to act. The state of affairs
was one which called for immediate action and with which the National Assembly would would not
be able to cope. The war itself and its attendant chaos and calamities could not have necessitated
the delegation had the National Assembly been in a position to operate.
After all the criticism that have been made against the efficiency of the system of the separation of
powers, the fact remains that the Constitution has set up this form of government, with all its defects
and shortcomings, in preference to the commingling of powers in one man or group of men. The
Filipino people by adopting parliamentary government have given notice that they share the faith of
other democracy-loving people in this system, with all its faults, as the ideal. The point is, under this
framework of government, legislation is preserved for Congress all the time, not expecting periods of
crisis no matter how serious. Never in the history of the United States, the basic features of whose
Constitution have been copied in ours, have the specific functions of the legislative branch of
enacting laws been surrendered to another department unless we regard as legislating the
carrying out of a legislative policy according to prescribed standards; no, not even when that

Republic was fighting a total war, or when it was engaged in a life-and-death struggle to preserve the
Union. The truth is that under our concept of constitutional government, in times of extreme perils
more than in normal circumstances "the various branches, executive, legislative, and judicial," given
the ability to act, are called upon "to the duties and discharge the responsibilities committed to them
respectively."
These observations, though beyond the issue as formulated in this decision, may, we trust, also
serve to answer the vehement plea that for the good of the Nation, the President should retain his
extraordinary powers as long asturmoil and other ills directly or indirectly traceable to the late war
harass the Philippines.
Upon the foregoing considerations, the petitions will be granted. In order to avoid any possible
disruption and interruption in the normal operation of the Government, we have deemed it best to
depart in these cases from the ordinary rule to the period for the effectivity of decisions, and to
decree, as it is hereby decreed, that this decision take effect fifteen days from the date of the entry of
final judgment provided in section 8 of Rule 53 of the Rules of Court in relation to section 2 of Rule
35. No costs will be charged.
Ozaeta, J., concurs.

EN BANC

PROF. RANDOLF S. DAVID, LORENZO TAADA III, RONALD LLAMAS, H. HARRY L.

ROQUE, JR., JOEL RUIZ BUTUYAN, ROGER R. RAYEL, GARY S. MALLARI,
ROMEL REGALADO BAGARES, CHRISTOPHER F.C. BOLASTIG,
Petitioners,

- versus -

GLORIA MACAPAGAL-ARROYO,
AS PRESIDENT AND COMMANDER-INCHIEF, EXECUTIVE SECRETARY EDUARDO ERMITA, HON. AVELINO CRUZ II,
SECRETARY OF NATIONAL DEFENSE, GENERAL GENEROSO SENGA, CHIEF OF STAFF,
ARMED FORCES OF THE PHILIPPINES, DIRECTOR GENERAL ARTURO LOMIBAO, CHIEF,
PHILIPPINE NATIONAL POLICE,
Respondents.
x-------------------------------------------------x
NIEZ CACHO-OLIVARES AND TRIBUNE PUBLISHING CO., INC.,
Petitioners,

- versus -

HONORABLE SECRETARY EDUARDO ERMITA AND HONORABLE DIRECTOR GENERAL

ARTURO C. LOMIBAO,
Respondents.
x-------------------------------------------------x
FRANCIS JOSEPH G. ESCUDERO, JOSEPH A. SANTIAGO, TEODORO A. CASINO,
AGAPITO A. AQUINO, MARIO J. AGUJA, SATUR C. OCAMPO, MUJIV S. HATAMAN, JUAN
EDGARDO ANGARA, TEOFISTO DL. GUINGONA III, EMMANUEL JOSEL J. VILLANUEVA,
LIZA L. MAZA, IMEE R. MARCOS, RENATO B. MAGTUBO, JUSTIN MARC SB. CHIPECO,
ROILO GOLEZ, DARLENE ANTONINO-CUSTODIO, LORETTA ANN P. ROSALES, JOSEL G.
VIRADOR, RAFAEL V. MARIANO, GILBERT C. REMULLA, FLORENCIO G. NOEL, ANA
THERESIA HONTIVEROS-BARAQUEL, IMELDA C. NICOLAS, MARVIC M.V.F. LEONEN,
NERI JAVIER COLMENARES, MOVEMENT OF CONCERNED CITIZENS FOR CIVIL
LIBERTIES REPRESENTED BY AMADO GAT INCIONG,
Petitioners,

- versus -

EDUARDO R. ERMITA, EXECUTIVE SECRETARY, AVELINO J. CRUZ, JR., SECRETARY,

DND RONALDO V. PUNO, SECRETARY, DILG, GENEROSO SENGA, AFP CHIEF OF
STAFF, ARTURO LOMIBAO, CHIEF PNP,
Respondents.
x-------------------------------------------------x
KILUSANG MAYO UNO, REPRESENTED BY ITS CHAIRPERSON ELMER C. LABOG AND
SECRETARY GENERAL JOEL MAGLUNSOD, NATIONAL FEDERATION OF LABOR UNIONS
KILUSANG MAYO UNO (NAFLU-KMU), REPRESENTED BY ITS NATIONAL PRESIDENT,
JOSELITO V. USTAREZ, ANTONIO C. PASCUAL, SALVADOR T. CARRANZA, EMILIA P.
DAPULANG, MARTIN CUSTODIO, JR., AND ROQUE M. TAN,
Petitioners,

- versus -

HER EXCELLENCY, PRESIDENT GLORIA MACAPAGAL-ARROYO, THE HONORABLE

EXECUTIVE SECRETARY, EDUARDO ERMITA, THE CHIEF OF STAFF, ARMED FORCES OF
THE PHILIPPINES, GENEROSO SENGA, AND THE PNP DIRECTOR GENERAL, ARTURO
LOMIBAO,
Respondents.
x-------------------------------------------------x
ALTERNATIVE LAW GROUPS, INC. (ALG),
Petitioner,
- versus -

EXECUTIVE SECRETARY EDUARDO R. ERMITA, LT. GEN. GENEROSO SENGA, AND

DIRECTOR GENERAL ARTURO LOMIBAO,
Respondents.
x-------------------------------------------------x
JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R. RIVERA, JOSE AMOR
M. AMORADO, ALICIA A. RISOS-VIDAL, FELIMON C. ABELITA III, MANUEL P. LEGASPI,
J.B. JOVY C. BERNABE, BERNARD L. DAGCUTA, ROGELIO V. GARCIA AND INTEGRATED
BAR OF THE PHILIPPINES (IBP),
Petitioners,

- versus -

HON. EXECUTIVE SECRETARY EDUARDO ERMITA, GENERAL GENEROSO SENGA, IN

HIS CAPACITY AS AFP CHIEF OF STAFF, AND DIRECTOR GENERAL ARTURO LOMIBAO,
IN HIS CAPACITY AS PNP CHIEF,
Respondents.
x-------------------------------------------------x
LOREN B. LEGARDA,
Petitioner,

- versus -

GLORIA MACAPAGAL-ARROYO, IN HER CAPACITY AS PRESIDENT AND COMMANDERIN-CHIEF; ARTURO LOMIBAO, IN HIS CAPACITY AS DIRECTOR-GENERAL OF THE
PHILIPPINE NATIONAL POLICE (PNP); GENEROSO SENGA, IN HIS CAPACITY AS CHIEF
OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES (AFP); AND EDUARDO
ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY,
Respondents.

G.R. No. 171396

Present:

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

Promulgated:

May 3, 2006

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

DECISION

SANDOVAL-GUTIERREZ, J.:

All powers need some restraint; practical adjustments rather than rigid formula are
necessary.[1] Superior strength the use of force cannot make wrongs into
rights. In this regard, the courts should be vigilant in safeguarding the
constitutional rights of the citizens, specifically their liberty.

Chief Justice Artemio V. Panganibans philosophy of liberty is thus most relevant.

He said: In cases involving liberty, the scales of justice should weigh heavily
against government and in favor of the poor, the oppressed, the marginalized, the
dispossessed and the weak. Laws and actions that restrict fundamental rights
come to the courts with a heavy presumption against their constitutional
validity.[2]
These seven (7) consolidated petitions for certiorari and prohibition allege that
in issuing Presidential Proclamation No. 1017 (PP 1017) and General Order No. 5
(G.O. No. 5), President Gloria Macapagal-Arroyo committed grave abuse of
discretion. Petitioners contend that respondent officials of the Government, in their
professed efforts to defend and preserve democratic institutions, are actually
trampling upon the very freedom guaranteed and protected by the Constitution.
Hence, such issuances are void for being unconstitutional.

Once again, the Court is faced with an age-old but persistently modern
problem. How does the Constitution of a free people combine the degree of liberty,
without which, law becomes tyranny, with the degree of law, without which, liberty
becomes license?[3]
On February 24, 2006, as the nation celebrated the 20th Anniversary of the
Edsa People Power I, President Arroyo issued PP 1017 declaring a state of national
emergency, thus:

NOW, THEREFORE, I, Gloria Macapagal-Arroyo, President of the Republic of the

Philippines and Commander-in-Chief of the Armed Forces of the Philippines, by
virtue of the powers vested upon me by Section 18, Article 7 of the Philippine
Constitution which states that: The President. . . whenever it becomes necessary, .
. . may call out (the) armed forces to prevent or suppress. . .rebellion. . ., and in
my capacity as their Commander-in-Chief, do hereby command the Armed Forces of
the Philippines, to maintain law and order throughout the Philippines, prevent or
suppress all forms of lawless violence as well as any act of insurrection or rebellion
and to enforce obedience to all the laws and to all decrees, orders and regulations
promulgated by me personally or upon my direction; and as provided in Section 17,
Article 12 of the Constitution do hereby declare a State of National Emergency.

She cited the following facts as bases:

WHEREAS, over these past months, elements in the political opposition have
conspired with authoritarians of the extreme Left represented by the NDF-CPP-NPA

and the extreme Right, represented by military adventurists the historical

enemies of the democratic Philippine State who are now in a tactical alliance and
engaged in a concerted and systematic conspiracy, over a broad front, to bring
down the duly constituted Government elected in May 2004;

WHEREAS, these conspirators have repeatedly tried to bring down the President;

WHEREAS, the claims of these elements have been recklessly magnified by certain
segments of the national media;

WHEREAS, this series of actions is hurting the Philippine State by obstructing

governance including hindering the growth of the economy and sabotaging the
peoples confidence in government and their faith in the future of this country;

WHEREAS, these actions are adversely affecting the economy;

WHEREAS, these activities give totalitarian forces of both the extreme Left and
extreme Right the opening to intensify their avowed aims to bring down the
democratic Philippine State;

WHEREAS, Article 2, Section 4 of the our Constitution makes the defense and
preservation of the democratic institutions and the State the primary duty of
Government;

WHEREAS, the activities above-described, their consequences, ramifications and

collateral effects constitute a clear and present danger to the safety and the
integrity of the Philippine State and of the Filipino people;

On the same day, the President issued G. O. No. 5 implementing PP 1017, thus:

WHEREAS, over these past months, elements in the political opposition have
conspired with authoritarians of the extreme Left, represented by the NDF-CPP-NPA
and the extreme Right, represented by military adventurists - the historical enemies
of the democratic Philippine State and who are now in a tactical alliance and
engaged in a concerted and systematic conspiracy, over a broad front, to bring
down the duly-constituted Government elected in May 2004;
WHEREAS, these conspirators have repeatedly tried to bring down our
republican government;

WHEREAS, the claims of these elements have been recklessly magnified by certain
segments of the national media;

WHEREAS, these series of actions is hurting the Philippine State by obstructing

governance, including hindering the growth of the economy and sabotaging the
peoples confidence in the government and their faith in the future of this country;

WHEREAS, these actions are adversely affecting the economy;

WHEREAS, these activities give totalitarian forces; of both the extreme Left and
extreme Right the opening to intensify their avowed aims to bring down the
democratic Philippine State;

WHEREAS, Article 2, Section 4 of our Constitution makes the defense and

preservation of the democratic institutions and the State the primary duty of
Government;

WHEREAS, the activities above-described, their consequences, ramifications and

collateral effects constitute a clear and present danger to the safety and the
integrity of the Philippine State and of the Filipino people;

WHEREAS, Proclamation 1017 date February 24, 2006 has been issued declaring a
State of National Emergency;

NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in

me under the Constitution as President of the Republic of the Philippines, and
Commander-in-Chief of the Republic of the Philippines, and pursuant to
Proclamation No. 1017 dated February 24, 2006, do hereby call upon the Armed
Forces of the Philippines (AFP) and the Philippine National Police (PNP), to prevent
and suppress acts of terrorism and lawless violence in the country;

I hereby direct the Chief of Staff of the AFP and the Chief of the PNP, as well
as the officers and men of the AFP and PNP, to immediately carry out the necessary
and appropriate actions and measures to suppress and prevent acts of terrorism
and lawless violence.

On March 3, 2006, exactly one week after the declaration of a state of national
emergency and after all these petitions had been filed, the President lifted PP 1017.
She issued Proclamation No. 1021 which reads:

WHEREAS, pursuant to Section 18, Article VII and Section 17, Article XII of the
Constitution, Proclamation No. 1017 dated February 24, 2006, was issued declaring
a state of national emergency;

WHEREAS, by virtue of General Order No.5 and No.6 dated February 24,
2006, which were issued on the basis of Proclamation No. 1017, the Armed Forces of
the Philippines (AFP) and the Philippine National Police (PNP), were directed to
maintain law and order throughout the Philippines, prevent and suppress all form of
lawless violence as well as any act of rebellion and to undertake such action as may
be necessary;

WHEREAS, the AFP and PNP have effectively prevented, suppressed and
quelled the acts lawless violence and rebellion;

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic

of the Philippines, by virtue of the powers vested in me by law, hereby declare that
the state of national emergency has ceased to exist.

In their presentation of the factual bases of PP 1017 and G.O. No. 5, respondents
stated that the proximate cause behind the executive issuances was the conspiracy
among some military officers, leftist insurgents of the New Peoples Army (NPA),
and some members of the political opposition in a plot to unseat or assassinate
President Arroyo.[4] They considered the aim to oust or assassinate the President
and take-over the reigns of government as a clear and present danger.

During the oral arguments held on March 7, 2006, the Solicitor General specified the
facts leading to the issuance of PP 1017 and
G.O. No. 5. Significantly, there
was no refutation from petitioners counsels.

The Solicitor General argued that the intent of the Constitution is to give full
discretionary powers to the President in determining the necessity of calling out the
armed forces. He emphasized that none of the petitioners has shown that PP 1017
was without factual bases. While he explained that it is not respondents task to
state the facts behind the questioned Proclamation, however, they are presenting
the same, narrated hereunder, for the elucidation of the issues.

On January 17, 2006, Captain Nathaniel Rabonza and

First Lieutenants
Sonny Sarmiento, Lawrence San Juan and Patricio Bumidang, members of the
Magdalo Group indicted in the Oakwood mutiny, escaped their detention cell in Fort
Bonifacio, Taguig City. In a public statement, they vowed to remain defiant and to
elude arrest at all costs. They called upon the people to show and proclaim our
displeasure at the sham regime. Let us demonstrate our disgust, not only by going
to the streets in protest, but also by wearing red bands on our left arms. [5]

On February 17, 2006, the authorities got hold of a document entitled Oplan
Hackle I which detailed plans for bombings and attacks during the Philippine
Military Academy Alumni Homecoming in Baguio City. The plot was to assassinate
selected targets including some cabinet members and President Arroyo herself.[6]
Upon the advice of her security, President Arroyo decided not to attend the Alumni
Homecoming. The next day, at the height of the celebration, a bomb was found and
detonated at the PMA parade ground.

On February 21, 2006, Lt. San Juan was recaptured in a communist safehouse in
Batangas province. Found in his possession were two (2) flash disks containing
minutes of the meetings between members of the Magdalo Group and the National
Peoples Army (NPA), a tape recorder, audio cassette cartridges, diskettes, and
copies of subversive documents.[7] Prior to his arrest, Lt. San Juan announced
through DZRH that the Magdalos D-Day would be on February 24, 2006, the 20th
Anniversary of Edsa I.

On February 23, 2006, PNP Chief Arturo Lomibao intercepted information that
members of the PNP- Special Action Force were planning to defect. Thus, he
immediately ordered SAF Commanding General Marcelino Franco, Jr. to disavow
any defection. The latter promptly obeyed and issued a public statement: All SAF
units are under the effective control of responsible and trustworthy officers with
proven integrity and unquestionable loyalty.

On the same day, at the house of former Congressman Peping Cojuangco, President
Cory Aquinos brother, businessmen and mid-level government officials plotted
moves to bring down the Arroyo administration. Nelly Sindayen of TIME Magazine
reported that Pastor Saycon, longtime Arroyo critic, called a U.S. government official
about his groups plans if President Arroyo is ousted. Saycon also phoned a man
code-named Delta. Saycon identified him as B/Gen. Danilo Lim, Commander of the
Armys elite Scout Ranger. Lim said it was all systems go for the planned
movement against Arroyo.[8]

B/Gen. Danilo Lim and Brigade Commander Col. Ariel Querubin confided to Gen.
Generoso Senga, Chief of Staff of the Armed Forces of the Philippines (AFP), that a
huge number of soldiers would join the rallies to provide a critical mass and armed
component to the Anti-Arroyo protests to be held on February 24, 2005. According
to these two (2) officers, there was no way they could possibly stop the soldiers
because they too, were breaking the chain of command to join the forces foist to
unseat the President. However, Gen. Senga has remained faithful to his
Commander-in-Chief and to the chain of command. He immediately took custody of
B/Gen. Lim and directed Col. Querubin to return to the Philippine Marines
Headquarters in Fort Bonifacio.

Earlier, the CPP-NPA called for intensification of political and revolutionary work
within the military and the police establishments in order to forge alliances with its
members and key officials. NPA spokesman Gregorio Ka Roger Rosal declared:
The Communist Party and revolutionary movement and the entire people look
forward to the possibility in the coming year of accomplishing its immediate task of
bringing down the Arroyo regime; of rendering it to weaken and unable to rule that
it will not take much longer to end it.[9]

On the other hand, Cesar Renerio, spokesman for the National Democratic Front
(NDF) at North Central Mindanao, publicly announced: Anti-Arroyo groups within
the military and police are growing rapidly, hastened by the economic difficulties
suffered by the families of AFP officers and enlisted personnel who undertake
counter-insurgency operations in the field. He claimed that with the forces of the
national democratic movement, the anti-Arroyo conservative political parties,
coalitions, plus the groups that have been reinforcing since June 2005, it is probable
that the Presidents ouster is nearing its concluding stage in the first half of 2006.

Respondents further claimed that the bombing of telecommunication towers and

cell sites in Bulacan and Bataan was also considered as additional factual basis for
the issuance of PP 1017 and G.O. No. 5. So is the raid of an army outpost in
Benguet resulting in the death of three (3) soldiers. And also the directive of the
Communist Party of the Philippines ordering its front organizations to join 5,000
Metro Manila radicals and 25,000 more from the provinces in mass protests.[10]

By midnight of February 23, 2006, the President convened her security advisers and
several cabinet members to assess the gravity of the fermenting peace and order
situation. She directed both the AFP and the PNP to account for all their men and

ensure that the chain of command remains solid and undivided. To protect the
young students from any possible trouble that might break loose on the streets, the
President suspended classes in all levels in the entire National Capital Region.

For their part, petitioners cited the events that followed after the issuance of PP
1017 and G.O. No. 5.

Immediately, the Office of the President announced the cancellation of all programs
and activities related to the 20th anniversary celebration of Edsa People Power I;
and revoked the permits to hold rallies issued earlier by the local governments.
Justice Secretary Raul Gonzales stated that political rallies, which to the Presidents
mind were organized for purposes of destabilization, are cancelled. Presidential
Chief of Staff Michael Defensor announced that warrantless arrests and take-over
of facilities, including media, can already be implemented.[11]

Undeterred by the announcements that rallies and public assemblies would not be
allowed, groups of protesters (members of Kilusang Mayo Uno [KMU] and National
Federation of Labor Unions-Kilusang Mayo Uno [NAFLU-KMU]), marched from various
parts of Metro Manila with the intention of converging at the EDSA shrine. Those
who were already near the EDSA site were violently dispersed by huge clusters of
anti-riot police. The well-trained policemen used truncheons, big fiber glass
shields, water cannons, and tear gas to stop and break up the marching groups, and
scatter the massed participants. The same police action was used against the
protesters marching forward to Cubao, Quezon City and to the corner of Santolan
Street and EDSA. That same evening, hundreds of riot policemen broke up an
EDSA celebration rally held along Ayala Avenue and Paseo de Roxas Street in Makati
City.[12]

According to petitioner Kilusang Mayo Uno, the police cited PP 1017 as the ground
for the dispersal of their assemblies.

During the dispersal of the rallyists along EDSA, police arrested (without warrant)
petitioner Randolf S. David, a professor at the University of the Philippines and
newspaper columnist. Also arrested was his companion, Ronald Llamas, president of
party-list Akbayan.

At around 12:20 in the early morning of February 25, 2006, operatives of the
Criminal Investigation and Detection Group (CIDG) of the PNP, on the basis of PP
1017 and G.O. No. 5, raided the Daily Tribune offices in Manila. The raiding team
confiscated news stories by reporters, documents, pictures, and mock-ups of the
Saturday issue. Policemen from Camp Crame in Quezon City were stationed inside
the editorial and business offices of the newspaper; while policemen from the
Manila Police District were stationed outside the building.[13]

A few minutes after the search and seizure at the Daily Tribune offices, the police
surrounded the premises of another pro-opposition paper, Malaya, and its sister
publication, the tabloid Abante.

The raid, according to Presidential Chief of Staff Michael Defensor, is meant to

show a strong presence, to tell media outlets not to connive or do anything that
would help the rebels in bringing down this government. The PNP warned that it

would take over any media organization that would not follow standards set by the
government during the state of national emergency. Director General Lomibao
stated that if they do not follow the standards and the standards are - if they
would contribute to instability in the government, or if they do not subscribe to what
is in General Order No. 5 and Proc. No. 1017 we will recommend a takeover.
National Telecommunications Commissioner Ronald Solis urged television and
radio networks to cooperate with the government for the duration of the state of
national emergency. He asked for balanced reporting from broadcasters when
covering the events surrounding the coup attempt foiled by the government. He
warned that his agency will not hesitate to recommend the closure of any broadcast
outfit that violates rules set out for media coverage when the national security is
threatened.[14]

Also, on February 25, 2006, the police arrested Congressman Crispin Beltran,
representing the Anakpawis Party and Chairman of Kilusang Mayo Uno (KMU), while
leaving his farmhouse in Bulacan. The police showed a warrant for his arrest dated
1985. Beltrans lawyer explained that the warrant, which stemmed from a case of
inciting to rebellion filed during the Marcos regime, had long been quashed.
Beltran, however, is not a party in any of these petitions.

When members of petitioner KMU went to Camp Crame to visit Beltran, they were
told they could not be admitted because of PP 1017 and G.O. No. 5. Two members
were arrested and detained, while the rest were dispersed by the police.

Bayan Muna Representative Satur Ocampo eluded arrest when the police went after
him during a public forum at the Sulo Hotel in Quezon City. But his two drivers,
identified as Roel and Art, were taken into custody.

Retired Major General Ramon Montao, former head of the Philippine Constabulary,
was arrested while with his wife and golfmates at the Orchard Golf and Country Club
in Dasmarias, Cavite.

Attempts were made to arrest Anakpawis Representative Satur Ocampo,

Representative Rafael Mariano, Bayan Muna Representative Teodoro Casio and
Gabriela Representative Liza Maza. Bayan Muna Representative Josel Virador was
arrested at the PAL Ticket Office in Davao City. Later, he was turned over to the
custody of the House of Representatives where the Batasan 5 decided to stay
indefinitely.

Let it be stressed at this point that the alleged violations of the rights of
Representatives Beltran, Satur Ocampo, et al., are not being raised in these
petitions.

On March 3, 2006, President Arroyo issued PP 1021 declaring that the state of
national emergency has ceased to exist.

In the interim, these seven (7) petitions challenging the constitutionality of PP 1017
and G.O. No. 5 were filed with this Court against the above-named respondents.
Three (3) of these petitions impleaded President Arroyo as respondent.

In G.R. No. 171396, petitioners Randolf S. David, et al. assailed PP 1017 on the
grounds that (1) it encroaches on the emergency powers of Congress; (2) it is a
subterfuge to avoid the constitutional requirements for the imposition of martial
law; and (3) it violates the constitutional guarantees of freedom of the press, of
speech and of assembly.

In G.R. No. 171409, petitioners Ninez Cacho-Olivares and Tribune Publishing

Co., Inc. challenged the CIDGs act of raiding the Daily Tribune offices as a clear
case of censorship or prior restraint. They also claimed that the term
emergency refers only to tsunami, typhoon, hurricane and similar occurrences,
hence, there is absolutely no emergency that warrants the issuance of PP 1017.

In G.R. No. 171485, petitioners herein are Representative Francis Joseph G.

Escudero, and twenty one (21) other members of the House of Representatives,
including Representatives Satur Ocampo, Rafael Mariano, Teodoro Casio, Liza Maza,
and Josel Virador. They asserted that PP 1017 and G.O. No. 5 constitute
usurpation of legislative powers; violation of freedom of expression and a
declaration of martial law. They alleged that President Arroyo gravely abused
her discretion in calling out the armed forces without clear and verifiable factual
basis of the possibility of lawless violence and a showing that there is necessity to
do so.

In G.R. No. 171483, petitioners KMU, NAFLU-KMU, and their members averred
that PP 1017 and G.O. No. 5 are unconstitutional because (1) they arrogate unto
President Arroyo the power to enact laws and decrees; (2) their issuance was
without factual basis; and (3) they violate freedom of expression and the right of the
people to peaceably assemble to redress their grievances.

In G.R. No. 171400, petitioner Alternative Law Groups, Inc. (ALGI) alleged that PP
1017 and G.O. No. 5 are unconstitutional because they violate (a) Section 4[15] of
Article II, (b) Sections 1,[16] 2,[17] and 4[18] of Article III, (c) Section 23[19] of
Article VI, and (d) Section 17[20] of Article XII of the Constitution.

In G.R. No. 171489, petitioners Jose Anselmo I. Cadiz et al., alleged that PP 1017 is
an arbitrary and unlawful exercise by the President of her Martial Law powers.
And assuming that PP 1017 is not really a declaration of Martial Law, petitioners
argued that it amounts to an exercise by the President of emergency powers
without congressional approval. In addition, petitioners asserted that PP 1017
goes beyond the nature and function of a proclamation as defined under the
Revised Administrative Code.

And lastly, in G.R. No. 171424, petitioner Loren B. Legarda maintained that PP 1017
and G.O. No. 5 are unconstitutional for being violative of the freedom of
expression, including its cognate rights such as freedom of the press and the right
to access to information on matters of public concern, all guaranteed under Article
III, Section 4 of the 1987 Constitution. In this regard, she stated that these
issuances prevented her from fully prosecuting her election protest pending before
the Presidential Electoral Tribunal.

In respondents Consolidated Comment, the Solicitor General countered that:

first, the petitions should be dismissed for being
moot; second, petitioners in
G.R. Nos. 171400 (ALGI), 171424 (Legarda), 171483 (KMU et al.), 171485 (Escudero
et al.) and 171489 (Cadiz et al.) have no legal standing; third, it is not necessary for

petitioners to implead President Arroyo as respondent; fourth, PP 1017 has

constitutional and legal basis; and fifth, PP 1017 does not violate the peoples right
to free expression and redress of grievances.

On March 7, 2006, the Court conducted oral arguments and heard the parties
on the above interlocking issues which may be summarized as follows:

A.
1)

PROCEDURAL:

Whether the issuance of PP 1021 renders the petitions moot and academic.

2) Whether petitioners in 171485 (Escudero et al.), G.R. Nos. 171400 (ALGI),

171483 (KMU et al.), 171489 (Cadiz et al.), and 171424 (Legarda) have legal
standing.
B.

SUBSTANTIVE:

1)

Whether the Supreme Court can review the factual bases of PP 1017.

2)

Whether PP 1017 and G.O. No. 5 are unconstitutional.

a. Facial Challenge
b. Constitutional Basis
c. As Applied Challenge

A.

PROCEDURAL

First, we must resolve the procedural roadblocks.

I- Moot and Academic Principle

One of the greatest contributions of the American system to this country is the
concept of judicial review enunciated in Marbury v. Madison.[21] This concept rests
on the extraordinary simple foundation --

The Constitution is the supreme law. It was ordained by the people, the
ultimate source of all political authority. It confers limited powers on the national
government. x x x If the government consciously or unconsciously oversteps these
limitations there must be some authority competent to hold it in control, to thwart
its unconstitutional attempt, and thus to vindicate and preserve inviolate the will of
the people as expressed in the Constitution. This power the courts exercise. This is
the beginning and the end of the theory of judicial review.[22]

But the power of judicial review does not repose upon the courts a selfstarting capacity.[23] Courts may exercise such power only when the following
requisites are present: first, there must be an actual case or controversy; second,
petitioners have to raise a question of constitutionality; third, the constitutional
question must be raised at the earliest opportunity; and fourth, the decision of the
constitutional question must be necessary to the determination of the case itself.
[24]

Respondents maintain that the first and second requisites are absent, hence, we
shall limit our discussion thereon.

An actual case or controversy involves a conflict of legal right, an opposite legal

claims susceptible of judicial resolution. It is definite and concrete, touching the
legal relations of parties having adverse legal interest; a real and substantial
controversy admitting of specific relief.[25] The Solicitor General refutes the
existence of such actual case or controversy, contending that the present petitions
were rendered moot and academic by President Arroyos issuance of PP 1021.

Such contention lacks merit.

A moot and academic case is one that ceases to present a justiciable controversy by
virtue of supervening events,[26] so that a declaration thereon would be of no
practical use or value.[27] Generally, courts decline jurisdiction over such case[28]
or dismiss it on ground of mootness.[29]

The Court holds that President Arroyos issuance of PP 1021 did not render the
present petitions moot and academic. During the eight (8) days that PP 1017 was
operative, the police officers, according to petitioners, committed illegal acts in
implementing it. Are PP 1017 and G.O. No. 5 constitutional or valid? Do they justify
these alleged illegal acts? These are the vital issues that must be resolved in the
present petitions. It must be stressed that an unconstitutional act is not a law, it
confers no rights, it imposes no duties, it affords no protection; it is in legal
contemplation, inoperative.[30]

The moot and academic principle is not a magical formula that can automatically
dissuade the courts in resolving a case. Courts will decide cases, otherwise moot
and academic, if: first, there is a grave violation of the Constitution;[31] second, the
exceptional character of the situation and the paramount public interest is involved;
[32] third, when constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar, and the public;[33] and fourth, the case is
capable of repetition yet evading review.[34]

All the foregoing exceptions are present here and justify this Courts assumption of
jurisdiction over the instant petitions. Petitioners alleged that the issuance of PP
1017 and G.O. No. 5 violates the Constitution. There is no question that the issues
being raised affect the publics interest, involving as they do the peoples basic
rights to freedom of expression, of assembly and of the press. Moreover, the Court
has the duty to formulate guiding and controlling constitutional precepts, doctrines
or rules. It has the symbolic function of educating the bench and the bar, and in the
present petitions, the military and the police, on the extent of the protection given
by constitutional guarantees.[35] And lastly, respondents contested actions are
capable of repetition. Certainly, the petitions are subject to judicial review.

In their attempt to prove the alleged mootness of this case, respondents cited Chief
Justice Artemio V. Panganibans Separate Opinion in Sanlakas v. Executive
Secretary.[36] However, they failed to take into account the Chief Justices very
statement that an otherwise moot case may still be decided provided the party
raising it in a proper case has been and/or continues to be prejudiced or damaged
as a direct result of its issuance. The present case falls right within this exception
to the mootness rule pointed out by the Chief Justice.

II- Legal Standing

In view of the number of petitioners suing in various personalities, the Court deems
it imperative to have a more than passing discussion on legal standing or locus
standi.

Locus standi is defined as a right of appearance in a court of justice on a

given question.[37] 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.[38] 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,
[39] 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:[40] 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[41] 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,
[42] later reaffirmed in Tileston v. Ullman.[43] 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,
[44] 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,[45] Manila Race Horse Trainers
Association v. De la Fuente,[46] Pascual v. Secretary of Public Works[47] and AntiChinese League of the Philippines v. Felix.[48]

However, being a mere procedural technicality, the requirement of locus standi may
be waived by the Court in the exercise of its discretion. This was done in the 1949
Emergency Powers Cases, Araneta v. Dinglasan,[49] where the transcendental
importance of the cases prompted the Court to act liberally. Such liberality was
neither a rarity nor accidental. In Aquino v. Comelec,[50] this Court resolved to
pass upon the issues raised due to the far-reaching implications of the petition
notwithstanding its categorical statement that petitioner therein had no personality
to file the suit. Indeed, there is a chain of cases where this liberal policy has been
observed, allowing ordinary citizens, members of Congress, and civic organizations
to prosecute actions involving the constitutionality or validity of laws, regulations
and rulings.[51]

Thus, the Court has adopted a rule that even where the petitioners have failed
to show direct injury, they have been allowed to sue under the principle of
transcendental importance. Pertinent are the following cases:

(1) Chavez v. Public Estates Authority,[52] where the Court ruled that the
enforcement of the constitutional right to information and the equitable diffusion of
natural resources are matters of transcendental importance which clothe the
petitioner with locus standi;

(2) Bagong Alyansang Makabayan v. Zamora,[53] wherein the Court held that
given the transcendental importance of the issues involved, the Court may relax
the standing requirements and allow the suit to prosper despite the lack of direct
injury to the parties seeking judicial review of the Visiting Forces Agreement;

(3) Lim v. Executive Secretary,[54] while the Court noted that the petitioners may
not file suit in their capacity as taxpayers absent a showing that Balikatan 02-01
involves the exercise of Congress taxing or spending powers, it
reiterated
its ruling in Bagong Alyansang Makabayan v. Zamora,[55] that in cases of
transcendental importance, the cases must be settled promptly and definitely and
standing requirements may be relaxed.

By way of summary, the following rules may be culled from the cases decided by
this Court. Taxpayers, voters, concerned citizens, and legislators may be accorded
standing to sue, provided that the following requirements are met:

(1)

the cases involve constitutional issues;

(2)
for taxpayers, there must be a claim of illegal disbursement of public
funds or that the tax measure is unconstitutional;
(3)
for voters, there must be a showing of obvious interest in the validity
of the election law in question;

(4)
for concerned citizens, there must be a showing that the issues
raised are of transcendental importance which must be settled early; and
(5)
for legislators, there must be a claim that the official action
complained of infringes upon their prerogatives as legislators.
Significantly, recent decisions show a certain toughening in the Courts attitude
toward legal standing.
In Kilosbayan, Inc. v. Morato,[56] the Court ruled that the status of Kilosbayan
as a peoples organization does not give it the requisite personality to question the
validity of the on-line lottery contract, more so where it does not raise any issue of
constitutionality. Moreover, it cannot sue as a taxpayer absent any allegation that
public funds are being misused. Nor can it sue as a concerned citizen as it does not
allege any specific injury it has suffered.
In Telecommunications and Broadcast Attorneys of the Philippines, Inc. v.
Comelec,[57] the Court reiterated the direct injury test with respect to
concerned citizens cases involving constitutional issues. It held that there must
be a showing that the citizen personally suffered some actual or threatened injury
arising from the alleged illegal official act.
In Lacson v. Perez,[58] the Court ruled that one of the petitioners, Laban ng
Demokratikong Pilipino (LDP), is not a real party-in-interest as it had not
demonstrated any injury to itself or to its leaders, members or supporters.
In Sanlakas v. Executive Secretary,[59] the Court ruled that only the petitioners who
are members of Congress have standing to sue, as they claim that the Presidents
declaration of a state of rebellion is a usurpation of the emergency powers of
Congress, thus impairing their legislative powers. As to petitioners Sanlakas, Partido
Manggagawa, and Social Justice Society, the Court declared them to be devoid of
standing, equating them with the LDP in Lacson.
Now, the application of the above principles to the present petitions.
The locus standi of petitioners in G.R. No. 171396, particularly David and Llamas, is
beyond doubt. The same holds true with petitioners in G.R. No. 171409, CachoOlivares and Tribune Publishing Co. Inc. They alleged direct injury resulting from
illegal arrest and unlawful search committed by police operatives pursuant to
PP 1017. Rightly so, the Solicitor General does not question their legal standing.
In G.R. No. 171485, the opposition Congressmen alleged there was usurpation
of legislative powers. They also raised the issue of whether or not the concurrence
of Congress is necessary whenever the alarming powers incident to Martial Law are
used. Moreover, it is in the interest of justice that those affected by PP 1017 can be
represented by their Congressmen in bringing to the attention of the Court the
alleged violations of their basic rights.
In G.R. No. 171400, (ALGI), this Court applied the liberality rule in Philconsa v.
Enriquez,[60] Kapatiran Ng Mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Tan,
[61] Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform,[62] Basco v. Philippine Amusement and Gaming Corporation,[63] and Ta
ada v. Tuvera,[64] that when the issue concerns a public right, it is sufficient that
the petitioner is a citizen and has an interest in the execution of the laws.
In G.R. No. 171483, KMUs assertion that PP 1017 and G.O. No. 5 violated its right
to peaceful assembly may be deemed sufficient to give it legal standing.
Organizations may be granted standing to assert the rights of their members.[65]
We take judicial notice of the announcement by the Office of the President banning
all rallies and canceling all permits for public assemblies following the issuance of
PP 1017 and G.O. No. 5.
In G.R. No. 171489, petitioners, Cadiz et al., who are national officers of the
Integrated Bar of the Philippines (IBP) have no legal standing, having failed to allege
any direct or potential injury which the IBP as an institution or its members may
suffer as a consequence of the issuance of PP No. 1017 and G.O. No. 5. In

Integrated Bar of the Philippines v. Zamora,[66] the Court held that the mere
invocation by the IBP of its duty to preserve the rule of law and nothing more, while
undoubtedly true, is not sufficient to clothe it with standing in this case. This is too
general an interest which is shared by other groups and the whole citizenry.
However, in view of the transcendental importance of the issue, this Court declares
that petitioner have locus standi.
In G.R. No. 171424, Loren Legarda has no personality as a taxpayer to file the
instant petition as there are no allegations of illegal disbursement of public funds.
The fact that she is a former Senator is of no consequence. She can no longer sue
as a legislator on the allegation that her prerogatives as a lawmaker have been
impaired by PP 1017 and G.O. No. 5. Her claim that she is a media personality will
not likewise aid her because there was no showing that the enforcement of these
issuances prevented her from pursuing her occupation. Her submission that she
has pending electoral protest before the Presidential Electoral Tribunal is likewise of
no relevance. She has not sufficiently shown that PP 1017 will affect the
proceedings or result of her case. But considering once more the transcendental
importance of the issue involved, this Court may relax the standing rules.
It must always be borne in mind that the question of locus standi is but corollary to
the bigger question of proper exercise of judicial power. This is the underlying legal
tenet of the liberality doctrine on legal standing. It cannot be doubted that the
validity of PP No. 1017 and G.O. No. 5 is a judicial question which is of paramount
importance to the Filipino people. To paraphrase Justice Laurel, the whole of
Philippine society now waits with bated breath the ruling of this Court on this very
critical matter. The petitions thus call for the application of the transcendental
importance doctrine, a relaxation of the standing requirements for the petitioners
in the PP 1017 cases.

This Court holds that all the petitioners herein have locus standi.

Incidentally, it is not proper to implead President Arroyo as respondent. Settled is

the doctrine that the President, during his tenure of office or actual incumbency,[67]
may not be sued in any civil or criminal case, and there is no need to provide for it
in the Constitution or law. It will degrade the dignity of the high office of the
President, the Head of State, if he can be dragged into court litigations while serving
as such. Furthermore, it is important that he be freed from any form of
harassment, hindrance or distraction to enable him to fully attend to the
performance of his official duties and functions. Unlike the legislative and judicial
branch, only one constitutes the executive branch and anything which impairs his
usefulness in the discharge of the many great and important duties imposed upon
him by the Constitution necessarily impairs the operation of the Government.
However, this does not mean that the President is not accountable to anyone. Like
any other official, he remains accountable to the people[68] but he may be removed
from office only in the mode provided by law and that is by impeachment.[69]

B. SUBSTANTIVE
I. Review of Factual Bases

Petitioners maintain that PP 1017 has no factual basis. Hence, it was not
necessary for President Arroyo to issue such Proclamation.

The issue of whether the Court may review the factual bases of the Presidents
exercise of his Commander-in-Chief power has reached its distilled point - from the
indulgent days of Barcelon v. Baker[70]
and Montenegro v.

Castaneda[71] to the volatile era of Lansang v.

Garcia,[72] Aquino, Jr. v.
Enrile,[73] and Garcia-Padilla v. Enrile.[74] The tug-of-war always cuts across the
line defining political questions, particularly those questions in regard to which
full discretionary authority has been delegated to the legislative or executive branch
of the government.[75] Barcelon and Montenegro were in unison in declaring that
the authority to decide whether an exigency has arisen belongs to the President and
his decision is final and conclusive on the courts. Lansang took the opposite view.
There, the members of the Court were unanimous in the conviction that the Court
has the authority to inquire into the existence of factual bases in order to determine
their constitutional sufficiency. From the principle of separation of powers, it shifted
the focus to the system of checks and balances, under which the President is
supreme, x x x only if and when he acts within the sphere allotted to him by the
Basic Law, and
the authority to determine whether or not he has so acted is
vested
in the Judicial Department, which in this respect, is, in
turn, constitutionally supreme.[76] In 1973, the unanimous Court of Lansang was
divided in Aquino v. Enrile.[77] There, the Court was
almost evenly
divided on the issue of whether the validity of the
imposition of
Martial Law is a political or justiciable question.[78] Then came Garcia-Padilla v.
Enrile which greatly diluted Lansang. It declared that there is a need to re-examine
the latter case, ratiocinating that in times of war or national emergency, the
President must be given absolute control for the very life of the nation and the
government is in great peril. The President, it intoned, is answerable only to his
conscience, the People, and God.[79]

The Integrated Bar of the Philippines v. Zamora[80] -- a recent case most pertinent
to these cases at bar -- echoed a principle similar to Lansang. While the Court
considered the Presidents calling-out power as a discretionary power solely
vested in his wisdom, it stressed that this does not prevent an examination of
whether such power was exercised within permissible constitutional limits or
whether it was exercised in a manner constituting grave abuse of discretion. This
ruling is mainly a result of the Courts reliance on Section 1, Article VIII of 1987
Constitution which fortifies the authority of the courts to determine in an
appropriate action the validity of the acts of the political departments. Under the
new definition of judicial power, the courts are authorized not only to settle actual
controversies involving rights which are legally demandable and enforceable, but
also to determine whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the government. The latter part of the authority represents a
broadening of judicial power to enable the courts of justice to review what was
before a forbidden territory, to wit, the discretion of the political departments of
the government.[81] It speaks of judicial prerogative not only in terms of power
but also of duty.[82]

As to how the Court may inquire into the Presidents exercise of power, Lansang
adopted the test that judicial inquiry can go no further than to satisfy the Court
not that the Presidents decision is correct, but that the President did not act
arbitrarily. Thus, the standard laid down is not correctness, but arbitrariness.[83]
In Integrated Bar of the Philippines, this Court further ruled that it is incumbent
upon the petitioner to show that the Presidents decision is totally bereft of factual
basis and that if he fails, by way of proof, to support his assertion, then this
Court cannot undertake an independent investigation beyond the pleadings.

Petitioners failed to show that President Arroyos exercise of the calling-out power,
by issuing PP 1017, is totally bereft of factual basis. A reading of the Solicitor
Generals Consolidated Comment and Memorandum shows a detailed narration of
the events leading to the issuance of PP 1017, with supporting reports forming part
of the records. Mentioned are the escape of the Magdalo Group, their audacious
threat of the Magdalo D-Day, the defections in the military, particularly in the

Philippine Marines, and the reproving statements from the communist leaders.
There was also the Minutes of the Intelligence Report and Security Group of the
Philippine Army showing the growing alliance between the NPA and the military.
Petitioners presented nothing to refute such events. Thus, absent any contrary
allegations, the Court is convinced that the President was justified in issuing PP
1017 calling for military aid.

Indeed, judging the seriousness of the incidents, President Arroyo was not expected
to simply fold her arms and do nothing to prevent or suppress what she believed
was lawless violence, invasion or rebellion. However, the exercise of such power or
duty must not stifle liberty.

II. Constitutionality of PP 1017 and G.O. No. 5

Doctrines of Several Political Theorists

on the Power of the President
in Times of Emergency

This case brings to fore a contentious subject -- the power of the President in times
of emergency. A glimpse at the various political theories relating to this subject
provides an adequate backdrop for our ensuing discussion.

John Locke, describing the architecture of civil government, called upon the English
doctrine of prerogative to cope with the problem of emergency. In times of danger
to the nation, positive law enacted by the legislature might be inadequate or even a
fatal obstacle to the promptness of action necessary to avert catastrophe. In these
situations, the Crown retained a prerogative power to act according to discretion
for the public good, without the proscription of the law and sometimes even against
it.[84] But Locke recognized that this moral restraint might not suffice to avoid
abuse of prerogative powers. Who shall judge the need for resorting to the
prerogative and how may its abuse be avoided? Here, Locke readily admitted
defeat, suggesting that the people have no other remedy in this, as in all other
cases where they have no judge on earth, but to appeal to Heaven.[85]

Jean-Jacques Rousseau also assumed the need for temporary suspension of

democratic processes of government in time of emergency. According to him:

The inflexibility of the laws, which prevents them from adopting themselves to
circumstances, may, in certain cases, render them disastrous and make them bring
about, at a time of crisis, the ruin of the State

It is wrong therefore to wish to make political institutions as strong as to render it

impossible to suspend their operation. Even Sparta allowed its law to lapse...

If the peril is of such a kind that the paraphernalia of the laws are an obstacle to
their preservation, the method is to nominate a supreme lawyer, who shall silence
all the laws and suspend for a moment the sovereign authority. In such a case, there
is no doubt about the general will, and it clear that the peoples first intention is
that the State shall not perish.[86]

Rosseau did not fear the abuse of the emergency dictatorship or supreme
magistracy as he termed it. For him, it would more likely be cheapened by
indiscreet use. He was unwilling to rely upon an appeal to heaven. Instead,
he relied upon a tenure of office of prescribed duration to avoid perpetuation of the
dictatorship.[87]

John Stuart Mill concluded his ardent defense of representative government: I am

far from condemning, in cases of extreme necessity, the assumption of absolute
power in the form of a temporary dictatorship.[88]

Nicollo Machiavellis view of emergency powers, as one element in the whole

scheme of limited government, furnished an ironic contrast to the Lockean theory of
prerogative. He recognized and attempted to bridge this chasm in democratic
political theory, thus:

Now, in a well-ordered society, it should never be necessary to resort to

extra constitutional measures; for although they may for a time be beneficial, yet
the precedent is pernicious, for if the practice is once established for good objects,
they will in a little while be disregarded under that pretext but for evil purposes.
Thus, no republic will ever be perfect if she has not by law provided for everything,
having a remedy for every emergency and fixed rules for applying it.[89]

Machiavelli in contrast to Locke, Rosseau and Mill sought to incorporate

into the constitution a regularized system of standby emergency powers to be
invoked with suitable checks and controls in time of national danger. He attempted
forthrightly to meet the problem of combining a capacious reserve of power and
speed and vigor in its application in time of emergency, with effective constitutional
restraints.[90]

Contemporary political theorists, addressing themselves to the problem of response

to emergency by constitutional democracies, have employed the doctrine of
constitutional dictatorship.[91] Frederick M. Watkins saw no reason why
absolutism should not be used as a means for the defense of liberal institutions,
provided it serves to protect established institutions from the danger of permanent
injury in a period of temporary emergency and is followed by a prompt return to the
previous forms of political life.[92] He recognized the two (2) key elements of the

problem of emergency governance, as well as all constitutional governance:

increasing administrative powers of the executive, while at the same time
imposing limitation upon that power.[93] Watkins placed his real faith in a
scheme of constitutional dictatorship. These are the conditions of success of such a
dictatorship: The period of dictatorship must be relatively shortDictatorship
should always be strictly legitimate in characterFinal authority to determine the
need for dictatorship in any given case must never rest with the dictator
himself[94] and the objective of such an emergency dictatorship should be
strict political conservatism.

Carl J. Friedrich cast his analysis in terms similar to those of Watkins.[95] It is a

problem of concentrating power in a government where power has consciously
been divided to cope with situations of unprecedented magnitude and gravity.
There must be a broad grant of powers, subject to equally strong limitations as to
who shall exercise such powers, when, for how long, and to what end.[96]
Friedrich, too, offered criteria for judging the adequacy of any of scheme of
emergency powers, to wit: The emergency executive must be appointed by
constitutional means i.e., he must be legitimate; he should not enjoy power to
determine the existence of an emergency; emergency powers should be exercised
under a strict time limitation; and last, the objective of emergency action must be
the defense of the constitutional order.[97]

Clinton L. Rossiter, after surveying the history of the employment of emergency

powers in Great Britain, France, Weimar, Germany and the United States, reverted
to a description of a scheme of constitutional dictatorship as solution to the
vexing problems presented by emergency.[98] Like Watkins and Friedrich, he
stated a priori the conditions of success of the constitutional dictatorship, thus:

1) No general regime or particular institution of constitutional dictatorship should be

initiated unless it is necessary or even indispensable to the preservation of the
State and its constitutional order

2) the decision to institute a constitutional dictatorship should never be in the

hands of the man or men who will constitute the dictator

3) No government should initiate a constitutional dictatorship without making

specific provisions for its termination

4) all uses of emergency powers and all readjustments in the organization of the
government should be effected in pursuit of constitutional or legal requirements

5) no dictatorial institution should be adopted, no right invaded, no regular

procedure altered any more than is absolutely necessary for the conquest of the
particular crisis . . .

6) The measures adopted in the prosecution of the a constitutional dictatorship

should never be permanent in character or effect

7) The dictatorship should be carried on by persons representative of every part of

the citizenry interested in the defense of the existing constitutional order. . .

8) Ultimate responsibility should be maintained for every action taken under a

constitutional dictatorship. . .

9) The decision to terminate a constitutional dictatorship, like the decision to

institute one should never be in the hands of the man or men who constitute the
dictator. . .

10) No constitutional dictatorship should extend beyond the termination of the crisis
for which it was instituted

11) the termination of the crisis must be followed by a complete return as possible
to the political and governmental conditions existing prior to the initiation of the
constitutional dictatorship[99]

Rossiter accorded to legislature a far greater role in the oversight exercise of

emergency powers than did Watkins. He would secure to Congress final
responsibility for declaring the existence or termination of an emergency, and he
places great faith in the effectiveness of congressional investigating committees.
[100]
Scott and Cotter, in analyzing the above contemporary theories in light of
recent experience, were one in saying that, the suggestion that democracies
surrender the control of government to an authoritarian ruler in time of grave
danger to the nation is not based upon sound constitutional theory. To appraise
emergency power in terms of constitutional dictatorship serves merely to distort the
problem and hinder realistic analysis. It matters not whether the term dictator is
used in its normal sense (as applied to authoritarian rulers) or is employed to
embrace all chief executives administering emergency powers. However used,
constitutional dictatorship cannot be divorced from the implication of suspension
of the processes of constitutionalism. Thus, they favored instead the concept of
constitutionalism articulated by Charles H. McIlwain:

A concept of constitutionalism which is less misleading in the analysis of problems

of emergency powers, and which is consistent with the findings of this study, is that
formulated by Charles H. McIlwain. While it does not by any means necessarily
exclude some indeterminate limitations upon the substantive powers of
government, full emphasis is placed upon procedural limitations, and political
responsibility. McIlwain clearly recognized the need to repose adequate power in
government. And in discussing the meaning of constitutionalism, he insisted that
the historical and proper test of constitutionalism was the existence of adequate
processes for keeping government responsible. He refused to equate
constitutionalism with the enfeebling of government by an exaggerated emphasis
upon separation of powers and substantive limitations on governmental power. He
found that the really effective checks on despotism have consisted not in the
weakening of government but, but rather in the limiting of it; between which there
is a great and very significant difference. In associating constitutionalism with
limited as distinguished from weak government, McIlwain meant government
limited to the orderly procedure of law as opposed to the processes of force. The
two fundamental correlative elements of constitutionalism for which all lovers of

liberty must yet fight are the legal limits to arbitrary power and a complete political
responsibility of government to the governed.[101]

In the final analysis, the various approaches to emergency of the above political
theorists - from Locks theory of prerogative, to Watkins doctrine of
constitutional dictatorship and, eventually, to McIlwains principle of
constitutionalism --- ultimately aim to solve one real problem in emergency
governance, i.e., that of allotting increasing areas of discretionary power to the
Chief Executive, while insuring that such powers will be exercised with a sense of
political responsibility and under effective limitations and checks.

Our Constitution has fairly coped with this problem. Fresh from the fetters of a
repressive regime, the 1986 Constitutional Commission, in drafting the 1987
Constitution, endeavored to create a government in the concept of Justice
Jacksons balanced power structure.[102] Executive, legislative, and judicial
powers are dispersed to the President, the Congress, and the Supreme Court,
respectively. Each is supreme within its own sphere. But none has the monopoly of
power in times of emergency. Each branch is given a role to serve as limitation or
check upon the other. This system does not weaken the President, it just limits
his power, using the language of McIlwain. In other words, in times of emergency,
our Constitution reasonably demands that we repose a certain amount of faith in
the basic integrity and wisdom of the Chief Executive but, at the same time, it
obliges him to operate within carefully prescribed procedural limitations.

a. Facial Challenge

Petitioners contend that PP 1017 is void on its face because of its overbreadth.
They claim that its enforcement encroached on both unprotected and protected
rights under Section 4, Article III of the Constitution and sent a chilling effect to
the citizens.

A facial review of PP 1017, using the overbreadth doctrine, is uncalled for.

First and foremost, the overbreadth doctrine is an analytical tool developed for
testing on their faces statutes in free speech cases, also known under the
American Law as First Amendment cases.[103]

A plain reading of PP 1017 shows that it is not primarily directed to speech or even
speech-related conduct. It is actually a call upon the AFP to prevent or suppress all
forms of lawless violence. In United States v. Salerno,[104] the US Supreme Court
held that we have not recognized an overbreadth doctrine outside the limited
context of the First Amendment (freedom of speech).

Moreover, the overbreadth doctrine is not intended for testing the validity of a law
that reflects legitimate state interest in maintaining comprehensive control over
harmful, constitutionally unprotected conduct. Undoubtedly, lawless violence,
insurrection and rebellion are considered harmful and constitutionally
unprotected conduct. In Broadrick v. Oklahoma,[105] it was held:

It remains a matter of no little difficulty to determine when a law may properly

be held void on its face and when such summary action is inappropriate. But the
plain import of our cases is, at the very least, that facial overbreadth adjudication is
an exception to our traditional rules of practice and that its function, a limited one
at the outset, attenuates as the otherwise unprotected behavior that it forbids the
State to sanction moves from pure speech toward conduct and that conduct
even if expressive falls within the scope of otherwise valid criminal laws that
reflect legitimate state interests in maintaining comprehensive controls over
harmful, constitutionally unprotected conduct.

Thus, claims of facial overbreadth are entertained in cases involving statutes

which, by their terms, seek to regulate only spoken words and again, that
overbreadth claims, if entertained at all, have been curtailed when invoked
against ordinary criminal laws that are sought to be applied to protected
conduct.[106] Here, the incontrovertible fact remains that PP 1017 pertains to a
spectrum of conduct, not free speech, which is manifestly subject to state
regulation.

Second, facial invalidation of laws is considered as manifestly strong

medicine, to be used sparingly and only as a last resort, and is generally
disfavored;[107] The reason for this is obvious. Embedded in the traditional rules
governing constitutional adjudication is the principle that a person to whom a law
may be applied will not be heard to challenge a law on the ground that it may
conceivably be applied unconstitutionally to others, i.e., in other situations not
before the Court.[108] A writer and scholar in Constitutional Law explains further:

The most distinctive feature of the overbreadth technique is that it marks an

exception to some of the usual rules of constitutional litigation. Ordinarily, a
particular litigant claims that a statute is unconstitutional as applied to him or her; if
the litigant prevails, the courts carve away the unconstitutional aspects of the law
by invalidating its improper applications on a case to case basis. Moreover,
challengers to a law are not permitted to raise the rights of third parties and can
only assert their own interests. In overbreadth analysis, those rules give way;
challenges are permitted to raise the rights of third parties; and the court
invalidates the entire statute on its face, not merely as applied for so that the
overbroad law becomes unenforceable until a properly authorized court construes it
more narrowly. The factor that motivates courts to depart from the normal
adjudicatory rules is the concern with the chilling; deterrent effect of the
overbroad statute on third parties not courageous enough to bring suit. The Court
assumes that an overbroad laws very existence may cause others not before the
court to refrain from constitutionally protected speech or expression. An
overbreadth ruling is designed to remove that deterrent effect on the speech of
those third parties.

In other words, a facial challenge using the overbreadth doctrine will require the
Court to examine PP 1017 and pinpoint its flaws and defects, not on the basis of its
actual operation to petitioners, but on the assumption or prediction that its very
existence may cause others not before the Court to refrain from constitutionally
protected speech or expression. In Younger v. Harris,[109] it was held that:

[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and

requiring correction of these deficiencies before the statute is put into effect, is
rarely if ever an appropriate task for the judiciary. The combination of the relative
remoteness of the controversy, the impact on the legislative process of the relief
sought, and above all the speculative and amorphous nature of the required line-byline analysis of detailed statutes,...ordinarily results in a kind of case that is wholly
unsatisfactory for deciding constitutional questions, whichever way they might be
decided.

And third, a facial challenge on the ground of overbreadth is the most difficult
challenge to mount successfully, since the challenger must establish that there can
be no instance when the assailed law may be valid. Here, petitioners did not even
attempt to show whether this situation exists.

Petitioners likewise seek a facial review of PP 1017 on the ground of vagueness.

This, too, is unwarranted.

Related to the overbreadth doctrine is the void for vagueness doctrine which
holds that a law is facially invalid if men of common intelligence must necessarily
guess at its meaning and differ as to its application.[110] It is subject to the same
principles governing overbreadth doctrine. For one, it is also an analytical tool for
testing on their faces statutes in free speech cases. And like overbreadth, it is
said that a litigant may challenge a statute on its face only if it is vague in all its
possible applications. Again, petitioners did not even attempt to show that PP 1017
is vague in all its application. They also failed to establish that men of common
intelligence cannot understand the meaning and application of PP 1017.

b. Constitutional Basis of PP 1017

Now on the constitutional foundation of PP 1017.

The operative portion of PP 1017 may be divided into three important provisions,
thus:

First provision:

by virtue of the power vested upon me by Section 18, Artilce VII do hereby
command the Armed Forces of the Philippines, to maintain law and order throughout

the Philippines, prevent or suppress all forms of lawless violence as well any act of
insurrection or rebellion

Second provision:

and to enforce obedience to all the laws and to all decrees, orders and
regulations promulgated by me personally or upon my direction;

Third provision:

as provided in Section 17, Article XII of the Constitution do hereby declare a State
of National Emergency.

First Provision: Calling-out Power

The first provision pertains to the Presidents calling-out power. In

Sanlakas v. Executive Secretary,[111] this Court, through Mr. Justice Dante O.
Tinga, held that Section 18, Article VII of the Constitution reproduced as follows:

Sec. 18. The President shall be the Commander-in-Chief of all armed forces
of the Philippines and whenever it becomes necessary, he may call out such armed
forces to prevent or suppress lawless violence, invasion or rebellion. In case of
invasion or rebellion, when the public safety requires it, he may, for a period not
exceeding sixty days, suspend the privilege of the writ of habeas corpus or place
the Philippines or any part thereof under martial law. Within forty-eight hours from
the proclamation of martial law or the suspension of the privilege of the writ of
habeas corpus, the President shall submit a report in person or in writing to the
Congress. The Congress, voting jointly, by a vote of at least a majority of all its
Members in regular or special session, may revoke such proclamation or
suspension, which revocation shall not be set aside by the President. Upon the
initiative of the President, the Congress may, in the same manner, extend such
proclamation or suspension for a period to be determined by the Congress, if the
invasion or rebellion shall persist and public safety requires it.

The Congress, if not in session, shall within twenty-four hours

following such proclamation or suspension, convene in accordance with its rules
without need of a call.

The Supreme Court may review, in an appropriate proceeding filed by any

citizen, the sufficiency of the factual bases of the proclamation of martial law or the
suspension of the privilege of the writ or the extension thereof, and must
promulgate its decision thereon within thirty days from its filing.

A state of martial law does not suspend the operation of the Constitution,
nor supplant the functioning of the civil courts or legislative assemblies, nor
authorize the conferment of jurisdiction on military courts and agencies over
civilians where civil courts are able to function, nor automatically suspend the
privilege of the writ.

The suspension of the privilege of the writ shall apply only to

persons judicially charged for rebellion or offenses inherent in or directly connected
with invasion.

During the suspension of the privilege of the writ, any person

thus arrested or detained shall be judicially charged within three days, otherwise he
shall be released.

grants the President, as Commander-in-Chief, a sequence of graduated powers.

From the most to the least benign, these are: the calling-out power, the power to
suspend the privilege of the writ of habeas corpus, and the power to declare Martial
Law. Citing Integrated Bar of the Philippines v. Zamora,[112] the Court ruled that
the only criterion for the exercise of the calling-out power is that whenever it
becomes necessary, the President may call the armed forces to prevent or
suppress lawless violence, invasion or rebellion. Are these conditions present in
the instant cases? As stated earlier, considering the circumstances then prevailing,
President Arroyo found it necessary to issue PP 1017. Owing to her Offices vast
intelligence network, she is in the best position to determine the actual condition of
the country.

Under the calling-out power, the President may summon the armed forces to
aid him in suppressing lawless violence, invasion and rebellion. This involves
ordinary police action. But every act that goes beyond the Presidents calling-out
power is considered illegal or ultra vires. For this reason, a President must be
careful in the exercise of his powers. He cannot invoke a greater power when he
wishes to act under a lesser power. There lies the wisdom of our Constitution, the
greater the power, the greater are the limitations.

It is pertinent to state, however, that there is a distinction between the

Presidents authority to declare a state of rebellion (in Sanlakas) and the
authority to proclaim a state of national emergency. While President Arroyos
authority to declare a state of rebellion emanates from her powers as Chief
Executive, the statutory authority cited in Sanlakas was Section 4, Chapter 2, Book
II of the Revised Administrative Code of 1987, which provides:

SEC. 4. Proclamations. Acts of the President fixing a date or declaring a

status or condition of public moment or interest, upon the existence of which the
operation of a specific law or regulation is made to depend, shall be promulgated in
proclamations which shall have the force of an executive order.

President Arroyos declaration of a state of rebellion was merely an act

declaring a status or condition of public moment or interest, a declaration allowed
under Section 4 cited above. Such declaration, in the words of Sanlakas, is
harmless, without legal significance, and deemed not written. In these cases, PP
1017 is more than that. In declaring a state of national emergency, President
Arroyo did not only rely on Section 18, Article VII of the Constitution, a provision
calling on the AFP to prevent or suppress lawless violence, invasion or rebellion.
She also relied on Section 17, Article XII, a provision on the States extraordinary
power to take over privately-owned public utility and business affected with public
interest. Indeed, PP 1017 calls for the exercise of an awesome power. Obviously,
such Proclamation cannot be deemed harmless, without legal significance, or not
written, as in the case of Sanlakas.

Some of the petitioners vehemently maintain that PP 1017 is actually a

declaration of Martial Law. It is no so. What defines the character of PP 1017 are its
wordings. It is plain therein that what the President invoked was her calling-out
power.

The declaration of Martial Law is a warn[ing] to citizens that the military

power has been called upon by the executive to assist in the maintenance of law
and order, and that, while the emergency lasts, they must, upon pain of arrest and
punishment, not commit any acts which will in any way render more difficult the
restoration of order and the enforcement of law.[113]

In his Statement before the Senate Committee on Justice on March 13, 2006, Mr.
Justice Vicente V. Mendoza,[114] an authority in constitutional law, said that of the
three powers of the President as Commander-in-Chief, the power to declare Martial
Law poses the most severe threat to civil liberties. It is a strong medicine which
should not be resorted to lightly. It cannot be used to stifle or persecute critics of
the government. It is placed in the keeping of the President for the purpose of
enabling him to secure the people from harm and to restore order so that they can
enjoy their individual freedoms. In fact, Section 18, Art. VII, provides:

A state of martial law does not suspend the operation of the Constitution, nor
supplant the functioning of the civil courts or legislative assemblies, nor authorize
the conferment of jurisdiction on military courts and agencies over civilians where
civil courts are able to function, nor automatically suspend the privilege of the writ.

Justice Mendoza also stated that PP 1017 is not a declaration of Martial Law.
It is no more than a call by the President to the armed forces to prevent or suppress
lawless violence. As such, it cannot be used to justify acts that only under a valid
declaration of Martial Law can be done. Its use for any other purpose is a
perversion of its nature and scope, and any act done contrary to its command is
ultra vires.

Justice Mendoza further stated that specifically, (a) arrests and seizures
without judicial warrants; (b) ban on public assemblies; (c) take-over of news media
and agencies and press censorship; and (d) issuance of Presidential Decrees, are
powers which can be exercised by the President as Commander-in-Chief only where
there is a valid declaration of Martial Law or suspension of the writ of habeas
corpus.

Based on the above disquisition, it is clear that PP 1017 is not a declaration of

Martial Law. It is merely an exercise of President Arroyos calling-out power for the
armed forces to assist her in preventing or suppressing lawless violence.

Second Provision: Take Care Power

The second provision pertains to the power of the President to ensure that the laws
be faithfully executed. This is based on Section 17, Article VII which reads:

SEC. 17. The President shall have control of all the executive departments, bureaus,
and offices. He shall ensure that the laws be faithfully executed.

As the Executive in whom the executive power is vested,[115] the primary function
of the President is to enforce the laws as well as to formulate policies to be
embodied in existing laws. He sees to it that all laws are enforced by the officials
and employees of his department. Before assuming office, he is required to take an
oath or affirmation to the effect that as President of the Philippines, he will, among
others, execute its laws.[116] In the exercise of such function, the President, if
needed, may employ the powers attached to his office as the Commander-in-Chief
of all the armed forces of the country,[117] including the Philippine National
Police[118] under the Department of Interior and Local Government.[119]

Petitioners, especially Representatives Francis Joseph G. Escudero, Satur Ocampo,

Rafael Mariano, Teodoro Casio, Liza Maza, and Josel Virador argue that PP 1017 is
unconstitutional as it arrogated upon President Arroyo the power to enact laws and
decrees in violation of Section 1, Article VI of the Constitution, which vests the
power to enact laws in Congress. They assail the clause to enforce obedience to
all the laws and to all decrees, orders and regulations promulgated by me
personally or upon my direction.

Petitioners contention is understandable. A reading of PP 1017 operative clause

shows that it was lifted[120] from Former President Marcos Proclamation No. 1081,
which partly reads:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines by virtue

of the powers vested upon me by Article VII, Section 10, Paragraph (2) of the
Constitution, do hereby place the entire Philippines as defined in Article 1, Section 1
of the Constitution under martial law and, in my capacity as their Commander-inChief, do hereby command the Armed Forces of the Philippines, to maintain law and
order throughout the Philippines, prevent or suppress all forms of lawless violence
as well as any act of insurrection or rebellion and to enforce obedience to all the
laws and decrees, orders and regulations promulgated by me personally or upon my
direction.

We all know that it was PP 1081 which granted President Marcos legislative power.
Its enabling clause states: to enforce obedience to all the laws and decrees,
orders and regulations promulgated by me personally or upon my direction. Upon
the other hand, the enabling clause of PP 1017 issued by President Arroyo is: to
enforce obedience to all the laws and to all decrees, orders and regulations
promulgated by me personally or upon my direction.

Is it within the domain of President Arroyo to promulgate decrees?

PP 1017 states in part: to enforce obedience to all the laws and decrees x x
x promulgated by me personally or upon my direction.

The President is granted an Ordinance Power under Chapter 2, Book III of Executive
Order No. 292 (Administrative Code of 1987). She may issue any of the following:

Sec. 2. Executive Orders. Acts of the President providing for rules of a general or
permanent character in implementation or execution of constitutional or statutory
powers shall be promulgated in executive orders.

Sec. 3. Administrative Orders. Acts of the President which relate to particular

aspect of governmental operations in pursuance of his duties as administrative
head shall be promulgated in administrative orders.

Sec. 4. Proclamations. Acts of the President fixing a date or declaring a status or

condition of public moment or interest, upon the existence of which the operation of
a specific law or regulation is made to depend, shall be promulgated in
proclamations which shall have the force of an executive order.

Sec. 5. Memorandum Orders. Acts of the President on matters of administrative

detail or of subordinate or temporary interest which only concern a particular officer
or office of the Government shall be embodied in memorandum orders.

Sec. 6. Memorandum Circulars. Acts of the President on matters relating to

internal administration, which the President desires to bring to the attention of all or
some of the departments, agencies, bureaus or offices of the Government, for
information or compliance, shall be embodied in memorandum circulars.

Sec. 7. General or Special Orders. Acts and commands of the President in his
capacity as Commander-in-Chief of the Armed Forces of the Philippines shall be
issued as general or special orders.

President Arroyos ordinance power is limited to the foregoing issuances. She

cannot issue decrees similar to those issued by Former President Marcos under PP
1081. Presidential Decrees are laws which are of the same category and binding
force as statutes because they were issued by the President in the exercise of his
legislative power during the period of Martial Law under the 1973 Constitution.[121]

This Court rules that the assailed PP 1017 is unconstitutional insofar as it grants
President Arroyo the authority to promulgate decrees. Legislative power is
peculiarly within the province of the Legislature. Section 1, Article VI categorically
states that [t]he legislative power shall be vested in the Congress of the
Philippines which shall consist of a Senate and a House of Representatives. To be
sure, neither Martial Law nor a state of rebellion nor a state of emergency can
justify President Arroyos exercise of legislative power by issuing decrees.

Can President Arroyo enforce obedience to all decrees and laws through the
military?

As this Court stated earlier, President Arroyo has no authority to enact

decrees. It follows that these decrees are void and, therefore, cannot be enforced.
With respect to laws, she cannot call the military to enforce or implement certain
laws, such as customs laws, laws governing family and property relations, laws on
obligations and contracts and the like. She can only order the military, under PP
1017, to enforce laws pertinent to its duty to suppress lawless violence.

Third Provision: Power to Take Over

The pertinent provision of PP 1017 states:

x x x and to enforce obedience to all the laws and to all decrees, orders, and
regulations promulgated by me personally or upon my direction; and as provided in
Section 17, Article XII of the Constitution do hereby declare a state of national
emergency.

The import of this provision is that President Arroyo, during the state of national
emergency under PP 1017, can call the military not only to enforce obedience to
all the laws and to all decrees x x x but also to act pursuant to the provision of
Section 17, Article XII which reads:

Sec. 17. In times of national emergency, when the public interest so requires,
the State may, during the emergency and under reasonable terms prescribed by it,
temporarily take over or direct the operation of any privately-owned public utility or
business affected with public interest.

What could be the reason of President Arroyo in invoking the above provision when
she issued PP 1017?

The answer is simple. During the existence of the state of national emergency, PP
1017 purports to grant the President, without any authority or delegation from
Congress, to take over or direct the operation of any privately-owned public utility
or business affected with public interest.

This provision was first introduced in the 1973 Constitution, as a product of the
martial law thinking of the 1971 Constitutional Convention.[122] In effect at the
time of its approval was President Marcos Letter of Instruction No. 2 dated
September 22, 1972 instructing the Secretary of National Defense to take over the
management, control and operation of the Manila Electric Company, the Philippine
Long Distance Telephone Company, the National Waterworks and Sewerage
Authority, the Philippine National Railways, the Philippine Air Lines, Air Manila (and)
Filipinas Orient Airways . . . for the successful prosecution by the Government of its
effort to contain, solve and end the present national emergency.

Petitioners, particularly the members of the House of Representatives, claim

that President Arroyos inclusion of Section 17, Article XII in PP 1017 is an
encroachment on the legislatures emergency powers.

This is an area that needs delineation.

A distinction must be drawn between the Presidents authority to declare a

state of national emergency and
to exercise emergency powers. To the first,
as elucidated by the Court, Section 18, Article VII grants the President such power,
hence, no legitimate constitutional objection can be raised. But to the second,
manifold constitutional issues arise.

Section 23, Article VI of the Constitution reads:

SEC. 23. (1) The Congress, by a vote of two-thirds of both Houses in joint session
assembled, voting separately, shall have the sole power to declare the existence of
a state of war.

(2) In times of war or other national emergency, the Congress may, by law,
authorize the President, for a limited period and subject to such restrictions as it
may prescribe, to exercise powers necessary and proper to carry out a declared
national policy. Unless sooner withdrawn by resolution of the Congress, such powers
shall cease upon the next adjournment thereof.

It may be pointed out that the second paragraph of the above provision refers
not only to war but also to other national emergency. If the intention of the
Framers of our Constitution was to withhold from the President the authority to
declare a state of national emergency pursuant to Section 18, Article VII (callingout power) and grant it to Congress (like the declaration of the existence of a state
of war), then the Framers could have provided so. Clearly, they did not intend that
Congress should first authorize the President before he can declare a state of
national emergency. The logical conclusion then is that President Arroyo could
validly declare the existence of a state of national emergency even in the absence
of a Congressional enactment.

But the exercise of emergency powers, such as the taking over of privately owned
public utility or business affected with public interest, is a
different matter.

This requires a delegation from Congress.

Courts have often said that constitutional provisions in pari materia are to be
construed together. Otherwise stated, different clauses, sections, and provisions of
a constitution which relate to the same subject matter will be construed together
and considered in the light of each other.[123] Considering that Section 17 of
Article XII and Section 23 of Article VI, previously quoted, relate to national
emergencies, they must be read together to determine the limitation of the exercise
of emergency powers.

Generally, Congress is the repository of emergency powers. This is evident in the

tenor of Section 23 (2), Article VI authorizing it to delegate such powers to the
President. Certainly, a body cannot delegate a power not reposed upon it.
However, knowing that during grave emergencies, it may not be possible or
practicable for Congress to meet and exercise its powers, the Framers of our

Constitution deemed it wise to allow Congress to grant emergency powers to the

President, subject to certain conditions, thus:

(1) There must be a war or other emergency.

(2) The delegation must be for a limited period only.

(3) The delegation must be subject to such restrictions as the Congress may
prescribe.
(4) The emergency powers must be exercised to carry out a national policy
declared by Congress.[124]

Section 17, Article XII must be understood as an aspect of the emergency

powers clause. The taking over of private business affected with public interest is
just another facet of the emergency powers generally reposed upon Congress.
Thus, when Section 17 states that the the State may, during the emergency and
under reasonable terms prescribed by it, temporarily take over or direct the
operation of any privately owned public utility or business affected with public
interest, it refers to Congress, not the President. Now, whether or not the
President may exercise such power is dependent on whether Congress may
delegate it to him pursuant to a law prescribing the reasonable terms thereof.
Youngstown Sheet & Tube Co. et al. v. Sawyer,[125] held:

It is clear that if the President had authority to issue the order he did, it must be
found in some provision of the Constitution. And it is not claimed that express
constitutional language grants this power to the President. The contention is that
presidential power should be implied from the aggregate of his powers under the
Constitution. Particular reliance is placed on provisions in Article II which say that
The executive Power shall be vested in a President . . . .; that he shall take Care
that the Laws be faithfully executed; and that he shall be Commander-in-Chief of
the Army and Navy of the United States.

The order cannot properly be sustained as an exercise of the Presidents military

power as Commander-in-Chief of the Armed Forces. The Government attempts to
do so by citing a number of cases upholding broad powers in military commanders
engaged in day-to-day fighting in a theater of war. Such cases need not concern us
here. Even though theater of war be an expanding concept, we cannot with
faithfulness to our constitutional system hold that the Commander-in-Chief of the
Armed Forces has the ultimate power as such to take possession of private property
in order to keep labor disputes from stopping production. This is a job for the
nations lawmakers, not for its military authorities.

Nor can the seizure order be sustained because of the several constitutional
provisions that grant executive power to the President. In the framework of our
Constitution, the Presidents power to see that the laws are faithfully executed
refutes the idea that he is to be a lawmaker. The Constitution limits his functions in
the lawmaking process to the recommending of laws he thinks wise and the vetoing

of laws he thinks bad. And the Constitution is neither silent nor equivocal about
who shall make laws which the President is to execute. The first section of the first
article says that All legislative Powers herein granted shall be vested in a Congress
of the United States. . .[126]

Petitioner Cacho-Olivares, et al. contends that the term emergency under

Section 17, Article XII refers to tsunami, typhoon, hurricane and similar
occurrences. This is a limited view of emergency.

Emergency, as a generic term, connotes the existence of conditions suddenly

intensifying the degree of existing danger to life or well-being beyond that which is
accepted as normal. Implicit in this definitions are the elements of intensity,
variety, and perception.[127] Emergencies, as perceived by legislature or
executive in the United Sates since 1933, have been occasioned by a wide range of
situations, classifiable under three (3) principal heads: a) economic,[128] b) natural
disaster,[129] and c) national security.[130]

Emergency, as contemplated in our Constitution, is of the same breadth. It may

include rebellion, economic crisis, pestilence or epidemic, typhoon, flood, or other
similar catastrophe of nationwide proportions or effect.[131] This is evident in the
Records of the Constitutional Commission, thus:

MR. GASCON. Yes. What is the Committees definition of national emergency

which appears in Section 13, page 5? It reads:

When the common good so requires, the State may temporarily take over or direct
the operation of any privately owned public utility or business affected with public
interest.

MR. VILLEGAS. What I mean is threat from external aggression, for example,
calamities or natural disasters.

MR. GASCON. There is a question by Commissioner de los Reyes. What about

strikes and riots?

MR. VILLEGAS. Strikes, no; those would not be covered by the term national
emergency.

MR. BENGZON. Unless they are of such proportions such that they would paralyze
government service.[132]

MR. TINGSON. May I ask the committee if national emergency refers to military
national emergency or could this be economic emergency?

MR. VILLEGAS. Yes, it could refer to both military or economic dislocations.

MR. TINGSON. Thank you very much.[133]

It may be argued that when there is national emergency, Congress may not be
able to convene and, therefore, unable to delegate to the President the power to
take over privately-owned public utility or business affected with public interest.

In Araneta v. Dinglasan,[134] this Court emphasized that legislative power,

through which extraordinary measures are exercised, remains in Congress even in
times of crisis.

x x x

After all the criticisms that have been made against the efficiency of the
system of the separation of powers, the fact remains that the Constitution has set
up this form of government, with all its defects and shortcomings, in preference to
the commingling of powers in one man or group of men. The Filipino people by
adopting parliamentary government have given notice that they share the faith of
other democracy-loving peoples in this system, with all its faults, as the ideal. The
point is, under this framework of government, legislation is preserved for Congress
all the time, not excepting periods of crisis no matter how serious. Never in the
history of the United States, the basic features of whose Constitution have been
copied in ours, have specific functions of the legislative branch of enacting laws
been surrendered to another department unless we regard as legislating the
carrying out of a legislative policy according to prescribed standards; no, not even
when that Republic was fighting a total war, or when it was engaged in a life-anddeath struggle to preserve the Union. The truth is that under our concept of
constitutional government, in times of extreme perils more than in normal
circumstances the various branches, executive, legislative, and judicial, given
the ability to act, are called upon to perform the duties and discharge the
responsibilities committed to them respectively.

Following our interpretation of Section 17, Article XII, invoked by President Arroyo in
issuing PP 1017, this Court rules that such Proclamation does not authorize her
during the emergency to temporarily take over or direct the operation of any
privately owned public utility or business affected with public interest without
authority from Congress.

Let it be emphasized that while the President alone can declare a state of national
emergency, however, without legislation, he has no
power to take over privatelyowned public utility or business affected
with public interest. The President
cannot decide whether exceptional
circumstances exist warranting the take over
of privately-owned
public utility or business affected with public interest. Nor
can he determine when such exceptional circumstances have ceased. Likewise,
without legislation, the President has no power to point out the types of businesses
affected with public interest that should be taken over. In short, the President has
no absolute authority to exercise all the powers of the State under Section 17,
Article VII in the absence of an emergency powers act passed by Congress.

c. AS APPLIED CHALLENGE

One of the misfortunes of an emergency, particularly, that which pertains to

security, is that military necessity and the guaranteed rights of the individual are
often not compatible. Our history reveals that in the crucible of conflict, many
rights are curtailed and trampled upon. Here, the right against unreasonable search
and seizure; the right against warrantless arrest; and the freedom of speech, of
expression, of the press, and of assembly under the Bill of Rights suffered the
greatest blow.

Of the seven (7) petitions, three (3) indicate direct injury.

In G.R. No. 171396, petitioners David and Llamas alleged that, on February 24,
2006, they were arrested without warrants on their way to EDSA to celebrate the
20th Anniversary of People Power I.
The arresting officers cited PP 1017 as basis
of the arrest.

In G.R. No. 171409, petitioners Cacho-Olivares and Tribune Publishing Co., Inc.
claimed that on February 25, 2006, the CIDG operatives raided and ransacked
without warrant their office. Three policemen were assigned to guard their office
as a possible source of destabilization. Again, the basis was PP 1017.

And in G.R. No. 171483, petitioners KMU and NAFLU-KMU et al. alleged that their
members were turned away and dispersed when they went to EDSA and later, to
Ayala Avenue, to celebrate the 20th Anniversary of People Power I.

A perusal of the direct injuries allegedly suffered by the said petitioners

shows that they resulted from the implementation, pursuant to G.O. No. 5, of PP
1017.

Can this Court adjudge as unconstitutional PP 1017 and G.O. No 5 on the basis of
these illegal acts? In general, does the illegal implementation of a law render it
unconstitutional?

Settled is the rule that courts are not at liberty to declare statutes invalid although
they may be abused and misabused[135] and may afford an opportunity for abuse

in the manner of application.[136] The validity of a statute or ordinance is to be

determined from its general purpose and its efficiency to accomplish the end
desired, not from its effects in a particular case.[137] PP 1017 is merely an
invocation of the Presidents calling-out power. Its general purpose is to command
the AFP to suppress all forms of lawless violence, invasion or rebellion. It had
accomplished the end desired which prompted President Arroyo to issue PP 1021.
But there is nothing in PP 1017 allowing the police, expressly or impliedly, to
conduct illegal arrest, search or violate the citizens constitutional rights.

Now, may this Court adjudge a law or ordinance unconstitutional on the ground that
its implementor committed illegal acts? The answer is no. The criterion by which
the validity of the statute or ordinance is to be measured is the essential basis for
the exercise of power, and not a mere incidental result arising from its exertion.
[138] This is logical. Just imagine the absurdity of situations when laws maybe
declared unconstitutional just because the officers implementing them have acted
arbitrarily. If this were so, judging from the blunders committed by policemen in the
cases passed upon by the Court, majority of the provisions of the Revised Penal
Code would have been declared unconstitutional a long time ago.

President Arroyo issued G.O. No. 5 to carry into effect the provisions of PP 1017.
General orders are acts and commands of the President in his capacity as
Commander-in-Chief of the Armed Forces of the Philippines. They are internal rules
issued by the executive officer to his subordinates precisely for the proper and
efficient administration of law. Such rules and regulations create no relation except
between the official who issues them and the official who receives them.[139] They
are based on and are the product of, a relationship in which power is their source,
and obedience, their object.[140] For these reasons, one requirement for these
rules to be valid is that they must be reasonable, not arbitrary or capricious.

G.O. No. 5 mandates the AFP and the PNP to immediately carry out the necessary
and appropriate actions and measures to suppress and prevent acts of terrorism
and lawless violence.

Unlike the term lawless violence which is unarguably extant in our statutes and
the Constitution, and which is invariably associated with invasion, insurrection or
rebellion, the phrase acts of terrorism is still an amorphous and vague concept.
Congress has yet to enact a law defining and punishing acts of terrorism.

In fact, this definitional predicament or the absence of an agreed definition of

terrorism confronts not only our country, but the international
community as well. The following observations are quite apropos:

In the actual unipolar context of international relations, the fight against

terrorism has become one of the basic slogans when it comes to the justification

of the use of force against certain states and against groups operating
internationally. Lists of states sponsoring terrorism and of terrorist organizations
are set up and constantly being updated according to criteria that are not always
known to the public, but are clearly determined by strategic interests.

The basic problem underlying all these military actions or threats of the use of
force as the most recent by the United States against Iraq consists in the absence
of an agreed definition of terrorism.

Remarkable confusion persists in regard to the legal categorization of acts of

violence either by states, by armed groups such as liberation movements, or by
individuals.

The dilemma can by summarized in the saying One countrys terrorist is another
countrys freedom fighter. The apparent contradiction or lack of consistency in
the use of the term terrorism may further be demonstrated by the historical fact
that leaders of national liberation movements such as Nelson Mandela in South
Africa, Habib Bourgouiba in Tunisia, or Ahmed Ben Bella in Algeria, to mention only a
few, were originally labeled as terrorists by those who controlled the territory at the
time, but later became internationally respected statesmen.

What, then, is the defining criterion for terrorist acts the differentia specifica
distinguishing those acts from eventually legitimate acts of national resistance or
self-defense?

Since the times of the Cold War the United Nations Organization has been trying in
vain to reach a consensus on the basic issue of definition. The organization has
intensified its efforts recently, but has been unable to bridge the gap between those
who associate terrorism with any violent act by non-state groups against
civilians, state functionaries or infrastructure or military installations, and those who
believe in the concept of the legitimate use of force when resistance against foreign
occupation or against systematic oppression of ethnic and/or religious groups within
a state is concerned.

The dilemma facing the international community can best be illustrated by

reference to the contradicting categorization of organizations and movements such
as Palestine Liberation Organization (PLO) which is a terrorist group for Israel and
a liberation movement for Arabs and Muslims the Kashmiri resistance groups
who are terrorists in the perception of India, liberation fighters in that of Pakistan
the earlier Contras in Nicaragua freedom fighters for the United States, terrorists
for the Socialist camp or, most drastically, the Afghani Mujahedeen (later to
become the Taliban movement): during the Cold War period they were a group of
freedom fighters for the West, nurtured by the United States, and a terrorist gang
for the Soviet Union. One could go on and on in enumerating examples of
conflicting categorizations that cannot be reconciled in any way because of
opposing political interests that are at the roots of those perceptions.

How, then, can those contradicting definitions and conflicting perceptions and
evaluations of one and the same group and its actions be explained? In our
analysis, the basic reason for these striking inconsistencies lies in the divergent
interest of states. Depending on whether a state is in the position of an occupying
power or in that of a rival, or adversary, of an occupying power in a given territory,
the definition of terrorism will fluctuate accordingly. A state may eventually see

itself as protector of the rights of a certain ethnic group outside its territory and will
therefore speak of a liberation struggle, not of terrorism when acts of violence
by this group are concerned, and vice-versa.

The United Nations Organization has been unable to reach a decision on the
definition of terrorism exactly because of these conflicting interests of sovereign
states that determine in each and every instance how a particular armed movement
(i.e. a non-state actor) is labeled in regard to the terrorists-freedom fighter
dichotomy. A policy of double standards on this vital issue of international affairs
has been the unavoidable consequence.

This definitional predicament of an organization consisting of sovereign states

and not of peoples, in spite of the emphasis in the Preamble to the United Nations
Charter! has become even more serious in the present global power constellation:
one superpower exercises the decisive role in the Security Council, former great
powers of the Cold War era as well as medium powers are increasingly being
marginalized; and the problem has become even more acute since the terrorist
attacks of 11 September 2001 I the United States.[141]

The absence of a law defining acts of terrorism may result in abuse and
oppression on the part of the police or military. An illustration is when a group of
persons are merely engaged in a drinking spree. Yet the military or the police may
consider the act as an act of terrorism and immediately arrest them pursuant to
G.O. No. 5. Obviously, this is abuse and oppression on their part. It must be
remembered that an act can only be considered a crime if there is a law defining
the same as such and imposing the corresponding penalty thereon.

So far, the word terrorism appears only once in our criminal laws, i.e., in P.D. No.
1835 dated January 16, 1981 enacted by President Marcos during the Martial Law
regime. This decree is entitled Codifying The Various Laws on Anti-Subversion and
Increasing The Penalties for Membership in Subversive Organizations. The word
terrorism is mentioned in the following provision: That one who conspires with
any other person for the purpose of overthrowing the Government of the Philippines
x x x by force, violence, terrorism, x x x shall be punished by reclusion temporal x x
x.

P.D. No. 1835 was repealed by E.O. No. 167 (which outlaws the Communist Party of
the Philippines) enacted by President Corazon Aquino on May 5, 1985. These two
(2) laws, however, do not define acts of terrorism. Since there is no law defining
acts of terrorism, it is President Arroyo alone, under G.O. No. 5, who has the
discretion to determine what acts constitute terrorism. Her judgment on this aspect
is absolute, without restrictions. Consequently, there can be indiscriminate arrest
without warrants, breaking into offices and residences, taking over the media
enterprises, prohibition and dispersal of all assemblies and gatherings unfriendly to
the administration. All these can be effected in the name of G.O. No. 5. These acts
go far beyond the calling-out power of the President. Certainly, they violate the due
process clause of the Constitution. Thus, this Court declares that the acts of
terrorism portion of G.O. No. 5 is unconstitutional.

Significantly, there is nothing in G.O. No. 5 authorizing the military or police to

commit acts beyond what are necessary and appropriate to suppress and prevent
lawless violence, the limitation of their authority in pursuing the Order. Otherwise,
such acts are considered illegal.

We first examine G.R. No. 171396 (David et al.)

The Constitution provides that the right of the people to be secured in their
persons, houses, papers and effects against unreasonable search and seizure of
whatever nature and for any purpose shall be inviolable, and no search warrant or
warrant of arrest shall issue except upon probable cause to be determined
personally by the judge after examination under oath or affirmation of the
complainant and the witnesses he may produce, and particularly describing the
place to be searched and the persons or things to be seized.[142] The plain
import of the language of the Constitution is that searches, seizures and arrests are
normally unreasonable unless authorized by a validly issued search warrant or
warrant of arrest. Thus, the fundamental protection given by this provision is that
between person and police must stand the protective authority of a magistrate
clothed with power to issue or refuse to issue search warrants or warrants of arrest.
[143]

In the Brief Account[144] submitted by petitioner David, certain facts are

established: first, he was arrested without warrant; second, the PNP operatives
arrested him on the basis of PP 1017; third, he was brought at Camp Karingal,
Quezon City where he was fingerprinted, photographed and booked like a criminal
suspect; fourth, he was treated brusquely by policemen who held his head and
tried to push him inside an unmarked car; fifth, he was charged with Violation of
Batas Pambansa Bilang
No. 880[145] and Inciting to Sedition; sixth, he was
detained for seven (7) hours; and seventh, he was eventually released for
insufficiency of evidence.

Section 5, Rule 113 of the Revised Rules on Criminal Procedure provides:

Sec. 5. Arrest without warrant; when lawful. - A peace officer or a private person
may, without a warrant, arrest a person:

(a) When, in his presence, the person to be arrested has committed, is actually
committing, or is attempting to commit an offense.

(b) When an offense has just been committed and he has probable cause to believe
based on personal knowledge of facts or circumstances that the person to be
arrested has committed it; and

x.

Neither of the two (2) exceptions mentioned above justifies petitioner Davids
warrantless arrest. During the inquest for the charges of inciting to sedition and
violation of BP 880, all that the arresting officers could invoke was their
observation that some rallyists were wearing t-shirts with the invective Oust
Gloria Now and their erroneous assumption that petitioner David was the leader
of the rally.[146] Consequently, the Inquest Prosecutor ordered his immediate
release on the ground of insufficiency of evidence. He noted that petitioner David
was not wearing the subject t-shirt and even if he was wearing it, such fact is
insufficient to charge him with inciting to sedition. Further, he also stated that there
is insufficient evidence for the charge of violation of BP 880 as it was not even
known whether petitioner David was the leader of the rally.[147]

But what made it doubly worse for petitioners David et al. is that not only was their
right against warrantless arrest violated, but also their right to peaceably assemble.

Section 4 of Article III guarantees:

No law shall be passed abridging the freedom of speech, of expression, or of the

press, or the right of the people peaceably to assemble and petition the government
for redress of grievances.

Assembly means a right on the part of the citizens to meet peaceably for
consultation in respect to public affairs. It is a necessary consequence of our
republican institution and complements the right of speech. As in the case of
freedom of expression, this right is not to be limited, much less denied, except on a
showing of a clear and present danger of a substantive evil that Congress has a
right to prevent. In other words, like other rights embraced in the freedom of
expression, the right to assemble is not subject to previous restraint or censorship.
It may not be conditioned upon the prior issuance of a permit or authorization from
the government authorities except, of course, if the assembly is intended to be held
in a public place, a permit for the use of such place, and not for the assembly itself,
may be validly required.

The ringing truth here is that petitioner David, et al. were arrested while they were
exercising their right to peaceful assembly. They were not committing any crime,
neither was there a showing of a clear and present danger that warranted the
limitation of that right. As can be gleaned from circumstances, the charges of
inciting to sedition and violation of BP 880 were mere afterthought. Even the
Solicitor General, during the oral argument, failed to justify the arresting officers
conduct. In De Jonge v. Oregon,[148] it was held that peaceable assembly cannot
be made a crime, thus:

Peaceable assembly for lawful discussion cannot be made a crime. The holding of
meetings for peaceable political action cannot be proscribed. Those who assist in
the conduct of such meetings cannot be branded as criminals on that score. The
question, if the rights of free speech and peaceful assembly are not to be preserved,
is not as to the auspices under which the meeting was held but as to its purpose;
not as to the relations of the speakers, but whether their utterances transcend the
bounds of the freedom of speech which the Constitution protects. If the persons
assembling have committed crimes elsewhere, if they have formed or are engaged
in a conspiracy against the public peace and order, they may be prosecuted for
their conspiracy or other violations of valid laws. But it is a different matter when
the State, instead of prosecuting them for such offenses, seizes upon mere
participation in a peaceable assembly and a lawful public discussion as the basis for
a criminal charge.

On the basis of the above principles, the Court likewise considers the dispersal and
arrest of the members of KMU et al. (G.R. No. 171483) unwarranted. Apparently,
their dispersal was done merely on the basis of Malacaangs directive canceling all
permits previously issued by local government units. This is arbitrary. The
wholesale cancellation of all permits to rally is a blatant disregard of the principle
that freedom of assembly is not to be limited, much less denied, except on a
showing of a clear and present danger of a substantive evil that the State has a
right to prevent.[149] Tolerance is the rule and limitation is the exception. Only
upon a showing that an assembly presents a clear and present danger that the
State may deny the citizens right to exercise it. Indeed, respondents failed to
show or convince the Court that the rallyists committed acts amounting to lawless
violence, invasion or rebellion. With the blanket revocation of permits, the
distinction between protected and unprotected assemblies was eliminated.

Moreover, under BP 880, the authority to regulate assemblies and rallies is lodged
with the local government units. They have the power to issue permits and to
revoke such permits after due notice and hearing on the determination of the
presence of clear and present danger. Here, petitioners were not even notified and
heard on the revocation of their permits.[150] The first time they learned of it was
at the time of the dispersal. Such absence of notice is a fatal defect. When a
persons right is restricted by government action, it behooves a democratic
government to see to it that the restriction is fair, reasonable, and according to
procedure.

G.R. No. 171409, (Cacho-Olivares, et al.) presents another facet of freedom of

speech i.e., the freedom of the press. Petitioners narration of facts, which the
Solicitor General failed to refute, established the following: first, the Daily Tribunes
offices were searched without warrant; second, the police operatives seized several
materials for publication; third, the search was conducted at about 1:00 o clock in
the morning of February 25, 2006; fourth, the search was conducted in the absence
of any official of the Daily Tribune except the security guard of the building; and
fifth, policemen stationed themselves at the vicinity of the Daily Tribune offices.

Thereafter, a wave of warning came from government officials. Presidential

Chief of Staff Michael Defensor was quoted as saying that such raid was meant to
show a strong presence, to tell media outlets not to connive or do anything that
would help the rebels in bringing down this government. Director General
Lomibao further stated that if they do not follow the standards and the standards
are if they would contribute to instability in the government, or if they do not
subscribe to what is in General Order No. 5 and Proc. No. 1017 we will
recommend a takeover. National Telecommunications Commissioner Ronald
Solis urged television and radio networks to cooperate with the government for
the duration of the state of national emergency. He warned that his agency will not
hesitate to recommend the closure of any broadcast outfit that violates rules set out
for media coverage during times when the national security is threatened.[151]

The search is illegal. Rule 126 of The Revised Rules on Criminal Procedure lays
down the steps in the conduct of search and seizure. Section 4 requires that a
search warrant be issued upon probable cause in connection with one specific
offence to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce. Section 8
mandates that the search of a house, room, or any other premise be made in the
presence of the lawful occupant thereof or any member of his family or in the
absence of the latter, in the presence of two (2) witnesses of sufficient age and
discretion residing in the same locality. And Section 9 states that the warrant
must direct that it be served in the daytime, unless the property is on the person or
in the place ordered to be searched, in which case a direction may be inserted that
it be served at any time of the day or night. All these rules were violated by the
CIDG operatives.

Not only that, the search violated petitioners freedom of the press. The best
gauge of a free and democratic society rests in the degree of freedom enjoyed by
its media. In the Burgos v. Chief of Staff[152] this Court held that --

As heretofore stated, the premises searched were the business and printing offices
of the "Metropolitan Mail" and the "We Forum newspapers. As a consequence of
the search and seizure, these premises were padlocked and sealed, with the further
result that the printing and publication of said newspapers were discontinued.

Such closure is in the nature of previous restraint or censorship abhorrent to the

freedom of the press guaranteed under the fundamental law, and constitutes a
virtual denial of petitioners' freedom to express themselves in print. This state of
being is patently anathematic to a democratic framework where a free, alert and
even militant press is essential for the political enlightenment and growth of the
citizenry.

While admittedly, the Daily Tribune was not padlocked and sealed like the
Metropolitan Mail and We Forum newspapers in the above case, yet it cannot
be denied that the CIDG operatives exceeded their enforcement duties. The search
and seizure of materials for publication, the stationing of policemen in the vicinity of
the The Daily Tribune offices, and the arrogant warning of government officials to
media, are plain censorship. It is that officious functionary of the repressive
government who tells the citizen that he may speak only if allowed to do so, and no
more and no less than what he is permitted to say on pain of punishment should he
be so rash as to disobey.[153] Undoubtedly, the The Daily Tribune was subjected to
these arbitrary intrusions because of its anti-government sentiments. This Court
cannot tolerate the blatant disregard of a constitutional right even if it involves the
most defiant of our citizens. Freedom to comment on public affairs is essential to
the vitality of a representative democracy. It is the duty of the courts to be watchful
for the constitutional rights of the citizen, and against any stealthy encroachments
thereon. The motto should always be obsta principiis.[154]

Incidentally, during the oral arguments, the Solicitor General admitted that the
search of the Tribunes offices and the seizure of its materials for publication and
other papers are illegal; and that the same are inadmissible for any purpose,
thus:

JUSTICE CALLEJO:

You made quite a mouthful of admission when you said that the policemen,
when inspected the Tribune for the purpose of gathering evidence and you admitted
that the policemen were able to get the clippings. Is that not in admission of the
admissibility of these clippings that were taken from the Tribune?

SOLICITOR GENERAL BENIPAYO:

Under the law they would seem to be, if they were illegally seized, I think
and I know, Your Honor, and these are inadmissible for any purpose.[155]

xxx

xxx

xxx

SR. ASSO. JUSTICE PUNO:

These have been published in the past issues of the Daily Tribune; all you
have to do is to get those past issues. So why do you have to go there at 1 oclock
in the morning and without any search warrant? Did they become suddenly part of
the evidence of rebellion or inciting to sedition or what?

SOLGEN BENIPAYO:

Well, it was the police that did that, Your Honor. Not upon my instructions.

SR. ASSO. JUSTICE PUNO:

Are you saying that the act of the policeman is illegal, it is not based on any
law, and it is not based on Proclamation 1017.

SOLGEN BENIPAYO:

It is not based on Proclamation 1017, Your Honor, because there is nothing

in 1017 which says that the police could go and inspect and gather clippings from
Daily Tribune or any other newspaper.

SR. ASSO. JUSTICE PUNO:

Is it based on any law?

SOLGEN BENIPAYO:

As far as I know, no, Your Honor, from the facts, no.

SR. ASSO. JUSTICE PUNO:

So, it has no basis, no legal basis whatsoever?

SOLGEN BENIPAYO:

Maybe so, Your Honor. Maybe so, that is why I said, I dont know if it is
premature to say this, we do not condone this. If the people who have been injured
by this would want to sue them, they can sue and there are remedies for this.[156]

Likewise, the warrantless arrests and seizures executed by the police were,
according to the Solicitor General, illegal and cannot be condoned, thus:

CHIEF JUSTICE PANGANIBAN:

There seems to be some confusions if not contradiction in your theory.

SOLICITOR GENERAL BENIPAYO:

I dont know whether this will clarify. The acts, the supposed illegal or
unlawful acts committed on the occasion of 1017, as I said, it cannot be condoned.
You cannot blame the President for, as you said, a misapplication of the law. These
are acts of the police officers, that is their responsibility.[157]

The Dissenting Opinion states that PP 1017 and G.O. No. 5 are constitutional in
every aspect and should result in no constitutional or statutory breaches if applied
according to their letter.

The Court has passed upon the constitutionality of these issuances. Its ratiocination
has been exhaustively presented. At this point, suffice it to reiterate that PP 1017 is
limited to the calling out by the President of the military to prevent or suppress
lawless violence, invasion or rebellion. When in implementing its provisions,
pursuant to G.O. No. 5, the military and the police committed acts which violate the
citizens rights under the Constitution, this Court has to declare such acts
unconstitutional and illegal.

In this connection, Chief Justice Artemio V. Panganibans concurring opinion,

attached hereto, is considered an integral part of this ponencia.

SUMMATION

In sum, the lifting of PP 1017 through the issuance of PP 1021 a supervening

event would have normally rendered this case moot and academic. However,
while PP 1017 was still operative, illegal acts were committed allegedly in
pursuance thereof. Besides, there is no guarantee that PP 1017, or one similar to it,
may not again be issued. Already, there have been media reports on April 30,
2006 that allegedly PP 1017 would be reimposed if the May 1 rallies become
unruly and violent. Consequently, the transcendental issues raised by the
parties should not be evaded; they must now be resolved to prevent future
constitutional aberration.

The Court finds and so holds that PP 1017 is constitutional insofar as it constitutes a
call by the President for the AFP to prevent or suppress lawless violence. The
proclamation is sustained by Section 18, Article VII of the Constitution and the
relevant jurisprudence discussed earlier. However, PP 1017s extraneous
provisions giving the President express or implied power (1) to issue decrees; (2) to
direct the AFP to enforce obedience to all laws even those not related to lawless
violence as well as decrees promulgated by the President; and (3) to impose
standards on media or any form of prior restraint on the press, are ultra vires and
unconstitutional. The Court also rules that under Section 17, Article XII of the
Constitution, the President, in the absence of a legislation, cannot take over
privately-owned public utility and private business affected with public interest.

In the same vein, the Court finds G.O. No. 5 valid. It is an Order issued by the
President acting as Commander-in-Chief addressed to subalterns in the AFP to
carry out the provisions of PP 1017. Significantly, it also provides a valid standard
that the military and the police should take only the necessary and appropriate
actions and measures to suppress and prevent acts of lawless violence. But the
words acts of terrorism found in G.O. No. 5 have not been legally defined and
made punishable by Congress and should thus be deemed deleted from the said
G.O. While terrorism has been denounced generally in media, no law has been
enacted to guide the military, and eventually the courts, to determine the limits of
the AFPs authority in carrying out this portion of G.O. No. 5.

On the basis of the relevant and uncontested facts narrated earlier, it is also pristine
clear that (1) the warrantless arrest of petitioners Randolf S. David and Ronald
Llamas; (2) the dispersal of the rallies and warrantless arrest of the KMU and NAFLUKMU members; (3) the imposition of standards on media or any prior restraint on
the press; and (4) the warrantless search of the Tribune offices and the whimsical
seizures of some articles for publication and other materials, are not authorized by
the Constitution, the law and jurisprudence. Not even by the valid provisions of PP
1017 and G.O. No. 5.

Other than this declaration of invalidity, this Court cannot impose any civil, criminal
or administrative sanctions on the individual police officers concerned. They have
not been individually identified and given their day in court. The civil complaints or
causes of action and/or relevant criminal Informations have not been presented
before this Court. Elementary due process bars this Court from making any specific
pronouncement of civil, criminal or administrative liabilities.

It is well to remember that military power is a means to an end and substantive civil
rights are ends in themselves. How to give the military the power it needs to
protect the Republic without unnecessarily trampling individual rights is one of the
eternal balancing tasks of a democratic state. During emergency, governmental
action may vary in breadth and intensity from normal times, yet they should not be
arbitrary as to unduly restrain our peoples liberty.

Perhaps, the vital lesson that we must learn from the theorists who studied the
various competing political philosophies is that, it is possible to grant government
the authority to cope with crises without surrendering the two vital principles of
constitutionalism: the maintenance of legal limits to arbitrary power, and political
responsibility of the government to the governed.[158]

WHEREFORE, the Petitions are partly granted. The Court rules that PP 1017 is
CONSTITUTIONAL insofar as it constitutes a call by President Gloria MacapagalArroyo on the AFP to prevent or suppress lawless violence. However, the provisions
of PP 1017 commanding the AFP to enforce laws not related to lawless violence, as
well as decrees promulgated by the President, are declared UNCONSTITUTIONAL.
In addition, the provision in PP 1017 declaring national emergency under Section
17, Article VII of the Constitution is CONSTITUTIONAL, but such declaration does not
authorize the President to take over privately-owned public utility or business
affected with public interest without prior legislation.

G.O. No. 5 is CONSTITUTIONAL since it provides a standard by which the AFP and
the PNP should implement PP 1017, i.e. whatever is necessary and appropriate
actions and measures to suppress and prevent acts of lawless violence.
Considering that acts of terrorism have not yet been defined and made
punishable by the Legislature, such portion of G.O. No. 5 is declared
UNCONSTITUTIONAL.

The warrantless arrest of Randolf S. David and Ronald Llamas; the dispersal and
warrantless arrest of the KMU and NAFLU-KMU members during their rallies, in the
absence of proof that these petitioners were committing acts constituting lawless
violence, invasion or rebellion and violating BP 880; the imposition of standards on
media or any form of prior restraint on the press, as well as the warrantless search
of the Tribune offices and whimsical seizure of its articles for publication and other
materials, are declared UNCONSTITUTIONAL.

No costs.

SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice

FIRST DIVISION

AMOS P. FRANCIA, JR., G.R. No. 170432

CECILIA P. FRANCIA,
AND HEIRS OF BENJAMIN
P. FRANCIA, Present:
Petitioners,
PUNO, C.J., Chairperson,
CARPIO,
CORONA,
AZCUNA and
- v e r s u s - LEONARDO-DE CASTRO, JJ.

MUNICIPALITY OF
MEYCAUAYAN,
Respondent. Promulgated:

March 24, 2008

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

RESOLUTION

CORONA, J.:

On February 6, 2003, respondent Municipality of Meycauayan, Bulacan filed a

complaint for expropriation[1] against petitioners Amos P. Francia, Jr., Cecilia P.
Francia and Benjamin P. Francia[2] in the Regional Trial Court (RTC) of Malolos,
Bulacan, Branch 16. Respondent needed petitioners' 16,256 sq. m. idle property at
the junction of the North Expressway, Malhacan-Iba-Camalig main road artery and
the MacArthur Highway.[3] It planned to use it to establish a common public
terminal for all types of public utility vehicles with a weighing scale for heavy trucks.

In their answer,[4] petitioners denied that the property sought to be expropriated

was raw land. It was in fact developed[5] and there were plans for further
development. For this reason, respondents offer price of P2,333,500 (or P111.99 per
square meter) was too low.

After trial, the RTC ruled that the expropriation was for a public purpose. The
construction of a common terminal for all public utility conveyances (serving as a
two-way loading and unloading point for commuters and goods) would improve the
flow of vehicular traffic during rush hours. Moreover, the property was the best site
for the proposed terminal because of its accessibility. Thus, on November 8, 2004,
the RTC issued the following order:[6]

WHEREFORE, premises considered, after [respondent] has deposited with this Court
the fifteen percent (15%) of the fair market value of the property based on the
current tax declaration of the property to be expropriated, it may take immediate
possession of the property upon issuance of writ of possession that this court will
issue for that purpose.

Further, the purposes of assessment and determination of the area needed that will
suit the purpose of expropriation and just compensation of the lot sought to be
expropriated, the court hereby appoints commissioners to be composed of the
officer-in-charge of this court, Lerida Socorro E. Joson and one each from
[respondent] and [petitioners].

Notify all parties concerned.

SO ORDERED.[7]

Petitioners moved for the reconsideration of the November 8, 2004 order but the
motion was denied in an order dated January 31, 2005.

Aggrieved, petitioners filed a petition for certiorari in the Court of Appeals (CA)
contending that the RTC committed grave abuse of discretion in issuing its
November 8, 2004 and January 31, 2005 orders. They claimed that the trial court
issued the orders without conducting a hearing to determine the existence of a
public purpose.

On July 28, 2005, the CA rendered a decision[8] partially granting the petition.
Finding that petitioners were deprived of an opportunity to controvert respondent's
allegations, the appellate court nullified the order of expropriation except with
regard to the writ of possession. According to the CA, a hearing was not necessary
because once the expropriator deposited the required amount (with the Court), the
issuance of a writ of possession became ministerial.

Petitioners moved for partial reconsideration but their motion was denied. Hence,
this recourse.

Petitioners essentially aver that the CA erred in upholding the RTC's orders that, in
expropriation cases, prior determination of the existence of a public purpose was
not necessary for the issuance of a writ of possession.

We deny the petition.

Section 19 of Republic Act 7160[9] provides:

Section 19. Eminent Domain. A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of eminent
domain for public use, or purpose, or welfare for the benefit of the poor and the
landless, upon payment of just compensation, pursuant to the provisions of the
Constitution and pertinent laws; Provided, however, That the power of eminent
domain may not be exercised unless a valid and definite offer has been previously
made to the owner, and that such offer was not accepted; Provided, further, That
the local government unit may immediately take possession of the property upon
the filing of the expropriation proceedings and upon making a deposit with the
proper court of at least fifteen percent (15%) of the fair market value of the property
based on the current tax declaration of the property to be expropriated; Provided,
finally, That, the amount to be paid for the expropriated property shall be
determined by the proper court, based on the fair market value at the time of the
taking of the property. (emphasis supplied)[10]

Before a local government unit may enter into the possession of the property
sought to be expropriated, it must (1) file a complaint for expropriation sufficient in
form and substance in the proper court and (2) deposit with the said court at least
15% of the property's fair market value based on its current tax declaration.[11] The
law does not make the determination of a public purpose a condition precedent to
the issuance of a writ of possession.[12]

WHEREFORE, the petition is hereby DENIED.

Costs against petitioners.

SO ORDERED.

RENATO C. CORONA
Associate Justice

SECOND DIVISION

[G.R. NO. 192945 - September 5, 2012]

CITY OF IRIGA, Petitioner, v. CAMARINES SUR III ELECTRIC COOPERATIVE, INC.

(CASURECO III), Respondent.

DECISION

PERLAS-BERNABE, J.:

The Court reiterates that a franchise tax is a tax levied on the exercise by an entity
of the rights or privileges granted to it by the government. In the absence of a clear
and subsisting legal provision granting it tax exemption, a franchise holder, though
non-profit in nature, may validly be assessed franchise tax by a local government
unit.

Before the Court is a petition filed under Rule 45 of the Revised Rules of Court
seeking to set aside the February 11, 2010 Decision and July 12, 2010
Resolution3rll of the Court of Appeals (CA), which reversed the February 7, 2005
Decision of the Regional Trial Court (RTC) of Iriga City, Branch 36 and ruled that
respondent Camarines Sur III Electric Cooperative, Inc. (CASURECO III) is exempt
from payment of local franchise tax.

The Facts

CASURECO III is an electric cooperative duly organized and existing by virtue of

Presidential Decree (PD) 269, as amended, and registered with the National
Electrification Administration (NEA). It is engaged in the business of electric power
distribution to various end-users and consumers within the City of Iriga and the
municipalities of Nabua, Bato, Baao, Buhi, Bula and Balatan of the Province of
Camarines Sur, otherwise known as the "Rinconada area."

Sometime in 2003, petitioner City of Iriga required CASURECO III to submit a report
of its gross receipts for the period 1997-2002 to serve as the basis for the
computation of franchise taxes, fees and other charges.The latter complied and was
subsequently assessed taxes.

On January 7, 2004, petitioner made a final demand on CASURECO III to pay the
franchise taxes due for the period 1998-2003 and real property taxes due for the
period 1995-2003. CASURECO III, however, refused to pay said taxes on the ground
that it is an electric cooperative provisionally registered with the Cooperative
Development Authority (CDA), and therefore exempt from the payment of local
taxes.

On March 15, 2004, petitioner filed a complaint for collection of local taxes against
CASURECO III before the RTC, citing its power to tax under the Local Government
Code (LGC) and the Revenue Code of Iriga City.

It alleged that as of December 31, 2003, CASURECO III franchise and real property
taxes liability, inclusive of penalties, surcharges and interest, amounted to
Seventeen Million Thirty-Seven Thousand Nine Hundred Thirty-Six Pesos and EightyNine Centavos (P 17,037,936.89) and Nine Hundred Sixteen Thousand Five Hundred
Thirty-Six Pesos and Fifty Centavos (P 916,536.50), respectively.

In its Answer, CASURECO III denied liability for the assessed taxes, asserting that
the computation of the petitioner was erroneous because it included 1) gross
receipts from service areas beyond the latter territorial jurisdiction; 2) taxes that
had already prescribed; and 3) taxes during the period when it was still exempt from
local government tax by virtue of its then subsisting registration with the CDA.
Ruling of the Trial Court
In its Decision dated February 7, 2005, the RTC ruled that the real property taxes
due for the years 1995-1999 had already prescribed in accordance with Section
1941 of the LGC. However, it found CASURECO III liable for franchise taxes for the
years 2000-2003 based on its gross receipts from Iriga City and the Rinconada area
on the ground that the "situs of taxation is the place where the privilege is
exercised."The dispositive portion of the RTC Decision reads:
WHEREFORE, in view of the foregoing, defendant is hereby made liable to pay
plaintiff real property taxes and franchise taxes on its receipts, including those from
service area covering Nabua, Bato, Baao and Buhi for the years 2000 up to the
present. The realty taxes for the years 1995 and 1999 is hereby declared
prescribed. The City Assessor is hereby directed to make the proper classification of
defendant real property in accordance with Ordinance issued by the City Council.
SO ORDERED.
Only CASURECO III appealed from the RTC Decision, questioning its liability for
franchise taxes.
Ruling of the Court of Appeals
In its assailed Decision, the CA found CASURECO III to be a non-profit entity, not
falling within the purview of "businesses enjoying a franchise" pursuant to Section
137 of the LGC. It explained that CASURECO III non-profit nature is diametrically
opposed to the concept of a "business," which, as defined under Section 131 of the
LGC, is a "trade or commercial activity regularly engaged in as a means of livelihood
or with a view to profit." Consequently, it relieved CASURECO III from liability to pay
franchise taxes.

Petitioner moved for reconsideration, which the CA denied in its July 12, 2010
Resolution for being filed a day late, hence, the instant petition.

Issues Before the Court

Petitioner raises two issues for resolution, which the Court restates as follows: (1)
whether or not an electric cooperative registered under PD 269 but not under RA
693817rll is liable for the payment of local franchise taxes; and (2) whether or
not the situs of taxation is the place where the franchise holder exercises its
franchise regardless of the place where its services or products are delivered.

CASURECO III, on the other hand, raises the procedural issue that since the motion
for reconsideration of the CA Decision was filed out of time, the same had attained
finality.

The Court s Rulingrbl r l l lbrr

The petition is meritorious.

Before delving into the substantive issues, the Court notes the procedural lapses
extant in the present case.
Proper Mode of Appeal from the Decision of the Regional Trial Court involving local
taxes
RA 9282, which took effect on April 23, 2004, expanded the jurisdiction of the Court
of Tax Appeals (CTA) to include, among others, the power to review by appeal
decisions, orders or resolutions of the Regional Trial Courts in local tax cases
originally decided or resolved by them in the exercise of their original or appellate
jurisdiction.
Considering that RA 9282 was already in effect when the RTC rendered its decision
on February 7, 2005, CASURECO III should have filed its appeal, not with the CA, but
with the CTA Division in accordance with the applicable law and the rules of the CTA.
Resort to the CA was, therefore, improper, rendering its decision null and void for
want of jurisdiction over the subject matter. A void judgment has no legal or binding
force or efficacy for any purpose or at any place. Hence, the fact that petitioner's
motion for reconsideration from the CA Decision was belatedly filed is
inconsequential, because a void and non-existent decision would never have
acquired finality.
The foregoing procedural lapses would have been sufficient to dismiss the instant
petition outright and declare the decision of the RTC final. However, the substantial
merits of the case compel us to dispense with these lapses and instead, exercise
the Court power of judicial review.
CASURECO III is not exempt from payment of franchise tax
PD 269, which took effect on August 6, 1973, granted electric cooperatives
registered with the NEA, like CASURECO III, several tax privileges, one of which is
exemption from the payment of "all national government, local government and
municipal taxes and fees, including franchise, filing, recordation, license or permit
fees or taxes.
On March 10, 1990, Congress enacted into law RA 6938, otherwise known as the
"Cooperative Code of the Philippines," and RA 693924rll creating the CDA. The
latter law vested the power to register cooperatives solely on the CDA, while the
former provides that electric cooperatives registered with the NEA under PD 269
which opt not to register with the CDA shall not be entitled to the benefits and
privileges under the said law.

On January 1, 1992, the LGC took effect, and Section 193 thereof withdrew tax
exemptions or incentives previously enjoyed by "all persons, whether natural or
juridical, including government-owned or controlled corporations, except local water
districts, cooperatives duly registered under R.A. No. 6938, non-stock and non-profit
hospitals and educational institutions."

In Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA) v. The

Secretary, Department of Interior and Local Government,26 the Court held that the

tax privileges granted to electric cooperatives registered with NEA under PD 269
were validly withdrawn and only those registered with the CDA under RA 6938 may
continue to enjoy the tax privileges under the Cooperative Code.

Therefore, CASURECO III can no longer invoke PD 269 to evade payment of local
taxes. Moreover, its provisional registration with the CDA which granted it
exemption for the payment of local taxes was extended only until May 4, 1992.
Thereafter, it can no longer claim any exemption from the payment of local taxes,
including the subject franchise tax.

Indisputably, petitioner has the power to impose local taxes. The power of the local
government units to impose and collect taxes is derived from the Constitution itself
which grants them "the power to create its own sources of revenues and to levy
taxes, fees and charges subject to such guidelines and limitation as the Congress
may provide. "This explicit constitutional grant of power to tax is consistent with the
basic policy of local autonomy and decentralization of governance. With this power,
local government units have the fiscal mechanisms to raise the funds needed to
deliver basic services to their constituents and break the culture of dependence on
the national government. Thus, consistent with these objectives, the LGC was
enacted granting the local government units, like petitioner, the power to impose
and collect franchise tax, to wit:
SEC. 137. Franchise Tax. - Notwithstanding any exemption granted by any law or
other special law, the province may impose a tax on businesses enjoying a
franchise, at a rate not exceeding fifty percent (50%) of one percent (1%) of the
gross annual receipts for the preceding calendar year based on the incoming
receipt, or realized, within its territorial jurisdiction. xxx
SEC. 151. Scope of Taxing Powers. - Except as otherwise provided in this Code, the
city, may levy the taxes, fees, and charges which the province or municipality may
impose: Provided, however, That the taxes, fees and charges levied and collected
by highly urbanized and independent component cities shall accrue to them and
distributed in accordance with the provisions of this Code. The rates of taxes that
the city may levy may exceed the maximum rates allowed for the province or
municipality by not more than fifty percent (50%) except the rates of professional
and amusement taxes.
Taking a different tack, CASURECO III maintains that it is exempt from payment of
franchise tax because of its nature as a non-profit cooperative, as contemplated in
PD 269, and insists that only entities engaged in business, and not non-profit
entities like itself, are subject to the said franchise tax.
The Court is not persuaded.
In National Power Corporation v. City of Cabanatuan,29 the Court declared that "a
franchise tax is a tax on the privilege of transacting business in the state and
exercising corporate franchises granted by the state. It is not levied on the
corporation simply for existing as a corporation, upon its property or its income, but
on its exercise of the rights or privileges granted to it by the government. It is within
this context that the phrase tax on businesses enjoying a franchise in Section 137 of
the LGC should be interpreted and understood.

Thus, to be liable for local franchise tax, the following requisites should concur: (1)
that one has a "franchise" in the sense of a secondary or special franchise; and (2)
that it is exercising its rights or privileges under this franchise within the territory of
the pertinent local government unit.
There is a confluence of these requirements in the case at bar. By virtue of PD 269,
NEA granted CASURECO III a franchise to operate an electric light and power service
for a period of fifty (50) years from June 6, 1979, and it is undisputed that

CASURECO III operates within Iriga City and the Rinconada area. It is, therefore,
liable to pay franchise tax notwithstanding its non-profit nature.
CASURECO III is liable for franchise tax on gross receipts within Iriga City and
Rinconada area.
CASURECO III further argued that its liability to pay franchise tax, if any, should be
limited to gross receipts received from the supply of the electricity within the City of
Iriga and not those from the Rinconada area.

Again, the Court is not convinced.

It should be stressed that what the petitioner seeks to collect from CASURECO III is
a franchise tax, which as defined, is a tax on the exercise of a privilege. As Section
137of the LGC provides, franchise tax shall be based on gross receipts precisely
because it is a tax on business, rather than on persons or property.36rll Since it
partakes of the nature of an excise tax/the situs of taxation is the place where the
privilege is exercised, in this case in the City of Iriga, where CASURECO III has its
principal office and from where it operates, regardless of the place where its
services or products are delivered. Hence, franchise tax covers all gross receipts
from Iriga City and the Rinconada area.
WHEREFORE, the petition is GRANTED. The assailed Decision dated February 11,
2010 and Resolution dated July 12, 2010 of the Court of Appeals are hereby SET
ASIDE and the Decision of the Regional Trial Court oflriga City, Branch 36, is
REINSTATED.

SO ORDERED
EN BANC

HON. EXECUTIVE SECRETARY, G.R. No. 164171

HON. SECRETARY OF THE
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS (DOTC),
COMMISSIONER OF CUSTOMS,
ASSISTANT SECRETARY, LAND
TRANSPORTATION OFFICE (LTO),
COLLECTOR OF CUSTOMS, SUBIC
BAY FREE PORT ZONE, AND CHIEF
OF LTO, SUBIC BAY FREE PORT ZONE,
Petitioners,
Present:

Panganiban, C.J.,
Puno,
Quisumbing,
Ynares-Santiago,

Sandoval-Gutierrez,
- versus - Carpio,
Austria-Martinez,
Corona,
Carpio-Morales,
Callejo, Sr.,
Azcuna,
Tinga,
Chico-Nazario, and
Garcia, JJ.
SOUTHWING HEAVY INDUSTRIES,
INC., represented by its President JOSE
T. DIZON, UNITED AUCTIONEERS,
INC., represented by its President
DOMINIC SYTIN, and MICROVAN,
INC., represented by its President
MARIANO C. SONON,
Respondents.
x -------------------------------------------------------- x
HON. EXECUTIVE SECRETARY, G.R. No. 164172
SECRETARY OF THE DEPARTMENT
OF TRANSPORTATION AND
COMMUNICATION (DOTC),
COMMISSIONER OF CUSTOMS,
ASSISTANT SECRETARY, LAND
TRANSPORTATION OFFICE (LTO),
COLLECTOR OF CUSTOMS, SUBIC
BAY FREE PORT ZONE AND CHIEF OF
LTO, SUBIC BAY FREE PORT ZONE,
Petitioners,

- versus -

SUBIC INTEGRATED MACRO

VENTURES CORP., represented
by its President YOLANDA AMBAR,

Respondent.

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

HON. EXECUTIVE SECRETARY, G.R. No. 168741

HON. SECRETARY OF FINANCE,
THE CHIEF OF THE LAND
TRANSPORTATION OFFICE, THE
COMMISSIONER OF CUSTOMS,
and THE COLLECTOR OF CUSTOMS,
SUBIC SPECIAL ECONOMIC ZONE,
Petitioners,

- versus -

MOTOR VEHICLE IMPORTERS

ASSOCIATION OF SUBIC BAY
FREEPORT, INC., represented by Promulgated:
its President ALFREDO S. GALANG,
Respondent. February 20, 2006

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

DECISION

YNARES-SANTIAGO, J.:

The instant consolidated petitions seek to annul and set aside the Decisions of the
Regional Trial Court of Olongapo City, Branch 72, in Civil Case No. 20-0-04 and Civil
Case No. 22-0-04, both dated May 24, 2004; and the February 14, 2005 Decision of
the Court of Appeals in CA-G.R. SP. No. 83284, which declared Article 2, Section 3.1
of Executive Order No. 156 (EO 156) unconstitutional. Said executive issuance
prohibits the importation into the country, inclusive of the Special Economic and
Freeport Zone or the Subic Bay Freeport (SBF or Freeport), of used motor vehicles,
subject to a few exceptions.

The undisputed facts show that on December 12, 2002, President Gloria MacapagalArroyo, through Executive Secretary Alberto G. Romulo, issued EO 156, entitled
PROVIDING FOR A COMPREHENSIVE INDUSTRIAL POLICY AND DIRECTIONS FOR THE
MOTOR VEHICLE DEVELOPMENT PROGRAM AND ITS IMPLEMENTING GUIDELINES.
The challenged provision states:

3.1 The importation into the country, inclusive of the Freeport, of all types of used
motor vehicles is prohibited, except for the following:

3.1.1 A vehicle that is owned and for the personal use of a returning resident or
immigrant and covered by an authority to import issued under the No-dollar
Importation Program. Such vehicles cannot be resold for at least three (3) years;

3.1.2 A vehicle for the use of an official of the Diplomatic Corps and authorized to be
imported by the Department of Foreign Affairs;

3.1.3 Trucks excluding pickup trucks;

1. with GVW of 2.5-6.0 tons covered by an authority to import issued by the DTI.
2. With GVW above 6.0 tons.

3.1.4 Buses:
1. with GVW of 6-12 tons covered by an authority to import issued by DTI;
2. with GVW above 12 tons.

3.1.5 Special purpose vehicles:

1.

fire trucks

2.

ambulances

3.

funeral hearse/coaches

4.

crane lorries

5.

tractor heads and truck tractors

6.

boom trucks

7.

tanker trucks

8.

tank lorries with high pressure spray gun

9.

reefers or refrigerated trucks

10. mobile drilling derricks

11. transit/concrete mixers

12. mobile radiological units
13. wreckers or tow trucks
14. concrete pump trucks
15. aerial/bucket flat-form trucks
16. street sweepers
17. vacuum trucks
18. garbage compactors
19. self loader trucks
20. man lift trucks
21. lighting trucks
22. trucks mounted with special purpose equipment
23. all other types of vehicle designed for a specific use.

The issuance of EO 156 spawned three separate actions for declaratory relief before
Branch 72 of the Regional Trial Court of Olongapo City, all seeking the declaration of
the unconstitutionality of Article 2, Section 3.1 of said executive order. The cases
were filed by herein respondent entities, who or whose members, are classified as
Subic Bay Freeport Enterprises and engaged in the business of, among others,
importing and/or trading used motor vehicles.

G.R. No. 164171:

On January 16, 2004, respondents Southwing Heavy Industries, Inc., (SOUTHWING)

United Auctioneers, Inc. (UNITED AUCTIONEERS), and Microvan, Inc. (MICROVAN),
instituted a declaratory relief case docketed as Civil Case No. 20-0-04,[1] against
the Executive Secretary, Secretary of Transportation and Communication,
Commissioner of Customs, Assistant Secretary and Head of the Land Transportation
Office, Subic Bay Metropolitan Authority (SBMA), Collector of Customs for the Port at
Subic Bay Freeport Zone, and the Chief of the Land Transportation Office at Subic
Bay Freeport Zone.
SOUTHWING, UNITED AUCTIONEERS and MICROVAN prayed that judgment be
rendered (1) declaring Article 2, Section 3.1 of EO 156 unconstitutional and illegal;
(2) directing the Secretary of Finance, Commissioner of Customs, Collector of
Customs and the Chairman of the SBMA to allow the importation of used motor
vehicles; (2) ordering the Land Transportation Office and its subordinates inside the
Subic Special Economic Zone to process the registration of the imported used motor
vehicles; and (3) in general, to allow the unimpeded entry and importation of used
motor vehicles subject only to the payment of the required customs duties.

Upon filing of petitioners answer/comment, respondents SOUTHWING and

MICROVAN filed a motion for summary judgment which was granted by the trial
court. On May 24, 2004, a summary judgment was rendered declaring that Article 2,
Section 3.1 of EO 156 constitutes an unlawful usurpation of legislative power vested
by the Constitution with Congress. The trial court further held that the proviso is
contrary to the mandate of Republic Act No. 7227 (RA 7227) or the Bases
Conversion and Development Act of 1992 which allows the free flow of goods and
capital within the Freeport. The dispositive portion of the said decision reads:

WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive

Order 156 [Article 2, Section] 3.1 for being unconstitutional and illegal; directing
respondents Collector of Customs based at SBMA to allow the importation and entry
of used motor vehicles pursuant to the mandate of RA 7227; directing respondent
Chief of the Land Transportation Office and its subordinates inside the Subic Special
Economic Zone or SBMA to process the registration of imported used motor vehicle;
and in general, to allow unimpeded entry and importation of used motor vehicles to
the Philippines subject only to the payment of the required customs duties.

SO ORDERED.[2]

From the foregoing decision, petitioners sought relief before this Court via a petition
for review on certiorari, docketed as G.R. No. 164171.

G.R. No. 164172:

On January 20, 2004, respondent Subic Integrated Macro Ventures Corporation

(MACRO VENTURES) filed with the same trial court, a similar action for declaratory
relief docketed as Civil Case No. 22-0-04,[3] with the same prayer and against the
same parties[4] as those in Civil Case No. 20-0-04.

In this case, the trial court likewise rendered a summary judgment on May 24, 2004,
holding that Article 2, Section 3.1 of EO 156, is repugnant to the constitution.[5]
Elevated to this Court via a petition for review on certiorari, Civil Case No. 22-0-04
was docketed as G.R. No. 164172.

G.R. No. 168741

On January 22, 2003, respondent Motor Vehicle Importers Association of Subic Bay
Freeport, Inc. (ASSOCIATION), filed another action for declaratory relief with
essentially the same prayer as those in Civil Case No. 22-0-04 and Civil Case No. 200-04, against the Executive Secretary, Secretary of Finance, Chief of the Land
Transportation Office, Commissioner of Customs, Collector of Customs at SBMA and
the Chairman of SBMA. This was docketed as Civil Case No. 30-0-2003,[6] before the
same trial court.

In a decision dated March 10, 2004, the court a quo granted the ASSOCIATIONs
prayer and declared the assailed proviso as contrary to the Constitution, to wit:

WHEREFORE, judgment is hereby rendered in favor of petitioner declaring Executive

Order 156 [Article 2, Section] 3.1 for being unconstitutional and illegal; directing
respondents Collector of Customs based at SBMA to allow the importation and entry
of used motor vehicles pursuant to the mandate of RA 7227; directing respondent
Chief of the Land Transportation Office and its subordinates inside the Subic Special
Economic Zone or SBMA to process the registration of imported used motor
vehicles; directing the respondent Chairman of the SBMA to allow the entry into the
Subic Special Economic Zone or SBMA imported used motor vehicle; and in general,
to allow unimpeded entry and importation of used motor vehicles to the Philippines
subject only to the payment of the required customs duties.

SO ORDERED.[7]

Aggrieved, the petitioners in Civil Case No. 30-0-2003, filed a petition for
certiorari[8] with the Court of Appeals (CA-G.R. SP. No. 83284) which denied the
petition on February 14, 2005 and sustained the finding of the trial court that Article
2, Section 3.1 of EO 156, is void for being repugnant to the constitution. The
dispositive portion thereof, reads:

WHEREFORE, the instant petition for certiorari is hereby DENIED. The assailed
decision of the Regional Trial Court, Third Judicial Region, Branch 72, Olongapo City,
in Civil Case No. 30-0-2003, accordingly, STANDS.

SO ORDERED.[9]

The aforequoted decision of the Court of Appeals was elevated to this Court and
docketed as G.R. No. 168741. In a Resolution dated October 4, 2005,[10] said case
was consolidated with G.R. No. 164171 and G.R. No. 164172.

Petitioners are now before this Court contending that Article 2, Section 3.1 of EO
156 is valid and applicable to the entire country, including the Freeeport. In support
of their arguments, they raise procedural and substantive issues bearing on the
constitutionality of the assailed proviso. The procedural issues are: the lack of
respondents locus standi to question the validity of EO 156, the propriety of
challenging EO 156 in a declaratory relief proceeding and the applicability of a
judgment on the pleadings in this case.

Petitioners argue that respondents will not be affected by the importation ban
considering that their certificate of registration and tax exemption do not authorize
them to engage in the importation and/or trading of used cars. They also aver that
the actions filed by respondents do not qualify as declaratory relief cases. Section 1,
Rule 63 of the Rules of Court provides that a petition for declaratory relief may be
filed before there is a breach or violation of rights. Petitioners claim that there was
already a breach of respondents supposed right because the cases were filed more
than a year after the issuance of EO 156. In fact, in Civil Case No. 30-0-2003,
numerous warrants of seizure and detention were issued against imported used
motor vehicles belonging to respondent ASSOCIATIONs members.

Petitioners arguments lack merit.

The established rule that the constitutionality of a law or administrative issuance

can be challenged by one who will sustain a direct injury as a result of its
enforcement[11] has been satisfied in the instant case. The broad subject of the
prohibited importation is all types of used motor vehicles. Respondents would
definitely suffer a direct injury from the implementation of EO 156 because their
certificate of registration and tax exemption authorize them to trade and/or import
new and used motor vehicles and spare parts, except used cars.[12] Other types of
motor vehicles imported and/or traded by respondents and not falling within the
category of used cars would thus be subjected to the ban to the prejudice of their
business. Undoubtedly, respondents have the legal standing to assail the validity of
EO 156.

As to the propriety of declaratory relief as a vehicle for assailing the executive

issuance, suffice it to state that any breach of the rights of respondents will not
affect the case. In Commission on Audit of the Province of Cebu v. Province of Cebu,
[13] the Court entertained a suit for declaratory relief to finally settle the doubt as
to the proper interpretation of the conflicting laws involved, notwithstanding a
violation of the right of the party affected. We find no reason to deviate from said
ruling mindful of the significance of the present case to the national economy.

So also, summary judgments were properly rendered by the trial court because the
issues involved in the instant case were pure questions of law. A motion for
summary judgment is premised on the assumption that the issues presented need
not be tried either because these are patently devoid of substance or that there is
no genuine issue as to any pertinent fact. It is a method sanctioned by the Rules of
Court for the prompt disposition of a civil action in which the pleadings raise only a
legal issue, not a genuine issue as to any material fact.[14]

At any rate, even assuming the procedural flaws raised by petitioners truly exist,
the Court is not precluded from brushing aside these technicalities and taking
cognizance of the action filed by respondents considering its importance to the
public and in keeping with the duty to determine whether the other branches of the
government have kept themselves within the limits of the Constitution.[15]

We now come to the substantive issues, which are: (1) whether there is statutory
basis for the issuance of EO 156; and (2) if the answer is in the affirmative, whether
the application of Article 2, Section 3.1 of EO 156, reasonable and within the scope
provided by law.

The main thrust of the petition is that EO 156 is constitutional because it was issued
pursuant to EO 226, the Omnibus Investment Code of the Philippines and that its
application should be extended to the Freeport because the guarantee of RA 7227
on the free flow of goods into the said zone is merely an exemption from customs
duties and taxes on items brought into the Freeport and not an open floodgate for
all kinds of goods and materials without restriction.

In G.R. No. 168741, the Court of Appeals invalidated Article 2, Section 3.1 of EO
156, on the ground of lack of any statutory basis for the President to issue the
same. It held that the prohibition on the importation of used motor vehicles is an
exercise of police power vested on the legislature and absent any enabling law, the
exercise thereof by the President through an executive issuance, is void.

Police power is inherent in a government to enact laws, within constitutional limits,

to promote the order, safety, health, morals, and general welfare of society. It is
lodged primarily with the legislature. By virtue of a valid delegation of legislative
power, it may also be exercised by the President and administrative boards, as well
as the lawmaking bodies on all municipal levels, including the barangay.[16] Such
delegation confers upon the President quasi-legislative power which may be defined
as the authority delegated by the law-making body to the administrative body to
adopt rules and regulations intended to carry out the provisions of the law and
implement legislative policy.[17] To be valid, an administrative issuance, such as an
executive order, must comply with the following requisites:

(1) Its promulgation must be authorized by the legislature;

(2) It must be promulgated in accordance with the prescribed procedure;
(3) It must be within the scope of the authority given by the legislature; and
(4) It must be reasonable.[18]

Contrary to the conclusion of the Court of Appeals, EO 156 actually satisfied the first
requisite of a valid administrative order. It has both constitutional and statutory
bases.

Delegation of legislative powers to the President is permitted in Section 28(2) of

Article VI of the Constitution. It provides:

(2) The Congress may, by law, authorize the President to fix within specified limits,
and subject to such limitations and restrictions as it may impose, tariff rates, import
and export quotas, tonnage and wharfage dues, and other duties or imposts within
the framework of the national development program of the Government.[19]
(Emphasis supplied)

The relevant statutes to execute this provision are:

1) The Tariff and Customs Code which authorizes the President, in the interest of
national economy, general welfare and/or national security, to, inter alia, prohibit
the importation of any commodity. Section 401 thereof, reads:

Sec. 401. Flexible Clause.

a. In the interest of national economy, general welfare and/or national security, and
subject to the limitations herein prescribed, the President, upon recommendation of
the National Economic and Development Authority (hereinafter referred to as
NEDA), is hereby empowered: x x x (2) to establish import quota or to ban imports
of any commodity, as may be necessary; x x x Provided, That upon periodic
investigations by the Tariff Commission and recommendation of the NEDA, the
President may cause a gradual reduction of protection levels granted in Section One
hundred and four of this Code, including those subsequently granted pursuant to
this section. (Emphasis supplied)

2) Executive Order No. 226, the Omnibus Investment Code of the Philippines which
was issued on July 16, 1987, by then President Corazon C. Aquino, in the exercise of
legislative power under the Provisional Freedom Constitution,[20] empowers the
President to approve or reject the prohibition on the importation of any equipment
or raw materials or finished products. Pertinent provisions thereof, read:

ART. 4. Composition of the board. The Board of Investments shall be composed of

seven (7) governors: The Secretary of Trade and Industry, three (3)
Undersecretaries of Trade and Industry to be chosen by the President; and three (3)
representatives from the government agencies and the private sector x x x.

ART. 7. Powers and duties of the Board.

xxxx

(12) Formulate and implement rationalization programs for certain industries whose
operation may result in dislocation, overcrowding or inefficient use of resources,
thus impeding economic growth. For this purpose, the Board may formulate
guidelines for progressive manufacturing programs, local content programs,
mandatory sourcing requirements and dispersal of industries. In appropriate cases
and upon approval of the President, the Board may restrict, either totally or
partially, the importation of any equipment or raw materials or finished products
involved in the rationalization program; (Emphasis supplied)

3) Republic Act No. 8800, otherwise known as the Safeguard Measures Act (SMA),
and entitled An Act Protecting Local Industries By Providing Safeguard Measures To
Be Undertaken In Response To Increased Imports And Providing Penalties For
Violation Thereof,[21] designated the Secretaries[22] of the Department of Trade
and Industry (DTI) and the Department of Agriculture, in their capacity as alter egos
of the President, as the implementing authorities of the safeguard measures, which
include, inter alia, modification or imposition of any quantitative restriction on the
importation of a product into the Philippines. The purpose of the SMA is stated in the
declaration of policy, thus:

SEC. 2. Declaration of Policy. The State shall promote competitiveness of domestic

industries and producers based on sound industrial and agricultural development
policies, and efficient use of human, natural and technical resources. In pursuit of
this goal and in the public interest, the State shall provide safeguard measures to
protect domestic industries and producers from increased imports which cause or
threaten to cause serious injury to those domestic industries and producers.

There are thus explicit constitutional and statutory permission authorizing the
President to ban or regulate importation of articles and commodities into the
country.

Anent the second requisite, that is, that the order must be issued or promulgated in
accordance with the prescribed procedure, it is necessary that the nature of the
administrative issuance is properly determined. As in the enactment of laws, the
general rule is that, the promulgation of administrative issuances requires previous
notice and hearing, the only exception being where the legislature itself requires it
and mandates that the regulation shall be based on certain facts as determined at
an appropriate investigation.[23] This exception pertains to the issuance of
legislative rules as distinguished from interpretative rules which give no real
consequence more than what the law itself has already prescribed;[24] and are
designed merely to provide guidelines to the law which the administrative agency is
in charge of enforcing.[25] A legislative rule, on the other hand, is in the nature of
subordinate legislation, crafted to implement a primary legislation.

In Commissioner of Internal Revenue v. Court of Appeals,[26] and Commissioner of

Internal Revenue v. Michel J. Lhuillier Pawnshop, Inc.,[27] the Court enunciated the
doctrine that when an administrative rule goes beyond merely providing for the
means that can facilitate or render less cumbersome the implementation of the law

and substantially increases the burden of those governed, it behooves the agency
to accord at least to those directly affected a chance to be heard and, thereafter, to
be duly informed, before the issuance is given the force and effect of law.

In the instant case, EO 156 is obviously a legislative rule as it seeks to implement or

execute primary legislative enactments intended to protect the domestic industry
by imposing a ban on the importation of a specified product not previously subject
to such prohibition. The due process requirements in the issuance thereof are
embodied in Section 401[28] of the Tariff and Customs Code and Sections 5 and 9 of
the SMA[29] which essentially mandate the conduct of investigation and public
hearings before the regulatory measure or importation ban may be issued.

In the present case, respondents neither questioned before this Court nor with the
courts below the procedure that paved the way for the issuance of EO 156. What
they challenged in their petitions before the trial court was the absence of
substantive due process in the issuance of the EO.[30] Their main contention before
the court a quo is that the importation ban is illogical and unfair because it
unreasonably drives them out of business to the prejudice of the national economy.
Considering the settled principle that in the absence of strong evidence to the
contrary, acts of the other branches of the government are presumed to be valid,
[31] and there being no objection from the respondents as to the procedure in the
promulgation of EO 156, the presumption is that said executive issuance duly
complied with the procedures and limitations imposed by law.

To determine whether EO 156 has complied with the third and fourth requisites of a
valid administrative issuance, to wit, that it was issued within the scope of authority
given by the legislature and that it is reasonable, an examination of the nature of a
Freeport under RA 7227 and the primordial purpose of the importation ban under
the questioned EO is necessary.

RA 7227 was enacted providing for, among other things, the sound and balanced
conversion of the Clark and Subic military reservations and their extensions into
alternative productive uses in the form of Special Economic and Freeport Zone, or
the Subic Bay Freeport, in order to promote the economic and social development of
Central Luzon in particular and the country in general.

The Rules and Regulations Implementing RA 7227 specifically defines the territory
comprising the Subic Bay Freeport, referred to as the Special Economic and Freeport
Zone in Section 12 of RA 7227 as "a separate customs territory consisting of the
City of Olongapo and the Municipality of Subic, Province of Zambales, the lands
occupied by the Subic Naval Base and its contiguous extensions as embraced,
covered and defined by the 1947 Philippine-U.S. Military Base Agreement as
amended and within the territorial jurisdiction of Morong and Hermosa, Province of
Bataan, the metes and bounds of which shall be delineated by the President of the
Philippines; provided further that pending establishment of secure perimeters
around the entire SBF, the SBF shall refer to the area demarcated by the SBMA
pursuant to Section 13[32] hereof."

Among the salient provisions of RA 7227 are as follows:

SECTION 12. Subic Special Economic Zone.

xxxx

The abovementioned zone shall be subject to the following policies:

xxxx

(a) Within the framework and subject to the mandate and limitations of the
Constitution and the pertinent provisions of the Local Government Code, the Subic
Special Economic Zone shall be developed into a self-sustaining, industrial,
commercial, financial and investment center to generate employment opportunities
in and around the zone and to attract and promote productive foreign investments;

(b) The Subic Special Economic Zone shall be operated and managed as a separate
customs territory ensuring free flow or movement of goods and capital within, into
and exported out of the Subic Special Economic Zone, as well as provide incentives
such as tax and duty-free importations of raw materials, capital and equipment.
However, exportation or removal of goods from the territory of the Subic Special
Economic Zone to the other parts of the Philippine territory shall be subject to
customs duties and taxes under the Customs and Tariff Code and other relevant tax
laws of the Philippines;

The Freeport was designed to ensure free flow or movement of goods and capital
within a portion of the Philippine territory in order to attract investors to invest their
capital in a business climate with the least governmental intervention. The concept
of this zone was explained by Senator Guingona in this wise:

Senator Guingona. Mr. President, the special economic zone is successful in many
places, particularly Hong Kong, which is a free port. The difference between a
special economic zone and an industrial estate is simply expansive in the sense that
the commercial activities, including the establishment of banks, services, financial
institutions, agro-industrial activities, maybe agriculture to a certain extent.

This delineates the activities that would have the least of government intervention,
and the running of the affairs of the special economic zone would be run principally
by the investors themselves, similar to a housing subdivision, where the subdivision
owners elect their representatives to run the affairs of the subdivision, to set the
policies, to set the guidelines.

We would like to see Subic area converted into a little Hong Kong, Mr. President,
where there is a hub of free port and free entry, free duties and activities to a
maximum spur generation of investment and jobs.

While the investor is reluctant to come in the Philippines, as a rule, because of red
tape and perceived delays, we envision this special economic zone to be an area
where there will be minimum government interference.

The initial outlay may not only come from the Government or the Authority as
envisioned here, but from them themselves, because they would be encouraged to
invest not only for the land but also for the buildings and factories. As long as they
are convinced that in such an area they can do business and reap reasonable
profits, then many from other parts, both local and foreign, would invest, Mr.
President.[33] (Emphasis, added)

With minimum interference from the government, investors can, in general, engage
in any kind of business as well as import and export any article into and out of the
Freeport. These are among the rights accorded to Subic Bay Freeport Enterprises
under Section 39 of the Rules and Regulations Implementing RA 7227, thus

SEC. 39. Rights and Obligations.- SBF Enterprises shall have the following rights and
obligations:

a. To freely engage in any business, trade, manufacturing, financial or service

activity, and to import and export freely all types of goods into and out of the SBF,
subject to the provisions of the Act, these Rules and other regulations that may be
promulgated by the SBMA;

Citing, inter alia, the interpellations of Senator Enrile, petitioners claim that the free
flow or movement of goods and capital only means that goods and material brought
within the Freeport shall not be subject to customs duties and other taxes and
should not be construed as an open floodgate for entry of all kinds of goods. They
thus surmise that the importation ban on motor vehicles is applicable within the
Freeport. Pertinent interpellations of Senator Enrile on the concept of Freeport is as
follows:

Senator Enrile: Mr. President, I think we are talking here of sovereign concepts, not
territorial concepts. The concept that we are supposed to craft here is to carve out a
portion of our terrestrial domain as well as our adjacent waters and say to the
world: Well, you can set up your factories in this area that we are circumscribing,
and bringing your equipment and bringing your goods, you are not subject to any
taxes and duties because you are not within the customs jurisdiction of the Republic
of the Philippines, whether you store the goods or only for purposes of
transshipment or whether you make them into finished products again to be
reexported to other lands.

xxxx

My understanding of a free port is, we are in effect carving out a part of our territory
and make it as if it were foreign territory for purposes of our customs laws, and that
people can come, bring their goods, store them there and bring them out again, as
long as they do not come into the domestic commerce of the Republic.

We do not really care whether these goods are stored here. The only thing that we
care is for our people to have an employment because of the entry of these goods
that are being discharged, warehoused and reloaded into the ships so that they can
be exported. That will generate employment for us. For as long as that is done, we
are saying, in effect, that we have the least contact with our tariff and customs laws
and our tax laws. Therefore, we consider these goods as outside of the customs

jurisdiction of the Republic of the Philippines as yet, until we draw them from this
territory and bring them inside our domestic commerce. In which case, they have to
pass through our customs gate. I thought we are carving out this entire area and
convert it into this kind of concept.[34]

However, contrary to the claim of petitioners, there is nothing in the foregoing

excerpts which absolutely limits the incentive to Freeport investors only to
exemption from customs duties and taxes. Mindful of the legislative intent to attract
investors, enhance investment and boost the economy, the legislature could not
have limited the enticement only to exemption from taxes. The minimum
interference policy of the government on the Freeport extends to the kind of
business that investors may embark on and the articles which they may import or
export into and out of the zone. A contrary interpretation would defeat the very
purpose of the Freeport and drive away investors.

It does not mean, however, that the right of Freeport enterprises to import all types
of goods and article is absolute. Such right is of course subject to the limitation that
articles absolutely prohibited by law cannot be imported into the Freeport.[35]
Nevertheless, in determining whether the prohibition would apply to the Freeport,
resort to the purpose of the prohibition is necessary.

In issuing EO 156, particularly the prohibition on importation under Article 2, Section

3.1, the President envisioned to rationalize the importation of used motor vehicles
and to enhance the capabilities of the Philippine motor manufacturing firms to be
globally competitive producers of completely build-up units and their parts and
components for the local and export markets.[36] In justifying the issuance of EO
156, petitioners alleged that there has been a decline in the sales of new vehicles
and a remarkable growth of the sales of imported used motor vehicles. To address
the same, the President issued the questioned EO to prevent further erosion of the
already depressed market base of the local motor vehicle industry and to curtail the
harmful effects of the increase in the importation of used motor vehicles.[37]

Taking our bearings from the foregoing discussions, we hold that the importation
ban runs afoul the third requisite for a valid administrative order. To be valid, an
administrative issuance must not be ultra vires or beyond the limits of the authority
conferred. It must not supplant or modify the Constitution, its enabling statute and
other existing laws, for such is the sole function of the legislature which the other
branches of the government cannot usurp. As held in United BF Homeowners
Association v. BF Homes, Inc.:[38]

The rule-making power of a public administrative body is a delegated legislative

power, which it may not use either to abridge the authority given it by Congress or
the Constitution or to enlarge its power beyond the scope intended. Constitutional
and statutory provisions control what rules and regulations may be promulgated by
such a body, as well as with respect to what fields are subject to regulation by it. It
may not make rules and regulations which are inconsistent with the provisions of
the Constitution or a statute, particularly the statute it is administering or which
created it, or which are in derogation of, or defeat, the purpose of a statute.

In the instant case, the subject matter of the laws authorizing the President to
regulate or forbid importation of used motor vehicles, is the domestic industry. EO
156, however, exceeded the scope of its application by extending the prohibition on

the importation of used cars to the Freeport, which RA 7227, considers to some
extent, a foreign territory. The domestic industry which the EO seeks to protect is
actually the customs territory which is defined under the Rules and Regulations
Implementing RA 7227, as follows:

the portion of the Philippines outside the Subic Bay Freeport where the Tariff and
Customs Code of the Philippines and other national tariff and customs laws are in
force and effect.[39]

The proscription in the importation of used motor vehicles should be operative only
outside the Freeport and the inclusion of said zone within the ambit of the
prohibition is an invalid modification of RA 7227. Indeed, when the application of an
administrative issuance modifies existing laws or exceeds the intended scope, as in
the instant case, the issuance becomes void, not only for being ultra vires, but also
for being unreasonable.

This brings us to the fourth requisite. It is an axiom in administrative law that

administrative authorities should not act arbitrarily and capriciously in the issuance
of rules and regulations. To be valid, such rules and regulations must be reasonable
and fairly adapted to secure the end in view. If shown to bear no reasonable relation
to the purposes for which they were authorized to be issued, then they must be held
to be invalid.[40]

There is no doubt that the issuance of the ban to protect the domestic industry is a
reasonable exercise of police power. The deterioration of the local motor
manufacturing firms due to the influx of imported used motor vehicles is an urgent
national concern that needs to be swiftly addressed by the President. In the exercise
of delegated police power, the executive can therefore validly proscribe the
importation of these vehicles. Thus, in Taxicab Operators of Metro Manila, Inc. v.
Board of Transportation,[41] the Court held that a regulation phasing out taxi cabs
more than six years old is a valid exercise of police power. The regulation was
sustained as reasonable holding that the purpose thereof was to promote the
convenience and comfort and protect the safety of the passengers.

The problem, however, lies with respect to the application of the importation ban to
the Freeport. The Court finds no logic in the all encompassing application of the
assailed provision to the Freeport which is outside the customs territory. As long as
the used motor vehicles do not enter the customs territory, the injury or harm
sought to be prevented or remedied will not arise. The application of the law should
be consistent with the purpose of and reason for the law. Ratione cessat lex, et
cessat lex. When the reason for the law ceases, the law ceases. It is not the letter
alone but the spirit of the law also that gives it life.[42] To apply the proscription to
the Freeport would not serve the purpose of the EO. Instead of improving the
general economy of the country, the application of the importation ban in the
Freeport would subvert the avowed purpose of RA 7227 which is to create a market
that would draw investors and ultimately boost the national economy.

In similar cases, we also declared void the administrative issuance or ordinances

concerned for being unreasonable. To illustrate, in De la Cruz v. Paras,[43] the Court
held as unreasonable and unconstitutional an ordinance characterized by
overbreadth. In that case, the Municipality of Bocaue, Bulacan, prohibited the
operation of all night clubs, cabarets and dance halls within its jurisdiction for the
protection of public morals. As explained by the Court:

x x x It cannot be said that such a sweeping exercise of a lawmaking power by

Bocaue could qualify under the term reasonable. The objective of fostering public
morals, a worthy and desirable end can be attained by a measure that does not
encompass too wide a field. Certainly the ordinance on its face is characterized by
overbreadth. The purpose sought to be achieved could have been attained by
reasonable restrictions rather than by an absolute prohibition. The admonition in
Salaveria should be heeded: The Judiciary should not lightly set aside legislative
action when there is not a clear invasion of personal or property rights under the
guise of police regulation. It is clear that in the guise of a police regulation, there
was in this instance a clear invasion of personal or property rights, personal in the
case of those individuals desirous of patronizing those night clubs and property in
terms of the investments made and salaries to be earned by those therein
employed.

Lupangco v. Court of Appeals,[44] is a case involving a resolution issued by the

Professional Regulation Commission which prohibited examinees from attending
review classes and receiving handout materials, tips, and the like three days before
the date of examination in order to preserve the integrity and purity of the licensure
examinations in accountancy. Besides being unreasonable on its face and violative
of academic freedom, the measure was found to be more sweeping than what was
necessary, viz:
Needless to say, the enforcement of Resolution No. 105 is not a guarantee that the
alleged leakages in the licensure examinations will be eradicated or at least
minimized. Making the examinees suffer by depriving them of legitimate means of
review or preparation on those last three precious days when they should be
refreshing themselves with all that they have learned in the review classes and
preparing their mental and psychological make-up for the examination day itself
would be like uprooting the tree to get rid of a rotten branch. What is needed to be
done by the respondent is to find out the source of such leakages and stop it right
there. If corrupt officials or personnel should be terminated from their loss, then so
be it. Fixers or swindlers should be flushed out. Strict guidelines to be observed by
examiners should be set up and if violations are committed, then licenses should be
suspended or revoked. x x x

In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc.,[45] the Court likewise
struck down as unreasonable and overbreadth a city ordinance granting an
exclusive franchise for 25 years, renewable for another 25 years, to one entity for
the construction and operation of one common bus and jeepney terminal facility in
Lucena City. While professedly aimed towards alleviating the traffic congestion
alleged to have been caused by the existence of various bus and jeepney terminals
within the city, the ordinance was held to be beyond what is reasonably necessary
to solve the traffic problem in the city.

By parity of reasoning, the importation ban in this case should also be declared void
for its too sweeping and unnecessary application to the Freeport which has no
bearing on the objective of the prohibition. If the aim of the EO is to prevent the
entry of used motor vehicles from the Freeport to the customs territory, the solution
is not to forbid entry of these vehicles into the Freeport, but to intensify
governmental campaign and measures to thwart illegal ingress of used motor
vehicles into the customs territory.

At this juncture, it must be mentioned that on June 19, 1993, President Fidel V.
Ramos issued Executive Order No. 97-A, Further Clarifying The Tax And Duty-Free

Privilege Within The Subic Special Economic And Free Port Zone, Section 1 of which
provides:

SECTION 1. The following guidelines shall govern the tax and duty-free privilege
within the Secured Area of the Subic Special Economic and Free Port Zone:

1.1. The Secured Area consisting of the presently fenced-in former Subic Naval Base
shall be the only completely tax and duty-free area in the SSEFPZ. Business
enterprises and individuals (Filipinos and foreigners) residing within the Secured
Area are free to import raw materials, capital goods, equipment, and consumer
items tax and dutry-free. Consumption items, however, must be consumed within
the Secured Area. Removal of raw materials, capital goods, equipment and
consumer items out of the Secured Area for sale to non-SSEFPZ registered
enterprises shall be subject to the usual taxes and duties, except as may be
provided herein.

In Tiu v. Court of Appeals[46] as reiterated in Coconut Oil Refiners Association, Inc.

v. Torres,[47] this provision limiting the special privileges on tax and duty-free
importation in the presently fenced-in former Subic Naval Base has been declared
valid and constitutional and in accordance with RA 7227. Consistent with these
rulings and for easier management and monitoring of activities and to prevent
fraudulent importation of merchandise and smuggling, the free flow and importation
of used motor vehicles shall be operative only within the secured area.

In sum, the Court finds that Article 2, Section 3.1 of EO 156 is void insofar as it is
made applicable to the presently secured fenced-in former Subic Naval Base area as
stated in Section 1.1 of EO 97-A. Pursuant to the separability clause[48] of EO 156,
Section 3.1 is declared valid insofar as it applies to the customs territory or the
Philippine territory outside the presently secured fenced-in former Subic Naval Base
area as stated in Section 1.1 of EO 97-A. Hence, used motor vehicles that come into
the Philippine territory via the secured fenced-in former Subic Naval Base area may
be stored, used or traded therein, or exported out of the Philippine territory, but
they cannot be imported into the Philippine territory outside of the secured fencedin former Subic Naval Base area.

WHEREFORE, the petitions are PARTIALLY GRANTED and the May 24, 2004 Decisions
of Branch 72, Regional Trial Court of Olongapo City, in Civil Case No. 20-0-04 and
Civil Case No. 22-0-04; and the February 14, 2005 Decision of the Court of Appeals
in CA-G.R. SP No. 63284, are MODIFIED insofar as they declared Article 2, Section
3.1 of Executive Order No. 156, void in its entirety.

Said provision is declared VALID insofar as it applies to the Philippine territory

outside the presently fenced-in former Subic Naval Base area and VOID with respect
to its application to the secured fenced-in former Subic Naval Base area.

SO ORDERED.

CONSUELO YNARES-SANTIAGO
Associate Justice

WE CONCUR:

ARTEMIO V. PANGANIBAN
Chief Justice

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-23825

December 24, 1965

EMMANUEL PELAEZ, petitioner,

vs.
THE AUDITOR GENERAL, respondent.

Zulueta, Gonzales, Paculdo and Associates for petitioner.

Office of the Solicitor General for respondent.

CONCEPCION, J.:

During the period from September 4 to October 29, 1964 the President of the
Philippines, purporting to act pursuant to Section 68 of the Revised Administrative
Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirtythree (33) municipalities enumerated in the margin.1 Soon after the date last
mentioned, or on November 10, 1964 petitioner Emmanuel Pelaez, as Vice President

of the Philippines and as taxpayer, instituted the present special civil action, for a
writ of prohibition with preliminary injunction, against the Auditor General, to
restrain him, as well as his representatives and agents, from passing in audit any
expenditure of public funds in implementation of said executive orders and/or any
disbursement by said municipalities.

Petitioner alleges that said executive orders are null and void, upon the ground that
said Section 68 has been impliedly repealed by Republic Act No. 2370 and
constitutes an undue delegation of legislative power. Respondent maintains the
contrary view and avers that the present action is premature and that not all proper
parties referring to the officials of the new political subdivisions in question
have been impleaded. Subsequently, the mayors of several municipalities adversely
affected by the aforementioned executive orders because the latter have taken
away from the former the barrios composing the new political subdivisions
intervened in the case. Moreover, Attorneys Enrique M. Fernando and Emma
Quisumbing-Fernando were allowed to and did appear as amici curiae.

The third paragraph of Section 3 of Republic Act No. 2370, reads:

Barrios shall not be created or their boundaries altered nor their names changed
except under the provisions of this Act or by Act of Congress.

Pursuant to the first two (2) paragraphs of the same Section 3:

All barrios existing at the time of the passage of this Act shall come under the
provisions hereof.

Upon petition of a majority of the voters in the areas affected, a new barrio may be
created or the name of an existing one may be changed by the provincial board of
the province, upon recommendation of the council of the municipality or
municipalities in which the proposed barrio is stipulated. The recommendation of
the municipal council shall be embodied in a resolution approved by at least twothirds of the entire membership of the said council: Provided, however, That no new
barrio may be created if its population is less than five hundred persons.

Hence, since January 1, 1960, when Republic Act No. 2370 became effective, barrios
may "not be created or their boundaries altered nor their names changed" except
by Act of Congress or of the corresponding provincial board "upon petition of a
majority of the voters in the areas affected" and the "recommendation of the
council of the municipality or municipalities in which the proposed barrio is
situated." Petitioner argues, accordingly: "If the President, under this new law,
cannot even create a barrio, can he create a municipality which is composed of
several barrios, since barrios are units of municipalities?"

Respondent answers in the affirmative, upon the theory that a new municipality can
be created without creating new barrios, such as, by placing old barrios under the
jurisdiction of the new municipality. This theory overlooks, however, the main import
of the petitioner's argument, which is that the statutory denial of the presidential
authority to create a new barrio implies a negation of the bigger power to create
municipalities, each of which consists of several barrios. The cogency and force of
this argument is too obvious to be denied or even questioned. Founded upon logic

and experience, it cannot be offset except by a clear manifestation of the intent of

Congress to the contrary, and no such manifestation, subsequent to the passage of
Republic Act No. 2379, has been brought to our attention.

Moreover, section 68 of the Revised Administrative Code, upon which the disputed
executive orders are based, provides:

The (Governor-General) President of the Philippines may by executive order define

the boundary, or boundaries, of any province, subprovince, municipality, [township]
municipal district, or other political subdivision, and increase or diminish the
territory comprised therein, may divide any province into one or more subprovinces,
separate any political division other than a province, into such portions as may be
required, merge any of such subdivisions or portions with another, name any new
subdivision so created, and may change the seat of government within any
subdivision to such place therein as the public welfare may require: Provided, That
the authorization of the (Philippine Legislature) Congress of the Philippines shall first
be obtained whenever the boundary of any province or subprovince is to be defined
or any province is to be divided into one or more subprovinces. When action by the
(Governor-General) President of the Philippines in accordance herewith makes
necessary a change of the territory under the jurisdiction of any administrative
officer or any judicial officer, the (Governor-General) President of the Philippines,
with the recommendation and advice of the head of the Department having
executive control of such officer, shall redistrict the territory of the several officers
affected and assign such officers to the new districts so formed.

Upon the changing of the limits of political divisions in pursuance of the foregoing
authority, an equitable distribution of the funds and obligations of the divisions
thereby affected shall be made in such manner as may be recommended by the
(Insular Auditor) Auditor General and approved by the (Governor-General) President
of the Philippines.

Respondent alleges that the power of the President to create municipalities under
this section does not amount to an undue delegation of legislative power, relying
upon Municipality of Cardona vs. Municipality of Binagonan (36 Phil. 547), which,
he claims, has settled it. Such claim is untenable, for said case involved, not the
creation of a new municipality, but a mere transfer of territory from an already
existing municipality (Cardona) to another municipality (Binagonan), likewise,
existing at the time of and prior to said transfer (See Gov't of the P.I. ex rel.
Municipality of Cardona vs. Municipality, of Binagonan [34 Phil. 518, 519-5201)
in consequence of the fixing and definition, pursuant to Act No. 1748, of the
common boundaries of two municipalities.

It is obvious, however, that, whereas the power to fix such common boundary, in
order to avoid or settle conflicts of jurisdiction between adjoining municipalities,
may partake of an administrative nature involving, as it does, the adoption of
means and ways to carry into effect the law creating said municipalities the
authority to create municipal corporations is essentially legislative in nature. In the
language of other courts, it is "strictly a legislative function" (State ex rel. Higgins
vs. Aicklen, 119 S. 425, January 2, 1959) or "solely and exclusively the exercise of
legislative power" (Udall vs. Severn, May 29, 1938, 79 P. 2d 347-349). As the
Supreme Court of Washington has put it (Territory ex rel. Kelly vs. Stewart, February
13, 1890, 23 Pac. 405, 409), "municipal corporations are purely the creatures of
statutes."

Although1a Congress may delegate to another branch of the Government the power
to fill in the details in the execution, enforcement or administration of a law, it is
essential, to forestall a violation of the principle of separation of powers, that said
law: (a) be complete in itself it must set forth therein the policy to be executed,
carried out or implemented by the delegate2 and (b) fix a standard the limits
of which are sufficiently determinate or determinable to which the delegate must
conform in the performance of his functions.2a Indeed, without a statutory
declaration of policy, the delegate would in effect, make or formulate such policy,
which is the essence of every law; and, without the aforementioned standard, there
would be no means to determine, with reasonable certainty, whether the delegate
has acted within or beyond the scope of his authority.2b Hence, he could thereby
arrogate upon himself the power, not only to make the law, but, also and this is
worse to unmake it, by adopting measures inconsistent with the end sought to be
attained by the Act of Congress, thus nullifying the principle of separation of powers
and the system of checks and balances, and, consequently, undermining the very
foundation of our Republican system.

Section 68 of the Revised Administrative Code does not meet these well settled
requirements for a valid delegation of the power to fix the details in the
enforcement of a law. It does not enunciate any policy to be carried out or
implemented by the President. Neither does it give a standard sufficiently precise to
avoid the evil effects above referred to. In this connection, we do not overlook the
fact that, under the last clause of the first sentence of Section 68, the President:

... may change the seat of the government within any subdivision to such place
therein as the public welfare may require.

It is apparent, however, from the language of this clause, that the phrase "as the
public welfare may require" qualified, not the clauses preceding the one just quoted,
but only the place to which the seat of the government may be transferred. This
fact becomes more apparent when we consider that said Section 68 was originally
Section 1 of Act No. 1748,3 which provided that, "whenever in the judgment of the
Governor-General the public welfare requires, he may, by executive order," effect
the changes enumerated therein (as in said section 68), including the change of the
seat of the government "to such place ... as the public interest requires." The
opening statement of said Section 1 of Act No. 1748 which was not included in
Section 68 of the Revised Administrative Code governed the time at which, or the
conditions under which, the powers therein conferred could be exercised; whereas
the last part of the first sentence of said section referred exclusively to the place to
which the seat of the government was to be transferred.

At any rate, the conclusion would be the same, insofar as the case at bar is
concerned, even if we assumed that the phrase "as the public welfare may require,"
in said Section 68, qualifies all other clauses thereof. It is true that in Calalang vs.
Williams (70 Phil. 726) and People vs. Rosenthal (68 Phil. 328), this Court had
upheld "public welfare" and "public interest," respectively, as sufficient standards
for a valid delegation of the authority to execute the law. But, the doctrine laid down
in these cases as all judicial pronouncements must be construed in relation to
the specific facts and issues involved therein, outside of which they do not
constitute precedents and have no binding effect.4 The law construed in the
Calalang case conferred upon the Director of Public Works, with the approval of the
Secretary of Public Works and Communications, the power to issue rules and
regulations to promote safe transit upon national roads and streets. Upon the other
hand, the Rosenthal case referred to the authority of the Insular Treasurer, under
Act No. 2581, to issue and cancel certificates or permits for the sale of speculative
securities. Both cases involved grants to administrative officers of powers related to

the exercise of their administrative functions, calling for the determination of

questions of fact.

Such is not the nature of the powers dealt with in section 68. As above indicated,
the creation of municipalities, is not an administrative function, but one which is
essentially and eminently legislative in character. The question of whether or not
"public interest" demands the exercise of such power is not one of fact. it is "purely
a legislative question "(Carolina-Virginia Coastal Highway vs. Coastal Turnpike
Authority, 74 S.E. 2d. 310-313, 315-318), or a political question (Udall vs. Severn, 79
P. 2d. 347-349). As the Supreme Court of Wisconsin has aptly characterized it, "the
question as to whether incorporation is for the best interest of the community in any
case is emphatically a question of public policy and statecraft" (In re Village of North
Milwaukee, 67 N.W. 1033, 1035-1037).

For this reason, courts of justice have annulled, as constituting undue delegation of
legislative powers, state laws granting the judicial department, the power to
determine whether certain territories should be annexed to a particular municipality
(Udall vs. Severn, supra, 258-359); or vesting in a Commission the right to
determine the plan and frame of government of proposed villages and what
functions shall be exercised by the same, although the powers and functions of the
village are specifically limited by statute (In re Municipal Charters, 86 Atl. 307-308);
or conferring upon courts the authority to declare a given town or village
incorporated, and designate its metes and bounds, upon petition of a majority of the
taxable inhabitants thereof, setting forth the area desired to be included in such
village (Territory ex rel Kelly vs. Stewart, 23 Pac. 405-409); or authorizing the
territory of a town, containing a given area and population, to be incorporated as a
town, on certain steps being taken by the inhabitants thereof and on certain
determination by a court and subsequent vote of the inhabitants in favor thereof,
insofar as the court is allowed to determine whether the lands embraced in the
petition "ought justly" to be included in the village, and whether the interest of the
inhabitants will be promoted by such incorporation, and to enlarge and diminish the
boundaries of the proposed village "as justice may require" (In re Villages of North
Milwaukee, 67 N.W. 1035-1037); or creating a Municipal Board of Control which shall
determine whether or not the laying out, construction or operation of a toll road is in
the "public interest" and whether the requirements of the law had been complied
with, in which case the board shall enter an order creating a municipal corporation
and fixing the name of the same (Carolina-Virginia Coastal Highway vs. Coastal
Turnpike Authority, 74 S.E. 2d. 310).

Insofar as the validity of a delegation of power by Congress to the President is

concerned, the case of Schechter Poultry Corporation vs. U.S. (79 L. Ed. 1570) is
quite relevant to the one at bar. The Schechter case involved the constitutionality of
Section 3 of the National Industrial Recovery Act authorizing the President of the
United States to approve "codes of fair competition" submitted to him by one or
more trade or industrial associations or corporations which "impose no inequitable
restrictions on admission to membership therein and are truly representative,"
provided that such codes are not designed "to promote monopolies or to eliminate
or oppress small enterprises and will not operate to discriminate against them, and
will tend to effectuate the policy" of said Act. The Federal Supreme Court held:

To summarize and conclude upon this point: Sec. 3 of the Recovery Act is without
precedent. It supplies no standards for any trade, industry or activity. It does not
undertake to prescribe rules of conduct to be applied to particular states of fact
determined by appropriate administrative procedure. Instead of prescribing rules of
conduct, it authorizes the making of codes to prescribe them. For that legislative
undertaking, Sec. 3 sets up no standards, aside from the statement of the general

aims of rehabilitation, correction and expansion described in Sec. 1. In view of the

scope of that broad declaration, and of the nature of the few restrictions that are
imposed, the discretion of the President in approving or prescribing codes, and thus
enacting laws for the government of trade and industry throughout the country, is
virtually unfettered. We think that the code making authority thus conferred is an
unconstitutional delegation of legislative power.

If the term "unfair competition" is so broad as to vest in the President a discretion

that is "virtually unfettered." and, consequently, tantamount to a delegation of
legislative power, it is obvious that "public welfare," which has even a broader
connotation, leads to the same result. In fact, if the validity of the delegation of
powers made in Section 68 were upheld, there would no longer be any legal
impediment to a statutory grant of authority to the President to do anything which,
in his opinion, may be required by public welfare or public interest. Such grant of
authority would be a virtual abdication of the powers of Congress in favor of the
Executive, and would bring about a total collapse of the democratic system
established by our Constitution, which it is the special duty and privilege of this
Court to uphold.

It may not be amiss to note that the executive orders in question were issued after
the legislative bills for the creation of the municipalities involved in this case had
failed to pass Congress. A better proof of the fact that the issuance of said executive
orders entails the exercise of purely legislative functions can hardly be given.

Again, Section 10 (1) of Article VII of our fundamental law ordains:

The President shall have control of all the executive departments, bureaus, or
offices, exercise general supervision over all local governments as may be provided
by law, and take care that the laws be faithfully executed.

The power of control under this provision implies the right of the President to
interfere in the exercise of such discretion as may be vested by law in the officers of
the executive departments, bureaus, or offices of the national government, as well
as to act in lieu of such officers. This power is denied by the Constitution to the
Executive, insofar as local governments are concerned. With respect to the latter,
the fundamental law permits him to wield no more authority than that of checking
whether said local governments or the officers thereof perform their duties as
provided by statutory enactments. Hence, the President cannot interfere with local
governments, so long as the same or its officers act Within the scope of their
authority. He may not enact an ordinance which the municipal council has failed or
refused to pass, even if it had thereby violated a duty imposed thereto by law,
although he may see to it that the corresponding provincial officials take
appropriate disciplinary action therefor. Neither may he vote, set aside or annul an
ordinance passed by said council within the scope of its jurisdiction, no matter how
patently unwise it may be. He may not even suspend an elective official of a regular
municipality or take any disciplinary action against him, except on appeal from a
decision of the corresponding provincial board.5

Upon the other hand if the President could create a municipality, he could, in effect,
remove any of its officials, by creating a new municipality and including therein the
barrio in which the official concerned resides, for his office would thereby become
vacant.6 Thus, by merely brandishing the power to create a new municipality (if he
had it), without actually creating it, he could compel local officials to submit to his

dictation, thereby, in effect, exercising over them the power of control denied to him
by the Constitution.

Then, also, the power of control of the President over executive departments,
bureaus or offices implies no more than the authority to assume directly the
functions thereof or to interfere in the exercise of discretion by its officials.
Manifestly, such control does not include the authority either to abolish an executive
department or bureau, or to create a new one. As a consequence, the alleged power
of the President to create municipal corporations would necessarily connote the
exercise by him of an authority even greater than that of control which he has over
the executive departments, bureaus or offices. In other words, Section 68 of the
Revised Administrative Code does not merely fail to comply with the constitutional
mandate above quoted. Instead of giving the President less power over local
governments than that vested in him over the executive departments, bureaus or
offices, it reverses the process and does the exact opposite, by conferring upon him
more power over municipal corporations than that which he has over said executive
departments, bureaus or offices.

In short, even if it did entail an undue delegation of legislative powers, as it

certainly does, said Section 68, as part of the Revised Administrative Code,
approved on March 10, 1917, must be deemed repealed by the subsequent
adoption of the Constitution, in 1935, which is utterly incompatible and inconsistent
with said statutory enactment.7

There are only two (2) other points left for consideration, namely, respondent's
claim (a) that "not all the proper parties" referring to the officers of the newly
created municipalities "have been impleaded in this case," and (b) that "the
present petition is premature."

As regards the first point, suffice it to say that the records do not show, and the
parties do not claim, that the officers of any of said municipalities have been
appointed or elected and assumed office. At any rate, the Solicitor General, who has
appeared on behalf of respondent Auditor General, is the officer authorized by law
"to act and represent the Government of the Philippines, its offices and agents, in
any official investigation, proceeding or matter requiring the services of a lawyer"
(Section 1661, Revised Administrative Code), and, in connection with the creation of
the aforementioned municipalities, which involves a political, not proprietary,
function, said local officials, if any, are mere agents or representatives of the
national government. Their interest in the case at bar has, accordingly, been, in
effect, duly represented.8
With respect to the second point, respondent alleges that he has not as yet acted
on any of the executive order & in question and has not intimated how he would act
in connection therewith. It is, however, a matter of common, public knowledge,
subject to judicial cognizance, that the President has, for many years, issued
executive orders creating municipal corporations and that the same have been
organized and in actual operation, thus indicating, without peradventure of doubt,
that the expenditures incidental thereto have been sanctioned, approved or passed
in audit by the General Auditing Office and its officials. There is no reason to
believe, therefore, that respondent would adopt a different policy as regards the
new municipalities involved in this case, in the absence of an allegation to such
effect, and none has been made by him.
WHEREFORE, the Executive Orders in question are hereby declared null and void ab
initio and the respondent permanently restrained from passing in audit any
expenditure of public funds in implementation of said Executive Orders or any
disbursement by the municipalities above referred to. It is so ordered.

Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barrera and Dizon, JJ., concur.
Zaldivar, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 17122

February 27, 1922

THE UNITED STATES, plaintiff-appellee,

vs.
ANG TANG HO, defendant-appellant.

Williams & Ferrier for appellant.

Acting Attorney-General Tuason for appellee.

JOHNS, J.:

At its special session of 1919, the Philippine Legislature passed Act No. 2868,
entitled "An Act penalizing the monopoly and holding of, and speculation in, palay,
rice, and corn under extraordinary circumstances, regulating the distribution and
sale thereof, and authorizing the Governor-General, with the consent of the Council
of State, to issue the necessary rules and regulations therefor, and making an
appropriation for this purpose," the material provisions of which are as follows:

Section 1. The Governor-General is hereby authorized, whenever, for any cause,

conditions arise resulting in an extraordinary rise in the price of palay, rice or corn,
to issue and promulgate, with the consent of the Council of State, temporary rules
and emergency measures for carrying out the purpose of this Act, to wit:

(a) To prevent the monopoly and hoarding of, and speculation in, palay, rice or corn.

(b) To establish and maintain a government control of the distribution or sale of the
commodities referred to or have such distribution or sale made by the Government
itself.

(c) To fix, from time to time the quantities of palay rice, or corn that a company or
individual may acquire, and the maximum sale price that the industrial or merchant
may demand.

(d) . . .

SEC. 2. It shall be unlawful to destroy, limit, prevent or in any other manner obstruct
the production or milling of palay, rice or corn for the purpose of raising the prices
thereof; to corner or hoard said products as defined in section three of this Act; . . .

Section 3 defines what shall constitute a monopoly or hoarding of palay, rice or corn
within the meaning of this Act, but does not specify the price of rice or define any
basic for fixing the price.

SEC. 4. The violations of any of the provisions of this Act or of the regulations,
orders and decrees promulgated in accordance therewith shall be punished by a
fine of not more than five thousands pesos, or by imprisonment for not more than
two years, or both, in the discretion of the court: Provided, That in the case of
companies or corporations the manager or administrator shall be criminally liable.

SEC. 7. At any time that the Governor-General, with the consent of the Council of
State, shall consider that the public interest requires the application of the
provisions of this Act, he shall so declare by proclamation, and any provisions of
other laws inconsistent herewith shall from then on be temporarily suspended.

Upon the cessation of the reasons for which such proclamation was issued, the
Governor-General, with the consent of the Council of State, shall declare the
application of this Act to have likewise terminated, and all laws temporarily
suspended by virtue of the same shall again take effect, but such termination shall
not prevent the prosecution of any proceedings or cause begun prior to such
termination, nor the filing of any proceedings for an offense committed during the
period covered by the Governor-General's proclamation.

August 1, 1919, the Governor-General issued a proclamation fixing the price at

which rice should be sold.

August 8, 1919, a complaint was filed against the defendant, Ang Tang Ho, charging
him with the sale of rice at an excessive price as follows:

The undersigned accuses Ang Tang Ho of a violation of Executive Order No. 53 of

the Governor-General of the Philippines, dated the 1st of August, 1919, in relation
with the provisions of sections 1, 2 and 4 of Act No. 2868, committed as follows:

That on or about the 6th day of August, 1919, in the city of Manila, Philippine
Islands, the said Ang Tang Ho, voluntarily, illegally and criminally sold to Pedro
Trinidad, one ganta of rice at the price of eighty centavos (P.80), which is a price
greater than that fixed by Executive Order No. 53 of the Governor-General of the
Philippines, dated the 1st of August, 1919, under the authority of section 1 of Act
No. 2868. Contrary to law.

Upon this charge, he was tried, found guilty and sentenced to five months'
imprisonment and to pay a fine of P500, from which he appealed to this court,
claiming that the lower court erred in finding Executive Order No. 53 of 1919, to be

of any force and effect, in finding the accused guilty of the offense charged, and in
imposing the sentence.

The official records show that the Act was to take effect on its approval; that it was
approved July 30, 1919; that the Governor-General issued his proclamation on the
1st of August, 1919; and that the law was first published on the 13th of August,
1919; and that the proclamation itself was first published on the 20th of August,
1919.

The question here involves an analysis and construction of Act No. 2868, in so far as
it authorizes the Governor-General to fix the price at which rice should be sold. It
will be noted that section 1 authorizes the Governor-General, with the consent of
the Council of State, for any cause resulting in an extraordinary rise in the price of
palay, rice or corn, to issue and promulgate temporary rules and emergency
measures for carrying out the purposes of the Act. By its very terms, the
promulgation of temporary rules and emergency measures is left to the discretion of
the Governor-General. The Legislature does not undertake to specify or define under
what conditions or for what reasons the Governor-General shall issue the
proclamation, but says that it may be issued "for any cause," and leaves the
question as to what is "any cause" to the discretion of the Governor-General. The
Act also says: "For any cause, conditions arise resulting in an extraordinary rise in
the price of palay, rice or corn." The Legislature does not specify or define what is
"an extraordinary rise." That is also left to the discretion of the Governor-General.
The Act also says that the Governor-General, "with the consent of the Council of
State," is authorized to issue and promulgate "temporary rules and emergency
measures for carrying out the purposes of this Act." It does not specify or define
what is a temporary rule or an emergency measure, or how long such temporary
rules or emergency measures shall remain in force and effect, or when they shall
take effect. That is to say, the Legislature itself has not in any manner specified or
defined any basis for the order, but has left it to the sole judgement and discretion
of the Governor-General to say what is or what is not "a cause," and what is or what
is not "an extraordinary rise in the price of rice," and as to what is a temporary rule
or an emergency measure for the carrying out the purposes of the Act. Under this
state of facts, if the law is valid and the Governor-General issues a proclamation
fixing the minimum price at which rice should be sold, any dealer who, with or
without notice, sells rice at a higher price, is a criminal. There may not have been
any cause, and the price may not have been extraordinary, and there may not have
been an emergency, but, if the Governor-General found the existence of such facts
and issued a proclamation, and rice is sold at any higher price, the seller commits a
crime.

By the organic law of the Philippine Islands and the Constitution of the United States
all powers are vested in the Legislative, Executive and Judiciary. It is the duty of the
Legislature to make the law; of the Executive to execute the law; and of the
Judiciary to construe the law. The Legislature has no authority to execute or
construe the law, the Executive has no authority to make or construe the law, and
the Judiciary has no power to make or execute the law. Subject to the Constitution
only, the power of each branch is supreme within its own jurisdiction, and it is for
the Judiciary only to say when any Act of the Legislature is or is not constitutional.
Assuming, without deciding, that the Legislature itself has the power to fix the price
at which rice is to be sold, can it delegate that power to another, and, if so, was that
power legally delegated by Act No. 2868? In other words, does the Act delegate
legislative power to the Governor-General? By the Organic Law, all Legislative power
is vested in the Legislature, and the power conferred upon the Legislature to make
laws cannot be delegated to the Governor-General, or any one else. The Legislature
cannot delegate the legislative power to enact any law. If Act no 2868 is a law unto
itself and within itself, and it does nothing more than to authorize the GovernorGeneral to make rules and regulations to carry the law into effect, then the

Legislature itself created the law. There is no delegation of power and it is valid. On
the other hand, if the Act within itself does not define crime, and is not a law, and
some legislative act remains to be done to make it a law or a crime, the doing of
which is vested in the Governor-General, then the Act is a delegation of legislative
power, is unconstitutional and void.

The Supreme Court of the United States in what is known as the Granger Cases (94
U.S., 183-187; 24 L. ed., 94), first laid down the rule:

Railroad companies are engaged in a public employment affecting the public

interest and, under the decision in Munn vs. Ill., ante, 77, are subject to legislative
control as to their rates of fare and freight unless protected by their charters.

The Illinois statute of Mar. 23, 1874, to establish reasonable maximum rates of
charges for the transportation of freights and passengers on the different railroads
of the State is not void as being repugnant to the Constitution of the United States
or to that of the State.

It was there for the first time held in substance that a railroad was a public utility,
and that, being a public utility, the State had power to establish reasonable
maximum freight and passenger rates. This was followed by the State of Minnesota
in enacting a similar law, providing for, and empowering, a railroad commission to
hear and determine what was a just and reasonable rate. The constitutionality of
this law was attacked and upheld by the Supreme Court of Minnesota in a learned
and exhaustive opinion by Justice Mitchell, in the case of State vs. Chicago,
Milwaukee & St. Paul ry. Co. (38 Minn., 281), in which the court held:

Regulations of railway tariffs Conclusiveness of commission's tariffs. Under

Laws 1887, c. 10, sec. 8, the determination of the railroad and warehouse
commission as to what are equal and reasonable fares and rates for the
transportation of persons and property by a railway company is conclusive, and, in
proceedings by mandamus to compel compliance with the tariff of rates
recommended and published by them, no issue can be raised or inquiry had on that
question.

Same constitution Delegation of power to commission. The authority thus

given to the commission to determine, in the exercise of their discretion and
judgement, what are equal and reasonable rates, is not a delegation of legislative
power.

It will be noted that the law creating the railroad commission expressly provides

That all charges by any common carrier for the transportation of passengers and
property shall be equal and reasonable.

With that as a basis for the law, power is then given to the railroad commission to
investigate all the facts, to hear and determine what is a just and reasonable rate.
Even then that law does not make the violation of the order of the commission a
crime. The only remedy is a civil proceeding. It was there held

That the legislative itself has the power to regulate railroad charges is now too well
settled to require either argument or citation of authority.

The difference between the power to say what the law shall be, and the power to
adopt rules and regulations, or to investigate and determine the facts, in order to
carry into effect a law already passed, is apparent. The true distinction is between
the delegation of power to make the law, which necessarily involves a discretion as
to what it shall be, and the conferring an authority or discretion to be exercised
under and in pursuance of the law.

The legislature enacts that all freights rates and passenger fares should be just and
reasonable. It had the undoubted power to fix these rates at whatever it deemed
equal and reasonable.

They have not delegated to the commission any authority or discretion as to what
the law shall be, which would not be allowable, but have merely conferred
upon it an authority and discretion, to be exercised in the execution of the law, and
under and in pursuance of it, which is entirely permissible. The legislature itself has
passed upon the expediency of the law, and what is shall be. The commission is
intrusted with no authority or discretion upon these questions. It can neither make
nor unmake a single provision of law. It is merely charged with the administration of
the law, and with no other power.

The delegation of legislative power was before the Supreme Court of Wisconsin in
Dowling vs. Lancoshire Ins. Co. (92 Wis., 63). The opinion says:

"The true distinction is between the delegation of power to make the law, which
necessarily involves a discretion as to what it shall be, and conferring authority or
discretion as to its execution, to be exercised under and in pursuance of the law.
The first cannot be done; to the latter no valid objection can be made."

The act, in our judgment, wholly fails to provide definitely and clearly what the
standard policy should contain, so that it could be put in use as a uniform policy
required to take the place of all others, without the determination of the insurance
commissioner in respect to maters involving the exercise of a legislative discretion
that could not be delegated, and without which the act could not possibly be put in
use as an act in confirmity to which all fire insurance policies were required to be
issued.

The result of all the cases on this subject is that a law must be complete, in all its
terms and provisions, when it leaves the legislative branch of the government, and
nothing must be left to the judgement of the electors or other appointee or delegate
of the legislature, so that, in form and substance, it is a law in all its details in
presenti, but which may be left to take effect in futuro, if necessary, upon the
ascertainment of any prescribed fact or event.

The delegation of legislative power was before the Supreme Court in United States
vs. Grimaud (220 U.S., 506; 55 L. ed., 563), where it was held that the rules and
regulations of the Secretary of Agriculture as to a trespass on government land in a
forest reserve were valid constitutional. The Act there provided that the Secretary of
Agriculture ". . . may make such rules and regulations and establish such service as

will insure the object of such reservations; namely, to regulate their occupancy and
use, and to preserve the forests thereon from destruction; and any violation of the
provisions of this act or such rules and regulations shall be punished, . . ."

The brief of the United States Solicitor-General says:

In refusing permits to use a forest reservation for stock grazing, except upon stated
terms or in stated ways, the Secretary of Agriculture merely assert and enforces the
proprietary right of the United States over land which it owns. The regulation of the
Secretary, therefore, is not an exercise of legislative, or even of administrative,
power; but is an ordinary and legitimate refusal of the landowner's authorized agent
to allow person having no right in the land to use it as they will. The right of
proprietary control is altogether different from governmental authority.

The opinion says:

From the beginning of the government, various acts have been passed conferring
upon executive officers power to make rules and regulations, not for the
government of their departments, but for administering the laws which did govern.
None of these statutes could confer legislative power. But when Congress had
legislated power. But when Congress had legislated and indicated its will, it could
give to those who were to act under such general provisions "power to fill up the
details" by the establishment of administrative rules and regulations, the violation
of which could be punished by fine or imprisonment fixed by Congress, or by
penalties fixed by Congress, or measured by the injury done.

That "Congress cannot delegate legislative power is a principle universally

recognized as vital to the integrity and maintenance of the system of government
ordained by the Constitution."

If, after the passage of the act and the promulgation of the rule, the defendants
drove and grazed their sheep upon the reserve, in violation of the regulations, they
were making an unlawful use of the government's property. In doing so they thereby
made themselves liable to the penalty imposed by Congress.

The subjects as to which the Secretary can regulate are defined. The lands are set
apart as a forest reserve. He is required to make provisions to protect them from
depredations and from harmful uses. He is authorized 'to regulate the occupancy
and use and to preserve the forests from destruction.' A violation of reasonable
rules regulating the use and occupancy of the property is made a crime, not by the
Secretary, but by Congress."

The above are leading cases in the United States on the question of delegating
legislative power. It will be noted that in the "Granger Cases," it was held that a
railroad company was a public corporation, and that a railroad was a public utility,
and that, for such reasons, the legislature had the power to fix and determine just
and reasonable rates for freight and passengers.

The Minnesota case held that, so long as the rates were just and reasonable, the
legislature could delegate the power to ascertain the facts and determine from the

facts what were just and reasonable rates,. and that in vesting the commission with
such power was not a delegation of legislative power.

The Wisconsin case was a civil action founded upon a "Wisconsin standard policy of
fire insurance," and the court held that "the act, . . . wholly fails to provide definitely
and clearly what the standard policy should contain, so that it could be put in use as
a uniform policy required to take the place of all others, without the determination
of the insurance commissioner in respect to matters involving the exercise of a
legislative discretion that could not be delegated."

The case of the United States Supreme Court, supra dealt with rules and regulations
which were promulgated by the Secretary of Agriculture for Government land in the
forest reserve.

These decisions hold that the legislative only can enact a law, and that it cannot
delegate it legislative authority.

The line of cleavage between what is and what is not a delegation of legislative
power is pointed out and clearly defined. As the Supreme Court of Wisconsin says:

That no part of the legislative power can be delegated by the legislature to any
other department of the government, executive or judicial, is a fundamental
principle in constitutional law, essential to the integrity and maintenance of the
system of government established by the constitution.

Where an act is clothed with all the forms of law, and is complete in and of itself, it
may be provided that it shall become operative only upon some certain act or
event, or, in like manner, that its operation shall be suspended.

The legislature cannot delegate its power to make a law, but it can make a law to
delegate a power to determine some fact or state of things upon which the law
makes, or intends to make, its own action to depend.

The Village of Little Chute enacted an ordinance which provides:

All saloons in said village shall be closed at 11 o'clock P.M. each day and remain
closed until 5 o'clock on the following morning, unless by special permission of the
president.

Construing it in 136 Wis., 526; 128 A. S. R., 1100,1 the Supreme Court of that State
says:

We regard the ordinance as void for two reasons; First, because it attempts to
confer arbitrary power upon an executive officer, and allows him, in executing the
ordinance, to make unjust and groundless discriminations among persons similarly
situated; second, because the power to regulate saloons is a law-making power
vested in the village board, which cannot be delegated. A legislative body cannot
delegate to a mere administrative officer power to make a law, but it can make a

law with provisions that it shall go into effect or be suspended in its operations upon
the ascertainment of a fact or state of facts by an administrative officer or board. In
the present case the ordinance by its terms gives power to the president to decide
arbitrary, and in the exercise of his own discretion, when a saloon shall close. This is
an attempt to vest legislative discretion in him, and cannot be sustained.

The legal principle involved there is squarely in point here.

It must be conceded that, after the passage of act No. 2868, and before any rules
and regulations were promulgated by the Governor-General, a dealer in rice could
sell it at any price, even at a peso per "ganta," and that he would not commit a
crime, because there would be no law fixing the price of rice, and the sale of it at
any price would not be a crime. That is to say, in the absence of a proclamation, it
was not a crime to sell rice at any price. Hence, it must follow that, if the defendant
committed a crime, it was because the Governor-General issued the proclamation.
There was no act of the Legislature making it a crime to sell rice at any price, and
without the proclamation, the sale of it at any price was to a crime.

The Executive order2 provides:

(5) The maximum selling price of palay, rice or corn is hereby fixed, for the time
being as follows:

In Manila

Palay at P6.75 per sack of 57 kilos, or 29 centavos per ganta.

Rice at P15 per sack of 57 kilos, or 63 centavos per ganta.

Corn at P8 per sack of 57 kilos, or 34 centavos per ganta.

In the provinces producing palay, rice and corn, the maximum price shall be the
Manila price less the cost of transportation from the source of supply and necessary
handling expenses to the place of sale, to be determined by the provincial
treasurers or their deputies.

In provinces, obtaining their supplies from Manila or other producing provinces, the
maximum price shall be the authorized price at the place of supply or the Manila
price as the case may be, plus the transportation cost, from the place of supply and
the necessary handling expenses, to the place of sale, to be determined by the
provincial treasurers or their deputies.

(6) Provincial treasurers and their deputies are hereby directed to communicate
with, and execute all instructions emanating from the Director of Commerce and
Industry, for the most effective and proper enforcement of the above regulations in
their respective localities.

The law says that the Governor-General may fix "the maximum sale price that the
industrial or merchant may demand." The law is a general law and not a local or
special law.

The proclamation undertakes to fix one price for rice in Manila and other and
different prices in other and different provinces in the Philippine Islands, and
delegates the power to determine the other and different prices to provincial
treasurers and their deputies. Here, then, you would have a delegation of legislative
power to the Governor-General, and a delegation by him of that power to provincial
treasurers and their deputies, who "are hereby directed to communicate with, and
execute all instructions emanating from the Director of Commerce and Industry, for
the most effective and proper enforcement of the above regulations in their
respective localities." The issuance of the proclamation by the Governor-General
was the exercise of the delegation of a delegated power, and was even a sub
delegation of that power.

Assuming that it is valid, Act No. 2868 is a general law and does not authorize the
Governor-General to fix one price of rice in Manila and another price in Iloilo. It only
purports to authorize him to fix the price of rice in the Philippine Islands under a
law, which is General and uniform, and not local or special. Under the terms of the
law, the price of rice fixed in the proclamation must be the same all over the
Islands. There cannot be one price at Manila and another at Iloilo. Again, it is a
mater of common knowledge, and of which this court will take judicial notice, that
there are many kinds of rice with different and corresponding market values, and
that there is a wide range in the price, which varies with the grade and quality. Act
No. 2868 makes no distinction in price for the grade or quality of the rice, and the
proclamation, upon which the defendant was tried and convicted, fixes the selling
price of rice in Manila "at P15 per sack of 57 kilos, or 63 centavos per ganta," and
is uniform as to all grades of rice, and says nothing about grade or quality. Again, it
will be noted that the law is confined to palay, rice and corn. They are products of
the Philippine Islands. Hemp, tobacco, coconut, chickens, eggs, and many other
things are also products. Any law which single out palay, rice or corn from the
numerous other products of the Islands is not general or uniform, but is a local or
special law. If such a law is valid, then by the same principle, the Governor-General
could be authorized by proclamation to fix the price of meat, eggs, chickens,
coconut, hemp, and tobacco, or any other product of the Islands. In the very nature
of things, all of that class of laws should be general and uniform. Otherwise, there
would be an unjust discrimination of property rights, which, under the law, must be
equal and inform. Act No. 2868 is nothing more than a floating law, which, in the
discretion and by a proclamation of the Governor-General, makes it a floating crime
to sell rice at a price in excess of the proclamation, without regard to grade or
quality.

When Act No. 2868 is analyzed, it is the violation of the proclamation of the
Governor-General which constitutes the crime. Without that proclamation, it was no
crime to sell rice at any price. In other words, the Legislature left it to the sole
discretion of the Governor-General to say what was and what was not "any cause"
for enforcing the act, and what was and what was not "an extraordinary rise in the
price of palay, rice or corn," and under certain undefined conditions to fix the price
at which rice should be sold, without regard to grade or quality, also to say whether
a proclamation should be issued, if so, when, and whether or not the law should be
enforced, how long it should be enforced, and when the law should be suspended.
The Legislature did not specify or define what was "any cause," or what was "an
extraordinary rise in the price of rice, palay or corn," Neither did it specify or define
the conditions upon which the proclamation should be issued. In the absence of the
proclamation no crime was committed. The alleged sale was made a crime, if at all,
because the Governor-General issued the proclamation. The act or proclamation
does not say anything about the different grades or qualities of rice, and the

defendant is charged with the sale "of one ganta of rice at the price of eighty
centavos (P0.80) which is a price greater than that fixed by Executive order No. 53."

We are clearly of the opinion and hold that Act No. 2868, in so far as it undertakes
to authorized the Governor-General in his discretion to issue a proclamation, fixing
the price of rice, and to make the sale of rice in violation of the price of rice, and to
make the sale of rice in violation of the proclamation a crime, is unconstitutional
and void.

It may be urged that there was an extraordinary rise in the price of rice and
profiteering, which worked a severe hardship on the poorer classes, and that an
emergency existed, but the question here presented is the constitutionality of a
particular portion of a statute, and none of such matters is an argument for, or
against, its constitutionality.

The Constitution is something solid, permanent an substantial. Its stability protects

the life, liberty and property rights of the rich and the poor alike, and that protection
ought not to change with the wind or any emergency condition. The fundamental
question involved in this case is the right of the people of the Philippine Islands to
be and live under a republican form of government. We make the broad statement
that no state or nation, living under republican form of government, under the terms
and conditions specified in Act No. 2868, has ever enacted a law delegating the
power to any one, to fix the price at which rice should be sold. That power can
never be delegated under a republican form of government.

In the fixing of the price at which the defendant should sell his rice, the law was not
dealing with government property. It was dealing with private property and private
rights, which are sacred under the Constitution. If this law should be sustained,
upon the same principle and for the same reason, the Legislature could authorize
the Governor-General to fix the price of every product or commodity in the
Philippine Islands, and empower him to make it a crime to sell any product at any
other or different price.

It may be said that this was a war measure, and that for such reason the provision
of the Constitution should be suspended. But the Stubborn fact remains that at all
times the judicial power was in full force and effect, and that while that power was
in force and effect, such a provision of the Constitution could not be, and was not,
suspended even in times of war. It may be claimed that during the war, the United
States Government undertook to, and did, fix the price at which wheat and flour
should be bought and sold, and that is true. There, the United States had declared
war, and at the time was at war with other nations, and it was a war measure, but it
is also true that in doing so, and as a part of the same act, the United States
commandeered all the wheat and flour, and took possession of it, either actual or
constructive, and the government itself became the owner of the wheat and flour,
and fixed the price to be paid for it. That is not this case. Here the rice sold was the
personal and private property of the defendant, who sold it to one of his customers.
The government had not bought and did not claim to own the rice, or have any
interest in it, and at the time of the alleged sale, it was the personal, private
property of the defendant. It may be that the law was passed in the interest of the
public, but the members of this court have taken on solemn oath to uphold and
defend the Constitution, and it ought not to be construed to meet the changing
winds or emergency conditions. Again, we say that no state or nation under a
republican form of government ever enacted a law authorizing any executive, under
the conditions states, to fix the price at which a price person would sell his own rice,
and make the broad statement that no decision of any court, on principle or by

analogy, will ever be found which sustains the constitutionality of the particular
portion of Act No. 2868 here in question. By the terms of the Organic Act, subject
only to constitutional limitations, the power to legislate and enact laws is vested
exclusively in the Legislative, which is elected by a direct vote of the people of the
Philippine Islands. As to the question here involved, the authority of the GovernorGeneral to fix the maximum price at which palay, rice and corn may be sold in the
manner power in violation of the organic law.

This opinion is confined to the particular question here involved, which is the right
of the Governor-General, upon the terms and conditions stated in the Act, to fix the
price of rice and make it a crime to sell it at a higher price, and which holds that
portions of the Act unconstitutional. It does not decide or undertake to construe the
constitutionality of any of the remaining portions of the Act.

The judgment of the lower court is reversed, and the defendant discharged. So
ordered.

Araullo, C.J., Johnson, Street and Ostrand, JJ., concur.

Romualdez, J., concurs in the result.

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 76633 October 18, 1988

EASTERN SHIPPING LINES, INC., petitioner,

vs.
PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION (POEA), MINISTER OF LABOR
AND EMPLOYMENT, HEARING OFFICER ABDUL BASAR and KATHLEEN D. SACO,
respondents.

Jimenea, Dala & Zaragoza Law Office for petitioner.

The Solicitor General for public respondent.

Dizon Law Office for respondent Kathleen D. Saco.

CRUZ, J.:

The private respondent in this case was awarded the sum of P192,000.00 by the
Philippine Overseas Employment Administration (POEA) for the death of her
husband. The decision is challenged by the petitioner on the principal ground that
the POEA had no jurisdiction over the case as the husband was not an overseas
worker.

Vitaliano Saco was Chief Officer of the M/V Eastern Polaris when he was killed in an
accident in Tokyo, Japan, March 15, 1985. His widow sued for damages under
Executive Order No. 797 and Memorandum Circular No. 2 of the POEA. The
petitioner, as owner of the vessel, argued that the complaint was cognizable not by
the POEA but by the Social Security System and should have been filed against the
State Insurance Fund. The POEA nevertheless assumed jurisdiction and after
considering the position papers of the parties ruled in favor of the complainant. The
award consisted of P180,000.00 as death benefits and P12,000.00 for burial
expenses.

The petitioner immediately came to this Court, prompting the Solicitor General to
move for dismissal on the ground of non-exhaustion of administrative remedies.

Ordinarily, the decisions of the POEA should first be appealed to the National Labor
Relations Commission, on the theory inter alia that the agency should be given an
opportunity to correct the errors, if any, of its subordinates. This case comes under
one of the exceptions, however, as the questions the petitioner is raising are
essentially questions of law. 1 Moreover, the private respondent himself has not
objected to the petitioner's direct resort to this Court, observing that the usual
procedure would delay the disposition of the case to her prejudice.

The Philippine Overseas Employment Administration was created under Executive

Order No. 797, promulgated on May 1, 1982, to promote and monitor the overseas
employment of Filipinos and to protect their rights. It replaced the National Seamen
Board created earlier under Article 20 of the Labor Code in 1974. Under Section 4(a)
of the said executive order, the POEA is vested with "original and exclusive
jurisdiction over all cases, including money claims, involving employee-employer
relations arising out of or by virtue of any law or contract involving Filipino contract
workers, including seamen." These cases, according to the 1985 Rules and
Regulations on Overseas Employment issued by the POEA, include "claims for
death, disability and other benefits" arising out of such employment. 2

The petitioner does not contend that Saco was not its employee or that the claim of
his widow is not compensable. What it does urge is that he was not an overseas
worker but a 'domestic employee and consequently his widow's claim should have
been filed with Social Security System, subject to appeal to the Employees
Compensation Commission.

We see no reason to disturb the factual finding of the POEA that Vitaliano Saco was
an overseas employee of the petitioner at the time he met with the fatal accident in
Japan in 1985.

Under the 1985 Rules and Regulations on Overseas Employment, overseas

employment is defined as "employment of a worker outside the Philippines,
including employment on board vessels plying international waters, covered by a
valid contract. 3 A contract worker is described as "any person working or who has
worked overseas under a valid employment contract and shall include seamen" 4 or
"any person working overseas or who has been employed by another which may be
a local employer, foreign employer, principal or partner under a valid employment
contract and shall include seamen." 5 These definitions clearly apply to Vitaliano
Saco for it is not disputed that he died while under a contract of employment with
the petitioner and alongside the petitioner's vessel, the M/V Eastern Polaris, while
berthed in a foreign country. 6

It is worth observing that the petitioner performed at least two acts which constitute
implied or tacit recognition of the nature of Saco's employment at the time of his
death in 1985. The first is its submission of its shipping articles to the POEA for
processing, formalization and approval in the exercise of its regulatory power over
overseas employment under Executive Order NO. 797. 7 The second is its payment
8 of the contributions mandated by law and regulations to the Welfare Fund for
Overseas Workers, which was created by P.D. No. 1694 "for the purpose of providing
social and welfare services to Filipino overseas workers."

Significantly, the office administering this fund, in the receipt it prepared for the
private respondent's signature, described the subject of the burial benefits as
"overseas contract worker Vitaliano Saco." 9 While this receipt is certainly not
controlling, it does indicate, in the light of the petitioner's own previous acts, that
the petitioner and the Fund to which it had made contributions considered Saco to
be an overseas employee.

The petitioner argues that the deceased employee should be likened to the
employees of the Philippine Air Lines who, although working abroad in its
international flights, are not considered overseas workers. If this be so, the
petitioner should not have found it necessary to submit its shipping articles to the
POEA for processing, formalization and approval or to contribute to the Welfare Fund

which is available only to overseas workers. Moreover, the analogy is hardly

appropriate as the employees of the PAL cannot under the definitions given be
considered seamen nor are their appointments coursed through the POEA.

The award of P180,000.00 for death benefits and P12,000.00 for burial expenses
was made by the POEA pursuant to its Memorandum Circular No. 2, which became
effective on February 1, 1984. This circular prescribed a standard contract to be
adopted by both foreign and domestic shipping companies in the hiring of Filipino
seamen for overseas employment. A similar contract had earlier been required by
the National Seamen Board and had been sustained in a number of cases by this
Court. 10 The petitioner claims that it had never entered into such a contract with
the deceased Saco, but that is hardly a serious argument. In the first place, it should
have done so as required by the circular, which specifically declared that "all parties
to the employment of any Filipino seamen on board any ocean-going vessel are
advised to adopt and use this employment contract effective 01 February 1984 and
to desist from using any other format of employment contract effective that date."
In the second place, even if it had not done so, the provisions of the said circular are
nevertheless deemed written into the contract with Saco as a postulate of the police
power of the State. 11

But the petitioner questions the validity of Memorandum Circular No. 2 itself as
violative of the principle of non-delegation of legislative power. It contends that no
authority had been given the POEA to promulgate the said regulation; and even with
such authorization, the regulation represents an exercise of legislative discretion
which, under the principle, is not subject to delegation.

The authority to issue the said regulation is clearly provided in Section 4(a) of
Executive Order No. 797, reading as follows:

... The governing Board of the Administration (POEA), as hereunder provided shall
promulgate the necessary rules and regulations to govern the exercise of the
adjudicatory functions of the Administration (POEA).

Similar authorization had been granted the National Seamen Board, which, as
earlier observed, had itself prescribed a standard shipping contract substantially the
same as the format adopted by the POEA.

The second challenge is more serious as it is true that legislative discretion as to the
substantive contents of the law cannot be delegated. What can be delegated is the
discretion to determine how the law may be enforced, not what the law shall be.
The ascertainment of the latter subject is a prerogative of the legislature. This
prerogative cannot be abdicated or surrendered by the legislature to the delegate.
Thus, in Ynot v. Intermediate Apellate Court 12 which annulled Executive Order No.
626, this Court held:

We also mark, on top of all this, the questionable manner of the disposition of the
confiscated property as prescribed in the questioned executive order. It is there
authorized that the seized property shall be distributed to charitable institutions and
other similar institutions as the Chairman of the National Meat Inspection
Commission may see fit, in the case of carabaos.' (Italics supplied.) The phrase
"may see fit" is an extremely generous and dangerous condition, if condition it is. It
is laden with perilous opportunities for partiality and abuse, and even corruption.
One searches in vain for the usual standard and the reasonable guidelines, or better

still, the limitations that the officers must observe when they make their
distribution. There is none. Their options are apparently boundless. Who shall be the
fortunate beneficiaries of their generosity and by what criteria shall they be chosen?
Only the officers named can supply the answer, they and they alone may choose
the grantee as they see fit, and in their own exclusive discretion. Definitely, there is
here a 'roving commission a wide and sweeping authority that is not canalized
within banks that keep it from overflowing,' in short a clearly profligate and
therefore invalid delegation of legislative powers.

There are two accepted tests to determine whether or not there is a valid delegation
of legislative power, viz, the completeness test and the sufficient standard test.
Under the first test, the law must be complete in all its terms and conditions when it
leaves the legislature such that when it reaches the delegate the only thing he will
have to do is enforce it. 13 Under the sufficient standard test, there must be
adequate guidelines or stations in the law to map out the boundaries of the
delegate's authority and prevent the delegation from running riot. 14

Both tests are intended to prevent a total transference of legislative authority to the
delegate, who is not allowed to step into the shoes of the legislature and exercise a
power essentially legislative.

The principle of non-delegation of powers is applicable to all the three major powers
of the Government but is especially important in the case of the legislative power
because of the many instances when its delegation is permitted. The occasions are
rare when executive or judicial powers have to be delegated by the authorities to
which they legally certain. In the case of the legislative power, however, such
occasions have become more and more frequent, if not necessary. This had led to
the observation that the delegation of legislative power has become the rule and its
non-delegation the exception.

The reason is the increasing complexity of the task of government and the growing
inability of the legislature to cope directly with the myriad problems demanding its
attention. The growth of society has ramified its activities and created peculiar and
sophisticated problems that the legislature cannot be expected reasonably to
comprehend. Specialization even in legislation has become necessary. To many of
the problems attendant upon present-day undertakings, the legislature may not
have the competence to provide the required direct and efficacious, not to say,
specific solutions. These solutions may, however, be expected from its delegates,
who are supposed to be experts in the particular fields assigned to them.

The reasons given above for the delegation of legislative powers in general are
particularly applicable to administrative bodies. With the proliferation of specialized
activities and their attendant peculiar problems, the national legislature has found it
more and more necessary to entrust to administrative agencies the authority to
issue rules to carry out the general provisions of the statute. This is called the
"power of subordinate legislation."

With this power, administrative bodies may implement the broad policies laid down
in a statute by "filling in' the details which the Congress may not have the
opportunity or competence to provide. This is effected by their promulgation of
what are known as supplementary regulations, such as the implementing rules
issued by the Department of Labor on the new Labor Code. These regulations have
the force and effect of law.

Memorandum Circular No. 2 is one such administrative regulation. The model

contract prescribed thereby has been applied in a significant number of the cases
without challenge by the employer. The power of the POEA (and before it the
National Seamen Board) in requiring the model contract is not unlimited as there is
a sufficient standard guiding the delegate in the exercise of the said authority. That
standard is discoverable in the executive order itself which, in creating the
Philippine Overseas Employment Administration, mandated it to protect the rights
of overseas Filipino workers to "fair and equitable employment practices."

Parenthetically, it is recalled that this Court has accepted as sufficient standards

"Public interest" in People v. Rosenthal 15 "justice and equity" in Antamok Gold
Fields v. CIR 16 "public convenience and welfare" in Calalang v. Williams 17 and
"simplicity, economy and efficiency" in Cervantes v. Auditor General, 18 to mention
only a few cases. In the United States, the "sense and experience of men" was
accepted in Mutual Film Corp. v. Industrial Commission, 19 and "national security" in
Hirabayashi v. United States. 20

It is not denied that the private respondent has been receiving a monthly death
benefit pension of P514.42 since March 1985 and that she was also paid a
P1,000.00 funeral benefit by the Social Security System. In addition, as already
observed, she also received a P5,000.00 burial gratuity from the Welfare Fund for
Overseas Workers. These payments will not preclude allowance of the private
respondent's claim against the petitioner because it is specifically reserved in the
standard contract of employment for Filipino seamen under Memorandum Circular
No. 2, Series of 1984, that

Section C. Compensation and Benefits.

1.
In case of death of the seamen during the term of his Contract, the employer
shall pay his beneficiaries the amount of:

a.

P220,000.00 for master and chief engineers

b.
P180,000.00 for other officers, including radio operators and master
electrician

c.

P 130,000.00 for ratings.

2.
It is understood and agreed that the benefits mentioned above shall be
separate and distinct from, and will be in addition to whatever benefits which the
seaman is entitled to under Philippine laws. ...

3.

...

c.
If the remains of the seaman is buried in the Philippines, the owners shall pay
the beneficiaries of the seaman an amount not exceeding P18,000.00 for burial
expenses.

The underscored portion is merely a reiteration of Memorandum Circular No. 22,

issued by the National Seamen Board on July 12,1976, providing an follows:

Income Benefits under this Rule Shall be Considered Additional Benefits.

All compensation benefits under Title II, Book Four of the Labor Code of the
Philippines (Employees Compensation and State Insurance Fund) shall be granted,
in addition to whatever benefits, gratuities or allowances that the seaman or his
beneficiaries may be entitled to under the employment contract approved by the
NSB. If applicable, all benefits under the Social Security Law and the Philippine
Medicare Law shall be enjoyed by the seaman or his beneficiaries in accordance
with such laws.

The above provisions are manifestations of the concern of the State for the working
class, consistently with the social justice policy and the specific provisions in the
Constitution for the protection of the working class and the promotion of its interest.

One last challenge of the petitioner must be dealt with to close t case. Its argument
that it has been denied due process because the same POEA that issued
Memorandum Circular No. 2 has also sustained and applied it is an uninformed
criticism of administrative law itself. Administrative agencies are vested with two
basic powers, the quasi-legislative and the quasi-judicial. The first enables them to
promulgate implementing rules and regulations, and the second enables them to
interpret and apply such regulations. Examples abound: the Bureau of Internal
Revenue adjudicates on its own revenue regulations, the Central Bank on its own
circulars, the Securities and Exchange Commission on its own rules, as so too do the
Philippine Patent Office and the Videogram Regulatory Board and the Civil
Aeronautics Administration and the Department of Natural Resources and so on ad
infinitum on their respective administrative regulations. Such an arrangement has
been accepted as a fact of life of modern governments and cannot be considered
violative of due process as long as the cardinal rights laid down by Justice Laurel in
the landmark case of Ang Tibay v. Court of Industrial Relations 21 are observed.

Whatever doubts may still remain regarding the rights of the parties in this case are
resolved in favor of the private respondent, in line with the express mandate of the
Labor Code and the principle that those with less in life should have more in law.

When the conflicting interests of labor and capital are weighed on the scales of
social justice, the heavier influence of the latter must be counter-balanced by the
sympathy and compassion the law must accord the underprivileged worker. This is
only fair if he is to be given the opportunity and the right to assert and defend his
cause not as a subordinate but as a peer of management, with which he can
negotiate on even plane. Labor is not a mere employee of capital but its active and
equal partner.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. The
temporary restraining order dated December 10, 1986 is hereby LIFTED. It is so
ordered.

Narvasa, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-32096

October 24, 1970

ROMEO F. EDU, in his capacity as Land Transportation Commissioner, petitioner,

vs.
HON. VICENTE G. ERICTA in his capacity as Judge of the Court of First Instance of
Rizal, Br. XVIII, Quezon City, and TEDDY C. GALO respondents.

Office of the Solicitor General Felix Q. Antonio, Acting Assistant Solicitor General
Hector C. Fule and Solicitor Vicente A. Torres for petitioner.

Teddy C. Galo in his own behalf.

Judge Vicente Ericta in his own behalf.

FERNANDO, J.:.

Petitioner Romeo F. Edu, the Land Transportation Commissioner, would have us rule
squarely on the constitutionality of the Reflector Law1 in this proceeding for
certiorari and prohibition against respondent Judge, the Honorable Vicente G. Ericta
of the Court of First Instance of Rizal, Quezon City Branch, to annul and set aside his

order for the issuance of a writ of preliminary injunction directed against

Administrative Order No. 2 of petitioner for the enforcement of the aforesaid
statute, in a pending suit in his court for certiorari and prohibition, filed by the other
respondent Teddy C. Galo assailing; the validity of such enactment as well as such
administrative order. Respondent Judge, in his answer, would join such a plea asking
that the constitutional and legal questions raised be decided "once and for all."
Respondent Teddy C. Galo who was quite categorical in his assertion that both the
challenged legislation and the administrative order transgress the constitutional
requirements of due process and non-delegation, is not averse either to such a
definitive ruling. Considering the great public interest involved and the reliance by
respondent Galo and the allegation that the repugnancy to the fundamental law
could be discerned on the face of the statute as enacted and the executive order as
promulgated, this Court, sees no obstacle to the determination in this proceeding of
the constitutional questions raised. For reasons to be hereafter stated, we sustain
the validity of the Reflector Law and Administrative Order No. 2 issued in the
implementation thereof, the imputation of constitutional infirmity being at best
flimsy and insubstantial.

As noted in the answer of respondent Judge, respondent Galo on his behalf and that
of other motorist filed on May 20, 1970 a suit for certiorari and prohibition with
preliminary injunction assailing the validity of the challenged Act as an invalid
exercise of the police power, for being violative of the due process clause. This he
followed on May 28, 1970 with a manifestation wherein he sought as an alternative
remedy that, in the event that respondent Judge would hold said statute
constitutional, Administrative Order No. 2 of the Land Transportation Commissioner,
now petitioner, implementing such legislation be nullified as an undue exercise of
legislative power. There was a hearing on the plea for the issuance of a writ of
preliminary injunction held on May 27. 1970 where both parties were duly
represented, but no evidence was presented. The next day, on May 28, 1970,
respondent Judge ordered the issuance of a preliminary injunction directed against
the enforcement of such administrative order. There was the day after, a motion for
its reconsideration filed by the Solicitor General representing petitioner. In the
meanwhile, the clerk of court of respondent Judge issued, on June 1, 1970 the writ
of preliminary injunction upon the filing of the required bond. The answer before the
lower court was filed by petitioner Edu on June 4, 1970. Thereafter, on June 9, 1970,
respondent Judge denied the motion for reconsideration of the order of injunction.
Hence this petition for certiorari and prohibition filed with this court on June 18,
1970.

In a resolution of June 22, 1970, this Court required respondents to file an answer to
the petition for certiorari and prohibition. Respondent Judge, the Honorable Vicente
G. Ericta, did file his answer on June 30, 1970 explaining why he restrained the
enforcement of Administrative Order No. 2 and, as noted at the outset, joining the
Solicitor General in seeking that the legal questions raised namely the
constitutionality of the Reflector Law and secondly the validity of Administrative
Order No. 2 alleged to be in excess of the authority conferred on petitioner and
therefore violative of the principle of non-delegation of legislative power be
definitely decided. It was on until July 6, 1970 that respondent Galo filed his answer
seeking the dismissal of this petition concentrating on what he considered to be the
patent invalidity of Administrative Order No. 2 as it went beyond the authority
granted by the Reflector Law, even assuming that it is constitutional. In the
meanwhile, on July 2, 1970, the petition was called for hearing with Solicitor Vicente
Torres appearing for petitioner and respondent Galo for himself. It was made clear
during the course of such argumentation that the matter of the constitutionality of
the Reflector Law was likewise under consideration by this Court. The case is thus
ripe for decision.

We repeat that we find for petitioner and sustain the Constitutionality of the
Reflector Law as well as the validity of Administrative Order No. 2.

1.
The threshold question is whether on the basis of the petition, the answers,
and the oral argument, it would be proper for this Court to resolve the issue of the
constitutionality of the Reflector Law. Our answer, as indicated, is in the affirmative.
It is to be noted that the main thrust of the petition before us is to demonstrate in a
rather convincing fashion that the challenged legislation does not suffer from the
alleged constitutional infirmity imputed to it by the respondent Galo. Since the
special civil action for certiorari and prohibition filed before him before respondent
Judge would seek a declaration of nullity of such enactment by the attribution of the
violation the face thereof of the due process guarantee in the deprivation of
property rights, it would follow that there is sufficient basis for us to determine
which view should prevail. Moreover, any further hearing by respondent Judge
would likewise to limited to a discussion of the constitutional issues raised, no
allegations of facts having made. This is one case then where the question of
validity is ripe for determination. If we do so, further effort need not be wasted and
time is saved moreover, the officials concerned as well as the public, both vitally
concerned with a final resolution of questions of validity, could know the definitive
answer and could act accordingly. There is a great public interest, as was
mentioned, to be served by the final disposition of such crucial issue, petitioner
praying that respondent Galo be declared having no cause of action with
respondent Judge being accordingly directed to dismiss his suit.

There is another reinforcement to this avenue of approach. We have done so before

in a suit, Climaco v. Macadaeg, 2 involving the legality of a presidential directive.
That was a petition for the review and reversal of a writ of preliminary injunction
issued by the then Judge Macadaeg. We there announced that we "have decided to
pass upon the question of the validity of the presidential directive ourselves,
believing that by doing so we would be putting an end to a dispute, a delay in the
disposition of which has caused considerable damage and injury to the Government
and to the tobacco planters themselves."

There is no principle of constitutional adjudication that bars this Court from similarly
passing upon the question of the validity of a legislative enactment in a proceeding
before it to test the propriety of the issuance of a preliminary injunction. The same
felt need for resolving once and for all the vexing question as to the constitutionality
of a challenged enactment and thus serve public interest exists. What we have done
in the case of an order proceeding from one of the coordinate branches, the
executive, we can very well do in the matter before us involving the alleged nullity
of a legislative act. Accordingly, there is nothing to preclude the grant of the writs
prayed for, the burden of showing the constitutionality of the act having proved to
be as will now be shown too much for respondent Galo.

2.
The Reflector Law reads in full: "(g) Lights and reflector when parked or
disabled. Appropriate parking lights or flares visible one hundred meters away
shall be displayed at a corner of the vehicle whenever such vehicle is parked on
highways or in places that are not well-lighted or is placed in such manner as to
endanger passing traffic. Furthermore, every motor vehicle shall be provided at all
times with built-in reflectors or other similar warning devices either pasted, painted
or attached to its front and back which shall likewise be visible at light at least one
hundred meters away. No vehicle not provided with any of the requirements
mentioned in this subsection shall be registered."3 It is thus obvious that the
challenged statute is a legislation enacted under the police power to promote public
safety.

Justice Laurel, in the first leading decision after the Constitution came to force,
Calalang v. Williams,4 identified police power with state authority to enact
legislation that may interfere with personal liberty or property in order to promote
the general welfare. Persons and property could thus "be subjected to all kinds of
restraints and burdens in order to secure the general comfort, health and prosperity
of the state." Shortly after independence in 1948, Primicias v. Fugoso,5 reiterated
the doctrine, such a competence being referred to as "the power to prescribe
regulations to promote the health, morals, peace, education, good order or safety,
and general welfare of the people." The concept was set forth in negative terms by
Justice Malcolm in a pre-Commonwealth decision as "that inherent and plenary
power in the State which enables it to prohibit all things hurtful to the comfort,
safety and welfare of society."6 In that sense it could be hardly distinguishable as
noted by this Court in Morfe v. Mutuc7 with the totality of legislative power.

It is in the above sense the greatest and most powerful attribute of government. It
is to quote Justice Malcolm anew "the most essential, insistent, and at least
illimitable of powers," 8 extending as Justice Holmes aptly pointed out "to all the
great public needs." 9 Its scope, ever-expanding to meet the exigencies of the
times, even to anticipate the future where it could be done, provides enough room
for an efficient and flexible response to conditions and circumstances thus assuring
the greatest benefits. In the language of Justice Cardozo: "Needs that were narrow
or parochial in the past may be interwoven in the present with the well-being of the
nation. What is critical or urgent changes with the
time." 10 The police power is thus a dynamic agency, suitably vague and far from
precisely defined, rooted in the conception that men in organizing the state and
imposing upon its government limitations to safeguard constitutional rights did not
intend thereby to enable an individual citizen or a group of citizens to obstruct
unreasonably the enactment of such salutary measures calculated to insure
communal peace, safety, good order, and welfare.

It would then be to overturn a host of decisions impressive for their number and
unanimity were this Court to sustain respondent Galo. 11 That we are not disposed
to do, especially so as the attack on the challenged statute ostensibly for
disregarding the due process safeguard is angularly unpersuasive. It would be to
close one's eyes to the hazards of traffic in the evening to condemn a statute of this
character. Such an attitude betrays lack of concern for public safety. How can it
plausibly alleged then that there was no observance of due process equated as it
has always been with that is reasonable? The statute assailed is not infected with
arbitrariness. It is not the product of whim or caprice. It is far from oppressive. It is a
legitimate response to a felt public need. It can stand the test of the most
unsymphatetic appraisal.

Respondent Galo is of a different mind, having been unable to resist the teaching of
many American State Court decisions referred to in the secondary source, American
Jurisprudence principally relied upon by him. He ought to have been cautioned
against an indiscriminate acceptance of such doctrines predicated on what was
once a fundamental postulate in American public law, laissez faire.

It is to be admitted that there was a period when such a concept did influence
American court decisions on constitutional law. As was explicitly stated by Justice
Cardozo speaking of that era: "Laissez-faire was not only a counsel of caution which
would do well to heed. It was a categorical imperative which statesmen as well as
judges must obey." 12 For a long time legislation tending to reduce economic
inequality foundered on the rock that was the due process clause, enshrining as it
did the liberty of contract, based on such a basic assumption.

The New Deal administration of President Roosevelt more responsive to the social
and economic forces at work changed matters greatly. By 1937, there was a greater
receptivity by the American Supreme Court to an approach not too reverential of
property rights. Even earlier, in 1935, Professor Coker of Yale, speaking as a
historian, could already discern a contrary drift. He did note the expending range of
governmental activity in the United States. 13 What is undeniable is that by 1943,
laissez-faire was no longer the dominant theory. In the language of Justice Jackson in
the leading case of West Virginia State Board of Education v. Barnette: 14 "We must,
transplant these rights to a soil in which the laissez-faire concept or noninterference has withered at least as to economic affairs, and social advancements
are increasingly sought through closer integration of society and through expanded
and strengthened governmental controls."

While authoritative precedents from the United States federal and state jurisdictions
were deferred to when the Philippines was still under American rule, it cannot be
said that the laissez-faire principle was invariably adhered to by us even then As
early as 1919, in the leading case of Rubi v. Provincial Board of Mindoro, 15 Justice
Malcolm already had occasion to affirm: "The doctrines of laissez-faire and of
unrestricted freedom of the individual, as axioms of economic and political theory,
are of the past. The modern period has shown a widespread belief in the amplest
possible demonstration of government activity. The Courts unfortunately have
sometimes seemed to trail after the other two branches of the Government in this
progressive march." People v. Pomar, 16 a 1924 decision which held invalid under
the due process clause a provision providing for maternity leave with pay thirty
days before and thirty days after confinement could be cited to show that such a
principle did have its day. It is to be remembered though that our Supreme Court
had no other choice as the Philippines was then under the United States, and only
recently the year before, the American Supreme Court in Adkins v. Children's
Hospital, 17 in line with the laissez-faire theory, did hold that a statute providing for
minimum wages was constitutionally infirm.

What is more, to erase any doubts, the Constitutional Convention saw to it that the
concept of laissez-faire was rejected. It entrusted to our government the
responsibility of coping with social and economic problems with the commensurate
power of control over economic affairs. Thereby it could live up to its commitment
to promote the general welfare through state action. No constitutional objection to
regulatory measures adversely affecting property rights, especially so when public
safety is the aim, is likely to be heeded, unless of course on the clearest and most
satisfactory proof of invasion of rights guaranteed by the Constitution. On such a
showing, there may be a declaration of nullity, but not because the laissez-faire
principle was disregarded but because the due process, equal protection, or nonimpairment guarantees would call for vindication.

To repeat, our Constitution which took effect in 1935 erased whatever doubts there
might be on that score. Its philosophy is a repudiation of laissez-faire. One of the
leading members of the Constitutional Convention, Manuel A. Roxas, later the first
President of the Republic, made it clear when he disposed of the objection of
Delegate Jose Reyes of Sorsogon, who noted the "vast extensions in the sphere of
governmental functions" and the "almost unlimited power to interfere in the affairs
of industry and agriculture as well as to compete with existing business" as
"reflections of the fascination exerted by [the then] current tendencies" in other
jurisdictions. 18 He spoke thus: "My answer is that this constitution has definite and
well defined philosophy not only political but social and economic. ... If in this
Constitution the gentlemen will find declarations of economic policy they are there
because they are necessary to safeguard the interests and welfare of the Filipino
people because we believe that the days have come when in self-defense, a nation

may provide in its constitution those safeguards, the patrimony, the freedom to
grow, the freedom to develop national aspirations and national interests, not to be
hampered by the artificial boundaries which a constitutional provision automatically
imposes. 19

It was not expected then when in a concurring opinion, Justice Laurel, who likewise
sat in the Constitutional Convention and was one of its leading lights, explicitly
affirmed in a concurring opinion, later quoted with approval in the leading case of
Antamok Goldfields Mining Co. v. Court of Industrial Relations, 20 that the
Constitution did away with the laissez-faire doctrine. In the course of such
concurring opinion and after noting the changes that have taken place calling for a
more affirmative role by the government and its undeniable power to curtail
property rights, he categorically declared the doctrine in People v. Pomar no longer
retains "its virtuality as a living principle." 21

It is in the light of such rejection of the laissez-faire principle that during the
Commonwealth era, no constitutional infirmity was found to have attached to
legislation covering such subjects as collective bargaining, 22 security of tenure, 23
minimum wages, 24 compulsory arbitration, 25 the regulation of tenancy 26 as well
as the issuance of
securities, 27 and control of public services. 28 So it is likewise under the Republic
this Court having given the seal of approval to more favorable tenancy laws, 29
nationalization of the retail trade, 30 limitation of the hours of labor, 31 imposition
of price control, 32 requirement of separation pay for one month, 33 and social
security scheme. 34

Respondent Galo thus could have profited by a little more diligence in the scrutiny
of Philippine decisions rendered with not unexpected regularity, during all the while
our Constitution has been in force attesting to the demise of such a shibboleth as
laissez-faire. It was one of those fighting faiths that time and circumstances had
upset, to paraphrase Holmes. Yet respondent Galo would seek to vivify and resurrect
it. That, it would appear, is a vain quest, a futile undertaking. The Reflector Law is
thus immune from the attack so recklessly hurled against it. It can survive, and
quite easily too, the constitutional test.

3.
The same lack of success marks the effort of respondent Galo to impugn the
validity of Administrative Order No. 2 issued by petitioner in his official capacity,
duly approved by the Secretary of Public Works and Communications, for being
contrary to the principle of non-delegation of legislative power. Such administrative
order, which took effect on April 17, 1970, has a provision on reflectors in effect
reproducing what was set forth in the Act. Thus: "No motor vehicles of whatever
style, kind, make, class or denomination shall be registered if not equipped with
reflectors. Such reflectors shall either be factory built-in-reflector commercial glass
reflectors, reflection tape or luminous paint. The luminosity shall have an intensity
to be maintained visible and clean at all times such that if struck by a beam of light
shall be visible 100 meters away at night." 35 Then came a section on dimensions,
placement and color. As to dimensions the following is provided for: "Glass reflectors
Not less than 3 inches in diameter or not less than 3 inches square; Reflectorized
Tape At least 3 inches wide and 12 inches long. The painted or taped area may be
bigger at the discretion of the vehicle owner." 36 Provision is then made as to how
such reflectors are to be "placed, installed, pasted or painted." 37 There is the
further requirement that in addition to such reflectors there shall be installed,
pasted or painted four reflectors on each side of the motor vehicle parallel to those
installed, pasted or painted in front and those in the rear end of the body thereof. 38
The color required of each reflectors, whether built-in, commercial glass,
reflectorized tape or reflectorized paint placed in the front part of any motor vehicle

shall be amber or yellow and those placed on the sides and in the rear shall all be
red. 39

Penalties resulting from a violation thereof could be imposed. Thus: "Noncompliance with the requirements contained in this Order shall be sufficient cause
to refuse registration of the motor vehicle affected and if already registered, its
registration maybe suspended in pursuance of the provisions of Section 16 of RA
4136; [Provided], However, that in the case of the violation of Section 1(a) and (b)
and paragraph (8) Section 3 hereof, a fine of not less than ten nor more than fifty
pesos shall be imposed. 40 It is not to be lost sight of that under Republic Act No.
4136, of which the Reflector Law is an amendment, petitioner, as the Land
Transportation Commissioner, may, with the approval of the Secretary of Public
Works and Communications, issue rules and regulations for its implementation as
long as they do not conflict with its provisions. 41 It is likewise an express provision
of the above statute that for a violation of any of its provisions or regulations
promulgated pursuant thereto a fine of not less than P10 nor not less than P50
could be imposed. 42

It is a fundamental principle flowing from the doctrine of separation of powers that

Congress may not delegate its legislative power to the two other branches of the
government, subject to the exception that local governments may over local affairs
participate in its exercise. What cannot be delegated is the authority under the
Constitution to make laws and to alter and repeal them; the test is the
completeness of the statute in all its term and provisions when it leaves the hands
of the legislature. To determine whether or not there is an undue delegation of
legislative power the inquiry must be directed to the scope and definiteness of the
measure enacted. The legislature does not abdicate its functions when it describes
what job must be done, who is to do it, and what is the scope of his authority. For a
complex economy, that may indeed be the only way in which the legislative process
can go forward. A distinction has rightfully been made between delegation of power
to make the laws which necessarily involves a discretion as to what it shall be,
which constitutionally may not be done, and delegation of authority or discretion as
to its execution to exercised under and in pursuance of the law, to which no valid
objection call be made. The Constitution is thus not to be regarded as denying the
legislature the necessary resources of flexibility and practicability.

To avoid the taint of unlawful delegation, there must be a standard, which implies at
the very least that the legislature itself determines matters of principle and lay
down fundamental policy. Otherwise, the charge of complete abdication may be
hard to repel. A standard thus defines legislative policy, marks its limits, its maps
out its boundaries and specifies the public agency to apply it. It indicates the
circumstances under which the legislative command is to be effected. It is the
criterion by which legislative purpose may be carried out. Thereafter, the executive
or administrative office designated may in pursuance of the above guidelines
promulgate supplemental rules and regulations.

The standard may be either express or implied. If the former, the non-delegation
objection is easily met. The standard though does not have to be spelled out
specifically. It could be implied from the policy and purpose of the act considered as
a whole. In the Reflector Law, clearly the legislative objective is public safety. That is
sought to be attained as in Calalang v. Williams is "safe transit upon the roads." 43

This is to adhere to the recognition given expression by Justice Laurel in a decision

announced not long after the Constitution came into force and effect that the
principle of non-delegation "has been made to adapt itself the complexities of

modern governments, giving rise to the adoption, within certain limits, of the
principle of "subordinate legislation" not only in the United States and England but
in practically all modern governments." 44 He continued: "Accordingly, 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 toward the delegation of greater powers by
the legislature and toward the approval of the practice by the courts." 45
Consistency with the conceptual approach requires the reminder that what is
delegated is authority non-legislative in character, the completeness of the statute
when it leaves the hands of Congress being assumed.

Our later decisions speak to the same effect. Thus from, Justice J. B. L. Reyes in
People vs. Exconde: 46 "It is well establish in this jurisdiction that, while the making
of laws is a non-delegable activity that corresponds exclusively to Congress,
nevertheless the latter may constitutionally delegate authority to promulgate rules
and regulations to implement a given legislation and effectuate its policies, for the
reason that the legislature often finds it impracticable (if not impossible) to
anticipate and proved for the multifarious and complex situations that may be met
in carrying the law in effect. All that is required is that the regulation should
germane to the objects and purposes of the law; that the regulation be not in
contradiction with it; but conform to the standards that the law prescribes ... " 47

An even more explicit formulation of the controlling principle comes from the pen of
the then Justice, now Chief Justice, Concepcion: "Lastly, the legality of Circular No.
21 is assailed upon the ground that the grant of authority to issue the same
constitutes an undue delegation of legislative power. It is true that, under our
system of government, said power may not be delegated except to local
governments. However, one thing is to delegate the power to determine what the
law shall be, and another thing to delegate the authority to fix the details in the
execution of enforcement of a policy set out in the law itself. Briefly stated, the rule
is that the delegated powers fall under the second category, if the law authorizing
the, delegation furnishes a reasonable standard which "sufficiently marks the field
within which the Administrator is to act so that it may be known whether he has
kept within it in compliance with the legislative will." (Yakus vs. United States, 88 L.
ed.
848) ... It should be noted, furthermore, that these powers must be construed and
exercised in relation to the objectives of the law creating the Central Bank, which
are, among others, "to maintain monetary stability in the Philippines," and "to
promote a rising level of production, employment and real income in the
Philippines." (Section 2, Rep. Act No. 265). These standards are sufficiently concrete
and definite to vest in the delegated authority, the character of administrative
details in the enforcement of the law and to place the grant said authority beyond
the category of a delegation of legislative powers ... " 48

It bears repeating that the Reflector Law construed together with the Land
Transportation Code. Republic Act No. 4136, of which it is an amendment, leaves no
doubt as to the stress and emphasis on public safety which is the prime
consideration in statutes of this character. There is likewise a categorical affirmation
Of the power of petitioner as Land Transportation Commissioner to promulgate rules
and regulations to give life to and translate into actuality such fundamental
purpose. His power is clear. There has been no abuse. His Administrative Order No.
2 can easily survive the attack, far-from-formidable, launched against it by
respondent Galo.

WHEREFORE, the writs of certiorari and prohibition prayed for are granted, the
orders of May 28, 1970 of respondent Judge for the issuance of a writ of preliminary

injunction, the writ of preliminary injunction of June 1, 1970 and his order of June 9,
1970 denying reconsideration are annulled and set aside. Respondent Judge is
likewise directed to dismiss the petition for certiorari and prohibition filed by
respondent Teddy C. Galo, there being no cause of action as the Reflector Law and
Administrative Order No. 2 of petitioner have not been shown to be tainted by
invalidity. Without pronouncement as to costs.

Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Castro, Teehankee, Barredo and
Makasiar, JJ., concur.

Concepcion, C.J. and Villamor, J., took no part.

Republic of the Philippines

SUPREME COURT

EN BANC

G.R. No. 168056 October 18, 2005

Agenda for Item No. 45

G.R. No. 168056 (ABAKADA Guro Party List Officer Samson S. Alcantara, et al. vs.
The Hon. Executive Secretary Eduardo R. Ermita); G.R. No. 168207 (Aquilino Q.
Pimentel, Jr., et al. vs. Executive Secretary Eduardo R. 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 vs. Cesar V. Purisima, et al); and
G.R. No. 168730 (Bataan Governor Enrique T. Garcia, Jr. vs. Hon. Eduardo R. Ermita,
et al.)

RESOLUTION

For resolution are the following motions for reconsideration of the Courts Decision
dated September 1, 2005 upholding the constitutionality of Republic Act No. 9337 or
the VAT Reform Act1:

1) Motion for Reconsideration filed by petitioners in G.R. No. 168463, Escudero, et

al., on the following grounds:

A. THE DELETION OF THE "NO PASS ON PROVISIONS" FOR THE SALE OF PETROLEUM
PRODUCTS AND POWER GENERATION SERVICES CONSTITUTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION ON THE PART OF
THE BICAMERAL CONFERENCE COMMITTEE.

B. REPUBLIC ACT NO. 9337 GROSSLY VIOLATES THE CONSTITUTIONAL IMPERATIVE

ON EXCLUSIVE ORIGINATION OF REVENUE BILLS UNDER 24, ARTICLE VI, 1987
PHILIPPINE CONSTITUTION.

C. REPUBLIC ACT NO. 9337S STAND-BY AUTHORITY TO THE EXECUTIVE TO

INCREASE THE VAT RATE, ESPECIALLY ON ACCOUNT OF THE EFFECTIVE
RECOMMENDATORY POWER GRANTED TO THE SECRETARY OF FINANCE,
CONSTITUTES UNDUE DELEGATION OF LEGISLATIVE AUTHORITY.

2) Motion for Reconsideration of petitioner in G.R. No. 168730, Bataan Governor

Enrique T. Garcia, Jr., with the argument that burdening the consumers with
significantly higher prices under a VAT regime vis--vis a 3% gross tax renders the
law unconstitutional for being arbitrary, oppressive and inequitable.

and

3) Motion for Reconsideration by petitioners Association of Pilipinas Shell Dealers,

Inc. in G.R. No. 168461, on the grounds that:

I. This Honorable Court erred in upholding the constitutionality of Section 110(A)(2)

and Section 110(B) of the NIRC, as amended by the EVAT Law, imposing limitations
on the amount of input VAT that may be claimed as a credit against output VAT, as
well as Section 114(C) of the NIRC, as amended by the EVAT Law, requiring the
government or any of its instrumentalities to withhold a 5% final withholding VAT on
their gross payments on purchases of goods and services, and finding that the
questioned provisions:

A. are not arbitrary, oppressive and consfiscatory as to amount to a deprivation of

property without due process of law in violation of Article III, Section 1 of the 1987
Philippine Constitution;

B. do not violate the equal protection clause prescribed under Article III, Section 1 of
the 1987 Philippine Constitution; and

C. apply uniformly to all those belonging to the same class and do not violate Article
VI, Section 28(1) of the 1987 Philippine Constitution.

II. This Honorable Court erred in upholding the constitutionality of Section 110(B) of
the NIRC, as amended by the EVAT Law, imposing a limitation on the amount of
input VAT that may be claimed as a credit against output VAT notwithstanding the
finding that the tax is not progressive as exhorted by Article VI, Section 28(1) of the
1987 Philippine Constitution.

Respondents filed their Consolidated Comment. Petitioner Garcia filed his Reply.

Petitioners Escudero, et al., insist that the bicameral conference committee should
not even have acted on the no pass-on provisions since there is no disagreement
between House Bill Nos. 3705 and 3555 on the one hand, and Senate Bill No. 1950
on the other, with regard to the no pass-on provision for the sale of service for
power generation because both the Senate and the House were in agreement that
the VAT burden for the sale of such service shall not be passed on to the end-

consumer. As to the no pass-on provision for sale of petroleum products, petitioners

argue that the fact that the presence of such a no pass-on provision in the House
version and the absence thereof in the Senate Bill means there is no conflict
because "a House provision cannot be in conflict with something that does not
exist."

Such argument is flawed. Note that the rules of both houses of Congress provide
that a conference committee shall settle the "differences" in the respective bills of
each house. Verily, the fact that a no pass-on provision is present in one version but
absent in the other, and one version intends two industries, i.e., power generation
companies and petroleum sellers, to bear the burden of the tax, while the other
version intended only the industry of power generation, transmission and
distribution to be saddled with such burden, clearly shows that there are indeed
differences between the bills coming from each house, which differences should be
acted upon by the bicameral conference committee. It is incorrect to conclude that
there is no clash between two opposing forces with regard to the no pass-on
provision for VAT on the sale of petroleum products merely because such provision
exists in the House version while it is absent in the Senate version. It is precisely the
absence of such provision in the Senate bill and the presence thereof in the House
bills that causes the conflict. The absence of the provision in the Senate bill shows
the Senates disagreement to the intention of the House of Representatives make
the sellers of petroleum bear the burden of the VAT. Thus, there are indeed two
opposing forces: on one side, the House of Representatives which wants petroleum
dealers to be saddled with the burden of paying VAT and on the other, the Senate
which does not see it proper to make that particular industry bear said burden.
Clearly, such conflicts and differences between the no pass-on provisions in the
Senate and House bills had to be acted upon by the bicameral conference
committee as mandated by the rules of both houses of Congress.

Moreover, the deletion of the no pass-on provision made the present VAT law more
in consonance with the very nature of VAT which, as stated in the Decision
promulgated on September 1, 2005, is a tax on spending or consumption, thus, the
burden thereof is ultimately borne by the end-consumer.

Escudero, et al., then claim that there had been changes introduced in the Rules of
the House of Representatives regarding the conduct of the House panel in a
bicameral conference committee, since the time of Tolentino vs. Secretary of
Finance2 to act as safeguards against possible abuse of authority by the House
members of the bicameral conference committee. Even assuming that the rule
requiring the House panel to report back to the House if there are substantial
differences in the House and Senate bills had indeed been introduced after
Tolentino, the Court stands by its ruling that the issue of whether or not the House
panel in the bicameral conference committee complied with said internal rule
cannot be inquired into by the Court. To reiterate, "mere failure to conform to
parliamentary usage will not invalidate the action (taken by a deliberative body)
when the requisite number of members have agreed to a particular measure."3

Escudero, et. al., also contend that Republic Act No. 9337 grossly violates the
constitutional imperative on exclusive origination of revenue bills under Section 24
of Article VI of the Constitution when the Senate introduced amendments not
connected with VAT.

The Court is not persuaded.

Article VI, Section 24 of the Constitution provides:

Sec. 24 All appropriation, revenue or tariff bills, bills authorizing increase of the
public debt, bills of local application, and private bills shall originate exclusively in
the House of Representatives, but the Senate may propose or concur with
amendments.

Section 24 speaks of origination of certain bills from the House of Representatives

which has been interpreted in the Tolentino case as follows:

To begin with, it is not the law but the revenue bill which is required by the
Constitution to "originate exclusively" in the House of Representatives. It is
important to emphasize this, because a bill originating in the House may undergo
such extensive changes in the Senate that the result may be a rewriting of the
whole At this point, what is important to note is that, as a result of the Senate
action, a distinct bill may be produced. To insist that a revenue statute and not
only the bill which initiated the legislative process culminating in the enactment of
the law must substantially be the same as the House bill would be to deny the
Senate's power not only to "concur with amendments" but also to " propose
amendments." It would be to violate the coequality of legislative power of the two
houses of Congress and in fact make the House superior to the Senate.

Given, then, the power of the Senate to propose amendments, the Senate can
propose its own version even with respect to bills which are required by the
Constitution to originate in the House.

...

Indeed, what the Constitution simply means is that the initiative for filing revenue,
tariff, or tax bills, bills authorizing an increase of the public debt, private bills and
bills of local application must come from the House of Representatives on the theory
that, elected as they are from the districts, the members of the House can be
expected to be more sensitive to the local needs and problems. On the other hand,
the senators, who are elected at large, are expected to approach the same
problems from the national perspective. Both views are thereby made to bear on
the enactment of such laws.4

Clearly, after the House bills as approved on third reading are duly transmitted to
the Senate, the Constitution states that the latter can propose or concur with
amendments. The Court finds that the subject provisions found in the Senate bill are
within the purview of such constitutional provision as declared in the Tolentino case.

The intent of the House of Representatives in initiating House Bill Nos. 3555 and
3705 was to solve the countrys serious financial problems. It was stated in the
respective explanatory notes that there is a need for the government to make
significant expenditure savings and a credible package of revenue measures. These
measures include improvement of tax administration and control and leakages in
revenues from income taxes and value added tax. It is also stated that one
opportunity that could be beneficial to the overall status of our economy is to
review existing tax rates, evaluating the relevance given our present conditions.
Thus, with these purposes in mind and to accomplish these purposes for which the

house bills were filed, i.e., to raise revenues for the government, the Senate
introduced amendments on income taxes, which as admitted by Senator Ralph
Recto, would yield about P10.5 billion a year.

Moreover, since the objective of these house bills is to raise revenues, the increase
in corporate income taxes would be a great help and would also soften the impact
of VAT measure on the consumers by distributing the burden across all sectors
instead of putting it entirely on the shoulders of the consumers.

As to the other National Internal Revenue Code (NIRC) provisions found in Senate
Bill No. 1950, i.e., percentage taxes, franchise taxes, amusement and excise taxes,
these provisions are needed so as to cushion the effects of VAT on consumers. As
we said in our decision, certain goods and services which were subject to
percentage tax and excise tax would no longer be VAT exempt, thus, the consumer
would be burdened more as they would be paying the VAT in addition to these
taxes. Thus, there is a need to amend these sections to soften the impact of VAT.
The Court finds no reason to reverse the earlier ruling that the Senate introduced
amendments that are germane to the subject matter and purposes of the house
bills.

Petitioners Escudero, et al., also reiterate that R.A. No. 9337s stand- by authority to
the Executive to increase the VAT rate, especially on account of the
recommendatory power granted to the Secretary of Finance, constitutes undue
delegation of legislative power. They submit that the recommendatory power given
to the Secretary of Finance in regard to the occurrence of either of two events using
the Gross Domestic Product (GDP) as a benchmark necessarily and inherently
required extended analysis and evaluation, as well as policy making.

There is no merit in this contention. The Court reiterates that in making his
recommendation to the President on the existence of either of the two conditions,
the Secretary of Finance is not acting as the alter ego of the President or even her
subordinate. He is acting as the agent of the legislative department, to determine
and declare the event upon which its expressed will is to take effect. The Secretary
of Finance becomes the means or tool by which legislative policy is determined and
implemented, considering that he possesses all the facilities to gather data and
information and has a much broader perspective to properly evaluate them. His
function is to gather and collate statistical data and other pertinent information and
verify if any of the two conditions laid out by Congress is present. Congress granted
the Secretary of Finance the authority to ascertain the existence of a fact, namely,
whether by December 31, 2005, the value-added tax collection as a percentage of
GDP of the previous year exceeds two and four-fifth percent (24/5%) or the national
government deficit as a percentage of GDP of the previous year exceeds one and
one-half percent (1%). If either of these two instances has occurred, the Secretary
of Finance, by legislative mandate, must submit such information to the President.
Then the 12% VAT rate must be imposed by the President effective January 1, 2006.
Congress does not abdicate its functions or unduly delegate power when it
describes what job must be done, who must do it, and what is the scope of his
authority; in our complex economy that is frequently the only way in which the
legislative process can go forward. There is no undue delegation of legislative power
but only of the discretion as to the execution of a law. This is constitutionally
permissible. Congress did not delegate the power to tax but the mere
implementation of the law. The intent and will to increase the VAT rate to 12% came
from Congress and the task of the President is to simply execute the legislative
policy. That Congress chose to use the GDP as a benchmark to determine economic
growth is not within the province of the Court to inquire into, its task being to
interpret the law.

With regard to petitioner Garcias arguments, the Court also finds the same to be
without merit. As stated in the assailed Decision, the Court recognizes the burden
that the consumers will be bearing with the passage of R.A. No. 9337. But as was
also stated by the Court, it cannot strike down the law as unconstitutional simply
because of its yokes. The legislature has spoken and the only role that the Court
plays in the picture is to determine whether the law was passed with due regard to
the mandates of the Constitution. Inasmuch as the Court finds that there are no
constitutional infirmities with its passage, the validity of the law must therefore be
upheld.

Finally, petitioners Association of Pilipinas Shell Dealers, Inc. reiterated their

arguments in the petition, citing this time, the dissertation of Associate Justice
Dante O. Tinga in his Dissenting Opinion.

The glitch in petitioners arguments is that it presents figures based on an event

that is yet to happen. Their illustration of the possible effects of the 70% limitation,
while seemingly concrete, still remains theoretical. Theories have no place in this
case as the Court must only deal with an existing case or controversy that is
appropriate or ripe for judicial determination, not one that is conjectural or merely
anticipatory.5 The Court will not intervene absent an actual and substantial
controversy admitting of specific relief through a decree conclusive in nature, as
distinguished from an opinion advising what the law would be upon a hypothetical
state of facts.6

The impact of the 70% limitation on the creditable input tax will ultimately depend
on how one manages and operates its business. Market forces, strategy and
acumen will dictate their moves. With or without these VAT provisions, an
entrepreneur who does not have the ken to adapt to economic variables will surely
perish in the competition. The arguments posed are within the realm of business,
and the solution lies also in business.

Petitioners also reiterate their argument that the input tax is a property or a
property right. In the same breath, the Court reiterates its finding that it is not a
property or a property right, and a VAT-registered persons entitlement to the
creditable input tax is a mere statutory privilege.

Petitioners also contend that even if the right to credit the input VAT is merely a
statutory privilege, it has already evolved into a vested right that the State cannot
remove.

As the Court stated in its Decision, the right to credit the input tax is a mere
creation of law. Prior to the enactment of multi-stage sales taxation, the sales taxes
paid at every level of distribution are not recoverable from the taxes payable. With
the advent of Executive Order No. 273 imposing a 10% multi-stage tax on all sales,
it was only then that the crediting of the input tax paid on purchase or importation
of goods and services by VAT-registered persons against the output tax was
established. This continued with the Expanded VAT Law (R.A. No. 7716), and The Tax
Reform Act of 1997 (R.A. No. 8424). The right to credit input tax as against the
output tax is clearly a privilege created by law, a privilege that also the law can
limit. It should be stressed that a person has no vested right in statutory privileges.7

The concept of "vested right" is a consequence of the constitutional guaranty of due

process that expresses a present fixed interest which in right reason and natural
justice is protected against arbitrary state action; it includes not only legal or
equitable title to the enforcement of a demand but also exemptions from new
obligations created after the right has become vested. Rights are considered vested
when the right to enjoyment is a present interest, absolute, unconditional, and
perfect or fixed and irrefutable.8 As adeptly stated by Associate Justice Minita V.
Chico-Nazario in her Concurring Opinion, which the Court adopts, petitioners right
to the input VAT credits has not yet vested, thus

It should be remembered that prior to Rep. Act No. 9337, the petroleum dealers
input VAT credits were inexistent they were unrecognized and disallowed by law.
The petroleum dealers had no such property called input VAT credits. It is only
rational, therefore, that they cannot acquire vested rights to the use of such input
VAT credits when they were never entitled to such credits in the first place, at least,
not until Rep. Act No. 9337.

My view, at this point, when Rep. Act No. 9337 has not yet even been implemented,
is that petroleum dealers right to use their input VAT as credit against their output
VAT unlimitedly has not vested, being a mere expectancy of a future benefit and
being contingent on the continuance of Section 110 of the National Internal
Revenue Code of 1997, prior to its amendment by Rep. Act No. 9337.

The elucidation of Associate Justice Artemio V. Panganiban is likewise worthy of

note, to wit:

Moreover, there is no vested right in generally accepted accounting principles.

These refer to accounting concepts, measurement techniques, and standards of
presentation in a companys financial statements, and are not rooted in laws of
nature, as are the laws of physical science, for these are merely developed and
continually modified by local and international regulatory accounting bodies. To
state otherwise and recognize such asset account as a vested right is to limit the
taxing power of the State. Unlimited, plenary, comprehensive and supreme, this
power cannot be unduly restricted by mere creations of the State.
More importantly, the assailed provisions of R.A. No. 9337 already involve legislative
policy and wisdom. So long as there is a public end for which R.A. No. 9337 was
passed, the means through which such end shall be accomplished is for the
legislature to choose so long as it is within constitutional bounds. As stated in
Carmichael vs. Southern Coal & Coke Co.:
If the question were ours to decide, we could not say that the legislature, in
adopting the present scheme rather than another, had no basis for its choice, or
was arbitrary or unreasonable in its action. But, as the state is free to distribute the
burden of a tax without regard to the particular purpose for which it is to be used,
there is no warrant in the Constitution for setting the tax aside because a court
thinks that it could have distributed the burden more wisely. Those are functions
reserved for the legislature.9
WHEREFORE, the Motions for Reconsideration are hereby DENIED WITH FINALITY.
The temporary restraining order issued by the Court is LIFTED.

SO ORDERED.
Republic of the Philippines
SUPREME COURT

Manila

EN BANC

G.R. No. L-57883

March 12, 1982

GUALBERTO J. DE LA LLANA Presiding Judge, Branch II of the City Court of Olongapo,

ESTANISLAO L. CESA, JR., FIDELA Y. VARGAS, BENJAMIN C. ESCOLANGO, JUANITO C.
ATIENZA, MANUEL REYES ROSAPAPAN, JR., VIRGILIO E. ACIERTO, and PORFIRIO
AGUILLON AGUILA, petitioners,
vs.
MANUEL ALBA, Minister of Budget, FRANCISCO TANTUICO, Chairman, Commission
on Audit, and RICARDO PUNO, Minister of Justice, Respondents.

FERNANDO, C.J.:

This Court, pursuant to its grave responsibility of passing upon the validity of any
executive or legislative act in an appropriate cases, has to resolve the crucial issue
of the constitutionality of Batas Pambansa Blg. 129, entitled "An act reorganizing
the Judiciary, Appropriating Funds Therefor and for Other Purposes." The task of
judicial review, aptly characterized as exacting and delicate, is never more so than
when a conceded legislative power, that of judicial reorganization, 1 may possibly
collide with the time-honored principle of the independence of the judiciary 2 as
protected and safeguarded by this constitutional provision: "The Members of the
Supreme Court and judges of inferior courts shall hold office during good behavior
until they reach the age of seventy years or become incapacitated to discharge the
duties of their office. The Supreme Court shall have the power to discipline judges of
inferior courts and, by a vote of at least eight Members, order their dismissal." 3 For
the assailed legislation mandates that Justices and judges of inferior courts from the
Court of Appeals to municipal circuit courts, except the occupants of the
Sandiganbayan and the Court of Tax Appeals, unless appointed to the inferior courts
established by such Act, would be considered separated from the judiciary. It is the
termination of their incumbency that for petitioners justifies a suit of this character,
it being alleged that thereby the security of tenure provision of the Constitution has
been ignored and disregarded,

That is the fundamental issue raised in this proceeding, erroneously entitled Petition
for Declaratory Relief and/or for Prohibition 4 considered by this Court as an action
for prohibited petition, seeking to enjoin respondent Minister of the Budget,
respondent Chairman of the Commission on Audit, and respondent Minister of
Justice from taking any action implementing Batas Pambansa Blg. 129. Petitioners 5
sought to bolster their claim by imputing lack of good faith in its enactment and
characterizing as an undue delegation of legislative power to the President his
authority to fix the compensation and allowances of the Justices and judges
thereafter appointed and the determination of the date when the reorganization
shall be deemed completed. In the very comprehensive and scholarly Answer of
Solicitor General Estelito P. Mendoza, 6 it was pointed out that there is no valid
justification for the attack on the constitutionality of this statute, it being a
legitimate exercise of the power vested in the Batasang Pambansa to reorganize the

judiciary, the allegations of absence of good faith as well as the attack on the
independence of the judiciary being unwarranted and devoid of any support in law.
A Supplemental Answer was likewise filed on October 8, 1981, followed by a Reply
of petitioners on October 13. After the hearing in the morning and afternoon of
October 15, in which not only petitioners and respondents were heard through
counsel but also the amici curiae, 7 and thereafter submission of the minutes of the
proceeding on the debate on Batas Pambansa Blg. 129, this petition was deemed
submitted for decision.

The importance of the crucial question raised called for intensive and rigorous study
of all the legal aspects of the case. After such exhaustive deliberation in several
sessions, the exchange of views being supplemented by memoranda from the
members of the Court, it is our opinion and so hold that Batas Pambansa Blg. 129 is
not unconstitutional.

1.
The argument as to the lack of standing of petitioners is easily resolved. As
far as Judge de la Llana is concerned, he certainly falls within the principle set forth
in Justice Laurel's opinion in People v. Vera. 8 Thus: "The unchallenged rule is 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 of its enforcement." 9 The other petitioners as members of the bar
and officers of the court cannot be considered as devoid of "any personal and
substantial interest" on the matter. There is relevance to this excerpt from a
separate opinion in Aquino, Jr. v. Commission on Elections: 10 "Then there is the
attack on the standing of petitioners, as vindicating at most what they consider a
public right and not protecting their rights as individuals. This is to conjure the
specter of the public right dogma as an inhibition to parties intent on keeping public
officials staying on the path of constitutionalism. As was so well put by Jaffe: 'The
protection of private rights is an essential constituent of public interest and,
conversely, without a well-ordered state there could be no enforcement of private
rights. Private and public interests are, both in substantive and procedural sense,
aspects of the totality of the legal order.' Moreover, petitioners have convincingly
shown that in their capacity as taxpayers, their standing to sue has been amply
demonstrated. There would be a retreat from the liberal approach followed in
Pascual v. Secretary of Public Works, foreshadowed by the very decision of People v.
Vera where the doctrine was first fully discussed, if we act differently now. I do not
think we are prepared to take that step. Respondents, however, would hark back to
the American Supreme Court doctrine in Mellon v. Frothingham with their claim that
what petitioners possess 'is an interest which is shared in common by other people
and is comparatively so minute and indeterminate as to afford any basis and
assurance that the judicial process can act on it.' That is to speak in the language of
a bygone era even in the United States. For as Chief Justice Warren clearly pointed
out in the later case of Flast v. Cohen, the barrier thus set up if not breached has
definitely been lowered." 11

2.
The imputation of arbitrariness to the legislative body in the enactment of
Batas Pambansa Blg. 129 to demonstrate lack of good faith does manifest violence
to the facts. Petitioners should have exercised greater care in informing themselves
as to its antecedents. They had laid themselves open to the accusation of reckless
disregard for the truth, On August 7, 1980, a Presidential Committee on Judicial
Reorganization was organized. 12 This Executive Order was later amended by
Executive Order No. 619-A., dated September 5 of that year. It clearly specified the
task assigned to it: "1. The Committee shall formulate plans on the reorganization of
the Judiciary which shall be submitted within seventy (70) days from August 7, 1980
to provide the President sufficient options for the reorganization of the entire
Judiciary which shall embrace all lower courts, including the Court of Appeals, the
Courts of First Instance, the City and Municipal Courts, and all Special Courts, but
excluding the Sandigan Bayan." 13 On October 17, 1980, a Report was submitted by

such Committee on Judicial Reorganization. It began with this paragraph: "The

Committee on Judicial Reorganization has the honor to submit the following Report.
It expresses at the outset its appreciation for the opportunity accorded it to study
ways and means for what today is a basic and urgent need, nothing less than the
restructuring of the judicial system. There are problems, both grave and pressing,
that call for remedial measures. The felt necessities of the time, to borrow a phrase
from Holmes, admit of no delay, for if no step be taken and at the earliest
opportunity, it is not too much to say that the people's faith in the administration of
justice could be shaken. It is imperative that there be a greater efficiency in the
disposition of cases and that litigants, especially those of modest means much
more so, the poorest and the humblest can vindicate their rights in an
expeditious and inexpensive manner. The rectitude and the fairness in the way the
courts operate must be manifest to all members of the community and particularly
to those whose interests are affected by the exercise of their functions. It is to that
task that the Committee addresses itself and hopes that the plans submitted could
be a starting point for an institutional reform in the Philippine judiciary. The
experience of the Supreme Court, which since 1973 has been empowered to
supervise inferior courts, from the Court of Appeals to the municipal courts, has
proven that reliance on improved court management as well as training of judges
for more efficient administration does not suffice. I hence, to repeat, there is need
for a major reform in the judicial so stem it is worth noting that it will be the first of
its kind since the Judiciary Act became effective on June 16, 1901." 14 I t went to
say: "I t does not admit of doubt that the last two decades of this century are likely
to be attended with problems of even greater complexity and delicacy. New social
interests are pressing for recognition in the courts. Groups long inarticulate,
primarily those economically underprivileged, have found legal spokesmen and are
asserting grievances previously ignored. Fortunately, the judicially has not proved
inattentive. Its task has thus become even more formidable. For so much grist is
added to the mills of justice. Moreover, they are likewise to be quite novel. The need
for an innovative approach is thus apparent. The national leadership, as is wellknown, has been constantly on the search for solutions that will prove to be both
acceptable and satisfactory. Only thus may there be continued national progress."
15 After which comes: "To be less abstract, the thrust is on development. That has
been repeatedly stressed and rightly so. All efforts are geared to its realization.
Nor, unlike in the past, was it to b "considered as simply the movement towards
economic progress and growth measured in terms of sustained increases in per
capita income and Gross National Product (GNP). 16 For the New Society, its
implication goes further than economic advance, extending to "the sharing, or more
appropriately, the democratization of social and economic opportunities, the
substantiation of the true meaning of social justice." 17 This process of
modernization and change compels the government to extend its field of activity
and its scope of operations. The efforts towards reducing the gap between the
wealthy and the poor elements in the nation call for more regulatory legislation.
That way the social justice and protection to labor mandates of the Constitution
could be effectively implemented." 18 There is likelihood then "that some measures
deemed inimical by interests adversely affected would be challenged in court on
grounds of validity. Even if the question does not go that far, suits may be filed
concerning their interpretation and application. ... There could be pleas for
injunction or restraining orders. Lack of success of such moves would not, even so,
result in their prompt final disposition. Thus delay in the execution of the policies
embodied in law could thus be reasonably expected. That is not conducive to
progress in development." 19 For, as mentioned in such Report, equally of vital
concern is the problem of clogged dockets, which "as is well known, is one of the
utmost gravity. Notwithstanding the most determined efforts exerted by the
Supreme Court, through the leadership of both retired Chief Justice Querube
Makalintal and the late Chief Justice Fred Ruiz Castro, from the time supervision of
the courts was vested in it under the 1973 Constitution, the trend towards more and
more cases has continued." 20 It is understandable why. With the accelerated
economic development, the growth of population, the increasing urbanization, and
other similar factors, the judiciary is called upon much oftener to resolve
controversies. Thus confronted with what appears to be a crisis situation that calls

for a remedy, the Batasang Pambansa had no choice. It had to act, before the
ailment became even worse. Time was of the essence, and yet it did not hesitate to
be duly mindful, as it ought to be, of the extent of its coverage before enacting
Batas Pambansa Blg. 129.

3.
There is no denying, therefore, the need for "institutional reforms,"
characterized in the Report as "both pressing and urgent." 21 It is worth noting,
likewise, as therein pointed out, that a major reorganization of such scope, if it were
to take place, would be the most thorough after four generations. 22 The reference
was to the basic Judiciary Act generations . enacted in June of 1901, 23 amended in
a significant way, only twice previous to the Commonwealth. There was, of course,
the creation of the Court of Appeals in 1935, originally composed "of a Presiding
Judge and ten appellate Judges, who shall be appointed by the President of the
Philippines, with the consent of the Commission on Appointments of the National
Assembly, 24 It could "sit en banc, but it may sit in two divisions, one of six and
another of five Judges, to transact business, and the two divisions may sit at the
same time." 25 Two years after the establishment of independence of the Republic
of the Philippines, the Judiciary Act of 1948 26 was passed. It continued the existing
system of regular inferior courts, namely, the Court of Appeals, Courts of First
Instance, 27 the Municipal Courts, at present the City Courts, and the Justice of the
Peace Courts, now the Municipal Circuit Courts and Municipal Courts. The
membership of the Court of Appeals has been continuously increased. 28 Under a
1978 Presidential Decree, there would be forty-five members, a Presiding Justice
and forty-four Associate Justices, with fifteen divisions. 29 Special courts were
likewise created. The first was the Court of Tax Appeals in 1954, 30 next came the
Court of Agrarian Relations in 1955, 31 and then in the same year a Court of the
Juvenile and Domestic Relations for Manila in 1955, 32 subsequently followed by the
creation of two other such courts for Iloilo and Quezon City in 1966. 33 In 1967,
Circuit Criminal Courts were established, with the Judges having the same
qualifications, rank, compensation, and privileges as judges of Courts of First
Instance. 34

4.
After the submission of such Report, Cabinet Bill No. 42, which later became
the basis of Batas Pambansa Blg. 129, was introduced. After setting forth the
background as above narrated, its Explanatory Note continues: "Pursuant to the
President's instructions, this proposed legislation has been drafted in accordance
with the guidelines of that report with particular attention to certain objectives of
the reorganization, to wit, the attainment of more efficiency in disposal of cases, a
reallocation of jurisdiction, and a revision of procedures which do not tend to the
proper meeting out of justice. In consultation with, and upon a consensus of, the
governmental and parliamentary leadership, however, it was felt that some options
set forth in the Report be not availed of. Instead of the proposal to confine the
jurisdiction of the intermediate appellate court merely to appellate adjudication, the
preference has been opted to increase rather than diminish its jurisdiction in order
to enable it to effectively assist the Supreme Court. This preference has been
translated into one of the innovations in the proposed Bill." 35 In accordance with
the parliamentary procedure, the Bill was sponsored by the Chairman of the
Committee on Justice, Human Rights and Good Government to which it was
referred. Thereafter, Committee Report No. 225 was submitted by such Committee
to the Batasang Pambansa recommending the approval with some amendments. In
the sponsorship speech of Minister Ricardo C. Puno, there was reference to the
Presidential Committee on Judicial Reorganization. Thus: "On October 17, 1980, the
Presidential Committee on Judicial Reorganization submitted its report to the
President which contained the 'Proposed Guidelines for Judicial Reorganization.'
Cabinet Bill No. 42 was drafted substantially in accordance with the options
presented by these guidelines. Some options set forth in the aforesaid report were
not availed of upon consultation with and upon consensus of the government and
parliamentary leadership. Moreover, some amendments to the bill were adopted by
the Committee on Justice, Human Rights and Good Government, to which The bill

was referred, following the public hearings on the bill held in December of 1980. The
hearings consisted of dialogues with the distinguished members of the bench and
the bar who had submitted written proposals, suggestions, and position papers on
the bill upon the invitation of the Committee on Justice, Human Rights and Good
Government." 36 Stress was laid by the sponsor that the enactment of such Cabinet
Bill would, firstly, result in the attainment of more efficiency in the disposal of cases.
Secondly, the improvement in the quality of justice dispensed by the courts is
expected as a necessary consequence of the easing of the court's dockets. Thirdly,
the structural changes introduced in the bill, together with the reallocation of
jurisdiction and the revision of the rules of procedure, are designated to suit the
court system to the exigencies of the present day Philippine society, and hopefully,
of the foreseeable future." 37 it may be observed that the volume containing the
minutes of the proceedings of the Batasang Pambansa show that 590 pages were
devoted to its discussion. It is quite obvious that it took considerable time and effort
as well as exhaustive study before the act was signed by the President on August
14, 1981. With such a background, it becomes quite manifest how lacking in factual
basis is the allegation that its enactment is tainted by the vice of arbitrariness.
What appears undoubted and undeniable is the good faith that characterized its
enactment from its inception to the affixing of the Presidential signature.

5.
Nothing is better settled in our law than that the abolition of an office within
the competence of a legitimate body if done in good faith suffers from no infirmity.
The ponencia of Justice J.B.L. Reyes in Cruz v. Primicias, Jr. 38 reiterated such a
doctrine: "We find this point urged by respondents, to be without merit. No removal
or separation of petitioners from the service is here involved, but the validity of the
abolition of their offices. This is a legal issue that is for the Courts to decide. It is
well-known rule also that valid abolition of offices is neither removal nor separation
of the incumbents. ... And, of course, if the abolition is void, the incumbent is
deemed never to have ceased to hold office. The preliminary question laid at rest,
we pass to the merits of the case. As well-settled as the rule that the abolition of an
office does not amount to an illegal removal of its incumbent is the principle that, in
order to be valid, the abolition must be made in good faith." 39 The above excerpt
was quoted with approval in Bendanillo, Sr. v. Provincial Governor, 40 two earlier
cases enunciating a similar doctrine having preceded it. 41 As with the offices in the
other branches of the government, so it is with the judiciary. The test remains
whether the abolition is in good faith. As that element is conspicuously present in
the enactment of Batas Pambansa Blg. 129, then the lack of merit of this petition
becomes even more apparent. The concurring opinion of Justice Laurel in Zandueta
v. De la Costa 42 cannot be any clearer. This is a quo warranto proceeding filed by
petitioner, claiming that he, and not respondent, was entitled to he office of judge of
the Fifth Branch of the Court of First Instance of Manila. There was a Judicial
Reorganization Act in 1936, 43 a year after the inauguration of the Commonwealth,
amending the Administrative Code to organize courts of original jurisdiction known
as the Courts of First Instance Prior to such statute, petitioner was the incumbent of
such branch. Thereafter, he received an ad interim appointment, this time to the
Fourth Judicial District, under the new legislation. Unfortunately for him, the
Commission on Appointments of then National Assembly disapproved the same,
with respondent being appointed in his place. He contested the validity of the Act
insofar as it resulted in his being forced to vacate his position This Court did not rule
squarely on the matter. His petition was dismissed on the ground of estoppel.
Nonetheless, the separate concurrence of Justice Laurel in the result reached, to
repeat, reaffirms in no uncertain terms the standard of good faith to preclude any
doubt as to the abolition of an inferior court, with due recognition of the security of
tenure guarantee. Thus: " I am of the opinion that Commonwealth Act No. 145 in so
far as it reorganizes, among other judicial districts, the Ninth Judicial District, and
establishes an entirely new district comprising Manila and the provinces of Rizal and
Palawan, is valid and constitutional. This conclusion flows from the fundamental
proposition that the legislature may abolish courts inferior to the Supreme Court
and therefore may reorganize them territorially or otherwise thereby necessitating
new appointments and commissions. Section 2, Article VIII of the Constitution vests

in the National Assembly the power to define, prescribe and apportion the
jurisdiction of the various courts, subject to certain limitations in the case of the
Supreme Court. It is admitted that section 9 of the same article of the Constitution
provides for the security of tenure of all the judges. The principles embodied in
these two sections of the same article of the Constitution must be coordinated and
harmonized. A mere enunciation of a principle will not decide actual cases and
controversies of every sort. (Justice Holmes in Lochner vs. New York, 198 U.S., 45;
49 Law. ed; 937)" 44 justice Laurel continued: "I am not insensible to the argument
that the National Assembly may abuse its power and move deliberately to defeat
the constitutional provision guaranteeing security of tenure to all judges, But, is this
the case? One need not share the view of Story, Miller and Tucker on the one hand,
or the opinion of Cooley, Watson and Baldwin on the other, to realize that the
application of a legal or constitutional principle is necessarily factual and
circumstantial and that fixity of principle is the rigidity of the dead and the
unprogressive. I do say, and emphatically, however, that cases may arise where the
violation of the constitutional provision regarding security of tenure is palpable and
plain, and that legislative power of reorganization may be sought to cloak an
unconstitutional and evil purpose. When a case of that kind arises, it will be the
time to make the hammer fall and heavily. But not until then. I am satisfied that, as
to the particular point here discussed, the purpose was the fulfillment of what was
considered a great public need by the legislative department and that
Commonwealth Act No. 145 was not enacted purposely to affect adversely the
tenure of judges or of any particular judge. Under these circumstances, I am for
sustaining the power of the legislative department under the Constitution. To be
sure, there was greater necessity for reorganization consequent upon the
establishment of the new government than at the time Acts Nos. 2347 and 4007
were approved by the defunct Philippine Legislature, and although in the case of
these two Acts there was an express provision providing for the vacation by the
judges of their offices whereas in the case of Commonwealth Act No. 145 doubt is
engendered by its silence, this doubt should be resolved in favor of the valid
exercise of the legislative power." 45

6.
A few more words on the question of abolition. In the above-cited opinion of
Justice Laurel in Zandueta, reference was made to Act No. 2347 46 on the
reorganization of the Courts of First Instance and to Act No. 4007 47 on the
reorganization of all branches of the government, including the courts of first
instance. In both of them, the then Courts of First Instance were replaced by new
courts with the same appellation. As Justice Laurel pointed out, there was no
question as to the fact of abolition. He was equally categorical as to Commonwealth
Act No. 145, where also the system of the courts of first instance was provided for
expressly. It was pointed out by Justice Laurel that the mere creation of an entirely
new district of the same court is valid and constitutional. such conclusion flowing
"from the fundamental proposition that the legislature may abolish courts inferior to
the Supreme Court and therefore may reorganize them territorially or otherwise
thereby necessitating new appointments and commissions." 48 The challenged
statute creates an intermediate appellate court, 49 regional trial courts, 50
metropolitan trial courts of the national capital region, 51 and other metropolitan
trial courts, 52 municipal trial courts in cities, 53 as well as in municipalities, 54 and
municipal circuit trial courts. 55 There is even less reason then to doubt the fact
that existing inferior courts were abolished. For the Batasang Pambansa, the
establishment of such new inferior courts was the appropriate response to the grave
and urgent problems that pressed for solution. Certainly, there could be differences
of opinion as to the appropriate remedy. The choice, however, was for the Batasan
to make, not for this Court, which deals only with the question of power. It bears
mentioning that in Brillo v. Eage 56 this Court, in an unanimous opinion penned by
the late Justice Diokno, citing Zandueta v. De la Costa, ruled: "La segunda question
que el recurrrido plantea es que la Carta de Tacloban ha abolido el puesto. Si
efectivamente ha sido abolido el cargo, entonces ha quedado extinguido el derecho
de recurente a ocuparlo y a cobrar el salario correspodiente. Mc Culley vs. State, 46
LRA, 567. El derecho de un juez de desempenarlo hasta los 70 aos de edad o se

incapacite no priva al Congreso de su facultad de abolir, fusionar o reorganizar

juzgados no constitucionales." 57 Nonetheless, such well-established principle was
not held applicable to the situation there obtaining, the Charter of Tacloban City
creating a city court in place of the former justice of the peace court. Thus: "Pero en
el caso de autos el Juzgado de Tacloban no ha sido abolido. Solo se le ha cambiado
el nombre con el cambio de forma del gobierno local." 58 The present case is
anything but that. Petitioners did not and could not prove that the challenged
statute was not within the bounds of legislative authority.

7.
This opinion then could very well stop at this point. The implementation of
Batas Pambansa Blg. 129, concededly a task incumbent on the Executive, may give
rise, however, to questions affecting a judiciary that should be kept independent.
The all-embracing scope of the assailed legislation as far as all inferior courts from
the Courts of Appeals to municipal courts are concerned, with the exception solely
of the Sandiganbayan and the Court of Tax Appeals 59 gave rise, and
understandably so, to misgivings as to its effect on such cherished Ideal. The first
paragraph of the section on the transitory provision reads: "The provisions of this
Act shall be immediately carried out in accordance with an Executive Order to be
issued by the President. The Court of Appeals, the Courts of First Instance, the
Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of
Agrarian Relations, the City Courts, the Municipal Courts, and the Municipal Circuit
Courts shall continue to function as presently constituted and organized, until the
completion of the reorganization provided in this Act as declared by the President.
Upon such declaration, the said courts shall be deemed automatically abolished and
the incumbents thereof shall cease to hold the office." 60 There is all the more
reason then why this Court has no choice but to inquire further into the allegation
by petitioners that the security of tenure provision, an assurance of a judiciary free
from extraneous influences, is thereby reduced to a barren form of words. The
amended Constitution adheres even more clearly to the long-established tradition of
a strong executive that antedated the 1935 Charter. As noted in the work of former
Vice-Governor Hayden, a noted political scientist, President Claro M. Recto of the
1934 Convention, in his closing address, in stressing such a concept, categorically
spoke of providing "an executive power which, subject to the fiscalization of the
Assembly, and of public opinion, will not only know how to govern, but will actually
govern, with a firm and steady hand, unembarrassed by vexatious interferences by
other departments, or by unholy alliances with this and that social group." 61 The
above excerpt was cited with approval by Justice Laurel in Planas v. Gil. 62
Moreover, under the 1981 Amendments, it may be affirmed that once again the
principle of separation of powers, to quote from the same jurist as ponente in
Angara v. Electoral Commission, 63 "obtains not through express provision but by
actual division." 64 The president, under Article VII, shall be the head of state and
chief executive of the Republic of the Philippines." 65 Moreover, it is equally therein
expressly provided that all the powers he possessed under the 1935 Constitution
are once again vested in him unless the Batasang Pambansa provides otherwise."
66 Article VII of the 1935 Constitution speaks categorically: "The Executive power
shall be vested in a President of the Philippines." 67 As originally framed, the 1973
Constitution created the position of President as the "symbolic head of state." 68 In
addition, there was a provision for a Prime Minister as the head of government
exercising the executive power with the assistance of the Cabinet 69 Clearly, a
modified parliamentary system was established. In the light of the 1981
amendments though, this Court in Free Telephone Workers Union v. Minister of Labor
70 could state: "The adoption of certain aspects of a parliamentary system in the
amended Constitution does not alter its essentially presidential character." 71 The
retention, however, of the position of the Prime Minister with the Cabinet, a majority
of the members of which shall come from the regional representatives of the
Batasang Pambansa and the creation of an Executive Committee composed of the
Prime Minister as Chairman and not more than fourteen other members at least half
of whom shall be members of the Batasang Pambansa, clearly indicate the evolving
nature of the system of government that is now operative. 72 What is equally
apparent is that the strongest ties bind the executive and legislative departments. It

is likewise undeniable that the Batasang Pambansa retains its full authority to enact
whatever legislation may be necessary to carry out national policy as usually
formulated in a caucus of the majority party. It is understandable then why in Fortun
v. Labang 73 it was stressed that with the provision transferring to the Supreme
Court administrative supervision over the Judiciary, there is a greater need "to
preserve unimpaired the independence of the judiciary, especially so at present,
where to all intents and purposes, there is a fusion between the executive and the
legislative branches." 74

8.
To be more specific, petitioners contend that the abolition of the existing
inferior courts collides with the security of tenure enjoyed by incumbent Justices and
judges under Article X, Section 7 of the Constitution. There was a similar provision in
the 1935 Constitution. It did not, however, go as far as conferring on this Tribunal
the power to supervise administratively inferior courts. 75 Moreover, this Court is
em powered "to discipline judges of inferior courts and, by a vote of at least eight
members, order their dismissal." 76 Thus it possesses the competence to remove
judges. Under the Judiciary Act, it was the President who was vested with such
power. 77 Removal is, of course, to be distinguished from termination by virtue of
the abolition of the office. There can be no tenure to a non-existent office. After the
abolition, there is in law no occupant. In case of removal, there is an office with an
occupant who would thereby lose his position. It is in that sense that from the
standpoint of strict law, the question of any impairment of security of tenure does
not arise. Nonetheless, for the incumbents of inferior courts abolished, the effect is
one of separation. As to its effect, no distinction exists between removal and the
abolition of the office. Realistically, it is devoid of significance. He ceases to be a
member of the judiciary. In the implementation of the assailed legislation, therefore,
it would be in accordance with accepted principles of constitutional construction
that as far as incumbent justices and judges are concerned, this Court be consulted
and that its view be accorded the fullest consideration. No fear need be entertained
that there is a failure to accord respect to the basic principle that this Court does
not render advisory opinions. No question of law is involved. If such were the case,
certainly this Court could not have its say prior to the action taken by either of the
two departments. Even then, it could do so but only by way of deciding a case
where the matter has been put in issue. Neither is there any intrusion into who shall
be appointed to the vacant positions created by the reorganization. That remains in
the hands of the Executive to whom it properly belongs. There is no departure
therefore from the tried and tested ways of judicial power, Rather what is sought to
be achieved by this liberal interpretation is to preclude any plausibility to the charge
that in the exercise of the conceded power of reorganizing tulle inferior courts, the
power of removal of the present incumbents vested in this Tribunal is ignored or
disregarded. The challenged Act would thus be free from any unconstitutional taint,
even one not readily discernidble except to those predisposed to view it with
distrust. Moreover, such a construction would be in accordance with the basic
principle that in the choice of alternatives between one which would save and
another which would invalidate a statute, the former is to be preferred. 78 There is
an obvious way to do so. The principle that the Constitution enters into and forms
part of every act to avoid any constitutional taint must be applied Nuez v.
Sandiganbayan, 79 promulgated last January, has this relevant excerpt: "It is true
that other Sections of the Decree could have been so worded as to avoid any
constitutional objection. As of now, however, no ruling is called for. The view is
given expression in the concurring and dissenting opinion of Justice Makasiar that in
such a case to save the Decree from the direct fate of invalidity, they must be
construed in such a way as to preclude any possible erosion on the powers vested in
this Court by the Constitution. That is a proposition too plain to be committed. It
commends itself for approval." 80 Nor would such a step be unprecedented. The
Presidential Decree constituting Municipal Courts into Municipal Circuit Courts,
specifically provides: "The Supreme Court shall carry out the provisions of this
Decree through implementing orders, on a province-to-province basis." 81 It is true
there is no such provision in this Act, but the spirit that informs it should not be

ignored in the Executive Order contemplated under its Section 44. 82 Thus Batas
Pambansa Blg. 129 could stand the most rigorous test of constitutionality. 83

9.
Nor is there anything novel in the concept that this Court is called upon to
reconcile or harmonize constitutional provisions. To be specific, the Batasang
Pambansa is expressly vested with the authority to reorganize inferior courts and in
the process to abolish existing ones. As noted in the preceding paragraph, the
termination of office of their occupants, as a necessary consequence of such
abolition, is hardly distinguishable from the practical standpoint from removal, a
power that is now vested in this Tribunal. It is of the essence of constitutionalism to
assure that neither agency is precluded from acting within the boundaries of its
conceded competence. That is why it has long been well-settled under the
constitutional system we have adopted that this Court cannot, whenever
appropriate, avoid the task of reconciliation. As Justice Laurel put it so well in the
previously cited Angara decision, while in the main, "the Constitution has blocked
out with deft strokes and in bold lines, allotment of power to the executive, the
legislative and the judicial departments of the government, the overlapping and
interlacing of functions and duties between the several departments, however,
sometimes makes it hard to say just where the one leaves off and the other begins."
84 It is well to recall another classic utterance from the same jurist, even more
emphatic in its affirmation of such a view, moreover buttressed by one of those
insights for which Holmes was so famous "The classical separation of government
powers, whether viewed in the light of the political philosophy of Aristotle, Locke, or
Motesquieu or of the postulations of Mabini, Madison, or Jefferson, is a relative
theory of government. There is more truism and actuality in interdependence than
in independence and separation of powers, for as observed by Justice Holmes in a
case of Philippine origin, we cannot lay down 'with mathematical precision and
divide the branches into water-tight compartments' not only because 'the great
ordinances of the Constitution do not establish and divide fields of black and white
but also because 'even the more specific of them are found to terminate in a
penumbra shading gradually from one extreme to the other.'" 85 This too from
Justice Tuazon, likewise expressing with force and clarity why the need for
reconciliation or balancing is well-nigh unavodiable under the fundamental principle
of separation of powers: "The constitutional structure is a complicated system, and
overlappings of governmental functions are recognized, unavoidable, and inherent
necessities of governmental coordination." 86 In the same way that the academe
has noted the existence in constitutional litigation of right versus right, there are
instances, and this is one of them, where, without this attempt at harmonizing the
provisions in question, there could be a case of power against power. That we
should avoid.

10.
There are other objections raised but they pose no difficulty. Petitioners would
characterize as an undue delegation of legislative power to the President the grant
of authority to fix the compensation and the allowances of the Justices and judges
thereafter appointed. A more careful reading of the challenged Batas Pambansa Blg.
129 ought to have cautioned them against raising such an issue. The language of
the statute is quite clear. The questioned provisions reads as follows: "Intermediate
Appellate Justices, Regional Trial Judges, Metropolitan Trial Judges, municipal Trial
Judges, and Municipal Circuit Trial Judges shall receive such receive such
compensation and allowances as may be authorized by the President along the
guidelines set forth in Letter of Implementation No. 93 pursuant to Presidential
Decree No. 985, as amended by Presidential Decree No. 1597." 87 The existence of
a standard is thus clear. The basic postulate that underlies the doctrine of nondelegation is that it is the legislative body which is entrusted with the competence
to make laws and to alter and repeal them, the test being the completeness of the
statue in all its terms and provisions when enacted. As pointed out in Edu v. Ericta:
88 "To avoid the taint of unlawful delegation, there must be a standard, which
implies at the very least that the legislature itself determines matters of principle
and lays down fundamental policy. Otherwise, the charge of complete abdication

may be hard to repel. A standard thus defines legislative policy, marks its limits,
maps out its boundaries and specifies the public agency to apply it. It indicates the
circumstances under which the legislative command is to be effected. It is the
criterion by which legislative purpose may be carried out. Thereafter, the executive
or administrative office designated may in pursuance of the above guidelines
promulgate supplemental rules and regulations. The standard may be either
express or implied. If the former, the non-delegation objection is easily met. The
standard though does not have to be spelled out specifically. It could be implied
from the policy and purpose of the act considered as a whole." 89 The undeniably
strong links that bind the executive and legislative departments under the amended
Constitution assure that the framing of policies as well as their implementation can
be accomplished with unity, promptitude, and efficiency. There is accuracy,
therefore, to this observation in the Free Telephone Workers Union decision: "There
is accordingly more receptivity to laws leaving to administrative and executive
agencies the adoption of such means as may be necessary to effectuate a valid
legislative purpose. It is worth noting that a highly-respected legal scholar, Professor
Jaffe, as early as 1947, could speak of delegation as the 'dynamo of modern
government.'" 90 He warned against a "restrictive approach" which could be "a
deterrent factor to much-needed legislation." 91 Further on this point from the same
opinion" "The spectre of the non-delegation concept need not haunt, therefore,
party caucuses, cabinet sessions or legislative chambers." 92 Another objection
based on the absence in the statue of what petitioners refer to as a "definite time
frame limitation" is equally bereft of merit. They ignore the categorical language of
this provision: "The Supreme Court shall submit to the President, within thirty (30)
days from the date of the effectivity of this act, a staffing pattern for all courts
constituted pursuant to this Act which shall be the basis of the implementing order
to be issued by the President in accordance with the immediately succeeding
section." 93 The first sentence of the next section is even more categorical: "The
provisions of this Act shall be immediately carried out in accordance with an
Executive Order to be issued by the President." 94 Certainly petitioners cannot be
heard to argue that the President is insensible to his constitutional duty to take care
that the laws be faithfully executed. 95 In the meanwhile, the existing inferior courts
affected continue functioning as before, "until the completion of the reorganization
provided in this Act as declared by the President. Upon such declaration, the said
courts shall be deemed automatically abolished and the incumbents thereof shall
cease to hold office." 96 There is no ambiguity. The incumbents of the courts thus
automatically abolished "shall cease to hold office." No fear need be entertained by
incumbents whose length of service, quality of performance, and clean record justify
their being named anew, 97 in legal contemplation without any interruption in the
continuity of their service. 98 It is equally reasonable to assume that from the ranks
of lawyers, either in the government service, private practice, or law professors will
come the new appointees. In the event that in certain cases a little more time is
necessary in the appraisal of whether or not certain incumbents deserve
reappointment, it is not from their standpoint undesirable. Rather, it would be a
reaffirmation of the good faith that will characterize its implementation by the
Executive. There is pertinence to this observation of Justice Holmes that even
acceptance of the generalization that courts ordinarily should not supply omissions
in a law, a generalization qualified as earlier shown by the principle that to save a
statute that could be done, "there is no canon against using common sense in
construing laws as saying what they obviously mean." 99 Where then is the
unconstitutional flaw

11.
On the morning of the hearing of this petition on September 8, 1981,
petitioners sought to have the writer of this opinion and Justices Ramon C. Aquino
and Ameurfina Melencio-Herrera disqualified because the first-named was the
chairman and the other two, members of the Committee on Judicial Reorganization.
At the hearing, the motion was denied. It was made clear then and there that not
one of the three members of the Court had any hand in the framing or in the
discussion of Batas Pambansa Blg. 129. They were not consulted. They did not
testify. The challenged legislation is entirely the product of the efforts of the

legislative body. 100 Their work was limited, as set forth in the Executive Order, to
submitting alternative plan for reorganization. That is more in the nature of
scholarly studies. That the undertook. There could be no possible objection to such
activity. Ever since 1973, this Tribunal has had administrative supervision over
interior courts. It has had the opportunity to inform itself as to the way judicial
business is conducted and how it may be improved. Even prior to the 1973
Constitution, it is the recollection of the writer of this opinion that either the then
Chairman or members of the Committee on Justice of the then Senate of the
Philippines 101 consulted members of the Court in drafting proposed legislation
affecting the judiciary. It is not inappropriate to cite this excerpt from an article in
the 1975 Supreme Court Review: "In the twentieth century the Chief Justice of the
United States has played a leading part in judicial reform. A variety of conditions
have been responsible for the development of this role, and foremost among them
has been the creation of explicit institutional structures designed to facilitate
reform." 102 Also: "Thus the Chief Justice cannot avoid exposure to and direct
involvement in judicial reform at the federal level and, to the extent issues of
judicial federalism arise, at the state level as well." 103

12.
It is a cardinal article of faith of our constitutional regime that it is the people
who are endowed with rights, to secure which a government is instituted. Acting as
it does through public officials, it has to grant them either expressly or impliedly
certain powers. Those they exercise not for their own benefit but for the body
politic. The Constitution does not speak in the language of ambiguity: "A public
office is a public trust." 104 That is more than a moral adjuration It is a legal
imperative. The law may vest in a public official certain rights. It does so to enable
them to perform his functions and fulfill his responsibilities more efficiently. It is from
that standpoint that the security of tenure provision to assure judicial independence
is to be viewed. It is an added guarantee that justices and judges can administer
justice undeterred by any fear of reprisal or untoward consequence. Their
judgments then are even more likely to be inspired solely by their knowledge of the
law and the dictates of their conscience, free from the corrupting influence of base
or unworthy motives. The independence of which they are assured is impressed
with a significance transcending that of a purely personal right. As thus viewed, it is
not solely for their welfare. The challenged legislation Thus subject d to the most
rigorous scrutiny by this Tribunal, lest by lack of due care and circumspection, it
allow the erosion of that Ideal so firmly embedded in the national consciousness
There is this farther thought to consider. independence in thought and action
necessarily is rooted in one's mind and heart. As emphasized by former Chief Justice
Paras in Ocampo v. Secretary of Justice, 105 there is no surer guarantee of judicial
independence than the God-given character and fitness of those appointed to the
Bench. The judges may be guaranteed a fixed tenure of office during good behavior,
but if they are of such stuff as allows them to be subservient to one administration
after another, or to cater to the wishes of one litigant after another, the
independence of the judiciary will be nothing more than a myth or an empty Ideal.
Our judges, we are confident, can be of the type of Lord Coke, regardless or in spite
of the power of Congress we do not say unlimited but as herein exercised to
reorganize inferior courts." 106 That is to recall one of the greatest Common Law
jurists, who at the cost of his office made clear that he would not just blindly obey
the King's order but "will do what becomes [him] as a judge." So it was pointed out
in the first leading case stressing the independence of the judiciary, Borromeo v.
Mariano, 107 The ponencia of Justice Malcolm Identified good judges with "men who
have a mastery of the principles of law, who discharge their duties in accordance
with law, who are permitted to perform the duties of the office undeterred by
outside influence, and who are independent and self-respecting human units in a
judicial system equal and coordinate to the other two departments of government."
108 There is no reason to assume that the failure of this suit to annul Batas
Pambansa Blg. 129 would be attended with deleterious consequences to the
administration of justice. It does not follow that the abolition in good faith of the
existing inferior courts except the Sandiganbayan and the Court of Tax Appeals and
the creation of new ones will result in a judiciary unable or unwilling to discharge

with independence its solemn duty or one recreant to the trust reposed in it. Nor
should there be any fear that less than good faith will attend the exercise be of the
appointing power vested in the Executive. It cannot be denied that an independent
and efficient judiciary is something to the credit of any administration. Well and
truly has it been said that the fundamental principle of separation of powers
assumes, and justifiably so, that the three departments are as one in their
determination to pursue the Ideals and aspirations and to fulfilling the hopes of the
sovereign people as expressed in the Constitution. There is wisdom as well as
validity to this pronouncement of Justice Malcolm in Manila Electric Co. v. Pasay
Transportation Company, 109 a decision promulgated almost half a century ago:
"Just as the Supreme Court, as the guardian of constitutional rights, should not
sanction usurpations by any other department or the government, so should it as
strictly confine its own sphere of influence to the powers expressly or by implication
conferred on it by the Organic Act." 110 To that basic postulate underlying our
constitutional system, this Court remains committed.

WHEREFORE, the unconstitutionality of Batas Pambansa Blg. 129 not having been
shown, this petition is dismissed. No costs.

Makasiar and Escolin, JJ., concur.

Concepcion, Jr., concur in the result.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. 74457

March 20, 1987

RESTITUTO YNOT, petitioner,

vs.
INTERMEDIATE APPELLATE COURT, THE STATION COMMANDER, INTEGRATED
NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU
OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, respondents.

Ramon A. Gonzales for petitioner.

CRUZ, J.:

The essence of due process is distilled in the immortal cry of Themistocles to

Alcibiades "Strike but hear me first!" It is this cry that the petitioner in effect
repeats here as he challenges the constitutionality of Executive Order No. 626-A.

The said executive order reads in full as follows:

WHEREAS, the President has given orders prohibiting the interprovincial movement
of carabaos and the slaughtering of carabaos not complying with the requirements
of Executive Order No. 626 particularly with respect to age;

WHEREAS, it has been observed that despite such orders the violators still manage
to circumvent the prohibition against inter-provincial movement of carabaos by
transporting carabeef instead; and

WHEREAS, in order to achieve the purposes and objectives of Executive Order No.
626 and the prohibition against interprovincial movement of carabaos, it is
necessary to strengthen the said Executive Order and provide for the disposition of
the carabaos and carabeef subject of the violation;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue

of the powers vested in me by the Constitution, do hereby promulgate the following:

SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no
carabao regardless of age, sex, physical condition or purpose and no carabeef shall
be transported from one province to another. The carabao or carabeef transported
in violation of this Executive Order as amended shall be subject to confiscation and
forfeiture by the government, to be distributed to charitable institutions and other
similar institutions as the Chairman of the National Meat Inspection Commission
may ay see fit, in the case of carabeef, and to deserving farmers through dispersal
as the Director of Animal Industry may see fit, in the case of carabaos.

SECTION 2. This Executive Order shall take effect immediately.

Done in the City of Manila, this 25th day of October, in the year of Our Lord,
nineteen hundred and eighty.

(SGD.) FERDINAND E. MARCOS

President

Republic of the Philippines

The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo
on January 13, 1984, when they were confiscated by the police station commander
of Barotac Nuevo, Iloilo, for violation of the above measure. 1 The petitioner sued

for recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon
his filing of a supersedeas bond of P12,000.00. After considering the merits of the
case, the court sustained the confiscation of the carabaos and, since they could no
longer be produced, ordered the confiscation of the bond. The court also declined to
rule on the constitutionality of the executive order, as raise by the petitioner, for
lack of authority and also for its presumed validity. 2

The petitioner appealed the decision to the Intermediate Appellate Court,* 3 which
upheld the trial court, ** and he has now come before us in this petition for review
on certiorari.

The thrust of his petition is that the executive order is unconstitutional insofar as it
authorizes outright confiscation of the carabao or carabeef being transported across
provincial boundaries. His claim is that the penalty is invalid because it is imposed
without according the owner a right to be heard before a competent and impartial
court as guaranteed by due process. He complains that the measure should not
have been presumed, and so sustained, as constitutional. There is also a challenge
to the improper exercise of the legislative power by the former President under
Amendment No. 6 of the 1973 Constitution. 4

While also involving the same executive order, the case of Pesigan v. Angeles 5 is
not applicable here. The question raised there was the necessity of the previous
publication of the measure in the Official Gazette before it could be considered
enforceable. We imposed the requirement then on the basis of due process of law.
In doing so, however, this Court did not, as contended by the Solicitor General,
impliedly affirm the constitutionality of Executive Order No. 626-A. That is an
entirely different matter.

This Court has declared that while lower courts should observe a becoming modesty
in examining constitutional questions, they are nonetheless not prevented from
resolving the same whenever warranted, subject only to review by the highest
tribunal. 6 We have jurisdiction under the Constitution to "review, revise, reverse,
modify or affirm on appeal or certiorari, as the law or rules of court may provide,"
final judgments and orders of lower courts in, among others, all cases involving the
constitutionality of certain measures. 7 This simply means that the resolution of
such cases may be made in the first instance by these lower courts.

And while it is true that laws are presumed to be constitutional, that presumption is
not by any means conclusive and in fact may be rebutted. Indeed, if there be a clear
showing of their invalidity, and of the need to declare them so, then "will be the
time to make the hammer fall, and heavily," 8 to recall Justice Laurel's trenchant
warning. Stated otherwise, courts should not follow the path of least resistance by
simply presuming the constitutionality of a law when it is questioned. On the
contrary, they should probe the issue more deeply, to relieve the abscess,
paraphrasing another distinguished jurist, 9 and so heal the wound or excise the
affliction.

Judicial power authorizes this; and when the exercise is demanded, there should be
no shirking of the task for fear of retaliation, or loss of favor, or popular censure, or
any other similar inhibition unworthy of the bench, especially this Court.

The challenged measure is denominated an executive order but it is really

presidential decree, promulgating a new rule instead of merely implementing an

existing law. It was issued by President Marcos not for the purpose of taking care
that the laws were faithfully executed but in the exercise of his legislative authority
under Amendment No. 6. It was provided thereunder that whenever in his judgment
there existed a grave emergency or a threat or imminence thereof or whenever the
legislature failed or was unable to act adequately on any matter that in his
judgment required immediate action, he could, in order to meet the exigency, issue
decrees, orders or letters of instruction that were to have the force and effect of law.
As there is no showing of any exigency to justify the exercise of that extraordinary
power then, the petitioner has reason, indeed, to question the validity of the
executive order. Nevertheless, since the determination of the grounds was supposed
to have been made by the President "in his judgment, " a phrase that will lead to
protracted discussion not really necessary at this time, we reserve resolution of this
matter until a more appropriate occasion. For the nonce, we confine ourselves to
the more fundamental question of due process.

It is part of the art of constitution-making that the provisions of the charter be cast
in precise and unmistakable language to avoid controversies that might arise on
their correct interpretation. That is the Ideal. In the case of the due process clause,
however, this rule was deliberately not followed and the wording was purposely
kept ambiguous. In fact, a proposal to delineate it more clearly was submitted in the
Constitutional Convention of 1934, but it was rejected by Delegate Jose P. Laurel,
Chairman of the Committee on the Bill of Rights, who forcefully argued against it.
He was sustained by the body. 10

The due process clause was kept intentionally vague so it would remain also
conveniently resilient. This was felt necessary because due process is not, like some
provisions of the fundamental law, an "iron rule" laying down an implacable and
immutable command for all seasons and all persons. Flexibility must be the best
virtue of the guaranty. The very elasticity of the due process clause was meant to
make it adapt easily to every situation, enlarging or constricting its protection as the
changing times and circumstances may require.

Aware of this, the courts have also hesitated to adopt their own specific description
of due process lest they confine themselves in a legal straitjacket that will deprive
them of the elbow room they may need to vary the meaning of the clause whenever
indicated. Instead, they have preferred to leave the import of the protection openended, as it were, to be "gradually ascertained by the process of inclusion and
exclusion in the course of the decision of cases as they arise." 11 Thus, Justice Felix
Frankfurter of the U.S. Supreme Court, for example, would go no farther than to
define due process and in so doing sums it all up as nothing more and nothing
less than "the embodiment of the sporting Idea of fair play." 12

When the barons of England extracted from their sovereign liege the reluctant
promise that that Crown would thenceforth not proceed against the life liberty or
property of any of its subjects except by the lawful judgment of his peers or the law
of the land, they thereby won for themselves and their progeny that splendid
guaranty of fairness that is now the hallmark of the free society. The solemn vow
that King John made at Runnymede in 1215 has since then resounded through the
ages, as a ringing reminder to all rulers, benevolent or base, that every person,
when confronted by the stern visage of the law, is entitled to have his say in a fair
and open hearing of his cause.

The closed mind has no place in the open society. It is part of the sporting Idea of
fair play to hear "the other side" before an opinion is formed or a decision is made
by those who sit in judgment. Obviously, one side is only one-half of the question;

the other half must also be considered if an impartial verdict is to be reached based
on an informed appreciation of the issues in contention. It is indispensable that the
two sides complement each other, as unto the bow the arrow, in leading to the
correct ruling after examination of the problem not from one or the other
perspective only but in its totality. A judgment based on less that this full appraisal,
on the pretext that a hearing is unnecessary or useless, is tainted with the vice of
bias or intolerance or ignorance, or worst of all, in repressive regimes, the insolence
of power.

The minimum requirements of due process are notice and hearing 13 which,
generally speaking, may not be dispensed with because they are intended as a
safeguard against official arbitrariness. It is a gratifying commentary on our judicial
system that the jurisprudence of this country is rich with applications of this
guaranty as proof of our fealty to the rule of law and the ancient rudiments of fair
play. We have consistently declared that every person, faced by the awesome
power of the State, is entitled to "the law of the land," which Daniel Webster
described almost two hundred years ago in the famous Dartmouth College Case, 14
as "the law which hears before it condemns, which proceeds upon inquiry and
renders judgment only after trial." It has to be so if the rights of every person are to
be secured beyond the reach of officials who, out of mistaken zeal or plain
arrogance, would degrade the due process clause into a worn and empty catchword.

This is not to say that notice and hearing are imperative in every case for, to be
sure, there are a number of admitted exceptions. The conclusive presumption, for
example, bars the admission of contrary evidence as long as such presumption is
based on human experience or there is a rational connection between the fact
proved and the fact ultimately presumed therefrom. 15 There are instances when
the need for expeditions action will justify omission of these requisites, as in the
summary abatement of a nuisance per se, like a mad dog on the loose, which may
be killed on sight because of the immediate danger it poses to the safety and lives
of the people. Pornographic materials, contaminated meat and narcotic drugs are
inherently pernicious and may be summarily destroyed. The passport of a person
sought for a criminal offense may be cancelled without hearing, to compel his return
to the country he has fled. 16 Filthy restaurants may be summarily padlocked in the
interest of the public health and bawdy houses to protect the public morals. 17 In
such instances, previous judicial hearing may be omitted without violation of due
process in view of the nature of the property involved or the urgency of the need to
protect the general welfare from a clear and present danger.

The protection of the general welfare is the particular function of the police power
which both restraints and is restrained by due process. The police power is simply
defined as the power inherent in the State to regulate liberty and property for the
promotion of the general welfare. 18 By reason of its function, it extends to all the
great public needs and is described as the most pervasive, the least limitable and
the most demanding of the three inherent powers of the State, far outpacing
taxation and eminent domain. The individual, as a member of society, is hemmed in
by the police power, which affects him even before he is born and follows him still
after he is dead from the womb to beyond the tomb in practically everything
he does or owns. Its reach is virtually limitless. It is a ubiquitous and often
unwelcome intrusion. Even so, as long as the activity or the property has some
relevance to the public welfare, its regulation under the police power is not only
proper but necessary. And the justification is found in the venerable Latin maxims,
Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which call for
the subordination of individual interests to the benefit of the greater number.

It is this power that is now invoked by the government to justify Executive Order No.
626-A, amending the basic rule in Executive Order No. 626, prohibiting the
slaughter of carabaos except under certain conditions. The original measure was
issued for the reason, as expressed in one of its Whereases, that "present conditions
demand that the carabaos and the buffaloes be conserved for the benefit of the
small farmers who rely on them for energy needs." We affirm at the outset the need
for such a measure. In the face of the worsening energy crisis and the increased
dependence of our farms on these traditional beasts of burden, the government
would have been remiss, indeed, if it had not taken steps to protect and preserve
them.

A similar prohibition was challenged in United States v. Toribio, 19 where a law

regulating the registration, branding and slaughter of large cattle was claimed to be
a deprivation of property without due process of law. The defendant had been
convicted thereunder for having slaughtered his own carabao without the required
permit, and he appealed to the Supreme Court. The conviction was affirmed. The
law was sustained as a valid police measure to prevent the indiscriminate killing of
carabaos, which were then badly needed by farmers. An epidemic had stricken
many of these animals and the reduction of their number had resulted in an acute
decline in agricultural output, which in turn had caused an incipient famine.
Furthermore, because of the scarcity of the animals and the consequent increase in
their price, cattle-rustling had spread alarmingly, necessitating more effective
measures for the registration and branding of these animals. The Court held that
the questioned statute was a valid exercise of the police power and declared in part
as follows:

To justify the State in thus interposing its authority in behalf of the public, it must
appear, first, that the interests of the public generally, as distinguished from those
of a particular class, require such interference; and second, that the means are
reasonably necessary for the accomplishment of the purpose, and not unduly
oppressive upon individuals. ...

From what has been said, we think it is clear that the enactment of the provisions of
the statute under consideration was required by "the interests of the public
generally, as distinguished from those of a particular class" and that the prohibition
of the slaughter of carabaos for human consumption, so long as these animals are
fit for agricultural work or draft purposes was a "reasonably necessary" limitation on
private ownership, to protect the community from the loss of the services of such
animals by their slaughter by improvident owners, tempted either by greed of
momentary gain, or by a desire to enjoy the luxury of animal food, even when by so
doing the productive power of the community may be measurably and dangerously
affected.

In the light of the tests mentioned above, we hold with the Toribio Case that the
carabao, as the poor man's tractor, so to speak, has a direct relevance to the public
welfare and so is a lawful subject of Executive Order No. 626. The method chosen in
the basic measure is also reasonably necessary for the purpose sought to be
achieved and not unduly oppressive upon individuals, again following the abovecited doctrine. There is no doubt that by banning the slaughter of these animals
except where they are at least seven years old if male and eleven years old if
female upon issuance of the necessary permit, the executive order will be
conserving those still fit for farm work or breeding and preventing their improvident
depletion.

But while conceding that the amendatory measure has the same lawful subject as
the original executive order, we cannot say with equal certainty that it complies
with the second requirement, viz., that there be a lawful method. We note that to
strengthen the original measure, Executive Order No. 626-A imposes an absolute
ban not on the slaughter of the carabaos but on their movement, providing that "no
carabao regardless of age, sex, physical condition or purpose (sic) and no carabeef
shall be transported from one province to another." The object of the prohibition
escapes us. The reasonable connection between the means employed and the
purpose sought to be achieved by the questioned measure is missing

We do not see how the prohibition of the inter-provincial transport of carabaos can
prevent their indiscriminate slaughter, considering that they can be killed anywhere,
with no less difficulty in one province than in another. Obviously, retaining the
carabaos in one province will not prevent their slaughter there, any more than
moving them to another province will make it easier to kill them there. As for the
carabeef, the prohibition is made to apply to it as otherwise, so says executive
order, it could be easily circumvented by simply killing the animal. Perhaps so.
However, if the movement of the live animals for the purpose of preventing their
slaughter cannot be prohibited, it should follow that there is no reason either to
prohibit their transfer as, not to be flippant dead meat.

Even if a reasonable relation between the means and the end were to be assumed,
we would still have to reckon with the sanction that the measure applies for
violation of the prohibition. The penalty is outright confiscation of the carabao or
carabeef being transported, to be meted out by the executive authorities, usually
the police only. In the Toribio Case, the statute was sustained because the penalty
prescribed was fine and imprisonment, to be imposed by the court after trial and
conviction of the accused. Under the challenged measure, significantly, no such trial
is prescribed, and the property being transported is immediately impounded by the
police and declared, by the measure itself, as forfeited to the government.

In the instant case, the carabaos were arbitrarily confiscated by the police station
commander, were returned to the petitioner only after he had filed a complaint for
recovery and given a supersedeas bond of P12,000.00, which was ordered
confiscated upon his failure to produce the carabaos when ordered by the trial
court. The executive order defined the prohibition, convicted the petitioner and
immediately imposed punishment, which was carried out forthright. The measure
struck at once and pounced upon the petitioner without giving him a chance to be
heard, thus denying him the centuries-old guaranty of elementary fair play.

It has already been remarked that there are occasions when notice and hearing may
be validly dispensed with notwithstanding the usual requirement for these minimum
guarantees of due process. It is also conceded that summary action may be validly
taken in administrative proceedings as procedural due process is not necessarily
judicial only. 20 In the exceptional cases accepted, however. there is a justification
for the omission of the right to a previous hearing, to wit, the immediacy of the
problem sought to be corrected and the urgency of the need to correct it.

In the case before us, there was no such pressure of time or action calling for the
petitioner's peremptory treatment. The properties involved were not even inimical
per se as to require their instant destruction. There certainly was no reason why the
offense prohibited by the executive order should not have been proved first in a
court of justice, with the accused being accorded all the rights safeguarded to him
under the Constitution. Considering that, as we held in Pesigan v. Angeles, 21
Executive Order No. 626-A is penal in nature, the violation thereof should have been

pronounced not by the police only but by a court of justice, which alone would have
had the authority to impose the prescribed penalty, and only after trial and
conviction of the accused.

We also mark, on top of all this, the questionable manner of the disposition of the
confiscated property as prescribed in the questioned executive order. It is there
authorized that the seized property shall "be distributed to charitable institutions
and other similar institutions as the Chairman of the National Meat Inspection
Commission may see fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industry may see fit, in the case of carabaos."
(Emphasis supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous opportunities for
partiality and abuse, and even corruption. One searches in vain for the usual
standard and the reasonable guidelines, or better still, the limitations that the said
officers must observe when they make their distribution. There is none. Their
options are apparently boundless. Who shall be the fortunate beneficiaries of their
generosity and by what criteria shall they be chosen? Only the officers named can
supply the answer, they and they alone may choose the grantee as they see fit, and
in their own exclusive discretion. Definitely, there is here a "roving commission," a
wide and sweeping authority that is not "canalized within banks that keep it from
overflowing," in short, a clearly profligate and therefore invalid delegation of
legislative powers.

To sum up then, we find that the challenged measure is an invalid exercise of the
police power because the method employed to conserve the carabaos is not
reasonably necessary to the purpose of the law and, worse, is unduly oppressive.
Due process is violated because the owner of the property confiscated is denied the
right to be heard in his defense and is immediately condemned and punished. The
conferment on the administrative authorities of the power to adjudge the guilt of
the supposed offender is a clear encroachment on judicial functions and militates
against the doctrine of separation of powers. There is, finally, also an invalid
delegation of legislative powers to the officers mentioned therein who are granted
unlimited discretion in the distribution of the properties arbitrarily taken. For these
reasons, we hereby declare Executive Order No. 626-A unconstitutional.

We agree with the respondent court, however, that the police station commander
who confiscated the petitioner's carabaos is not liable in damages for enforcing the
executive order in accordance with its mandate. The law was at that time
presumptively valid, and it was his obligation, as a member of the police, to enforce
it. It would have been impertinent of him, being a mere subordinate of the
President, to declare the executive order unconstitutional and, on his own
responsibility alone, refuse to execute it. Even the trial court, in fact, and the Court
of Appeals itself did not feel they had the competence, for all their superior
authority, to question the order we now annul.

The Court notes that if the petitioner had not seen fit to assert and protect his rights
as he saw them, this case would never have reached us and the taking of his
property under the challenged measure would have become a fait accompli despite
its invalidity. We commend him for his spirit. Without the present challenge, the
matter would have ended in that pump boat in Masbate and another violation of the
Constitution, for all its obviousness, would have been perpetrated, allowed without
protest, and soon forgotten in the limbo of relinquished rights.

The strength of democracy lies not in the rights it guarantees but in the courage of
the people to invoke them whenever they are ignored or violated. Rights are but

weapons on the wall if, like expensive tapestry, all they do is embellish and impress.
Rights, as weapons, must be a promise of protection. They become truly
meaningful, and fulfill the role assigned to them in the free society, if they are kept
bright and sharp with use by those who are not afraid to assert them.

WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except

as affirmed above, the decision of the Court of Appeals is reversed. The
supersedeas bond is cancelled and the amount thereof is ordered restored to the
petitioner. No costs.

SO ORDERED
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-10202

March 29, 1916

THE GOVERNMENT OF THE PHILIPPINE ISLANDS Ex Rel. THE MUNICIPALITY OF

CARDONA, plaintiff,
vs.
THE MUNICIPALITY OF BINANGONAN, ET AL., defendants.

Modesto Reyes and Eliseo Ymzon for plaintiff.

Office of the Solicitor-General Corpus and Roberto Moreno for defendants.

MORELAND, J.:

This is an action by the municipality of Cardona to prohibit perpetually the

municipality of Binangonan from exercising municipal authority over the barrios of
Tatala, Balatik, Nambug, Tutulo, Mahabang Parang, Nagsulo, and Bonot.

The complaint alleges that the municipality of Binangonan is now exercising

governmental authority over the barrios named, to the exclusion of the municipality
of Cardona; that such authority is exercised by the municipality of Binangonan by
reason of Executive Order No. 66, series of 1914, issued by the Governor-General of
the Philippine Islands on the 1st day of July, 1914, which reads as follows:

Pursuant to the provisions of section one of Act Numbered seventeen hundred and
forty-eight, the boundary line between the municipalities of Binangonan and
Cardona, in the Province of Rizal, is hereby defined and fixed as follows, viz:

On the mainland, beginning on the north at the intersection of the Morong River and
the existing Binangonan boundary, thence in a southerly and westerly direction to
Mapulanglupa (otherwise called Santol), where a partially destroyed monument now
exists; thence in a direct southeasterly line to the summit of Mountain Tutulo; and
thence to the Laguna de Bay; thus embracing within the limits of the municipality of
Binangonan the barrios or sitios of Tatala, Balatik, Nambug, Tutulo, Mahabang
Parang, Nagsulo, Sampad, and Bonot.

On the Island of Talim, that portion of the island embraced within points known as
Kaymaralina and Virgen-Bato, on the eastern coast and extending to the summits of
the range of hills geographically dividing the land, is hereby confirmed as being
embraced within the jurisdiction of the municipality of Cardona; and the remainder
of the island, including the small off-lying islands of Bunga, Olahipan, and Malake,
as being embrace within the jurisdiction of the municipality of Binangonan.

Action will at once be taken to survey the boundary line herein fixed and to
establish monuments demarcating same.

The plaintiff further alleges that the executive order referred to and above quoted
and the Act under which it was issued are "unconstitutional" in that said Act confers
on the Governor-General legislative authority; and that the Governor-General in
promulgating said order usurped legislative functions. Plaintiff also claims that the
order is void because it does not contain a statement that the change in the division
line between the said municipalities was required by the public good; and that it
does not appear in said order itself that there was a present urgency requiring the
promulgation of such an order.

The defendant municipality demurrer to the complaint on the ground that it did not
state facts sufficient to constitute a cause of action. The question before us is that
presented by the demurrer.

We do not think that plaintiff's objections are well founded. No reason has been
given why the Act is unconstitutional and no argument or citation of authorities has
been presented on that subject. Every Act of the legislature is presumed to be
constituted until the contrary is clearly shown; and no showing of unconstitutionality
having been made in this case, the objection to the order of the Governor-General
based on that ground must be overruled. The other two objections are frivolous.
Although it be admitted, for the sake of argument, that the Governor-General ought
not to make such an order unless the public good requires it, that fact need not be
stated in the order. The same may be said with regard to its urgency. The GovernorGeneral having full authority to promulgate such an order this court will assume, if it
should act on the matter at all, that there was public necessity therefor and that the
matter was of such urgency as properly to evoke action by the Chief Executive.

The demurrer to the complaint is sustained and unless an amendment thereof is

made within five days from the service of a copy of this order eliminating the
objections stated in this decision, the action will be dismissed on the merits. So
ordered.

Torres, Trent and Araullo, JJ., concur.

Johnson, J., concurs in the result.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
G.R. No. 181704

December 6, 2011

BUREAU OF CUSTOMS EMPLOYEES ASSOCIATION (BOCEA), represented by its

National President (BOCEA National Executive Council) Mr. Romulo A. Pagulayan,
Petitioner,
vs.
HON. MARGARITO B. TEVES, in his capacity as Secretary of the Department of
Finance, HON. NAPOLEON L. MORALES, in his capacity as Commissioner of the
Bureau of Customs, HON. LILIAN B. HEFTI, in her capacity as Commissioner of the
Bureau of Internal Revenue, Respondents.

DECISION

VILLARAMA, JR., J.:

Before this Court is a petition1 for certiorari and prohibition with prayer for
injunctive relief/s under Rule 65 of the 1997 Rules of Civil Procedure, as amended,
to declare Republic Act (R.A.) No. 9335,2 otherwise known as the Attrition Act of
2005, and its Implementing Rules and Regulations3 (IRR) unconstitutional, and the
implementation thereof be enjoined permanently.

The Facts

On January 25, 2005, former President Gloria Macapagal-Arroyo signed into law R.A.
No. 9335 which took effect on February 11, 2005.

In Abakada Guro Party List v. Purisima4 (Abakada), we said of R.A. No. 9335:

RA [No.] 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). It covers all officials and employees of the BIR and the
BOC with at least six months of service, regardless of employment status.

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.

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.

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.

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 [No.] 9335, to
be approved by a Joint Congressional Oversight Committee created for such
purpose.5

The Joint Congressional Oversight Committee approved the assailed IRR on May 22,
2006. Subsequently, the IRR was published on May 30, 2006 in two newspapers of
general circulation, the Philippine Star and the Manila Standard, and became
effective fifteen (15) days later.6

Contending that the enactment and implementation of R.A. No. 9335 are tainted
with constitutional infirmities in violation of the fundamental rights of its members,
petitioner Bureau of Customs Employees Association (BOCEA), an association of
rank-and-file employees of the Bureau of Customs (BOC), duly registered with the
Department of Labor and Employment (DOLE) and the Civil Service Commission

(CSC), and represented by its National President, Mr. Romulo A. Pagulayan

(Pagulayan), directly filed the present petition before this Court against respondents
Margarito B. Teves, in his capacity as Secretary of the Department of Finance (DOF),
Commissioner Napoleon L. Morales (Commissioner Morales), in his capacity as BOC
Commissioner, and Lilian B. Hefti, in her capacity as Commissioner of the Bureau of
Internal Revenue (BIR). In its petition, BOCEA made the following averments:

Sometime in 2008, high-ranking officials of the BOC pursuant to the mandate of R.A.
No. 9335 and its IRR, and in order to comply with the stringent deadlines thereof,
started to disseminate Collection District Performance Contracts7 (Performance
Contracts) for the lower ranking officials and rank-and-file employees to sign. The
Performance Contract pertinently provided:

xxxx

WHEREAS, pursuant to the provisions of Sec. 25 (b) of the Implementing Rules and
Regulations (IRR) of the Attrition Act of 2005, that provides for the setting of criteria
and procedures for removing from the service Officials and Employees whose
revenue collection fall short of the target in accordance with Section 7 of Republic
Act 9335.

xxxx

NOW, THEREFORE, for and in consideration of the foregoing premises, parties unto
this Agreement hereby agree and so agreed to perform the following:

xxxx

2. The "Section 2, PA/PE" hereby accepts the allocated Revenue Collection Target
and further accepts/commits to meet the said target under the following conditions:

a.) That he/she will meet the allocated Revenue Collection Target and thereby
undertakes and binds himself/herself that in the event the revenue collection falls
short of the target with due consideration of all relevant factors affecting the level
of collection as provided in the rules and regulations promulgated under the Act and
its IRR, he/she will voluntarily submit to the provisions of Sec. 25 (b) of the IRR and
Sec. 7 of the Act; and

b.) That he/she will cascade and/or allocate to respective Appraisers/Examiners or

Employees under his/her section the said Revenue Collection Target and require
them to execute a Performance Contract, and direct them to accept their individual
target. The Performance Contract executed by the respective
Examiners/Appraisers/Employees shall be submitted to the Office of the
Commissioner through the LAIC on or before March 31, 2008.

x x x x8

BOCEA opined that the revenue target was impossible to meet due to the
Governments own policies on reduced tariff rates and tax breaks to big businesses,
the occurrence of natural calamities and because of other economic factors. BOCEA
claimed that some BOC employees were coerced and forced to sign the
Performance Contract. The majority of them, however, did not sign. In particular,
officers of BOCEA were summoned and required to sign the Performance Contracts
but they also refused. To ease the brewing tension, BOCEA claimed that its officers
sent letters, and sought several dialogues with BOC officials but the latter refused to
heed them.

In addition, BOCEA alleged that Commissioner Morales exerted heavy pressure on

the District Collectors, Chiefs of Formal Entry Divisions, Principal Customs
Appraisers and Principal Customs Examiners of the BOC during command
conferences to make them sign their Performance Contracts. Likewise, BOC Deputy
Commissioner Reynaldo Umali (Deputy Commissioner Umali) individually spoke to
said personnel to convince them to sign said contracts. Said personnel were
threatened that if they do not sign their respective Performance Contracts, they
would face possible reassignment, reshuffling, or worse, be placed on floating
status. Thus, all the District Collectors, except a certain Atty. Carlos So of the
Collection District III of the Ninoy Aquino International Airport (NAIA), signed the
Performance Contracts.

BOCEA further claimed that Pagulayan was constantly harassed and threatened with
lawsuits. Pagulayan approached Deputy Commissioner Umali to ask the BOC
officials to stop all forms of harassment, but the latter merely said that he would
look into the matter. On February 5, 2008, BOCEA through counsel wrote the
Revenue Performance Evaluation Board (Board) to desist from implementing R.A.
No. 9335 and its IRR and from requiring rank-and-file employees of the BOC and BIR
to sign Performance Contracts.9 In his letter-reply10 dated February 12, 2008,
Deputy Commissioner Umali denied having coerced any BOC employee to sign a
Performance Contract. He also defended the BOC, invoking its mandate of merely
implementing the law. Finally, Pagulayan and BOCEAs counsel, on separate
occasions, requested for a certified true copy of the Performance Contract from
Deputy Commissioner Umali but the latter failed to furnish them a copy.11

This petition was filed directly with this Court on March 3, 2008. BOCEA asserted
that in view of the unconstitutionality of R.A. No. 9335 and its IRR, and their adverse
effects on the constitutional rights of BOC officials and employees, direct resort to
this Court is justified. BOCEA argued, among others, that its members and other
BOC employees are in great danger of losing their jobs should they fail to meet the
required quota provided under the law, in clear violation of their constitutional right
to security of tenure, and at their and their respective families prejudice.

In their Comment,12 respondents, through the Office of the Solicitor General (OSG),
countered that R.A. No. 9335 and its IRR do not violate the right to due process and
right to security of tenure of BIR and BOC employees. The OSG stressed that the
guarantee of security of tenure under the 1987 Constitution is not a guarantee of
perpetual employment. R.A. No. 9335 and its IRR provided a reasonable and valid
ground for the dismissal of an employee which is germane to the purpose of the law.
Likewise, R.A. No. 9335 and its IRR provided that an employee may only be
separated from the service upon compliance with substantive and procedural due
process. The OSG added that R.A. No. 9335 and its IRR must enjoy the presumption
of constitutionality.

In its Reply,13 BOCEA claimed that R.A. No. 9335 employs means that are
unreasonable to achieve its stated objectives; that the law is unduly oppressive of
BIR and BOC employees as it shifts the extreme burden upon their shoulders when
the Government itself has adopted measures that make collection difficult such as
reduced tariff rates to almost zero percent and tax exemption of big businesses; and
that the law is discriminatory of BIR and BOC employees. BOCEA manifested that
only the high-ranking officials of the BOC benefited largely from the reward system
under R.A. No. 9335 despite the fact that they were not the ones directly toiling to
collect revenue. Moreover, despite the BOCEAs numerous requests,14 BOC
continually refused to provide BOCEA the Expenditure Plan on how such reward was
distributed.

Since BOCEA was seeking similar reliefs as that of the petitioners in Abakada Guro
Party List v. Purisima, BOCEA filed a Motion to Consolidate15 the present case with
Abakada on April 16, 2008. However, pending action on said motion, the Court
rendered its decision in Abakada on August 14, 2008. Thus, the consolidation of this
case with Abakada was rendered no longer possible.16

In Abakada, this Court, through then Associate Justice, now Chief Justice Renato C.
Corona, declared Section 1217 of R.A. No. 9335 creating a Joint Congressional
Oversight Committee to approve the IRR as unconstitutional and violative of the
principle of separation of powers. However, the constitutionality of the remaining
provisions of R.A. No. 9335 was upheld pursuant to Section 1318 of R.A. No. 9335.
The Court also held that until the contrary is shown, the IRR of R.A. No. 9335 is
presumed valid and effective even without the approval of the Joint Congressional
Oversight Committee.19

Notwithstanding our ruling in Abakada, both parties complied with our Resolution20
dated February 10, 2009, requiring them to submit their respective Memoranda.

The Issues

BOCEA raises the following issues:

I.

WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.] 9335, AND ITS
IMPLEMENTING RULES AND REGULATIONS ARE UNCONSTITUTIONAL AS THESE
VIOLATE THE RIGHT TO DUE PROCESS OF THE COVERED BIR AND BOC OFFICIALS
AND EMPLOYEES[;]

II.

WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.] 9335, AND ITS
IMPLEMENTING RULES AND REGULATIONS ARE UNCONSTITUTIONAL AS THESE
VIOLATE THE RIGHT OF BIR AND BOC OFFICIALS AND EMPLOYEES TO THE EQUAL
PROTECTION OF THE LAWS[;]

III.

WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS IMPLEMENTING RULES AND
REGULATIONS VIOLATE THE RIGHT TO SECURITY OF TENURE OF BIR AND BOC
OFFICIALS AND EMPLOYEES AS ENSHRINED UNDER SECTION 2 (3), ARTICLE IX (B) OF
THE CONSTITUTION[;]

IV.

WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS IMPLEMENTING RULES AND
REGULATIONS ARE UNCONSTITUTIONAL AS THEY CONSTITUTE UNDUE DELEGATION
OF LEGISLATIVE POWERS TO THE REVENUE PERFORMANCE EVALUATION BOARD IN
VIOLATION OF THE PRINCIPLE OF SEPARATION OF POWERS ENSHRINED IN THE
CONSTITUTION[; AND]

V.

WHETHER OR NOT REPUBLIC ACT [NO.] 9335 IS A BILL OF ATTAINDER AND HENCE[,]
UNCONSTITUTIONAL BECAUSE IT INFLICTS PUNISHMENT THROUGH LEGISLATIVE
FIAT UPON A PARTICULAR GROUP OR CLASS OF OFFICIALS AND EMPLOYEES
WITHOUT TRIAL.21

BOCEA manifested that while waiting for the Court to give due course to its petition,
events unfolded showing the patent unconstitutionality of R.A. No. 9335. It narrated
that during the first year of the implementation of R.A. No. 9335, BOC employees
exerted commendable efforts to attain their revenue target of P196 billion which
they surpassed by as much as P2 billion for that year alone. However, this was
attained only because oil companies made advance tax payments to BOC.
Moreover, BOC employees were given their "reward" for surpassing said target only
in 2008, the distribution of which they described as unjust, unfair, dubious and
fraudulent because only top officials of BOC got the huge sum of reward while the
employees, who did the hard task of collecting, received a mere pittance of around
P8,500.00. In the same manner, the Bonds Division of BOC-NAIA collected 400+% of
its designated target but the higher management gave out to the employees a
measly sum of P8,500.00 while the top level officials partook of millions of the
excess collections. BOCEA relies on a piece of information revealed by a newspaper
showing the list of BOC officials who apparently earned huge amounts of money by
way of reward.22 It claims that the recipients thereof included lawyers, support
personnel and other employees, including a dentist, who performed no collection
functions at all. These alleged anomalous selection, distribution and allocation of
rewards was due to the failure of R.A. No. 9335 to set out clear guidelines.23

In addition, BOCEA avers that the Board initiated the first few cases of attrition for
the Fiscal Year 2007 by subjecting five BOC officials from the Port of Manila to
attrition despite the fact that the Port of Manila substantially complied with the
provisions of R.A. No. 9335. It is thus submitted that the selection of these officials
for attrition without proper investigation was nothing less than arbitrary. Further, the
legislative and executive departments promulgation of issuances and the
Governments accession to regional trade agreements have caused a significant
diminution of the tariff rates, thus, decreasing over-all collection. These unrealistic
settings of revenue targets seriously affect BIR and BOC employees tasked with the
burden of collection, and worse, subjected them to attrition.24

BOCEA assails the constitutionality of R.A. No. 9335 and its IRR on the following
grounds:

1. R.A. No. 9335 and its IRR violate the BIR and BOC employees right to due
process because the termination of employees who had not attained their revenue
targets for the year is peremptory and done without any form of hearing to allow
said employees to ventilate their side. Moreover, R.A. No. 9335 and its IRR do not
comply with the requirements under CSC rules and regulations as the dismissal in
this case is immediately executory. Such immediately executory nature of the
Boards decision negates the remedies available to an employee as provided under
the CSC rules.

2. R.A. No. 9335 and its IRR violate the BIR and BOC employees right to equal
protection of the law because R.A. No. 9335 and its IRR unduly discriminates against
BIR and BOC employees as compared to employees of other revenue generating
government agencies like the Philippine Amusement and Gaming Corporation,
Department of Transportation and Communication, the Air Transportation Office, the
Land Transportation Office, and the Philippine Charity Sweepstakes Office, among
others, which are not subject to attrition.

3. R.A. No. 9335 and its IRR violate the BIR and BOC employees right to security of
tenure because R.A. No. 9335 and its IRR effectively removed remedies provided in
the ordinary course of administrative procedure afforded to government employees.
The law likewise created another ground for dismissal, i.e., non-attainment of
revenue collection target, which is not provided under CSC rules and which is, by its
nature, unpredictable and therefore arbitrary and unreasonable.

4. R.A. No. 9335 and its IRR violate the 1987 Constitution because Congress granted
to the Revenue Performance Evaluation Board (Board) the unbridled discretion of
formulating the criteria for termination, the manner of allocating targets, the
distribution of rewards and the determination of relevant factors affecting the
targets of collection, which is tantamount to undue delegation of legislative power.

5. R.A. No. 9335 is a bill of attainder because it inflicts punishment upon a particular
group or class of officials and employees without trial. This is evident from the fact
that the law confers upon the Board the power to impose the penalty of removal
upon employees who do not meet their revenue targets; that the same is without
the benefit of hearing; and that the removal from service is immediately executory.
Lastly, it disregards the presumption of regularity in the performance of the official
functions of a public officer.25

On the other hand, respondents through the OSG stress that except for Section 12
of R.A. No. 9335, R.A. No. 9335 and its IRR are constitutional, as per our ruling in
Abakada. Nevertheless, the OSG argues that the classification of BIR and BOC
employees as public officers under R.A. No. 9335 is based on a valid and substantial
distinction since the revenue generated by the BIR and BOC is essentially in the
form of taxes, which is the lifeblood of the State, while the revenue produced by
other agencies is merely incidental or secondary to their governmental functions;
that in view of their mandate, and for purposes of tax collection, the BIR and BOC
are sui generis; that R.A. No. 9335 complies with the "completeness" and "sufficient
standard" tests for the permissive delegation of legislative power to the Board; that
the Board exercises its delegated power consistent with the policy laid down in the
law, that is, to optimize the revenue generation capability and collection of the BIR
and the BOC; that parameters were set in order that the Board may identify the

officials and employees subject to attrition, and the proper procedure for their
removal in case they fail to meet the targets set in the Performance Contract were
provided; and that the rights of BIR and BOC employees to due process of law and
security of tenure are duly accorded by R.A. No. 9335. The OSG likewise maintains
that there was no encroachment of judicial power in the enactment of R.A. No. 9335
amounting to a bill of attainder since R.A. No. 9335 and its IRR merely defined the
offense and provided for the penalty that may be imposed. Finally, the OSG
reiterates that the separation from the service of any BIR or BOC employee under
R.A. No. 9335 and its IRR shall be done only upon due consideration of all relevant
factors affecting the level of collection, subject to Civil Service laws, rules and
regulations, and in compliance with substantive and procedural due process. The
OSG opines that the Performance Contract, far from violating the BIR and BOC
employees right to due process, actually serves as a notice of the revenue target
they have to meet and the possible consequences of failing to meet the same.
More, there is nothing in the law which prevents the aggrieved party from appealing
the unfavorable decision of dismissal.26

In essence, the issues for our resolution are:

1. Whether there is undue delegation of legislative power to the Board;

2. Whether R.A. No. 9335 and its IRR violate the rights of BOCEAs members to: (a)
equal protection of laws, (b) security of tenure and (c) due process; and

3. Whether R.A. No. 9335 is a bill of attainder.

Our Ruling

Prefatorily, we note that it is clear, and in fact uncontroverted, that BOCEA has locus
standi. BOCEA impugns the constitutionality of R.A. No. 9335 and its IRR because its
members, who are rank-and-file employees of the BOC, are actually covered by the
law and its IRR. BOCEAs members have a personal and substantial interest in the
case, such that they have sustained or will sustain, direct injury as a result of the
enforcement of R.A. No. 9335 and its IRR.27

However, we find no merit in the petition and perforce dismiss the same.

It must be noted that this is not the first time the constitutionality of R.A. No. 9335
and its IRR are being challenged. The Court already settled the majority of the same
issues raised by BOCEA in our decision in Abakada, which attained finality on
September 17, 2008. As such, our ruling therein is worthy of reiteration in this case.

We resolve the first issue in the negative.

The principle of separation of powers ordains that each of the three great branches
of government has exclusive cognizance of and is supreme in matters falling within
its own constitutionally allocated sphere.28 Necessarily imbedded in this doctrine is
the principle of non-delegation of powers, as expressed in the Latin maxim potestas
delegata non delegari potest, which means "what has been delegated, cannot be

delegated." This doctrine is based on the ethical principle that such delegated
power constitutes not only a right but a duty to be performed by the delegate
through the instrumentality of his own judgment and not through the intervening
mind of another.29 However, this principle of non-delegation of powers admits of
numerous exceptions,30 one of which is the delegation of legislative power to
various specialized administrative agencies like the Board in this case.

The rationale for the aforementioned exception was clearly explained in our ruling in
Gerochi v. Department of Energy,31 to wit:

In the face of the increasing complexity of modern life, delegation of legislative

power to various specialized administrative agencies is allowed as an exception to
this principle. Given the volume and variety of interactions in todays society, it is
doubtful if the legislature can promulgate laws that will deal adequately with and
respond promptly to the minutiae of everyday life. Hence, the need to delegate to
administrative bodies the principal agencies tasked to execute laws in their
specialized fields the authority to promulgate rules and regulations to implement
a given statute and effectuate its policies. All that is required for the valid exercise
of this power of subordinate legislation is that the regulation be germane to the
objects and purposes of the law and that the regulation be not in contradiction to,
but in conformity with, the standards prescribed by the law. These requirements are
denominated as the completeness test and the sufficient standard test.32

Thus, in Abakada, we 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.

RA [No.] 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 revenuegeneration 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" 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 [Over] the Revenue Targets

Collection to Accrue to the Fund

Percent (%) of the Excess

30% or below

15%

More than 30%

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

x x x"

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. 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, and 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

x x x"

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". In this case, the declared policy of optimization of the
revenue-generation capability and collection of the BIR and the BOC is infused with
public interest.33

We could not but deduce that the completeness test and the sufficient standard test
were fully satisfied by R.A. No. 9335, as evident from the aforementioned Sections
2, 4 and 7 thereof. Moreover, Section 534 of R.A. No. 9335 also provides for the
incentives due to District Collection Offices. While it is apparent that the last
paragraph of Section 5 provides that "[t]he allocation, distribution and release of the
district reward shall likewise be prescribed by the rules and regulations of the
Revenue Performance and Evaluation Board," Section 7 (a)35 of R.A. No. 9335
clearly mandates and sets the parameters for the Board by providing that such
rules and guidelines for the allocation, distribution and release of the fund shall be
in accordance with Sections 4 and 5 of R.A. No. 9335. In sum, the Court finds that
R.A. No. 9335, read and appreciated in its entirety, is complete in all its essential
terms and conditions, and that it contains sufficient standards as to negate BOCEAs
supposition of undue delegation of legislative power to the Board.

Similarly, we resolve the second issue in the negative.

Equal protection simply provides that all persons or things similarly situated should
be treated in a similar manner, both as to rights conferred and responsibilities
imposed. 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 statute or by its improper execution through
the states duly constituted authorities. In other words, the concept of equal justice
under the law requires the state to govern impartially, and it may not draw
distinctions between individuals solely on differences that are irrelevant to a
legitimate governmental objective.361awphil

Thus, on the issue on equal protection of the laws, we held in Abakada:

The equal protection clause recognizes a valid classification, that is, a classification
that has a reasonable foundation or rational basis and not arbitrary. With respect to
RA [No.] 9335, its expressed public policy is the optimization of the revenuegeneration capability and collection of the BIR and the BOC. Since the subject of the
law is the revenue-generation 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.

xxx

xxx

x x x"

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.

xxx

xxx

x x x"

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 [No.] 9335
fully satisfy the demands of equal protection.37

As it was imperatively correlated to the issue on equal protection, the issues on the
security of tenure of affected BIR and BOC officials and employees and their
entitlement to due process were also settled in Abakada:

Clearly, RA [No.] 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. In the case of
RA [No.] 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. The action for removal is also subject to
civil service laws, rules and regulations and compliance with substantive and
procedural due process.38

In addition, the essence of due process is simply an opportunity to be heard, or as

applied to administrative proceedings, a fair and reasonable opportunity to explain
ones side.39 BOCEAs apprehension of deprivation of due process finds its answer
in Section 7 (b) and (c) of R.A. No. 9335.40 The concerned BIR or BOC official or
employee is not simply given a target revenue collection and capriciously left
without any quarter. R.A. No. 9335 and its IRR clearly give due consideration to all
relevant factors41 that may affect the level of collection. In the same manner,

exemptions42 were set, contravening BOCEAs claim that its members may be
removed for unattained target collection even due to causes which are beyond their
control. Moreover, an employees right to be heard is not at all prevented and his
right to appeal is not deprived of him.43 In fine, a BIR or BOC official or employee in
this case cannot be arbitrarily removed from the service without according him his
constitutional right to due process. No less than R.A. No. 9335 in accordance with
the 1987 Constitution guarantees this.

We have spoken, and these issues were finally laid to rest. Now, the Court proceeds
to resolve the last, but new issue raised by BOCEA, that is, whether R.A. No. 9335 is
a bill of attainder proscribed under Section 22,44 Article III of the 1987 Constitution.

On this score, we hold that R.A. No. 9335 is not a bill of attainder. A bill of attainder
is a legislative act which inflicts punishment on individuals or members of a
particular group without a judicial trial. Essential to a bill of attainder are a
specification of certain individuals or a group of individuals, the imposition of a
punishment, penal or otherwise, and the lack of judicial trial.451avvphi1

In his Concurring Opinion in Tuason v. Register of Deeds, Caloocan City,46 Justice

Florentino P. Feliciano traces the roots of a Bill of Attainder, to wit:

Bills of attainder are an ancient instrument of tyranny. In England a few centuries

back, Parliament would at times enact bills or statutes which declared certain
persons attainted and their blood corrupted so that it lost all heritable quality (Ex
Parte Garland, 4 Wall. 333, 18 L.Ed. 366 [1867]). In more modern terms, a bill of
attainder is essentially a usurpation of judicial power by a legislative body. It
envisages and effects the imposition of a penalty the deprivation of life or liberty
or property not by the ordinary processes of judicial trial, but by legislative fiat.
While cast in the form of special legislation, a bill of attainder (or bill of pains and
penalties, if it prescribed a penalty other than death) is in intent and effect a penal
judgment visited upon an identified person or group of persons (and not upon the
general community) without a prior charge or demand, without notice and hearing,
without an opportunity to defend, without any of the civilized forms and safeguards
of the judicial process as we know it (People v. Ferrer, 48 SCRA 382 [1972];
Cummings and Missouri, 4 Wall. 277, 18 L. Ed. 356 [1867]; U.S. v. Lovett, 328, U.S.
303, 90 L.Ed. 1252 [1945]; U.S. v. Brown, 381 U.S. 437, 14 L.Ed. 2d. 484 [1965].
Such is the archetypal bill of attainder wielded as a means of legislative oppression.
x x x47

R.A. No. 9335 does not possess the elements of a bill of attainder. It does not seek
to inflict punishment without a judicial trial. R.A. No. 9335 merely lays down the
grounds for the termination of a BIR or BOC official or employee and provides for the
consequences thereof. The democratic processes are still followed and the
constitutional rights of the concerned employee are amply protected.

A final note.

We find that BOCEAs petition is replete with allegations of defects and anomalies in
allocation, distribution and receipt of rewards. While BOCEA intimates that it intends
to curb graft and corruption in the BOC in particular and in the government in
general which is nothing but noble, these intentions do not actually pertain to the
constitutionality of R.A. No. 9335 and its IRR, but rather in the faithful
implementation thereof. R.A. No. 9335 itself does not tolerate these pernicious acts

of graft and corruption.48 As the Court is not a trier of facts, the investigation on the
veracity of, and the proper action on these anomalies are in the hands of the
Executive branch. Correlatively, the wisdom for the enactment of this law remains
within the domain of the Legislative branch. We merely interpret the law as it is. The
Court has no discretion to give statutes a meaning detached from the manifest
intendment and language thereof.49 Just like any other law, R.A. No. 9335 has in its
favor the presumption of constitutionality, and to justify its nullification, there must
be a clear and unequivocal breach of the Constitution and not one that is doubtful,
speculative, or argumentative.50 We have so declared in Abakada, and we now
reiterate that R.A. No. 9335 and its IRR are constitutional.

WHEREFORE, the present petition for certiorari and prohibition with prayer for
injunctive relief/s is DISMISSED.

No costs.

SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice
EN BANC

ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST

CONSUMERS NETWORK, INC. (ECN),
Petitioners,

-versus-

DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC),

NATIONAL POWER CORPORATION (NPC), POWER SECTOR ASSETS AND LIABILITIES
MANAGEMENT GROUP (PSALM Corp.), STRATEGIC POWER UTILITIES GROUP (SPUG),
and PANAY ELECTRIC COMPANY INC. (PECO),
Respondents.

G.R. No. 159796

Present:

PUNO, C.J.,
QUISUMBING,
YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,

AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
AZCUNA,
TINGA,
CHICO-NAZARIO,
GARCIA,
VELASCO, JR. and
NACHURA, JJ.

Promulgated:

July 17, 2007

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

DECISION

NACHURA, J.:

Petitioners Romeo P. Gerochi, Katulong Ng Bayan (KB), and Environmentalist

Consumers Network, Inc. (ECN) (petitioners), come before this Court in this original
action praying that Section 34 of Republic Act (RA) 9136, otherwise known as the
Electric Power Industry Reform Act of 2001 (EPIRA), imposing the Universal Charge,
[1] and Rule 18 of the Rules and Regulations (IRR)[2] which seeks to implement the
said imposition, be declared unconstitutional. Petitioners also pray that the
Universal Charge imposed upon the consumers be refunded and that a preliminary
injunction and/or temporary restraining order (TRO) be issued directing the
respondents to refrain from implementing, charging, and collecting the said charge.
[3] The assailed provision of law reads:

SECTION 34. Universal Charge. Within one (1) year from the effectivity of this Act, a
universal charge to be determined, fixed and approved by the ERC, shall be
imposed on all electricity end-users for the following purposes:

(a) Payment for the stranded debts[4] in excess of the amount assumed by the
National Government and stranded contract costs of NPC[5] and as well as qualified
stranded contract costs of distribution utilities resulting from the restructuring of the
industry;

(b) Missionary electrification;[6]

(c) The equalization of the taxes and royalties applied to indigenous or renewable
sources of energy vis--vis imported energy fuels;

(d) An environmental charge equivalent to one-fourth of one centavo per kilowatthour (P0.0025/kWh), which shall accrue to an environmental fund to be used solely
for watershed rehabilitation and management. Said fund shall be managed by NPC
under existing arrangements; and

(e) A charge to account for all forms of cross-subsidies for a period not exceeding
three (3) years.

The universal charge shall be a non-bypassable charge which shall be passed on

and collected from all end-users on a monthly basis by the distribution utilities.
Collections by the distribution utilities and the TRANSCO in any given month shall be
remitted to the PSALM Corp. on or before the fifteenth (15th) of the succeeding
month, net of any amount due to the distribution utility. Any end-user or selfgenerating entity not connected to a distribution utility shall remit its corresponding
universal charge directly to the TRANSCO. The PSALM Corp., as administrator of the
fund, shall create a Special Trust Fund which shall be disbursed only for the
purposes specified herein in an open and transparent manner. All amount collected
for the universal charge shall be distributed to the respective beneficiaries within a
reasonable period to be provided by the ERC.

The Facts

Congress enacted the EPIRA on June 8, 2001; on June 26, 2001, it took effect.[7]

On April 5, 2002, respondent National Power Corporation-Strategic Power Utilities

Group[8] (NPC-SPUG) filed with respondent Energy Regulatory Commission (ERC) a
petition for the availment from the Universal Charge of its share for Missionary
Electrification, docketed as ERC Case No. 2002-165.[9]

On May 7, 2002, NPC filed another petition with ERC, docketed as ERC Case No.
2002-194, praying that the proposed share from the Universal Charge for the
Environmental charge of P0.0025 per kilowatt-hour (/kWh), or a total of
P119,488,847.59, be approved for withdrawal from the Special Trust Fund (STF)
managed by respondent Power Sector Assets and

Liabilities Management Group (PSALM)[10] for the rehabilitation and management

of watershed areas.[11]

On December 20, 2002, the ERC issued an Order[12] in ERC Case No. 2002-165
provisionally approving the computed amount of P0.0168/kWh as the share of the
NPC-SPUG from the Universal Charge for Missionary Electrification and authorizing
the National Transmission Corporation (TRANSCO) and Distribution Utilities to collect
the same from its end-users on a monthly basis.

On June 26, 2003, the ERC rendered its Decision[13] (for ERC Case No. 2002-165)
modifying its Order of December 20, 2002, thus:

WHEREFORE, the foregoing premises considered, the provisional authority granted

to petitioner National Power Corporation-Strategic Power Utilities Group (NPC-SPUG)
in the Order dated December 20, 2002 is hereby modified to the effect that an
additional amount of P0.0205 per kilowatt-hour should be added to the P0.0168 per
kilowatt-hour provisionally authorized by the Commission in the said Order.
Accordingly, a total amount of P0.0373 per kilowatt-hour is hereby APPROVED for
withdrawal from the Special Trust Fund managed by PSALM as its share from the
Universal Charge for Missionary Electrification (UC-ME) effective on the following
billing cycles:

(a) June 26-July 25, 2003 for National Transmission Corporation (TRANSCO); and
(b) July 2003 for Distribution Utilities (Dus).

Relative thereto, TRANSCO and Dus are directed to collect the UC-ME in the amount
of P0.0373 per kilowatt-hour and remit the same to PSALM on or before the 15th
day of the succeeding month.

In the meantime, NPC-SPUG is directed to submit, not later than April 30, 2004, a
detailed report to include Audited Financial Statements and physical status
(percentage of completion) of the projects using the prescribed format.

Let copies of this Order be furnished petitioner NPC-SPUG and all distribution
utilities (Dus).

SO ORDERED.

On August 13, 2003, NPC-SPUG filed a Motion for Reconsideration asking the ERC,
among others,[14] to set aside the above-mentioned Decision, which the ERC
granted in its Order dated October 7, 2003, disposing:

WHEREFORE, the foregoing premises considered, the Motion for Reconsideration

filed by petitioner National Power Corporation-Small Power Utilities Group (NPCSPUG) is hereby GRANTED. Accordingly, the Decision dated June 26, 2003 is hereby
modified accordingly.

Relative thereto, NPC-SPUG is directed to submit a quarterly report on the following:

1.

Projects for CY 2002 undertaken;

2.

Location

3.

Actual amount utilized to complete the project;

4.

Period of completion;

5.

Start of Operation; and

6.

Explanation of the reallocation of UC-ME funds, if any.

SO ORDERED.[15]

Meanwhile, on April 2, 2003, ERC decided ERC Case No. 2002-194, authorizing the
NPC to draw up to P70,000,000.00 from PSALM for its 2003 Watershed
Rehabilitation Budget subject to the availability of funds for the Environmental Fund
component of the Universal Charge.[16]

On the basis of the said ERC decisions, respondent Panay Electric Company, Inc.
(PECO) charged petitioner Romeo P. Gerochi and all other

end-users with the Universal Charge as reflected in their respective electric bills
starting from the month of July 2003.[17]
Hence, this original action.

Petitioners submit that the assailed provision of law and its IRR which sought to
implement the same are unconstitutional on the following grounds:

1)
The universal charge provided for under Sec. 34 of the EPIRA and sought to be
implemented under Sec. 2, Rule 18 of the IRR of the said law is a tax which is to be
collected from all electric end-users and self-generating entities. The power to tax is
strictly a legislative function and as such, the delegation of said power to any
executive or administrative agency like the ERC is unconstitutional, giving the same
unlimited authority. The assailed provision clearly provides that the Universal
Charge is to be determined, fixed and approved by the ERC, hence leaving to the
latter complete discretionary legislative authority.

2)
The ERC is also empowered to approve and determine where the funds
collected should be used.

3)
The imposition of the Universal Charge on all end-users is oppressive and
confiscatory and amounts to taxation without representation as the consumers were
not given a chance to be heard and represented.[18]

Petitioners contend that the Universal Charge has the characteristics of a tax and is
collected to fund the operations of the NPC. They argue that the cases[19] invoked
by the respondents clearly show the regulatory purpose of the charges imposed
therein, which is not so in the case at bench. In said cases, the respective funds[20]
were created in order to balance and stabilize the prices of oil and sugar, and to act
as buffer to counteract the changes and adjustments in prices, peso devaluation,
and other variables which cannot be adequately and timely monitored by the
legislature. Thus, there was a need to delegate powers to administrative bodies.[21]
Petitioners posit that the Universal Charge is imposed not for a similar purpose.
On the other hand, respondent PSALM through the Office of the Government
Corporate Counsel (OGCC) contends that unlike a tax which is imposed to provide

income for public purposes, such as support of the government, administration of

the law, or payment of public expenses, the assailed Universal Charge is levied for a
specific regulatory purpose, which is to ensure the viability of the country's electric
power industry. Thus, it is exacted by the State in the exercise of its inherent police
power. On this premise, PSALM submits that there is no undue delegation of
legislative power to the ERC since the latter merely exercises a limited authority or
discretion as to the execution and implementation of the provisions of the EPIRA.
[22]

Respondents Department of Energy (DOE), ERC, and NPC, through the Office of the
Solicitor General (OSG), share the same view that the Universal Charge is not a tax
because it is levied for a specific regulatory purpose, which is to ensure the viability
of the country's electric power industry, and is, therefore, an exaction in the
exercise of the State's police power. Respondents further contend that said
Universal Charge does not possess the essential characteristics of a tax, that its
imposition would redound to the benefit of the electric power industry and not to
the public, and that its rate is uniformly levied on electricity end-users, unlike a tax
which is imposed based on the individual taxpayer's ability to pay. Moreover,
respondents deny that there is undue delegation of legislative power to the ERC
since the EPIRA sets forth sufficient determinable standards which would guide the
ERC in the exercise of the powers granted to it. Lastly, respondents argue that the
imposition of the Universal Charge is not oppressive and confiscatory since it is an
exercise of the police power of the State and it complies with the requirements of
due process.[23]

On its part, respondent PECO argues that it is duty-bound to collect and remit the
amount pertaining to the Missionary Electrification and Environmental Fund
components of the Universal Charge, pursuant to Sec. 34 of the EPIRA and the
Decisions in ERC Case Nos. 2002-194 and 2002-165. Otherwise, PECO could be held
liable under Sec. 46[24] of the EPIRA, which imposes fines and penalties for any
violation of its provisions or its IRR.[25]

The Issues

The ultimate issues in the case at bar are:

1)
Whether or not, the Universal Charge imposed under Sec. 34 of the EPIRA is a
tax; and

2)
Whether or not there is undue delegation of legislative power to tax on the
part of the ERC.[26]

Before we discuss the issues, the Court shall first deal with an obvious procedural
lapse.

Petitioners filed before us an original action particularly denominated as a

Complaint assailing the constitutionality of Sec. 34 of the EPIRA imposing the
Universal Charge and Rule 18 of the EPIRA's IRR. No doubt, petitioners have locus

standi. They impugn the constitutionality of Sec. 34 of the EPIRA because they
sustained a direct injury as a result of the imposition of the Universal Charge as
reflected in their electric bills.

However, petitioners violated the doctrine of hierarchy of courts when they filed this
Complaint directly with us. Furthermore, the Complaint is bereft of any allegation of
grave abuse of discretion on the part of the ERC or any of the public respondents, in
order for the Court to consider it as a petition for certiorari or prohibition.

Article VIII, Section 5(1) and (2) of the 1987 Constitution[27] categorically provides
that:

SECTION 5. The Supreme Court shall have the following powers:

1.
Exercise original jurisdiction over cases affecting ambassadors, other public
ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus.
2.
Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or
the rules of court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation, order, instruction,
ordinance, or regulation is in question.

But this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo
warranto, and habeas corpus, while concurrent with that of the regional trial courts
and the Court of Appeals, does not give litigants unrestrained freedom of choice of
forum from which to seek such relief.[28] It has long been established that this
Court will not entertain direct resort to it unless the redress desired cannot be
obtained in the appropriate courts, or where exceptional and compelling
circumstances justify availment of a remedy within and call for the exercise of our
primary jurisdiction.[29] This circumstance alone warrants the outright dismissal of
the present action.

This procedural infirmity notwithstanding, we opt to resolve the constitutional issue

raised herein. We are aware that if the constitutionality of Sec. 34 of the EPIRA is not
resolved now, the issue will certainly resurface in the near future, resulting in a
repeat of this litigation, and probably involving the same parties. In the public
interest and to avoid unnecessary delay, this Court renders its ruling now.

The instant complaint is bereft of merit.

The First Issue

To resolve the first issue, it is necessary to distinguish the States power of taxation
from the police power.

The power to tax is an incident of sovereignty and is unlimited in its range,

acknowledging in its very nature no limits, so that security against its abuse is to be
found only in the responsibility of the legislature which imposes the tax on the
constituency that is to pay it.[30] It is based on the principle that taxes are the
lifeblood of the government, and their prompt and certain availability is an
imperious need.[31] Thus, the theory behind the exercise of the power to tax
emanates from necessity; without taxes, government cannot fulfill its mandate of
promoting the general welfare and well-being of the people.[32]

On the other hand, police power is the power of the state to promote public welfare
by restraining and regulating the use of liberty and property.[33] It is the most
pervasive, the least limitable, and the most demanding of the three fundamental
powers of the State. The justification is found in the Latin maxims salus populi est
suprema lex (the welfare of the people is the supreme law) and sic utere tuo ut
alienum non laedas (so use your property as not to injure the property of others). As
an inherent attribute of sovereignty which virtually extends to all public needs,
police power grants a wide panoply of instruments through which the State, as
parens patriae, gives effect to a host of its regulatory powers.[34] We have held that
the power to "regulate" means the power to protect, foster, promote, preserve, and
control, with due regard for the interests, first and foremost, of the public, then of
the utility and of its patrons.[35]

The conservative and pivotal distinction between these two powers rests in the
purpose for which the charge is made. If generation of revenue is the primary
purpose and regulation is merely incidental, the imposition is a tax; but if regulation
is the primary purpose, the fact that revenue is incidentally raised does not make
the imposition a tax.[36]
In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's
police power, particularly its regulatory dimension, is invoked. Such can be deduced
from Sec. 34 which enumerates the purposes for which the Universal Charge is
imposed[37] and which can be amply discerned as regulatory in character. The
EPIRA resonates such regulatory purposes, thus:

SECTION 2. Declaration of Policy. It is hereby declared the policy of the State:

(a) To ensure and accelerate the total electrification of the country;

(b) To ensure the quality, reliability, security and affordability of the supply of
electric power;
(c) To ensure transparent and reasonable prices of electricity in a regime of free and
fair competition and full public accountability to achieve greater operational and
economic efficiency and enhance the competitiveness of Philippine products in the
global market;
(d) To enhance the inflow of private capital and broaden the ownership base of the
power generation, transmission and distribution sectors;
(e) To ensure fair and non-discriminatory treatment of public and private sector
entities in the process of restructuring the electric power industry;
(f) To protect the public interest as it is affected by the rates and services of electric
utilities and other providers of electric power;
(g) To assure socially and environmentally compatible energy sources and
infrastructure;

(h) To promote the utilization of indigenous and new and renewable energy
resources in power generation in order to reduce dependence on imported energy;
(i) To provide for an orderly and transparent privatization of the assets and liabilities
of the National Power Corporation (NPC);
(j) To establish a strong and purely independent regulatory body and system to
ensure consumer protection and enhance the competitive operation of the
electricity market; and
(k) To encourage the efficient use of energy and other modalities of demand side
management.

From the aforementioned purposes, it can be gleaned that the assailed Universal
Charge is not a tax, but an exaction in the exercise of the State's police power.
Public welfare is surely promoted.

Moreover, it is a well-established doctrine that the taxing power may be used as an

implement of police power.[38] In Valmonte v. Energy Regulatory Board, et al.[39]
and in Gaston v. Republic Planters Bank,[40] this Court held that the Oil Price
Stabilization Fund (OPSF) and the Sugar Stabilization Fund (SSF) were exactions
made in the exercise of the police power. The doctrine was reiterated in Osmea v.
Orbos[41] with respect to the OPSF. Thus, we disagree with petitioners that the
instant case is different from the aforementioned cases. With the Universal Charge,
a Special Trust Fund (STF) is also created under the administration of PSALM.[42]
The STF has some notable characteristics similar to the OPSF and the SSF, viz.:

1)
In the implementation of stranded cost recovery, the ERC shall conduct a
review to determine whether there is under-recovery or over recovery and adjust
(true-up) the level of the stranded cost recovery charge. In case of an overrecovery, the ERC shall ensure that any excess amount shall be remitted to the STF.
A separate account shall be created for these amounts which shall be held in trust
for any future claims of distribution utilities for stranded cost recovery. At the end of
the stranded cost recovery period, any remaining amount in this account shall be
used to reduce the electricity rates to the end-users.[43]

2)
With respect to the assailed Universal Charge, if the total amount collected for
the same is greater than the actual availments against it, the PSALM shall retain the
balance within the STF to pay for periods where a shortfall occurs.[44]

3)
Upon expiration of the term of PSALM, the administration of the STF shall be
transferred to the DOF or any of the DOF attached agencies as designated by the
DOF Secretary.[45]

The OSG is in point when it asseverates:

Evidently, the establishment and maintenance of the Special Trust Fund, under the
last paragraph of Section 34, R.A. No. 9136, is well within the pervasive and nonwaivable power and responsibility of the government to secure the physical and

economic survival and well-being of the community, that comprehensive sovereign

authority we designate as the police power of the State.[46]

This feature of the Universal Charge further boosts the position that the same is an
exaction imposed primarily in pursuit of the State's police objectives. The STF
reasonably serves and assures the attainment and perpetuity of the purposes for
which the Universal Charge is imposed, i.e., to ensure the viability of the country's
electric power industry.

The Second Issue

The principle of separation of powers ordains that each of the three branches of
government has exclusive cognizance of and is supreme in matters falling within its
own constitutionally allocated sphere. A logical corollary to the doctrine of
separation of powers is the principle of non-delegation of powers, as expressed in
the Latin maxim potestas delegata non delegari potest (what has been delegated
cannot be delegated). This is based on the ethical principle that such delegated
power constitutes not only a right but a duty to be performed by the delegate
through the instrumentality of his own judgment and not through the intervening
mind of another. [47]

In the face of the increasing complexity of modern life, delegation of legislative

power to various specialized administrative agencies is allowed as an exception to
this principle.[48] Given the volume and variety of interactions in today's society, it
is doubtful if the legislature can promulgate laws that will deal adequately with and
respond promptly to the minutiae of everyday life. Hence, the need to delegate to
administrative bodies - the principal agencies tasked to execute laws in their
specialized fields - the authority to promulgate rules and regulations to implement a
given statute and effectuate its policies. All that is required for the valid exercise of
this power of subordinate legislation is that the regulation be germane to the
objects and purposes of the law and that the regulation be not in contradiction to,
but in conformity with, the standards prescribed by the law. These requirements are
denominated as the completeness test and the sufficient standard test.

Under the first test, the law must be complete in all its terms and conditions when it
leaves the legislature such that when it reaches the delegate, the only thing he will
have to do is to enforce it. The second test mandates adequate guidelines or
limitations in the law to determine the boundaries of the delegate's authority and
prevent the delegation from running riot.[49]

The Court finds that the EPIRA, read and appreciated in its entirety, in relation to
Sec. 34 thereof, is complete in all its essential terms and conditions, and that it
contains sufficient standards.

Although Sec. 34 of the EPIRA merely provides that within one (1) year from the
effectivity thereof, a Universal Charge to be determined, fixed and approved by the
ERC, shall be imposed on all electricity end-users, and therefore, does not state the
specific amount to be paid as Universal Charge, the amount nevertheless is made
certain by the legislative parameters provided in the law itself. For one, Sec. 43(b)
(ii) of the EPIRA provides:

SECTION 43. Functions of the ERC. The ERC shall promote competition, encourage
market development, ensure customer choice and penalize abuse of market power
in the restructured electricity industry. In appropriate cases, the ERC is authorized to
issue cease and desist order after due notice and hearing. Towards this end, it shall
be responsible for the following key functions in the restructured industry:

xxxx

(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in
accordance with law, a National Grid Code and a Distribution Code which shall
include, but not limited to the following:

xxxx

(ii) Financial capability standards for the generating companies, the TRANSCO,
distribution utilities and suppliers: Provided, That in the formulation of the financial
capability standards, the nature and function of the entity shall be considered:
Provided, further, That such standards are set to ensure that the electric power
industry participants meet the minimum financial standards to protect the public
interest. Determine, fix, and approve, after due notice and public hearings the
universal charge, to be imposed on all electricity end-users pursuant to Section 34
hereof;

Moreover, contrary to the petitioners contention, the ERC does not enjoy a wide
latitude of discretion in the determination of the Universal Charge. Sec. 51(d) and
(e) of the EPIRA[50] clearly provides:

SECTION 51. Powers. The PSALM Corp. shall, in the performance of its functions and
for the attainment of its objective, have the following powers:

xxxx

(d) To calculate the amount of the stranded debts and stranded contract costs of
NPC which shall form the basis for ERC in the determination of the universal charge;

(e) To liquidate the NPC stranded contract costs, utilizing the proceeds from sales
and other property contributed to it, including the proceeds from the universal
charge.

Thus, the law is complete and passes the first test for valid delegation of legislative
power.

As to the second test, this Court had, in the past, accepted as sufficient standards
the following: "interest of law and order;"[51] "adequate and efficient
instruction;"[52] "public interest;"[53] "justice and equity;"[54] "public convenience
and welfare;"[55] "simplicity, economy and efficiency;"[56] "standardization and
regulation of medical education;"[57] and "fair and equitable employment
practices."[58] Provisions of the EPIRA such as, among others, to ensure the total
electrification of the country and the quality, reliability, security and affordability of
the supply of electric power[59] and watershed rehabilitation and management[60]
meet the requirements for valid delegation, as they provide the limitations on the
ERCs power to formulate the IRR. These are sufficient standards.

It may be noted that this is not the first time that the ERC's conferred powers were
challenged. In Freedom from Debt Coalition v. Energy Regulatory Commission,[61]
the Court had occasion to say:

In determining the extent of powers possessed by the ERC, the provisions of the
EPIRA must not be read in separate parts. Rather, the law must be read in its
entirety, because a statute is passed as a whole, and is animated by one general
purpose and intent. Its meaning cannot to be extracted from any single part thereof
but from a general consideration of the statute as a whole. Considering the intent of
Congress in enacting the EPIRA and reading the statute in its entirety, it is plain to
see that the law has expanded the jurisdiction of the regulatory body, the ERC in
this case, to enable the latter to implement the reforms sought to be accomplished
by the EPIRA. When the legislators decided to broaden the jurisdiction of the ERC,
they did not intend to abolish or reduce the powers already conferred upon ERC's
predecessors. To sustain the view that the ERC possesses only the powers and
functions listed under Section 43 of the EPIRA is to frustrate the objectives of the
law.

In his Concurring and Dissenting Opinion[62] in the same case, then Associate
Justice, now Chief Justice, Reynato S. Puno described the immensity of police power
in relation to the delegation of powers to the ERC and its regulatory functions over
electric power as a vital public utility, to wit:

Over the years, however, the range of police power was no longer limited to the
preservation of public health, safety and morals, which used to be the primary
social interests in earlier times. Police power now requires the State to "assume an
affirmative duty to eliminate the excesses and injustices that are the concomitants
of an unrestrained industrial economy." Police power is now exerted "to further the
public welfare a concept as vast as the good of society itself." Hence, "police power
is but another name for the governmental authority to further the welfare of society
that is the basic end of all government." When police power is delegated to
administrative bodies with regulatory functions, its exercise should be given a wide
latitude. Police power takes on an even broader dimension in developing countries
such as ours, where the State must take a more active role in balancing the many
conflicting interests in society. The Questioned Order was issued by the ERC, acting
as an agent of the State in the exercise of police power. We should have

exceptionally good grounds to curtail its exercise. This approach is more compelling
in the field of rate-regulation of electric power rates. Electric power generation and
distribution is a traditional instrument of economic growth that affects not only a
few but the entire nation. It is an important factor in encouraging investment and
promoting business. The engines of progress may come to a screeching halt if the
delivery of electric power is impaired. Billions of pesos would be lost as a result of
power outages or unreliable electric power services. The State thru the ERC should
be able to exercise its police power with great flexibility, when the need arises.

This was reiterated in National Association of Electricity Consumers for Reforms v.

Energy Regulatory Commission[63] where the Court held that the ERC, as regulator,
should have sufficient power to respond in real time to changes wrought by
multifarious factors affecting public utilities.

From the foregoing disquisitions, we therefore hold that there is no undue

delegation of legislative power to the ERC.

Petitioners failed to pursue in their Memorandum the contention in the Complaint

that the imposition of the Universal Charge on all end-users is oppressive and
confiscatory, and amounts to taxation without representation. Hence, such
contention is deemed waived or abandoned per Resolution[64] of August 3, 2004.
[65] Moreover, the determination of whether or not a tax is excessive, oppressive or
confiscatory is an issue which essentially involves questions of fact, and thus, this
Court is precluded from reviewing the same.[66]

As a penultimate statement, it may be well to recall what this Court said of EPIRA:

One of the landmark pieces of legislation enacted by Congress in recent years is the
EPIRA. It established a new policy, legal structure and regulatory framework for the
electric power industry. The new thrust is to tap private capital for the expansion
and improvement of the industry as the large government debt and the highly
capital-intensive character of the industry itself have long been acknowledged as
the critical constraints to the program. To attract private investment, largely foreign,
the jaded structure of the industry had to be addressed. While the generation and
transmission sectors were centralized and monopolistic, the distribution side was
fragmented with over 130 utilities, mostly small and uneconomic. The pervasive
flaws have caused a low utilization of existing generation capacity; extremely high
and uncompetitive power rates; poor quality of service to consumers; dismal to
forgettable performance of the government power sector; high system losses; and
an inability to develop a clear strategy for overcoming these shortcomings.

Thus, the EPIRA provides a framework for the restructuring of the industry, including
the privatization of the assets of the National Power Corporation (NPC), the
transition to a competitive structure, and the delineation of the roles of various
government agencies and the private entities. The law ordains the division of the

industry into four (4) distinct sectors, namely: generation, transmission, distribution
and supply.
Corollarily, the NPC generating plants have to privatized and its transmission
business spun off and privatized thereafter.[67]

Finally, every law has in its favor the presumption of constitutionality, and to justify
its nullification, there must be a clear and unequivocal breach of the Constitution
and not one that is doubtful, speculative, or argumentative.[68] Indubitably,
petitioners failed to overcome this presumption in favor of the EPIRA. We find no
clear violation of the Constitution which would warrant a pronouncement that Sec.
34 of the EPIRA and Rule 18 of its IRR are unconstitutional and void.

WHEREFORE, the instant case is hereby DISMISSED for lack of merit.

SO ORDERED.