G.R. No.

L-14639 March 25, 1919

ZACARIAS VILLAVICENCIO, ET AL., petitioners,

vs.
JUSTO LUKBAN, ET AL., respondents.

MALCOLM, J.:

The annals of juridical history fail to reveal a case quite as remarkable as the one which this application
for habeas corpus submits for decision. While hardly to be expected to be met with in this modern epoch
of triumphant democracy, yet, after all, the cause presents no great difficulty if there is kept in the
forefront of our minds the basic principles of popular government, and if we give expression to the
paramount purpose for which the courts, as an independent power of such a government, were
constituted. The primary question is — Shall the judiciary permit a government of the men instead of a
government of laws to be set up in the Philippine Islands?

Omitting much extraneous matter, of no moment to these proceedings, but which might prove profitable
reading for other departments of the government, the facts are these: The Mayor of the city of Manila,
Justo Lukban, for the best of all reasons, to exterminate vice, ordered the segregated district for women of
ill repute, which had been permitted for a number of years in the city of Manila, closed. Between October
16 and October 25, 1918, the women were kept confined to their houses in the district by the police.
Presumably, during this period, the city authorities quietly perfected arrangements with the Bureau of
Labor for sending the women to Davao, Mindanao, as laborers; with some government office for the use
of the coastguard cutters Corregidor and Negros, and with the Constabulary for a guard of soldiers. At any
rate, about midnight of October 25, the police, acting pursuant to orders from the chief of police, Anton
Hohmann and the Mayor of the city of Manila, Justo Lukban, descended upon the houses, hustled some
170 inmates into patrol wagons, and placed them aboard the steamers that awaited their arrival. The
women were given no opportunity to collect their belongings, and apparently were under the impression
that they were being taken to a police station for an investigation. They had no knowledge that they were
destined for a life in Mindanao. They had not been asked if they wished to depart from that region and
had neither directly nor indirectly given their consent to the deportation. The involuntary guests were
received on board the steamers by a representative of the Bureau of Labor and a detachment of
Constabulary soldiers. The two steamers with their unwilling passengers sailed for Davao during the
night of October 25.

The vessels reached their destination at Davao on October 29. The women were landed and receipted for
as laborers by Francisco Sales, provincial governor of Davao, and by Feliciano Yñigo and Rafael Castillo.
The governor and the hacendero Yñigo, who appear as parties in the case, had no previous notification
that the women were prostitutes who had been expelled from the city of Manila. The further happenings
to these women and the serious charges growing out of alleged ill-treatment are of public interest, but
are not essential to the disposition of this case. Suffice it to say, generally, that some of the women
married, others assumed more or less clandestine relations with men, others went to work in different
capacities, others assumed a life unknown and disappeared, and a goodly portion found means to return
to Manila.

To turn back in our narrative, just about the time the Corregidor and the Negros were putting in to Davao,
the attorney for the relatives and friends of a considerable number of the deportees presented an
application for habeas corpus to a member of the Supreme Court. Subsequently, the application, through
stipulation of the parties, was made to include all of the women who were sent away from Manila to
Davao and, as the same questions concerned them all, the application will be considered as including
them. The application set forth the salient facts, which need not be repeated, and alleged that the women
were illegally restrained of their liberty by Justo Lukban, Mayor of the city of Manila, Anton Hohmann,
chief of police of the city of Manila, and by certain unknown parties. The writ was made returnable before
the full court. The city fiscal appeared for the respondents, Lukban and Hohmann, admitted certain facts
relative to sequestration and deportation, and prayed that the writ should not be granted because the
petitioners were not proper parties, because the action should have been begun in the Court of First
Instance for Davao, Department of Mindanao and Sulu, because the respondents did not have any of the
women under their custody or control, and because their jurisdiction did not extend beyond the
boundaries of the city of Manila. According to an exhibit attached to the answer of the fiscal, the 170
women were destined to be laborers, at good salaries, on the haciendas of Yñigo and Governor Sales. In
open court, the fiscal admitted, in answer to question of a member of the court, that these women had
been sent out of Manila without their consent. The court awarded the writ, in an order of November 4,
that directed Justo Lukban, Mayor of the city of Manila, Anton Hohmann, chief of police of the city of
Manila, Francisco Sales, governor of the province of Davao, and Feliciano Yñigo, an hacenderoof Davao, to
bring before the court the persons therein named, alleged to be deprived of their liberty, on December 2,
1918.

Before the date mentioned, seven of the women had returned to Manila at their own expense. On motion
of counsel for petitioners, their testimony was taken before the clerk of the Supreme Court sitting as
commissioners. On the day named in the order, December 2nd, 1918, none of the persons in whose behalf
the writ was issued were produced in court by the respondents. It has been shown that three of those
who had been able to come back to Manila through their own efforts, were notified by the police and the
secret service to appear before the court. The fiscal appeared, repeated the facts more comprehensively,
reiterated the stand taken by him when pleading to the original petition copied a telegram from the
Mayor of the city of Manila to the provincial governor of Davao and the answer thereto, and telegrams
that had passed between the Director of Labor and the attorney for that Bureau then in Davao, and
offered certain affidavits showing that the women were contained with their life in Mindanao and did not
wish to return to Manila. Respondents Sales answered alleging that it was not possible to fulfill the order
of the Supreme Court because the women had never been under his control, because they were at liberty
in the Province of Davao, and because they had married or signed contracts as laborers. Respondent
Yñigo answered alleging that he did not have any of the women under his control and that therefore it
was impossible for him to obey the mandate. The court, after due deliberation, on December 10, 1918,
promulgated a second order, which related that the respondents had not complied with the original
order to the satisfaction of the court nor explained their failure to do so, and therefore directed that those
of the women not in Manila be brought before the court by respondents Lukban, Hohmann, Sales, and
Yñigo on January 13, 1919, unless the women should, in written statements voluntarily made before the
judge of first instance of Davao or the clerk of that court, renounce the right, or unless the respondents
should demonstrate some other legal motives that made compliance impossible. It was further stated
that the question of whether the respondents were in contempt of court would later be decided and the
reasons for the order announced in the final decision.

Before January 13, 1919, further testimony including that of a number of the women, of certain detectives
and policemen, and of the provincial governor of Davao, was taken before the clerk of the Supreme Court
sitting as commissioner and the clerk of the Court of First Instance of Davao acting in the same capacity.
On January 13, 1919, the respondents technically presented before the Court the women who had
returned to the city through their own efforts and eight others who had been brought to Manila by the
respondents. Attorneys for the respondents, by their returns, once again recounted the facts and further
endeavored to account for all of the persons involved in the habeas corpus. In substance, it was stated
that the respondents, through their representatives and agents, had succeeded in bringing from Davao
with their consent eight women; that eighty-one women were found in Davao who, on notice that if they
desired they could return to Manila, transportation fee, renounced the right through sworn statements;
that fifty-nine had already returned to Manila by other means, and that despite all efforts to find them
twenty-six could not be located. Both counsel for petitioners and the city fiscal were permitted to submit
memoranda. The first formally asked the court to find Justo Lukban, Mayor of the city of Manila, Anton
Hohmann, chief of police of the city of Manila, Jose Rodriguez and Fernando Ordax, members of the police
force of the city of Manila, Feliciano Yñigo, an hacendero of Davao, Modesto Joaquin, the attorney for the
Bureau of Labor, and Anacleto Diaz, fiscal of the city of Manila, in contempt of court. The city fiscal
requested that the replica al memorandum de los recurridos, (reply to respondents' memorandum) dated
January 25, 1919, be struck from the record.

In the second order, the court promised to give the reasons for granting the writ of habeas corpus in the
final decision. We will now proceed to do so.

One fact, and one fact only, need be recalled — these one hundred and seventy women were isolated
from society, and then at night, without their consent and without any opportunity to consult with
friends or to defend their rights, were forcibly hustled on board steamers for transportation to regions
unknown. Despite the feeble attempt to prove that the women left voluntarily and gladly, that such was
not the case is shown by the mere fact that the presence of the police and the constabulary was deemed
necessary and that these officers of the law chose the shades of night to cloak their secret and stealthy
acts. Indeed, this is a fact impossible to refute and practically admitted by the respondents.

With this situation, a court would next expect to resolve the question — By authority of what law did the
Mayor and the Chief of Police presume to act in deporting by duress these persons from Manila to
another distant locality within the Philippine Islands? We turn to the statutes and we find —

Alien prostitutes can be expelled from the Philippine Islands in conformity with an Act of congress. The
Governor-General can order the eviction of undesirable aliens after a hearing from the Islands. Act No.
519 of the Philippine Commission and section 733 of the Revised Ordinances of the city of Manila provide
for the conviction and punishment by a court of justice of any person who is a common prostitute. Act No.
899 authorizes the return of any citizen of the United States, who may have been convicted of vagrancy,
to the homeland. New York and other States have statutes providing for the commitment to the House of
Refuge of women convicted of being common prostitutes. Always a law! Even when the health authorities
compel vaccination, or establish a quarantine, or place a leprous person in the Culion leper colony, it is
done pursuant to some law or order. But one can search in vain for any law, order, or regulation, which
even hints at the right of the Mayor of the city of Manila or the chief of police of that city to force citizens
of the Philippine Islands — and these women despite their being in a sense lepers of society are
nevertheless not chattels but Philippine citizens protected by the same constitutional guaranties as are
other citizens — to change their domicile from Manila to another locality. On the contrary, Philippine
penal law specifically punishes any public officer who, not being expressly authorized by law or
regulation, compels any person to change his residence.

In other countries, as in Spain and Japan, the privilege of domicile is deemed so important as to be found
in the Bill of Rights of the Constitution. Under the American constitutional system, liberty of abode is a
principle so deeply imbedded in jurisprudence and considered so elementary in nature as not even to
require a constitutional sanction. Even the Governor-General of the Philippine Islands, even the President
of the United States, who has often been said to exercise more power than any king or potentate, has no
such arbitrary prerogative, either inherent or express. Much less, therefore, has the executive of a
municipality, who acts within a sphere of delegated powers. If the mayor and the chief of police could, at
their mere behest or even for the most praiseworthy of motives, render the liberty of the citizen so
insecure, then the presidents and chiefs of police of one thousand other municipalities of the Philippines
have the same privilege. If these officials can take to themselves such power, then any other official can
do the same. And if any official can exercise the power, then all persons would have just as much right to
do so. And if a prostitute could be sent against her wishes and under no law from one locality to another
within the country, then officialdom can hold the same club over the head of any citizen.

Law defines power. Centuries ago Magna Charta decreed that — "No freeman shall be taken, or
imprisoned, or be disseized of his freehold, or liberties, or free customs, or be outlawed, or exiled, or any
other wise destroyed; nor will we pass upon him nor condemn him, but by lawful judgment of his peers
or by the law of the land. We will sell to no man, we will not deny or defer to any man either justice or
right." (Magna Charta, 9 Hen., 111, 1225, Cap. 29; 1 eng. stat. at Large, 7.) No official, no matter how high,
is above the law. The courts are the forum which functionate to safeguard individual liberty and to punish
official transgressors. "The law," said Justice Miller, delivering the opinion of the Supreme Court of the
United States, "is the only supreme power in our system of government, and every man who by accepting
office participates in its functions is only the more strongly bound to submit to that supremacy, and to
observe the limitations which it imposes upon the exercise of the authority which it gives." (U.S. vs. Lee
[1882], 106 U.S., 196, 220.) "The very idea," said Justice Matthews of the same high tribunal in another
case, "that one man may be compelled to hold his life, or the means of living, or any material right
essential to the enjoyment of life, at the mere will of another, seems to be intolerable in any country
where freedom prevails, as being the essence of slavery itself." (Yick Wo vs. Hopkins [1886], 118 U.S., 356,
370.) All this explains the motive in issuing the writ of habeas corpus, and makes clear why we said in the
very beginning that the primary question was whether the courts should permit a government of men or
a government of laws to be established in the Philippine Islands.

What are the remedies of the unhappy victims of official oppression? The remedies of the citizen are
three: (1) Civil action; (2) criminal action, and (3) habeas corpus.

The first is an optional but rather slow process by which the aggrieved party may recoup money damages.
It may still rest with the parties in interest to pursue such an action, but it was never intended effectively
and promptly to meet any such situation as that now before us.

As to criminal responsibility, it is true that the Penal Code in force in these Islands provides:

Any public officer not thereunto authorized by law or by regulations of a general character in force
in the Philippines who shall banish any person to a place more than two hundred kilometers
distant from his domicile, except it be by virtue of the judgment of a court, shall be punished by a
fine of not less than three hundred and twenty-five and not more than three thousand two
hundred and fifty pesetas.

Any public officer not thereunto expressly authorized by law or by regulation of a general
character in force in the Philippines who shall compel any person to change his domicile or
residence shall suffer the penalty of destierro and a fine of not less than six hundred and twenty-
five and not more than six thousand two hundred and fifty pesetas. (Art. 211.)

We entertain no doubt but that, if, after due investigation, the proper prosecuting officers find that any
public officer has violated this provision of law, these prosecutors will institute and press a criminal
prosecution just as vigorously as they have defended the same official in this action. Nevertheless, that
the act may be a crime and that the persons guilty thereof can be proceeded against, is no bar to the
instant proceedings. To quote the words of Judge Cooley in a case which will later be referred to — "It
would be a monstrous anomaly in the law if to an application by one unlawfully confined, ta be restored
to his liberty, it could be a sufficient answer that the confinement was a crime, and therefore might be
continued indefinitely until the guilty party was tried and punished therefor by the slow process of
criminal procedure." (In the matter of Jackson [1867], 15 Mich., 416, 434.) The writ of habeas corpus was
devised and exists as a speedy and effectual remedy to relieve persons from unlawful restraint, and as the
best and only sufficient defense of personal freedom. Any further rights of the parties are left untouched
by decision on the writ, whose principal purpose is to set the individual at liberty.

Granted that habeas corpus is the proper remedy, respondents have raised three specific objections to its
issuance in this instance. The fiscal has argued (l) that there is a defect in parties petitioners, (2) that the
Supreme Court should not assume jurisdiction, and (3) that the person in question are not restrained of
their liberty by respondents. It was finally suggested that the jurisdiction of the Mayor and the chief of
police of the city of Manila only extends to the city limits and that perforce they could not bring the
women from Davao.

The first defense was not presented with any vigor by counsel. The petitioners were relatives and friends
of the deportees. The way the expulsion was conducted by the city officials made it impossible for the
women to sign a petition for habeas corpus. It was consequently proper for the writ to be submitted by
persons in their behalf. (Code of Criminal Procedure, sec. 78; Code of Civil Procedure, sec. 527.) The law,
in its zealous regard for personal liberty, even makes it the duty of a court or judge to grant a writ
of habeas corpus if there is evidence that within the court's jurisdiction a person is unjustly imprisoned or
restrained of his liberty, though no application be made therefor. (Code of Criminal Procedure, sec. 93.)
Petitioners had standing in court.

The fiscal next contended that the writ should have been asked for in the Court of First Instance of Davao
or should have been made returnable before that court. It is a general rule of good practice that, to avoid
unnecessary expense and inconvenience, petitions for habeas corpus should be presented to the nearest
judge of the court of first instance. But this is not a hard and fast rule. The writ of habeas corpus may be
granted by the Supreme Court or any judge thereof enforcible anywhere in the Philippine Islands. (Code
of Criminal Procedure, sec. 79; Code of Civil Procedure, sec. 526.) Whether the writ shall be made
returnable before the Supreme Court or before an inferior court rests in the discretion of the Supreme
Court and is dependent on the particular circumstances. In this instance it was not shown that the Court
of First Instance of Davao was in session, or that the women had any means by which to advance their
plea before that court. On the other hand, it was shown that the petitioners with their attorneys, and the
two original respondents with their attorney, were in Manila; it was shown that the case involved parties
situated in different parts of the Islands; it was shown that the women might still be imprisoned or
restrained of their liberty; and it was shown that if the writ was to accomplish its purpose, it must be
taken cognizance of and decided immediately by the appellate court. The failure of the superior court to
consider the application and then to grant the writ would have amounted to a denial of the benefits of the
writ.

The last argument of the fiscal is more plausible and more difficult to meet. When the writ was prayed for,
says counsel, the parties in whose behalf it was asked were under no restraint; the women, it is claimed,
were free in Davao, and the jurisdiction of the mayor and the chief of police did not extend beyond the
city limits. At first blush, this is a tenable position. On closer examination, acceptance of such dictum is
found to be perversive of the first principles of the writ of habeas corpus.

A prime specification of an application for a writ of habeas corpus is restraint of liberty. The essential
object and purpose of the writ of habeas corpus is to inquire into all manner of involuntary restraint as
distinguished from voluntary, and to relieve a person therefrom if such restraint is illegal. Any restraint
which will preclude freedom of action is sufficient. The forcible taking of these women from Manila by
officials of that city, who handed them over to other parties, who deposited them in a distant region,
deprived these women of freedom of locomotion just as effectively as if they had been imprisoned. Placed
in Davao without either money or personal belongings, they were prevented from exercising the liberty
of going when and where they pleased. The restraint of liberty which began in Manila continued until the
aggrieved parties were returned to Manila and released or until they freely and truly waived his right.

Consider for a moment what an agreement with such a defense would mean. The chief executive of any
municipality in the Philippines could forcibly and illegally take a private citizen and place him beyond the
boundaries of the municipality, and then, when called upon to defend his official action, could calmly fold
his hands and claim that the person was under no restraint and that he, the official, had no jurisdiction
over this other municipality. We believe the true principle should be that, if the respondent is within the
jurisdiction of the court and has it in his power to obey the order of the court and thus to undo the wrong
that he has inflicted, he should be compelled to do so. Even if the party to whom the writ is addressed has
illegally parted with the custody of a person before the application for the writ is no reason why the writ
should not issue. If the mayor and the chief of police, acting under no authority of law, could deport these
women from the city of Manila to Davao, the same officials must necessarily have the same means to
return them from Davao to Manila. The respondents, within the reach of process, may not be permitted to
restrain a fellow citizen of her liberty by forcing her to change her domicile and to avow the act with
impunity in the courts, while the person who has lost her birthright of liberty has no effective recourse.
The great writ of liberty may not thus be easily evaded.
It must be that some such question has heretofore been presented to the courts for decision.
Nevertheless, strange as it may seem, a close examination of the authorities fails to reveal any analogous
case. Certain decisions of respectable courts are however very persuasive in nature.

A question came before the Supreme Court of the State of Michigan at an early date as to whether or not a
writ of habeas corpus would issue from the Supreme Court to a person within the jurisdiction of the State
to bring into the State a minor child under guardianship in the State, who has been and continues to be
detained in another State. The membership of the Michigan Supreme Court at this time was notable. It
was composed of Martin, chief justice, and Cooley, Campbell, and Christiancy, justices. On the question
presented the court was equally divided. Campbell, J., with whom concurred Martin, C. J., held that the
writ should be quashed. Cooley, J., one of the most distinguished American judges and law-writers, with
whom concurred Christiancy, J., held that the writ should issue. Since the opinion of Justice Campbell was
predicated to a large extent on his conception of the English decisions, and since, as will hereafter appear,
the English courts have taken a contrary view, only the following eloquent passages from the opinion of
Justice Cooley are quoted:

I have not yet seen sufficient reason to doubt the power of this court to issue the present writ on
the petition which was laid before us. . . .

It would be strange indeed if, at this late day, after the eulogiums of six centuries and a half have
been expended upon the Magna Charta, and rivers of blood shed for its establishment; after its
many confirmations, until Coke could declare in his speech on the petition of right that "Magna
Charta was such a fellow that he will have no sovereign," and after the extension of its benefits and
securities by the petition of right, bill of rights and habeas corpus acts, it should now be discovered
that evasion of that great clause for the protection of personal liberty, which is the life and soul of
the whole instrument, is so easy as is claimed here. If it is so, it is important that it be determined
without delay, that the legislature may apply the proper remedy, as I can not doubt they would, on
the subject being brought to their notice. . . .

The second proposition — that the statutory provisions are confined to the case of imprisonment
within the state — seems to me to be based upon a misconception as to the source of our
jurisdiction. It was never the case in England that the court of king's bench derived its jurisdiction
to issue and enforce this writ from the statute. Statutes were not passed to give the right, but to
compel the observance of rights which existed. . . .

The important fact to be observed in regard to the mode of procedure upon this writ is, that it is
directed to and served upon, not the person confined, but his jailor. It does not reach the former
except through the latter. The officer or person who serves it does not unbar the prison doors, and
set the prisoner free, but the court relieves him by compelling the oppressor to release his
constraint. The whole force of the writ is spent upon the respondent, and if he fails to obey it, the
means to be resorted to for the purposes of compulsion are fine and imprisonment. This is the
ordinary mode of affording relief, and if any other means are resorted to, they are only auxiliary to
those which are usual. The place of confinement is, therefore, not important to the relief, if the guilty
party is within reach of process, so that by the power of the court he can be compelled to release his
grasp. The difficulty of affording redress is not increased by the confinement being beyond the
limits of the state, except as greater distance may affect it. The important question is, where the
power of control exercised? And I am aware of no other remedy. (In the matter of Jackson [1867],
15 Mich., 416.)

The opinion of Judge Cooley has since been accepted as authoritative by other courts. (Rivers vs. Mitchell
[1881], 57 Iowa, 193; Breene vs. People [1911], Colo., 117 Pac. Rep., 1000; Ex parte Young [1892], 50 Fed.,
526.)
The English courts have given careful consideration to the subject. Thus, a child had been taken out of
English by the respondent. A writ of habeas corpus was issued by the Queen's Bench Division upon the
application of the mother and her husband directing the defendant to produce the child. The judge at
chambers gave defendant until a certain date to produce the child, but he did not do so. His return stated
that the child before the issuance of the writ had been handed over by him to another; that it was no
longer in his custody or control, and that it was impossible for him to obey the writ. He was found in
contempt of court. On appeal, the court, through Lord Esher, M. R., said:

A writ of habeas corpus was ordered to issue, and was issued on January 22. That writ commanded
the defendant to have the body of the child before a judge in chambers at the Royal Courts of
Justice immediately after the receipt of the writ, together with the cause of her being taken and
detained. That is a command to bring the child before the judge and must be obeyed, unless some
lawful reason can be shown to excuse the nonproduction of the child. If it could be shown that by
reason of his having lawfully parted with the possession of the child before the issuing of the writ, the
defendant had no longer power to produce the child, that might be an answer; but in the absence of
any lawful reason he is bound to produce the child, and, if he does not, he is in contempt of the Court
for not obeying the writ without lawful excuse. Many efforts have been made in argument to shift
the question of contempt to some anterior period for the purpose of showing that what was done
at some time prior to the writ cannot be a contempt. But the question is not as to what was done
before the issue of the writ. The question is whether there has been a contempt in disobeying the
writ it was issued by not producing the child in obedience to its commands. (The
Queen vs. Bernardo [1889], 23 Q. B. D., 305. See also to the same effect the Irish case of In
re Matthews, 12 Ir. Com. Law Rep. [N. S.], 233; The Queen vs. Barnardo, Gossage's Case [1890], 24
Q. B. D., 283.)

A decision coming from the Federal Courts is also of interest. A habeas corpus was directed to the
defendant to have before the circuit court of the District of Columbia three colored persons, with the
cause of their detention. Davis, in his return to the writ, stated on oath that he had purchased the negroes
as slaves in the city of Washington; that, as he believed, they were removed beyond the District of
Columbia before the service of the writ of habeas corpus, and that they were then beyond his control and
out of his custody. The evidence tended to show that Davis had removed the negroes because he
suspected they would apply for a writ of habeas corpus. The court held the return to be evasive and
insufficient, and that Davis was bound to produce the negroes, and Davis being present in court, and
refusing to produce them, ordered that he be committed to the custody of the marshall until he should
produce the negroes, or be otherwise discharged in due course of law. The court afterwards ordered that
Davis be released upon the production of two of the negroes, for one of the negroes had run away and
been lodged in jail in Maryland. Davis produced the two negroes on the last day of the term. (United
States vs. Davis [1839], 5 Cranch C.C., 622, Fed. Cas. No. 14926. See also Robb vs. Connolly [1883], 111 U.S.,
624; Church on Habeas, 2nd ed., p. 170.)

We find, therefore, both on reason and authority, that no one of the defense offered by the respondents
constituted a legitimate bar to the granting of the writ of habeas corpus.

There remains to be considered whether the respondent complied with the two orders of the Supreme
Court awarding the writ of habeas corpus, and if it be found that they did not, whether the contempt
should be punished or be taken as purged.

The first order, it will be recalled, directed Justo Lukban, Anton Hohmann, Francisco Sales, and Feliciano
Yñigo to present the persons named in the writ before the court on December 2, 1918. The order was
dated November 4, 1918. The respondents were thus given ample time, practically one month, to comply
with the writ. As far as the record discloses, the Mayor of the city of Manila waited until the 21st of
November before sending a telegram to the provincial governor of Davao. According to the response of
the attorney for the Bureau of Labor to the telegram of his chief, there were then in Davao women who
desired to return to Manila, but who should not be permitted to do so because of having contracted debts.
The half-hearted effort naturally resulted in none of the parties in question being brought before the
court on the day named.

For the respondents to have fulfilled the court's order, three optional courses were open: (1) They could
have produced the bodies of the persons according to the command of the writ; or (2) they could have
shown by affidavit that on account of sickness or infirmity those persons could not safely be brought
before the court; or (3) they could have presented affidavits to show that the parties in question or their
attorney waived the right to be present. (Code of Criminal Procedure, sec. 87.) They did not produce the
bodies of the persons in whose behalf the writ was granted; they did not show impossibility of
performance; and they did not present writings that waived the right to be present by those interested.
Instead a few stereotyped affidavits purporting to show that the women were contended with their life in
Davao, some of which have since been repudiated by the signers, were appended to the return. That
through ordinary diligence a considerable number of the women, at least sixty, could have been brought
back to Manila is demonstrated to be found in the municipality of Davao, and that about this number
either returned at their own expense or were produced at the second hearing by the respondents.

The court, at the time the return to its first order was made, would have been warranted summarily in
finding the respondents guilty of contempt of court, and in sending them to jail until they obeyed the
order. Their excuses for the non-production of the persons were far from sufficient. The, authorities cited
herein pertaining to somewhat similar facts all tend to indicate with what exactitude a habeas corpus writ
must be fulfilled. For example, in Gossage's case, supra, the Magistrate in referring to an earlier decision
of the Court, said: "We thought that, having brought about that state of things by his own illegal act, he
must take the consequences; and we said that he was bound to use every effort to get the child back; that
he must do much more than write letters for the purpose; that he must advertise in America, and even if
necessary himself go after the child, and do everything that mortal man could do in the matter; and that
the court would only accept clear proof of an absolute impossibility by way of excuse." In other words,
the return did not show that every possible effort to produce the women was made by the respondents.
That the court forebore at this time to take drastic action was because it did not wish to see presented to
the public gaze the spectacle of a clash between executive officials and the judiciary, and because it
desired to give the respondents another chance to demonstrate their good faith and to mitigate their
wrong.

In response to the second order of the court, the respondents appear to have become more zealous and to
have shown a better spirit. Agents were dispatched to Mindanao, placards were posted, the constabulary
and the municipal police joined in rounding up the women, and a steamer with free transportation to
Manila was provided. While charges and counter-charges in such a bitterly contested case are to be
expected, and while a critical reading of the record might reveal a failure of literal fulfillment with our
mandate, we come to conclude that there is a substantial compliance with it. Our finding to this effect
may be influenced somewhat by our sincere desire to see this unhappy incident finally closed. If any
wrong is now being perpetrated in Davao, it should receive an executive investigation. If any particular
individual is still restrained of her liberty, it can be made the object of separate habeas
corpus proceedings.

Since the writ has already been granted, and since we find a substantial compliance with it, nothing
further in this connection remains to be done.

The attorney for the petitioners asks that we find in contempt of court Justo Lukban, Mayor of the city of
Manila, Anton Hohmann, chief of police of the city of Manila, Jose Rodriguez, and Fernando Ordax,
members of the police force of the city of Manila, Modesto Joaquin, the attorney for the Bureau of Labor,
Feliciano Yñigo, an hacendero of Davao, and Anacleto Diaz, Fiscal of the city of Manila.

The power to punish for contempt of court should be exercised on the preservative and not on the
vindictive principle. Only occasionally should the court invoke its inherent power in order to retain that
respect without which the administration of justice must falter or fail. Nevertheless when one is
commanded to produce a certain person and does not do so, and does not offer a valid excuse, a court
must, to vindicate its authority, adjudge the respondent to be guilty of contempt, and must order him
either imprisoned or fined. An officer's failure to produce the body of a person in obedience to a writ
of habeas corpus when he has power to do so, is a contempt committed in the face of the court. (Ex
parte Sterns [1888], 77 Cal., 156; In re Patterson [1888], 99 N. C., 407.)

With all the facts and circumstances in mind, and with judicial regard for human imperfections, we
cannot say that any of the respondents, with the possible exception of the first named, has flatly
disobeyed the court by acting in opposition to its authority. Respondents Hohmann, Rodriguez, Ordax,
and Joaquin only followed the orders of their chiefs, and while, under the law of public officers, this does
not exonerate them entirely, it is nevertheless a powerful mitigating circumstance. The hacendero Yñigo
appears to have been drawn into the case through a misconstruction by counsel of telegraphic
communications. The city fiscal, Anacleto Diaz, would seem to have done no more than to fulfill his duty
as the legal representative of the city government. Finding him innocent of any disrespect to the court, his
counter-motion to strike from the record the memorandum of attorney for the petitioners, which brings
him into this undesirable position, must be granted. When all is said and done, as far as this record
discloses, the official who was primarily responsible for the unlawful deportation, who ordered the police
to accomplish the same, who made arrangements for the steamers and the constabulary, who conducted
the negotiations with the Bureau of Labor, and who later, as the head of the city government, had it
within his power to facilitate the return of the unfortunate women to Manila, was Justo Lukban, the
Mayor of the city of Manila. His intention to suppress the social evil was commendable. His methods were
unlawful. His regard for the writ of habeas corpus issued by the court was only tardily and reluctantly
acknowledged.

It would be possible to turn to the provisions of section 546 of the Code of Civil Procedure, which relates
to the penalty for disobeying the writ, and in pursuance thereof to require respondent Lukban to forfeit
to the parties aggrieved as much as P400 each, which would reach to many thousands of pesos, and in
addition to deal with him as for a contempt. Some members of the court are inclined to this stern view. It
would also be possible to find that since respondent Lukban did comply substantially with the second
order of the court, he has purged his contempt of the first order. Some members of the court are inclined
to this merciful view. Between the two extremes appears to lie the correct finding. The failure of
respondent Lukban to obey the first mandate of the court tended to belittle and embarrass the
administration of justice to such an extent that his later activity may be considered only as extenuating
his conduct. A nominal fine will at once command such respect without being unduly oppressive — such
an amount is P100.

In resume — as before stated, no further action on the writ of habeas corpus is necessary. The
respondents Hohmann, Rodriguez, Ordax, Joaquin, Yñigo, and Diaz are found not to be in contempt of
court. Respondent Lukban is found in contempt of court and shall pay into the office of the clerk of the
Supreme Court within five days the sum of one hundred pesos (P100). The motion of the fiscal of the city
of Manila to strike from the record the Replica al Memorandum de los Recurridos of January 25, 1919, is
granted. Costs shall be taxed against respondents. So ordered.

In concluding this tedious and disagreeable task, may we not be permitted to express the hope that this
decision may serve to bulwark the fortifications of an orderly government of laws and to protect
individual liberty from illegal encroachment.

[G.R. No. 100481. January 22, 1997]

PHILIPPINE INTERISLAND SHIPPING ASSOCIATION OF THE PHILIPPINES, CONFERENCE OF

INTERISLAND SHIP-OWNERS AND OPERATORS, UNITED PETROLEUM TANKER OPERATORS
 ASSOCIATION OF THE PHILIPPINES, LIGHTERAGE ASSOCIATION OF THE PHILIPPINES and
PILOTAGE INTEGRATED SERVICES CORPORATION, petitioners, vs. COURT OF APPEALS, UNITED
HARBOR PILOTS' ASSOCIATION OF THE PHILIPPINES, INC. and MANILA PILOTS'
ASSOCIATION, respondents.

[G.R. Nos. 103716-17. January 22, 1997]

HON. PETE NICOMEDES PRADO, in his capacity as Secretary of Transportation and Communications and
the PHILIPPINE PORTS AUTHORITY, petitioners, vs. COURT OF APPEALS, UNITED HARBOR
PILOTS' ASSOCIATION OF THE PHILIPPINES, INC., respondents.

[G.R. No. 107720. January 22, 1997]

HON. JESUS B. GARCIA, JR., in his capacity as Secretary of Transportation and Communications and
Chairman of the PHILIPPINE PORTS AUTHORITY, COMMODORE ROGELIO A. DAYAN, in his
capacity as General Manager of the Philippine Ports Authority, and SIMEON T. SILVA, JR., in his
capacity as the South Harbor Manager, Philippine Ports Authority, petitioners, vs. HON. NAPOLEON
R. FLOJO, in his capacity as the Presiding Judge of Branch 2, Regional Trial Court - Manila, UNITED
HARBOR PILOTS' ASSOCIATION OF THE PHILIPPINES and the MANILA PILOTS'
ASSOCIATION, respondents.

DECISION
MENDOZA, J.:

Private respondent United Harbor Pilots' Association of the Philippines, Inc. (UHPAP) is the umbrella
organization of various groups rendering pilotage service in different ports of the Philippines. The service
consists of navigating a vessel from a specific point, usually about two (2) miles off shore, to an assigned
area at the pier and vice versa. When a vessel arrives, a harbor pilot takes over the ship from its captain
to maneuver it to a berth in the port, and when it departs, the harbor pilot also maneuvers it up to a
specific point off shore. The setup is required by the fact that each port has peculiar topography with
which a harbor pilot is presumed to be more familiar than a ship captain.
The Philippine Ports Authority (PPA) is the government agency which regulates pilotage. Pursuant to
Presidential Decree No. 857, it has the power "to supervise, control, regulate . . . such services as are
necessary in the ports vested in, or belonging to the Authority"[1] and to "control, regulate and supervise
pilotage and the conduct of pilots in any Port District."[2] It also has the power "to impose, fix, prescribe,
increase or decrease such rates, charges or fees. . . for the services rendered by the Authority or by any
private organization within a Port District.[3]
These cases arose out of the efforts of harbor pilots to secure enforcement of Executive Order No.
1088, which fixes the rates of pilotage service, and the equally determined efforts of the PPA and its
officials, the herein petitioners, to block enforcement of the executive order, even as they promulgated
their own orders which in the beginning fixed lower rates of pilotage and later left the matter to self
determination by parties to a pilotage contract.

I. THE FACTS
G.R. No. 103716

On February 3, 1986, shortly before the presidential elections, President Ferdinand E. Marcos,
responding to the clamor of harbor pilots for an increase in pilotage rates, issued Executive Order No.
1088, PROVIDING FOR UNIFORM AND MODIFIED RATES FOR PILOTAGE SERVICES RENDERED TO
FOREIGN AND COASTWISE VESSELS IN ALL PRIVATE AND PUBLIC PORTS. The executive order
increased substantially the rates of the existing pilotage fees previously fixed by the PPA.
However, the PPA refused to enforce the executive order on the ground that it had been drawn
hastily and without prior consultation; that its enforcement would create disorder in the ports as the
operators and owners of the maritime vessels had expressed opposition to its implementation; and that
the increase in pilotage, as mandated by it, was exorbitant and detrimental to port operations. [4]
The UHPAP then announced its intention to implement E.O. No. 1088 effective November 16, 1986.
This in turn drew a warning from the PPA that disciplinary sanctions would be applied to those who
would charge rates under E.O. No. 1088. The PPA instead issued Memorandum Circular No. 43-86, fixing
pilotage fees at rates lower than those provided in E.O. No. 1088.
Consequently, the UHPAP filed on January 7, 1987 a complaint for injunction with the Regional Trial
Court of Manila, against the then Minister of Transportation and Communications, Hernando Perez, and
PPA General Manager, Primitivo S. Solis, Jr. It sought a writ of preliminary mandatory injunction for the
immediate implementation of E.O. No. 1088, as well as a temporary restraining order to stop PPA officials
from imposing disciplinary sanctions against UHPAP members charging rates in accordance with E.O. No.
1088.
The case, docketed as Civil Case No. 87-38913, was raffled to Branch 28 of the Regional Trial Court of
Manila which issued a temporary restraining order, enjoining the PPA from threatening the UHPAP, its
officers and its members with suspension and other disciplinary action for collecting pilotage fees
pursuant to E.O. No. 1088.
On March 16, 1987, the Chamber of Maritime Industries of the Philippines, William Lines, Inc.,
Loadstar Shipping Co., Inc. and Delsen Transport Lines, Inc., after obtaining leave, filed a joint answer in
intervention.
On February 26, 1988, while the case was pending, the PPA issued Administrative Order No. 02-88,
entitled IMPLEMENTING GUIDELINES ON OPEN PILOTAGE SERVICE. The PPA announced in its order
that it was leaving to the contracting parties, i.e., the shipping lines and the pilots, the fixing of mutually
acceptable rates for pilotage services, thus abandoning the rates fixed by it (PPA) under Memorandum
Circular No. 43-86, as well as those provided in E.O. No. 1088. The administrative order provided:

Section 3. Terms/Conditions on Pilotage Service. The shipping line or vessel's agent/representative and
the harbor pilot/firm chosen by the former shall agree between themselves, among others, on what
pilotage service shall be performed, the use of tugs and their rates, taking into consideration the
circumstances stated in Section 12 of PPA AO No. 03-85, and such other conditions designed to ensure
the safe movement of the vessel in pilotage areas/grounds.

The PPA then moved to dismiss the case, contending that the issuance of its order had rendered the
case moot and academic and that consequently E.O. No. 1088 had ceased to be effective. The UHPAP
opposed the motion. Together with the Manila Pilots' Association (MPA), it filed on May 25, 1988 a
petition for certiorari and prohibition in the RTC-Manila, questioning the validity of A.O. No. 02-88. This
petition was docketed as Civil Case No. 88-44726 (United Harbor Pilots' Association and Manila Pilots'
Association v. Hon. Rainerio Reyes, as Acting Secretary of the Department of Transportation and
Communications and Chairman of the Philippine Ports Authority (PPA) and Maximo Dumlao, Jr., as
General Manager of the Philippine Ports Authority (PPA), et al.) and raffled to Branch 2 of RTC-Manila.
The factual antecedents of this case are discussed in G.R. No. 100481 below.
 Meanwhile, in Civil Case 87-38913, the court, without resolving the motion to dismiss filed by the
PPA, rendered a decision[5] holding that A.O. No. 02-88 did not render the case moot and academic and
that the PPA was under obligation to comply with E.O. No. 1088 because the order had the force of law
which the PPA could not repeal.
The then Transportation Minister Hernando Perez and the PPA filed a petition for review. The
petition was filed in this Court which later referred the case to the Court of Appeals where it was
docketed as CA G.R. SP. No. 18072. On the other hand the intervenors appealed to the Court of Appeals
where this case was docketed as CA G.R. No. 21590. The two cases were then consolidated.
In a decision rendered on October 4, 1991, the Twelfth Division[6] of the Court of Appeals affirmed
the decision of the trial court, by dismissing CA G.R. No. 21590 and denying CA G.R. SP. No. 18072. Hence,
this petition by the Secretary of Transportation and Communications and the PPA. The intervenor
shipping lines did not appeal.

G.R. No. 100481

Meanwhile, in a petition for certiorari filed before RTC-Manila, Branch 2 (Civil Case No. 88-44726),
the UHPAP and the MPA sought the annulment of A.O. No. 02-88, which in pertinent parts provided:

Section 1. Statement of Policy. It is hereby declared that the provision of pilotage in ports/harbors/areas
defined as compulsory in Section 8 of PPA Administrative Order No. 03-85, entitled, "Rules and
Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in Philippine Ports" shall
be open to all licensed harbor pilots/pilotage firms/associations appointed/accredited by this authority
to perform pilotage service.

Section 2. Persons Authorized to Render Pilotage. The following individuals, persons or groups shall be
appointed/accredited by this Authority to provide pilotage service:

a. Harbor Pilots of the present Pilotage Associations of the different pilotage districts in the
Philippines. Their probationary training as required under Section 31 of PPA AO No. 03-85 shall
be undertaken by any member of said Association.

b. Members/employees of any partnership/corporation or association, including Filipino

shipmasters/ captains of vessel (domestic/foreign) of Philippine Registry and individuals who
meet the minimum qualifications and comply with the requirements prescribed in Sec. 29 of PPA
AO No. 03-85, aforestated, and who are appointed by said firm or association and accredited as
harbor pilots by this authority. New Harbor Pilots who wish to be appointed/accredited by PPA
under the open pilotage system either as an individual pilot or as a member of any Harbor Pilot
partnership/association shall be required to undergo a practical examination, in addition to the
written examination given by the Philippine Coast Guard, prior to their appointment/
accreditation by this Authority.

The UHPAP and MPA, as petitioners below, contended (1) that A.O. No. 02-88 was issued without the
benefit of a public hearing; (2) that E.O. No. 1088 had not been repealed by any other Executive Order or
Presidential Decree and, therefore, should be given effect; and (3) that A.O. No. 02-88 contravened P.D.
No. 857.
On August 21, 1989, the Philippine Interisland Shipping Association, Conference of Interisland
Shipowners and Operators, United Petroleum Tanker Operators of the Philippines, Lighterage
Association of the Philippines, and Pilotage Integrated Services Corp., were allowed to intervene.
On September 8, 1989, a writ of preliminary injunction was issued by the court, enjoining the PPA
from implementing A.O. No. 02-88 and, on October 26, 1989, judgment was rendered in favor of the
petitioners therein. The dispositive portion of the court's decision[7] reads:
WHEREFORE, for all of the foregoing, the petition is hereby granted.

1. Respondents are hereby declared to have acted in excess of jurisdiction and with grave abuse of
discretion amounting to lack of jurisdiction in approving Resolution No. 860 and in enacting Philippine
Ports Authority Administrative Order No. 02-88, the subject of which is "Implementing Guidelines on
Open Pilotage Service";

2. Philippine Ports Authority Administrative Order No. 02-88 is declared null and void;

3. The preliminary injunction issued on September 8, 1989 is made permanent; and

4. Without costs.

SO ORDERED.

Respondents and the intervenors below filed a joint petition for certiorari in the Court of Appeals (CA
G.R. SP No. 19570), assailing the decision of the trial court. But their petition was dismissed for lack of
jurisdiction on the ground that the issue raised was purely legal.
The parties separately filed petitions for review before this Court. The first one, by the PPA and its
officers, was docketed as G.R. No. 100109 (Hon. Pete Nicomedes Prado, Philippine Ports Authority and
Commodore Rogelio Dayan v. United Harbor Pilots' Association of the Philippines and Manila Pilots'
Association), while the second one, by the intervenors, was docketed as G.R. No. 100481 (Philippine
Interisland Shipping Association of the Philippines, Conference of Interisland Ship Owners and Operators,
United Petroleum Tanker Operators Association of the Philippines, Inc. v. The Court of Appeals, United
Harbor Pilots' Association of the Philippines and Manila Pilots' Association.)
The petition filed by the government in G.R. No. 100109 was dismissed for failure of petitioners to
show that the Court of Appeals committed a reversible error.[8] On the other hand, the petition of the
intervenors in G.R. No. 100481 was given due course.

G.R. No. 107720

Following the denial of its petition in G.R. No. 100109, the PPA issued on July 31, 1992,
Administrative Order No. 05-92, placing harbor pilots under the control of the PPA with respect to the
scheduling and assignment of service of vessels. The PPA cited as justification "pilotage delays . . . under
the set-up where private respondents (UHPAP & MPA) assign the pilots. Intentionally or otherwise,
several vessels do not receive the pilotage service promptly, causing them operational disruptions and
additional expenses/costs." [9]
Private respondents UHPAP and MPA viewed the matter differently. On October 28, 1992, they asked
the RTC-Manila, Branch 2 which heard and decided Civil Case No. 88-44726 to cite PPA officials in
contempt of court. On the same day, the trial court issued an order restraining the herein petitioners
from implementing Administrative Order No. 05-92. However, the PPA proceeded to implement its order,
prompting the UHPAP and MPA to move again to cite petitioners in contempt, even as they questioned
the validity of A.O. No. 05-92. Accordingly the trial court issued another order on November 4, 1992,
reiterating its previous order of October 28, 1992 to petitioners to refrain from implementing A.O. No.
05-92 pending resolution of the petitions.
Making a special appearance, petitioners questioned the jurisdiction of the court and moved for the
dismissal of the petitions for contempt. Allegedly to prevent the disruption of pilotage services,
petitioners created a special team of reserve pilots to take over the pilotage service in the event members
of UHPAP/MPA refused to render pilotage services.
 For the third time respondents moved to cite petitioners in contempt of court. Again petitioners
questioned the court's jurisdiction and manifested that they were adopting their previous motion to
dismiss petitions for contempt filed against them.
On November 17, 1992, the trial court denied the petitioners' motion and set the contempt petitions
for hearing on November 19, 1992. Hence, this petition, which was docketed as G.R. No. 107720 (Hon.
Jesus B. Garcia, Jr. in his capacity as Secretary of Transportation and Communications and Chairman of
the Philippine Ports Authority, Commodore Rogelio A. Dayan, in his capacity as General Manager of the
Philippine Ports Authority and Simeon T. Silva, Jr., in his capacity as the South Harbor Manager,
Philippine Ports Authority v. Hon. Napoleon Flojo, in his capacity as the Presiding Judge of Branch 2, RTC,
Manila, UHPAP and MPA).
Pending resolution of this case, the Court ordered the parties to maintain the status quo as of October
31, 1992.

II. THE ISSUES AND THEIR DISPOSITION

The issues raised are:

I. WHETHER OR NOT RESPONDENT COURT OF APPEALS ERRED IN AFFIRMING THE CHALLENGED

DECISION OF RTC-MANILA, BRANCH 41, WHICH RULED THAT:

(A) CIVIL CASE NO. 87-38913 HAS NOT BECOME MOOT AND ACADEMIC WITH THE ISSUANCE
OF ADMINISTRATIVE ORDER NO. 02-88; AND

(B) HEREIN PETITIONERS ARE BOUND TO COMPLY WITH E.O. NO. 1088;

II. WHETHER OR NOT THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN DISMISSING
CA G.R. SP. NO. 19570 FOR LACK OF JURISDICTION?

III. WHETHER OR NOT RESPONDENT JUDGE NAPOLEON FLOJO COMMITTED GRAVE ABUSE OF
DISCRETION IN ASSUMING JURISDICTION OVER THE PETITIONS FOR CONTEMPT FILED BY
PRIVATE RESPONDENTS AS A RESULT OF THE ISSUANCE OF A.O. NO. 05-92?

These issues will be discussed in seriatim.

A. Whether Executive Order No. 1088 is Valid and

Petitioners are Bound to Obey it
(G.R. Nos. 103716-17)

Executive Order No. 1088 reads:

EXECUTIVE ORDER No. 1088

PROVIDING FOR UNIFORM AND MODIFIED RATES FOR PILOTAGE SERVICES RENDERED TO
FOREIGN AND COASTWISE VESSELS IN ALL PRIVATE OR PUBLIC PHILIPPINE PORTS.

WHEREAS, the United Harbor Pilots' Association of the Philippines has clamored for the rationalization of
pilotage service charges, through the imposition of uniform and adjusted rates for foreign and coastwise
vessels in all Philippine ports, whether public or private;

WHEREAS, the plea of the Association has been echoed by a great number of Members of Parliament and
other persons and groups;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers
vested in me by the Constitution and by law, do hereby direct and order:

Section 1. The following shall be the rate of pilotage fees or charges based on tonnage for services
rendered to both foreign and coastwise vessels;

For Foreign Vessels Rate in US $ or

its Peso
Equivalent

Less than 500GT $ 30.00

500GT to 2,500GT 43.33
2,500GT to 5,000GT 71.33
5,000GT to 10,000GT 133.67
10,000GT to 15,000GT 181.67
15,000GT to 20,000GT 247.00
20,000GT to 30,000GT 300.00
30,000GT to 40,000GT 416.67
40,000GT to 60,000GT 483.33
60,000GT to 80,000GT 550.00
80,000GT to 100,000GT 616.67
100,000GT to 120,000GT 666.67
120,000GT to 130,000GT 716.67
130,000GT to 140,000GT 766.67

Over 140,000 gross tonnage $0.05 or its peso equivalent every excess tonnage. Rate for docking and
undocking anchorage, conduction and shifting other related special services is equal to 100%. Pilotage
services shall be compulsory in government and private wharves or piers,

For Coastwise Vessels: Regular

100 and under 500 gross tons P 41.70

500 and under 600 gross tons 55.60
600 and under 1,000 gross tons 69.60
1,000 and under 3,000 gross tons 139.20
3,000 and under 5,000 gross tons 300.00
5,000 and over gross tons

SEC. 2. With respect to foreign vessels, payment of pilotage services shall be made in dollars or in pesos at
the prevailing exchange rate.

SEC. 3. All orders, letters of instruction, rules, regulations and other issuances inconsistent with this
Executive Order are hereby repealed or amended accordingly.

SEC. 4. This Executive Order shall take effect immediately.

Done in the City of Manila, this 3rd day of February, in the year of our Lord, nineteen hundred and eighty-
six.

(Sgd.) FERDINAND E. MARCOS

President of the Philippines

By the President:

(Sgd.) JUAN C. TUVERA

Presidential Executive Assistant

Petitioners contend that E.O. No. 1088 was merely an administrative issuance of then President
Ferdinand E. Marcos and, as such, it could be superseded by an order of the PPA. They argue that to
consider E.O. No. 1088 a statute would be to deprive the PPA of its power under its charter to fix pilotage
rates.
The contention has no merit. The fixing of rates is essentially a legislative power. [10] Indeed, the great
battle over the validity of the exercise of this power by administrative agencies was fought in the 1920s
on the issue of undue delegation precisely because the power delegated was legislative. The growing
complexity of modern society, the multiplication of the subjects of governmental regulations and the
increased difficulty of administering the laws made the creation of administrative agencies and the
delegation to them of legislative power necessary.[11]
There is no basis for petitioners' argument that rate fixing is merely an exercise of administrative
power; that if President Marcos had power to revise the rates previously fixed by the PPA through the
issuance of E.O. No. 1088, the PPA could in turn revise those fixed by the President, as the PPA actually
did in A.O. No. 43-86, which fixed lower rates of pilotage fees, and even entirely left the fees to be paid for
pilotage to the agreement of the parties to a contract. The orders previously issued by the PPA were in
the nature of subordinate legislation, promulgated by it in the exercise of delegated power. As such these
could only be amended or revised by law, as the President did by E.O. No. 1088.
It is not an answer to say that E.O. No. 1088 should not be considered a statute because that would
imply the withdrawal of power from the PPA. What determines whether an act is a law or an
administrative issuance is not its form but its nature. Here, as we have already said, the power to fix the
rates of charges for services, including pilotage service, has always been regarded as legislative in
character.
Nor is there any doubt of the power of the then President to fix rates. On February 3, 1986, when he
issued E.O. No. 1088, President Marcos was authorized under Amendment No. 6 of the 1973 Constitution
to exercise legislative power, just as he was under the original 1973 Constitution, when he issued P.D. NO.
857 which created the PPA, endowing it with the power to regulate pilotage service in Philippine ports.
Although the power to fix rates for pilotage had been delegated to the PPA, it became necessary to
rationalize the rates of charges fixed by it through the imposition of uniform rates. That is what the
President did in promulgating E.O. No. 1088. As the President could delegate the ratemaking power to the
PPA, so could he exercise it in specific instances without thereby withdrawing the power vested by P.D.
No. 857, Section 20(a) in the PPA "to impose, fix, prescribe, increase or decrease such rates, charges or
fees... for the services rendered by the Authority or by any private organization within a Port District."
It is worthy to note that E.O. No. 1088 provides for adjusted pilotage service rates without
withdrawing the power of the PPA to impose, prescribe, increase or decrease rates, charges or fees. The
reason is because E.O. NO. 1088 is not meant simply to fix new pilotage rates. Its legislative purpose is the
"rationalization of pilotage service charges, through the imposition of uniform and adjusted rates for
foreign and coastwise vessels in all Philippine ports."
The case presented is similar to the fixing of wages under the Wage Rationalization Act (R.A. No.
6727) whereby minimum wages are determined by Congress and provided by law, subject to revision by
Wage Boards should later conditions warrant their revision. It cannot be denied that Congress may
intervene anytime despite the existence of administrative agencies entrusted with wage-fixing powers,
by virtue of the former's plenary power of legislation. When Congress does so, the result is not the
withdrawal of the powers delegated to the Wage Boards but cooperative lawmaking in an area where
initiative and expertise are required. The Court of Appeals is correct in holding that

The power of the PPA to fix pilotage rates and its authority to regulate pilotage still remain
notwithstanding the fact that a schedule for pilotage fees has already been prescribed by the questioned
executive order. PPA is at liberty to fix new rates of pilotage subject only to the limitation that such new
rates should not go below the rates fixed under E.O. 1088. The rationale behind the limitation is no
different from what has been previously stated. Being a mere administrative agency, PPA cannot validly
issue orders or regulations that would have the effect of rendering nugatory the provisions of the
legislative issuance such as those of the executive order in question.(emphasis supplied)

Petitioners refused to implement E.O. No. 1088 on the ground that it was issued without notice to the
PPA and that it was nothing but a "political gimmick" resorted to by then President Marcos. This
perception obviously stemmed from the fact that E.O. No. 1088 was issued shortly before the presidential
elections in 1986.
But lack of notice to the PPA is not proof that the necessary factual basis for the order was wanting.
To the contrary, the presumption is that the President had before him pertinent data on which he based
the rates prescribed in his order. Nor is the fact that the order might have been issued to curry favor with
the voters a reason for the PPA to refuse to enforce the order in question. It is not unusual for lawmakers
to have in mind partisan political consideration in sponsoring legislation. Yet that is not a ground for
invalidating a statute.
Moreover, an inquiry into legislative motivation is not proper since the only relevant question is
whether in issuing it the President violated constitutional and statutory restrictions on his power. The
PPA did not have any objection to the order based on constitutional ground. In fact the nearest to a
challenge on constitutional grounds was that mounted not by the PPA but by the intervenors below
which claimed that the rates fixed in E.O. NO. 1088 were exorbitant and unreasonable. However, both the
trial court and the Court of Appeals overruled the objections and the intervenors apparently accepted the
ruling because they did not appeal further to this Court.
There is, therefore, no legal basis for PPA's intransigence, after failing to get the new administration
of President Aquino to revoke the order by issuing it own order in the form of A.O. NO. 02-88. It is
noteworthy that if President Marcos had legislative power under Amendment No. 6 of the 1973
Constitution[12] so did President Aquino under the Provisional (Freedom) Constitution[13] who could, had
she thought E.O. No. 1088 to be a mere "political gimmick," have just as easily revoked her predecessor's
order. It is tempting to ask if the administrative agency would have shown the same act of defiance of the
President's order had there been no change of administration. What this Court said in La Perla Cigar and
Cigarette Factory v. Capapas," [14]mutatis mutandis may be applied to the cases at bar:

Was it within the powers of the then Collector Ang-angco to refuse to collect the duties that must be paid?
That is the crucial point of inquiry. We hold that it was not.

Precisely, he had to give the above legal provisions, quite explicit in character, force and effect. His
obligation was to collect the revenue for the government in accordance with existing legal provisions,
executive agreements and executive orders certainly not excluded. He would not be living up to his official
designation if he were permitted to act otherwise. He was not named Collector of Customs for nothing. . . .

Certainly, if the President himself were called upon to execute the laws faithfully, a Collector of Customs,
himself a subordinate executive official, cannot be considered as exempt in any wise from such an
obligation of fealty. Similarly, if the President cannot suspend the operation of any law, it would be
presumptuous in the extreme for one in the position of then Collector Ang-angco to consider himself as
possessed of such a prerogative. . . .

We conclude that E.O. No. 1088 is a valid statute and that the PPA is duty bound to comply with its
provisions. The PPA may increase the rates but it may not decrease them below those mandated by E.O.
No. 1088. Finally, the PPA cannot refuse to implement E.O. No. 1088 or alter it as it did in promulgating
Memorandum Circular No. 43-86. Much less could the PPA abrogate the rates fixed and leave the fixing of
rates for pilotage service to the contracting parties as it did through A. O. No. 02-88, Section 3.
Theretofore the policy was one of governmental regulation of the pilotage business. By leaving the matter
to the determination of the parties, the PPA jettisoned this policy and changed it to laissez-faire,
something which only the legislature, or whoever is vested with lawmaking authority, could do.
B. Whether the Court of Appeals had Jurisdiction over the
Appeal of Intervenors from the Decision of the
Trial Court Invalidating Administrative Order
No. 02-88 of the PPA
(G.R. No. 100481)

The Court of Appeals dismissed the joint appeal of the government and the intervenors from the trial
court's decision in Civil Case No. 88-44726 on the ground that the issues raised were purely legal
questions.[15] The appellate court stated:

After a painstaking review of the records We resolved to dismiss the petition for lack of jurisdiction.

From the facts, it is clear that the main issue proffered by the appellant is whether or not the respondent
Philippine Ports Authority could validly issue rules and regulations adopting the "open pilotage policy"
pursuant to its charter (P.D. 857).

....

It must be noted that while the court a quo had clearly recognized the intricate legal issue involved, it
nevertheless decided it on the merits which apparently resolved only the procedural aspect that justified
it in declaring the questioned order as null and void. While We recognize the basic requirements of due
process, the same cannot take precedence in the case at bar in lieu of the fact that the resolution of the
present case is purely a legal question.

Moreover, it appears that appellants in the court below had filed a manifestation and motion waiving
their presentation of evidence. Instead, they opted to submit a comprehensive memorandum of the case
on the ground that the pivotal issue raised in the petition below is purely legal in character. (p. 231,
Records)

At this juncture, We are at a loss why appellants had elevated the present action before Us where at the
outset they already noted that the issue is purely legal.

If in the case of Murillo v. Consul (UDK-9748, Resolution en banc, March 1, 1990) the Supreme Court laid
down the rule that "if an appeal by notice of appeal is taken from the Regional Trial Court to the Court of
Appeals, and in the latter Court, the appellant raised naught but issues of law, the appeal should be
dismissed for lack of jurisdiction (page 5, Resolution in Murillo)," then with more reason where as in the
case at bar public-appellants thru the Office of the Solicitor General in their memorandum manifested
that the controversy has reference to the pure legal question of the validity of the questioned
administrative order. Consequently, We have no other recourse but to dismiss the petition on the
strength of these pronouncements.

As already stated, from this decision, both the government and the intervenors separately brought
petitions for review to this Court. In G.R. No. 100109, the government's petition was dismissed for lack of
showing that the appellate court committed reversible error. The dismissal of the government's petition
goes far to sustain the dismissal of the intervenors' petition in G.R. No. 100481 for the review of the same
decision of the Court of Appeals. After all, the intervenors' petition is based on substantially the same
grounds as those stated in the government's petition. It is now settled that the dismissal of a petition for
review on certiorari is an adjudication on the merits of a controversy.[16] Such dismissal can only mean
that the Supreme Court agrees with the findings and conclusions of the Court of Appeals or that the
decision sought to be reviewed is correct.[17]
It is significant to note that the Secretary of Transportation and Communications and the PPA,
petitioners in G.R. No. 100109, have conceded the finality of the dismissal of their appeal. [18]Thus, the
administrative policy, the validity of which herein petitioners seek to justify by their appeal, has already
been abandoned by the very administrative agency which adopted it, with the result that the question of
validity of A.O. No. 02-88 is now moot and academic.

C. Whether the Trial Court has Jurisdiction to Hear and

Decide the Contempt Charges
against Petitioners
(G.R. No. 107720)

As already noted, following the dismissal of the government's appeal in G.R. No. 100109, the PPA
abandoned A.O. No. 02-88 which provided for "Open Pilotage System." But it subsequently promulgated
Administrative Order No. 05-92, under which the PPA assumed the power of scheduling and assigning
pilots to service vessels, allegedly regardless of whether the pilots assigned are or are not members of the
UHPAP and the MPA which theretofore had been the exclusive agencies rendering pilotage service in
Philippine ports. The UHPAP and the MPA saw the adoption of this system as a return to the "Open
Pilotage System" and, therefore, a violation of the trial court's decision invalidating the "Open Pilotage
System." They considered this to be a contempt of the trial court.
Petitioners moved to dismiss the motions for contempt against them. They contend that even if the
motions were filed as incidents of Civil Case No. 88-44726, the RTC-Manila, Branch 2 did not have
jurisdiction to hear them because the main case was no longer before the court and the fact was that the
contempt citation was not an incident of the case, not even of its execution, but a new matter raising a
new cause of action which must be litigated in a separate action, even as petitioners denied they had
committed any contumacious act by the issuance of A.O. No. 05-92.
Private respondents maintained that their petitions were mere incidents of Civil Case No. 88-44726
and that the trial court has jurisdiction because in fact this Court had not yet remanded the case to the
court a quo for execution of its decision. Private respondents complain that petitioners are trying to
circumvent the final and executory decision of the court in Civil Case No. 88-44726, through the issuance
of A.O. No. 05-92.
As already noted, however, the decision of the trial court in Civil Case No. 88-44726 enjoined
petitioners from implementing the so called "Open Pilotage System" embodied in A O. No. 02-88. If, as
alleged, A.O. No. 05-92 is in substance a reenactment of A.O. No. 02-88, then there is basis for private
respondents' invocation of the trial court's jurisdiction to punish for contempt.
Still it is argued that the trial court lost jurisdiction over Civil Case No. 887426, upon the perfection of
their appeal from its decision. That is indeed true. "The appeal transfers the proceedings to the appellate
court, and this last court becomes thereby charged with the authority to deal with contempt's committed
after perfection of the appeal."[19] The trial court would have jurisdiction only in the event of an attempt
to block execution of its decision and that would be after the remand of the case to the trial court. [20] Until
then the trial court would have no jurisdiction to deal with alleged contemptuous acts.
The fly in the ointment, however, is that by accepting the dismissal of their petition for review in G.R.
No. 100109, petitioners rendered execution of the decision of the trial court superfluous. Any attempt by
them, therefore, to disobey the court's final injunction as embodied in its decision would be properly
subject to punishment for contempt. Petitioners' contention that private respondents' complaint must be
the subject of a separate action would nullify contempt proceedings as means of securing obedience to
the lawful processes of a court. Petitioners' theory would reward ingenuity and cunning in devising
orders which substantially are the same as the order previously prohibited by the court.
We hold that the trial court has jurisdiction to hear the motions for contempt filed by private
respondent, subject to any valid defense which petitioners may interpose.

III. JUDGMENT
 WHEREFORE, the several petitions in these cases are DISMISSED.
SO ORDERED.
Narvasa, C.J., Padilla, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Francisco,
Hermosisima, Jr., Panganiban, and Torres, Jr., JJ., concur.
Regalado, J., no part related to a counsel in G.R. No. 100481.

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 well-known, 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. 38reiterated 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. Eñage 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 años 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." 65Moreover, 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 Nuñez 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." 80Nor 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 non-delegation 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.

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 open-ended, 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 above-
cited 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 faitaccompli 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.

G.R. No. 96754 June 22, 1995

CONGRESSMAN JAMES L. CHIONGBIAN (Third District, South Cotobato) ADELBERT W. ANTONINO (First
District, South Cotobato), WILFREDO G. CAINGLET (Third District, Zamboanga del Norte), HILARION
RAMIRO, JR. (Second Division, Misamis Occidental), ERNESTO S. AMATONG (Second District, Zamboanga
del Norte), ALVIN G. DANS (Lone District, Basilan), ABDULLAH M. DIMAPORO (Second District, Lanao del
Norte), and CONGRESSWOMAN MARIA CLARA A. LOBREGAT (Lone District, Zamboanga
City) petitioners,
vs.
HON. OSCAR M. ORBOS, Executive Secretary; COMMITTEE CHAIRMAN SEC. FIDEL V. RAMOS, CABINET
OFFICERS FOR REGIONAL DEVELOPMENT FOR REGIONS X AND XII, CHAIRMAN OF THE REGIONAL
DEVELOPMENT COUNCIL FOR REGION X, CHAIRMAN JESUS V. AYALA, CABINET OFFICERS FOR
REGIONAL DEVELOPMENT FOR REGIONS XI and XII, DEPARTMENT OF LOCAL GOVERNMENT,
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY SECRETARIAT, PRESIDENTIAL MANAGEMENT
STAFF, HON. GUILLERMO CARAGUE, Secretary of the DEPARTMENT OF BUDGET and MANAGEMENT;
and HON. ROSALINA S. CAJUCUM, OIC National Treasurer, respondents.

IMMANUEL JALDON, petitioner,

vs.
HON. EXECUTIVE SECRETARY OSCAR M. ORBOS, HON. FIDEL RAMOS, HON. SECRETARY LUIS SANTOS,
AND HON. NATIONAL TREASURER ROSALINA CAJUCOM, respondents.

MENDOZA, J.:

These suits challenge the validity of a provision of the Organic Act for the Autonomous Region in Muslim
Mindanao (R.A. No. 6734), authorizing the President of the Philippines to "merge" by administrative
determination the regions remaining after the establishment of the Autonomous Region, and the
Executive Order issued by the President pursuant to such authority, "Providing for the Reorganization of
Administrative Regions in Mindanao." A temporary restraining order prayed for by the petitioners was
issued by this Court on January 29, 1991, enjoining the respondents from enforcing the Executive Order
and statute in question.

The facts are as follows:

Pursuant to Art. X, §18 of the 1987 Constitution, Congress passed R.A. No. 6734, the Organic Act for the
Autonomous Region in Muslim Mindanao, calling for a plebiscite to be held in the provinces of Basilan,
Cotobato, Davao del Sur, Lanao del Norte, Lanao del Sur, Maguindanao, Palawan, South Cotabato, Sultan
Kudarat, Sulu, Tawi-Tawi, Zamboanga del Norte, and Zamboanga del Sur, and the cities of Cotabato,
Dapitan, Dipolog, General Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga. In the
ensuing plebiscite held on November 16, 1989, four provinces voted in favor of creating an autonomous
region. These are the provinces of Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi. In accordance with
the constitutional provision, these provinces became the Autonomous Region in Muslim Mindanao.

On the other hand, with respect to provinces and cities not voting in favor of the Autonomous Region, Art.
XIX, § 13 of R.A. No. 6734 provides,

That only the provinces and cities voting favorably in such plebiscites shall be included in
the Autonomous Region in Muslim Mindanao. The provinces and cities which in the
plebiscite do not vote for inclusion in the Autonomous Region shall remain in the existing
administrative regions. Provided, however, that the President may, by administrative
determination, merge the existing regions.

Pursuant to the authority granted by this provision, then President Corazon C. Aquino issued on October
12, 1990 Executive Order No. 429, "providing for the Reorganization of the Administrative Regions in
Mindanao." Under this Order, as amended by E.O. No. 439 —

(1) Misamis Occidental, at present part of Region X, will become part of Region IX.

(2) Oroquieta City, Tangub City and Ozamiz City, at present parts of Region X will become
parts of Region IX.

(3) South Cotobato, at present a part of Region XI, will become part of Region XII.

(4) General Santos City, at present part of Region XI, will become part of Region XII.

(5) Lanao del Norte, at present part of Region XII, will become part of Region IX.

(6) Iligan City and Marawi City, at present part of Region XII, will become part of Region IX.

Petitioners in G.R. No. 96754 are, or at least at the time of the filing of their petition, members of Congress
representing various legislative districts in South Cotobato, Zamboanga del Norte, Basilan, Lanao del
Norte and Zamboanga City. On November 12, 1990, they wrote then President Aquino protesting E.O. No.
429. They contended that

There is no law which authorizes the President to pick certain provinces and cities within
the existing regions — some of which did not even take part in the plebiscite as in the case
of the province of Misamis Occidental and the cities of Oroquieta, Tangub and Ozamiz —
and restructure them to new administrative regions. On the other hand, the law (Sec. 13,
Art. XIX, R.A. 6734) is specific to the point, that is, that "the provinces and cities which in
the plebiscite do not vote for inclusion in the Autonomous Region shall remain in the
existing administrative regions."

The transfer of the provinces of Misamis Occidental from Region X to Region IX; Lanao del
Norte from Region XII to Region IX, and South Cotobato from Region XI to Region XII are
 alterations of the existing structures of governmental units, in other words, reorganization.
This can be gleaned from Executive Order No. 429, thus

Whereas, there is an urgent need to reorganize the administrative regions in

Mindanao to guarantee the effective delivery of field services of government
agencies taking into consideration the formation of the Autonomous Region
in Muslim Mindanao.

With due respect to Her Excellency, we submit that while the authority necessarily includes
the authority to merge, the authority to merge does not include the authority to reorganize.
Therefore, the President's authority under RA 6734 to "merge existing regions" cannot be
construed to include the authority to reorganize them. To do so will violate the rules of
statutory construction.

The transfer of regional centers under Executive Order 429 is actually a restructuring
(reorganization) of administrative regions. While this reorganization, as in Executive Order
429, does not affect the apportionment of congressional representatives, the same is not
valid under the penultimate paragraph of Sec. 13, Art. XIX of R.A. 6734 and Ordinance
appended to the 1986 Constitution apportioning the seats of the House of Representatives
of Congress of the Philippines to the different legislative districts in provinces and cities.1

As their protest went unheeded, while Inauguration Ceremonies of the New Administrative Region IX
were scheduled on January 26, 1991, petitioners brought this suit for certiorari and prohibition.

On the other hand, the petitioner in G.R. No. 96673, Immanuel Jaldon, is a resident of Zamboanga City,
who is suing in the capacity of taxpayer and citizen of the Republic of the Philippines.

Petitioners in both cases contend that Art. XIX, §13 of R.A. No. 6734 is unconstitutional because (1) it
unduly delegates legislative power to the President by authorizing him to "merge [by administrative
determination] the existing regions" or at any rate provides no standard for the exercise of the power
delegated and (2) the power granted is not expressed in the title of the law.

In addition, petitioner in G.R. No. 96673 challenges the validity of E.O. No. 429 on the ground that the
power granted by Art. XIX, §13 to the President is only to "merge regions IX and XII" but not to reorganize
the entire administrative regions in Mindanao and certainly not to transfer the regional center of Region
IX from Zamboanga City to Pagadian City.

The Solicitor General defends the reorganization of regions in Mindanao by E.O. No. 429 as merely the
exercise of a power "traditionally lodged in the President," as held in Abbas v. Comelec,2 and as a mere
incident of his power of general supervision over local governments and control of executive
departments, bureaus and offices under Art. X, §16 and Art. VII, §17, respectively, of the Constitution.

He contends that there is no undue delegation of legislative power but only a grant of the power to "fill
up" or provide the details of legislation because Congress did not have the facility to provide for them. He
cites by analogy the case of Municipality of Cardona v. Municipality of Binangonan,3 in which the power of
the Governor-General to fix municipal boundaries was sustained on the ground that —

[such power] is simply a transference of certain details with respect to provinces,

municipalities, and townships, many of them newly created, and all of them subject to a
more or less rapid change both in development and centers of population, the proper
regulation of which might require not only prompt action but action of such a detailed
character as not to permit the legislative body, as such, to take it efficiently.
The Solicitor General justifies the grant to the President of the power "to merge the existing regions" as
something fairly embraced in the title of R.A. No. 6734, to wit, "An Act Providing for an Organic Act for the
Autonomous Region in Muslim Mindanao," because it is germane to it.

He argues that the power is not limited to the merger of those regions in which the provinces and cities
which took part in the plebiscite are located but that it extends to all regions in Mindanao as necessitated
by the establishment of the autonomous region.

Finally, he invokes P.D. No. 1416, as amended by P.D. No. 1772 which provides:

1. The President of the Philippines shall have the continuing authority to reorganize the
National Government. In exercising this authority, the President shall be guided by
generally acceptable principles of good government and responsive national government,
including but not limited to the following guidelines for a more efficient, effective,
economical and development-oriented governmental framework:

(a) More effective planning implementation, and review functions;

(b) Greater decentralization and responsiveness in decision-making process;

(c) Further minimization, if not, elimination, of duplication or overlapping of

purposes, functions, activities, and programs;

(d) Further development of as standardized as possible ministerial, sub-

ministerial and corporate organizational structures;

(e) Further development of the regionalization process; and

(f) Further rationalization of the functions of and administrative

relationships among government entities.

For purposes of this Decree, the coverage of the continuing authority of the
President to reorganize shall be interpreted to encompass all agencies,
entities, instrumentalities, and units of the National Government, including
all government owned or controlled corporations as well as the entire range
of the powers, functions, authorities, administrative relationships, acid
related aspects pertaining to these agencies, entities, instrumentalities, and
units.

2. [T]he President may, at his discretion, take the following actions:

xxx xxx xxx

f. Create, abolish, group, consolidate, merge, or integrate entities, agencies,

instrumentalities, and units of the National Government, as well as expand,
amend, change, or otherwise modify their powers, functions and authorities,
including, with respect to government-owned or controlled corporations,
their corporate life, capitalization, and other relevant aspects of their
charters.

g. Take such other related actions as may be necessary to carry out the
purposes and objectives of this Decree.

Considering the arguments of the parties, the issues are:

(1) whether the power to "merge" administrative regions is legislative in character, as petitioners
contend, or whether it is executive in character, as respondents claim it is, and, in any event, whether Art.
XIX, §13 is invalid because it contains no standard to guide the President's discretion;

(2) whether the power given is fairly expressed in the title of the statute; and

(3) whether the power granted authorizes the reorganization even of regions the provinces and cities in
which either did not take part in the plebiscite on the creation of the Autonomous Region or did not vote
in favor of it; and

(4) whether the power granted to the President includes the power to transfer the regional center of
Region IX from Zamboanga City to Pagadian City.

It will be useful to recall first the nature of administrative regions and the basis and purpose for their
creation. On September 9, 1968, R.A. No. 5435 was passed "authorizing the President of the Philippines,
with the help of a Commission on Reorganization, to reorganize the different executive departments,
bureaus, offices, agencies and instrumentalities of the government, including banking or financial
institutions and corporations owned or controlled by it." The purpose was to promote "simplicity,
economy and efficiency in the government."4 The Commission on Reorganization created under the law
was required to submit an integrated reorganization plan not later than December 31, 1969 to the
President who was in turn required to submit the plan to Congress within forty days after the opening of
its next regular session. The law provided that any reorganization plan submitted would become effective
only upon the approval of Congress.5

Accordingly, the Reorganization Commission prepared an Integrated Reorganization Plan which divided
the country into eleven administrative regions. 6 By P.D. No. 1, the Plan was approved and made part of
the law of the land on September 24, 1972. P.D. No. 1 was twice amended in 1975, first by P.D. No. 742
which "restructur[ed] the regional organization of Mindanao, Basilan, Sulu and Tawi-Tawi" and later by
P.D. No. 773 which further "restructur[ed] the regional organization of Mindanao and divid[ed] Region IX
into two sub-regions." In 1978, P.D. No. 1555 transferred the regional center of Region IX from Jolo to
Zamboanga City.

Thus the creation and subsequent reorganization of administrative regions have been by the President
pursuant to authority granted to him by law. In conferring on the President the power "to merge [by
administrative determination] the existing regions" following the establishment of the Autonomous
Region in Muslim Mindanao, Congress merely followed the pattern set in previous legislation dating back
to the initial organization of administrative regions in 1972. The choice of the President as delegate is
logical because the division of the country into regions is intended to facilitate not only the
administration of local governments but also the direction of executive departments which the law
requires should have regional offices. As this Court observed in Abbas, "while the power to merge
administrative regions is not expressly provided for in the Constitution, it is a power which has
traditionally been lodged with the President to facilitate the exercise of the power of general supervision
over local governments [seeArt. X, §4 of the Constitution]." The regions themselves are not territorial and
political divisions like provinces, cities, municipalities and barangays but are "mere groupings of
contiguous provinces for administrative purposes."7 The power conferred on the President is similar to
the power to adjust municipal boundaries8 which has been described in Pelaez v. Auditor General9 or as
"administrative in nature."

There is, therefore, no abdication by Congress of its legislative power in conferring on the President the
power to merge administrative regions. The question is whether Congress has provided a sufficient
standard by which the President is to be guided in the exercise of the power granted and whether in any
event the grant of power to him is included in the subject expressed in the title of the law.
First, the question of standard. A legislative standard need not be expressed. It may simply be gathered or
implied. 10 Nor need it be found in the law challenged because it may be embodied in other statutes on
the same subject as that of the challenged legislation. 11

With respect to the power to merge existing administrative regions, the standard is to be found in the
same policy underlying the grant to the President in R.A. No. 5435 of the power to reorganize the
Executive Department, to wit: "to promote simplicity, economy and efficiency in the government to
enable it to pursue programs consistent with national goals for accelerated social and economic
development and to improve the service in the transaction of the public business."12 Indeed, as the
original eleven administrative regions were established in accordance with this policy, it is logical to
suppose that in authorizing the President to "merge [by administrative determination] the existing
regions" in view of the withdrawal from some of those regions of the provinces now constituting the
Autonomous Region, the purpose of Congress was to reconstitute the original basis for the organization
of administrative regions.

Nor is Art. XIX, §13 susceptible to charge that its subject is not embraced in the title of R.A. No. 6734. The
constitutional requirement that "every bill passed by the Congress shall embrace only one subject which
shall be expressed in the title thereof" 13 has always been given a practical rather than a technical
construction. The title is not required to be an index of the content of the bill. It is a sufficient compliance
with the constitutional requirement if the title expresses the general subject and all provisions of the
statute are germane to that subject. 14 Certainly the reorganization of the remaining administrative
regions is germane to the general subject of R.A. No. 6734, which is the establishment of the Autonomous
Region in Muslim Mindanao.

Finally, it is contended that the power granted to the President is limited to the reorganization of
administrative regions in which some of the provinces and cities which voted in favor of regional
autonomy are found, because Art. XIX, §13 provides that those which did not vote for autonomy "shall
remain in the existing administrative regions." More specifically, petitioner in G.R. No. 96673 claims:

The questioned Executive Order No. 429 distorted and, in fact, contravened the clear intent
of this provision by moving out or transferring certain political subdivisions
(provinces/cities) out of their legally designated regions. Aggravating this unacceptable or
untenable situation is EO No. 429's effecting certain movements on areas which did not
even participate in the November 19, 1989 plebiscite. The unauthorized action of the
President, as effected by and under the questioned EO No. 429, is shown by the following
dispositions: (1) Misamis Occidental, formerly of Region X and which did not even
participate in the plebiscite, was moved from said Region X to Region IX; (2) the cities of
Ozamis, Oroquieta, and Tangub, all formerly belonging to Region X, which likewise did not
participate in the said plebiscite, were transferred to Region IX; (3) South Cotobato, from
Region XI to Region XII; (4) General Santos City: from Region XI to Region XII; (5) Lanao del
Norte, from Region XII to Region IX; and (6) the cities of Marawi and Iligan from Region XII
to Region IX. All of the said provinces and cities voted "NO", and thereby rejected their
entry into the Autonomous Region in Muslim Mindanao, as provided under RA No. 6734. 15

The contention has no merit. While Art. XIX, §13 provides that "The provinces and cities which do not
vote for inclusion in the Autonomous Region shall remain in the existing administrative regions," this
provision is subject to the qualification that "the President may by administrative determination merge
the existing regions." This means that while non-assenting provinces and cities are to remain in the
regions as designated upon the creation of the Autonomous Region, they may nevertheless be regrouped
with contiguous provinces forming other regions as the exigency of administration may require.

The regrouping is done only on paper. It involves no more than are definition or redrawing of the lines
separating administrative regions for the purpose of facilitating the administrative supervision of local
government units by the President and insuring the efficient delivery of essential services. There will be
no "transfer" of local governments from one region to another except as they may thus be regrouped so
that a province like Lanao del Norte, which is at present part of Region XII, will become part of Region IX.

The regrouping of contiguous provinces is not even analogous to a redistricting or to the division or
merger of local governments, which all have political consequences on the right of people residing in
those political units to vote and to be voted for. It cannot be overemphasized that administrative regions
are mere groupings of contiguous provinces for administrative purposes, not for political representation.

Petitioners nonetheless insist that only those regions, in which the provinces and cities which voted for
inclusion in the Autonomous Region are located, can be "merged" by the President.

To be fundamental reason Art. XIX, §13 is not so limited. But the more fundamental reason is that the
President's power cannot be so limited without neglecting the necessities of administration. It is
noteworthy that the petitioners do not claim that the reorganization of the regions in E.O. No. 429 is
irrational. The fact is that, as they themselves admit, the reorganization of administrative regions in E.O.
No. 429 is based on relevant criteria, to wit: (1) contiguity and geographical features; (2) transportation
and communication facilities; (3) cultural and language groupings; (4) land area and population; (5)
existing regional centers adopted by several agencies; (6) socio-economic development programs in the
regions and (7) number of provinces and cities.

What has been said above applies to the change of the regional center from Zamboanga City to Pagadian
City. Petitioners contend that the determination of provincial capitals has always been by act of Congress.
But as, this Court said in Abbas, 16 administrative regions are mere "groupings of contiguous provinces
for administrative purposes, . . . [They] are not territorial and political subdivisions like provinces, cities,
municipalities and barangays." There is, therefore, no basis for contending that only Congress can change
or determine regional centers. To the contrary, the examples of P.D. Nos. 1, 742, 773 and 1555 suggest
that the power to reorganize administrative regions carries with it the power to determine the regional
center.

It may be that the transfer of the regional center in Region IX from Zamboanga City to Pagadian City may
entail the expenditure of large sums of money for the construction of buildings and other infrastructure
to house regional offices. That contention is addressed to the wisdom of the transfer rather than to its
legality and it is settled that courts are not the arbiters of the wisdom or expediency of legislation. In any
event this is a question that we will consider only if fully briefed and upon a more adequate record than
that presented by petitioners.

WHEREFORE, the petitions for certiorari and prohibition are DISMISSED for lack of merit.

SO ORDERED.

G.R. No. L-7995 May 31, 1957

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and partnerships
adversely affected. by Republic Act No. 1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer of
Manila,respondents.

Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for respondent Secretary
of Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for respondent City Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.

LABRADOR, J.:

I. The case and issue, in general

This Court has before it the delicate task of passing upon the validity and constitutionality of a legislative
enactment, fundamental and far-reaching in significance. The enactment poses questions of due process,
police power and equal protection of the laws. It also poses an important issue of fact, that is whether the
conditions which the disputed law purports to remedy really or actually exist. Admittedly springing from
a deep, militant, and positive nationalistic impulse, the law purports to protect citizen and country from
the alien retailer. Through it, and within the field of economy it regulates, Congress attempts to translate
national aspirations for economic independence and national security, rooted in the drive and urge for
national survival and welfare, into a concrete and tangible measures designed to free the national retailer
from the competing dominance of the alien, so that the country and the nation may be free from a
supposed economic dependence and bondage. Do the facts and circumstances justify the enactment?

II. Pertinent provisions of Republic Act No. 1180

Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the
retail trade business. The main provisions of the Act are: (1) a prohibition against persons, not citizens of
the Philippines, and against associations, partnerships, or corporations the capital of which are not
wholly owned by citizens of the Philippines, from engaging directly or indirectly in the retail trade; (2) an
exception from the above prohibition in favor of aliens actually engaged in said business on May 15, 1954,
who are allowed to continue to engaged therein, unless their licenses are forfeited in accordance with the
law, until their death or voluntary retirement in case of natural persons, and for ten years after the
approval of the Act or until the expiration of term in case of juridical persons; (3) an exception therefrom
in favor of citizens and juridical entities of the United States; (4) a provision for the forfeiture of licenses
(to engage in the retail business) for violation of the laws on nationalization, control weights and
measures and labor and other laws relating to trade, commerce and industry; (5) a prohibition against
the establishment or opening by aliens actually engaged in the retail business of additional stores or
branches of retail business, (6) a provision requiring aliens actually engaged in the retail business to
present for registration with the proper authorities a verified statement concerning their businesses,
giving, among other matters, the nature of the business, their assets and liabilities and their offices and
principal offices of judicial entities; and (7) a provision allowing the heirs of aliens now engaged in the
retail business who die, to continue such business for a period of six months for purposes of liquidation.

III. Grounds upon which petition is based-Answer thereto

Petitioner, for and in his own behalf and on behalf of other alien residents corporations and partnerships
adversely affected by the provisions of Republic Act. No. 1180, brought this action to obtain a judicial
declaration that said Act is unconstitutional, and to enjoin the Secretary of Finance and all other persons
acting under him, particularly city and municipal treasurers, from enforcing its provisions. Petitioner
attacks the constitutionality of the Act, contending that: (1) it denies to alien residents the equal
protection of the laws and deprives of their liberty and property without due process of law ; (2) the
subject of the Act is not expressed or comprehended in the title thereof; (3) the Act violates international
and treaty obligations of the Republic of the Philippines; (4) the provisions of the Act against the
transmission by aliens of their retail business thru hereditary succession, and those requiring 100%
Filipino capitalization for a corporation or entity to entitle it to engage in the retail business, violate the
spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.

In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was passed
in the valid exercise of the police power of the State, which exercise is authorized in the Constitution in
the interest of national economic survival; (2) the Act has only one subject embraced in the title; (3) no
treaty or international obligations are infringed; (4) as regards hereditary succession, only the form is
affected but the value of the property is not impaired, and the institution of inheritance is only of
statutory origin.

IV. Preliminary consideration of legal principles involved

a. The police power. —

There is no question that the Act was approved in the exercise of the police power, but petitioner claims
that its exercise in this instance is attended by a violation of the constitutional requirements of due
process and equal protection of the laws. But before proceeding to the consideration and resolution of
the ultimate issue involved, it would be well to bear in mind certain basic and fundamental, albeit
preliminary, considerations in the determination of the ever recurrent conflict between police power and
the guarantees of due process and equal protection of the laws. What is the scope of police power, and
how are the due process and equal protection clauses related to it? What is the province and power of the
legislature, and what is the function and duty of the courts? These consideration must be clearly and
correctly understood that their application to the facts of the case may be brought forth with clarity and
the issue accordingly resolved.

It has been said the police power is so far - reaching in scope, that it has become almost impossible to
limit its sweep. As it derives its existence from the very existence of the State itself, it does not need to be
expressed or defined in its scope; it is said to be co-extensive with self-protection and survival, and as
such it is the most positive and active of all governmental processes, the most essential, insistent and
illimitable. Especially is it so under a modern democratic framework where the demands of society and of
nations have multiplied to almost unimaginable proportions; the field and scope of police power has
become almost boundless, just as the fields of public interest and public welfare have become almost all-
embracing and have transcended human foresight. Otherwise stated, as we cannot foresee the needs and
demands of public interest and welfare in this constantly changing and progressive world, so we cannot
delimit beforehand the extent or scope of police power by which and through which the State seeks to
attain or achieve interest or welfare. So it is that Constitutions do not define the scope or extent of the
police power of the State; what they do is to set forth the limitations thereof. The most important of these
are the due process clause and the equal protection clause.

b. Limitations on police power. —

The basic limitations of due process and equal protection are found in the following provisions of our
Constitution:

SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of law,
nor any person be denied the equal protection of the laws. (Article III, Phil. Constitution)

These constitutional guarantees which embody the essence of individual liberty and freedom in
democracies, are not limited to citizens alone but are admittedly universal in their application, without
regard to any differences of race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)

c. The, equal protection clause. —

The equal protection of the law clause is against undue favor and individual or class privilege, as well as
hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is
limited either in the object to which it is directed or by territory within which is to operate. It does not
demand absolute equality among residents; it merely requires that all persons shall be treated
alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced. The
equal protection clause is not infringed by legislation which applies only to those persons falling within a
specified class, if it applies alike to all persons within such class, and reasonable grounds exists for
making a distinction between those who fall within such class and those who do not. (2 Cooley,
Constitutional Limitations, 824-825.)

d. The due process clause. —

The due process clause has to do with the reasonableness of legislation enacted in pursuance of the police
power. Is there public interest, a public purpose; is public welfare involved? Is the Act reasonably
necessary for the accomplishment of the legislature's purpose; is it not unreasonable, arbitrary or
oppressive? Is there sufficient foundation or reason in connection with the matter involved; or has there
not been a capricious use of the legislative power? Can the aims conceived be achieved by the means used,
or is it not merely an unjustified interference with private interest? These are the questions that we ask
when the due process test is applied.

The conflict, therefore, between police power and the guarantees of due process and equal protection of
the laws is more apparent than real. Properly related, the power and the guarantees are supposed to
coexist. The balancing is the essence or, shall it be said, the indispensable means for the attainment of
legitimate aspirations of any democratic society. There can be no absolute power, whoever exercise it, for
that would be tyranny. Yet there can neither be absolute liberty, for that would mean license and anarchy.
So the State can deprive persons of life, liberty and property, provided there is due process of law; and
persons may be classified into classes and groups, provided everyone is given the equal protection of the
law. The test or standard, as always, is reason. The police power legislation must be firmly grounded on
public interest and welfare, and a reasonable relation must exist between purposes and means. And if
distinction and classification has been made, there must be a reasonable basis for said distinction.

e. Legislative discretion not subject to judicial review. —

Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must not be
overlooked, in the first place, that the legislature, which is the constitutional repository of police power
and exercises the prerogative of determining the policy of the State, is by force of circumstances
primarily the judge of necessity, adequacy or reasonableness and wisdom, of any law promulgated in the
exercise of the police power, or of the measures adopted to implement the public policy or to achieve
public interest. On the other hand, courts, although zealous guardians of individual liberty and right, have
nevertheless evinced a reluctance to interfere with the exercise of the legislative prerogative. They have
done so early where there has been a clear, patent or palpable arbitrary and unreasonable abuse of the
legislative prerogative. Moreover, courts are not supposed to override legitimate policy, and courts never
inquire into the wisdom of the law.

V. Economic problems sought to be remedied

With the above considerations in mind, we will now proceed to delve directly into the issue involved. If
the disputed legislation were merely a regulation, as its title indicates, there would be no question that it
falls within the legitimate scope of legislative power. But it goes further and prohibits a group of
residents, the aliens, from engaging therein. The problem becomes more complex because its subject is a
common, trade or occupation, as old as society itself, which from the immemorial has always been open
to residents, irrespective of race, color or citizenship.

a. Importance of retail trade in the economy of the nation. —

In a primitive economy where families produce all that they consume and consume all that they produce,
the dealer, of course, is unknown. But as group life develops and families begin to live in communities
producing more than what they consume and needing an infinite number of things they do not produce,
the dealer comes into existence. As villages develop into big communities and specialization in
production begins, the dealer's importance is enhanced. Under modern conditions and standards of living,
in which man's needs have multiplied and diversified to unlimited extents and proportions, the retailer
comes as essential as the producer, because thru him the infinite variety of articles, goods and needed for
daily life are placed within the easy reach of consumers. Retail dealers perform the functions of
capillaries in the human body, thru which all the needed food and supplies are ministered to members of
the communities comprising the nation.

There cannot be any question about the importance of the retailer in the life of the community. He
ministers to the resident's daily needs, food in all its increasing forms, and the various little gadgets and
things needed for home and daily life. He provides his customers around his store with the rice or corn,
the fish, the salt, the vinegar, the spices needed for the daily cooking. He has cloths to sell, even the needle
and the thread to sew them or darn the clothes that wear out. The retailer, therefore, from the lowly
peddler, the owner of a small sari-sari store, to the operator of a department store or, a supermarket is so
much a part of day-to-day existence.

b. The alien retailer's trait. —

The alien retailer must have started plying his trades in this country in the bigger centers of population
(Time there was when he was unknown in provincial towns and villages). Slowly but gradually be
invaded towns and villages; now he predominates in the cities and big centers of population. He even
pioneers, in far away nooks where the beginnings of community life appear, ministering to the daily
needs of the residents and purchasing their agricultural produce for sale in the towns. It is an undeniable
fact that in many communities the alien has replaced the native retailer. He has shown in this trade,
industry without limit, and the patience and forbearance of a slave.

Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred and
insolent neighbors and customers are made in his face, but he heeds them not, and he forgets and
forgives. The community takes note of him, as he appears to be harmless and extremely useful.

c. Alleged alien control and dominance. —

There is a general feeling on the part of the public, which appears to be true to fact, about the controlling
and dominant position that the alien retailer holds in the nation's economy. Food and other essentials,
clothing, almost all articles of daily life reach the residents mostly through him. In big cities and centers of
population he has acquired not only predominance, but apparent control over distribution of almost all
kinds of goods, such as lumber, hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of
other goods and articles. And were it not for some national corporations like the Naric, the Namarco, the
Facomas and the Acefa, his control over principal foods and products would easily become full and
complete.

Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is said
that the fear is unfounded and the threat is imagined; in another, it is charged that the law is merely the
result of radicalism and pure and unabashed nationalism. Alienage, it is said, is not an element of control;
also so many unmanageable factors in the retail business make control virtually impossible. The first
argument which brings up an issue of fact merits serious consideration. The others are matters of opinion
within the exclusive competence of the legislature and beyond our prerogative to pass upon and decide.

The best evidence are the statistics on the retail trade, which put down the figures in black and white.
Between the constitutional convention year (1935), when the fear of alien domination and control of the
retail trade already filled the minds of our leaders with fears and misgivings, and the year of the
enactment of the nationalization of the retail trade act (1954), official statistics unmistakably point out to
the ever-increasing dominance and control by the alien of the retail trade, as witness the following tables:

Assets Gross Sales

Year and Retailers No.- Pesos Per cent Pesos Per cent
Nationality Establishments Distribution Distribution
1941:
Filipino .......... 106,671 200,323,138 55.82 174,181,924 51.74
Chinese ........... 15,356 118,348,692 32.98 148,813,239 44.21
Others ............ 1,646 40,187,090 11.20 13,630,239 4.05
1947:
Filipino .......... 111,107 208,658,946 65.05 279,583,333 57.03
Chinese ........... 13,774 106,156,218 33.56 205,701,134 41.96
Others ........... 354 8,761,260 .49 4,927,168 1.01
1948: (Census)
Filipino .......... 113,631 213,342,264 67.30 467,161,667 60.51
Chinese .......... 12,087 93,155,459 29.38 294,894,227 38.20
Others .......... 422 10,514,675 3.32 9,995,402 1.29
1949:
Filipino .......... 113,659 213,451,602 60.89 462,532,901 53.47
Chinese .......... 16,248 125,223,336 35.72 392,414,875 45.36
Others .......... 486 12,056,365 3.39 10,078,364 1.17
1951:
Filipino ......... 119,352 224,053,620 61.09 466,058,052 53.07
Chinese .......... 17,429 134,325,303 36.60 404,481,384 46.06
Others .......... 347 8,614,025 2.31 7,645,327 87

AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT

Item Gross
Year and Retailer's
Assets Sales
Nationality
(Pesos) (Pesos)

1941:

Filipino ............................................. 1,878 1,633

Chinese .............................................. 7,707 9,691

Others ............................................... 24,415 8,281

1947:

Filipino ............................................. 1,878 2,516

Chinese ........................................... 7,707 14,934

Others .............................................. 24,749 13,919

1948: (Census)

Filipino ............................................. 1,878 4,111

Chinese ............................................. 7,707 24,398

Others .............................................. 24,916 23,686

 1949:

Filipino ............................................. 1,878 4,069

Chinese .............................................. 7,707 24,152

Others .............................................. 24,807 20,737

1951:

Filipino ............................................. 1,877 3,905

Chinese ............................................. 7,707 33,207

Others ............................................... 24,824 22,033

(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of Owners,
Benchmark: 1948 Census, issued by the Bureau of Census and Statistics, Department of Commerce
and Industry; pp. 18-19 of Answer.)

The above statistics do not include corporations and partnerships, while the figures on Filipino
establishments already include mere market vendors, whose capital is necessarily small..

The above figures reveal that in percentage distribution of assests and gross sales, alien participation has
steadily increased during the years. It is true, of course, that Filipinos have the edge in the number of
retailers, but aliens more than make up for the numerical gap through their assests and gross sales which
average between six and seven times those of the very many Filipino retailers. Numbers in retailers, here,
do not imply superiority; the alien invests more capital, buys and sells six to seven times more, and gains
much more. The same official report, pointing out to the known predominance of foreign elements in the
retail trade, remarks that the Filipino retailers were largely engaged in minor retailer enterprises. As
observed by respondents, the native investment is thinly spread, and the Filipino retailer is practically
helpless in matters of capital, credit, price and supply.

d. Alien control and threat, subject of apprehension in Constitutional convention. —

It is this domination and control, which we believe has been sufficiently shown to exist, that is the
legislature's target in the enactment of the disputed nationalization would never have been adopted. The
framers of our Constitution also believed in the existence of this alien dominance and control when they
approved a resolution categorically declaring among other things, that "it is the sense of the Convention
that the public interest requires the nationalization of the retail trade; . . . ." (II Aruego, The Framing of the
Philippine Constitution, 662-663, quoted on page 67 of Petitioner.) That was twenty-two years ago; and
the events since then have not been either pleasant or comforting. Dean Sinco of the University of the
Philippines College of Law, commenting on the patrimony clause of the Preamble opines that the fathers
of our Constitution were merely translating the general preoccupation of Filipinos "of the dangers from
alien interests that had already brought under their control the commercial and other economic activities
of the country" (Sinco, Phil. Political Law, 10th ed., p. 114); and analyzing the concern of the members of
the constitutional convention for the economic life of the citizens, in connection with the nationalistic
provisions of the Constitution, he says:

But there has been a general feeling that alien dominance over the economic life of the country is
not desirable and that if such a situation should remain, political independence alone is no
guarantee to national stability and strength. Filipino private capital is not big enough to wrest
from alien hands the control of the national economy. Moreover, it is but of recent formation and
hence, largely inexperienced, timid and hesitant. Under such conditions, the government as the
instrumentality of the national will, has to step in and assume the initiative, if not the leadership,
in the struggle for the economic freedom of the nation in somewhat the same way that it did in the
crusade for political freedom. Thus . . . it (the Constitution) envisages an organized movement for
 the protection of the nation not only against the possibilities of armed invasion but also against its
economic subjugation by alien interests in the economic field. (Phil. Political Law by Sinco, 10th
ed., p. 476.)

Belief in the existence of alien control and predominance is felt in other quarters. Filipino businessmen,
manufacturers and producers believe so; they fear the dangers coming from alien control, and they
express sentiments of economic independence. Witness thereto is Resolution No. 1, approved on July 18,
1953, of the Fifth National convention of Filipino Businessmen, and a similar resolution, approved on
March 20, 1954, of the Second National Convention of Manufacturers and Producers. The man in the
street also believes, and fears, alien predominance and control; so our newspapers, which have
editorially pointed out not only to control but to alien stranglehold. We, therefore, find alien domination
and control to be a fact, a reality proved by official statistics, and felt by all the sections and groups that
compose the Filipino community.

e. Dangers of alien control and dominance in retail. —

But the dangers arising from alien participation in the retail trade does not seem to lie in the
predominance alone; there is a prevailing feeling that such predominance may truly endanger the
national interest. With ample capital, unity of purpose and action and thorough organization, alien
retailers and merchants can act in such complete unison and concert on such vital matters as the fixing of
prices, the determination of the amount of goods or articles to be made available in the market, and even
the choice of the goods or articles they would or would not patronize or distribute, that fears of
dislocation of the national economy and of the complete subservience of national economy and of the
consuming public are not entirely unfounded. Nationals, producers and consumers alike can be placed
completely at their mercy. This is easily illustrated. Suppose an article of daily use is desired to be
prescribed by the aliens, because the producer or importer does not offer them sufficient profits, or
because a new competing article offers bigger profits for its introduction. All that aliens would do is to
agree to refuse to sell the first article, eliminating it from their stocks, offering the new one as a substitute.
Hence, the producers or importers of the prescribed article, or its consumers, find the article suddenly
out of the prescribed article, or its consumers, find the article suddenly out of circulation. Freedom of
trade is thus curtailed and free enterprise correspondingly suppressed.

We can even go farther than theoretical illustrations to show the pernicious influences of alien
domination. Grave abuses have characterized the exercise of the retail trade by aliens. It is a fact within
judicial notice, which courts of justice may not properly overlook or ignore in the interests of truth and
justice, that there exists a general feeling on the part of the public that alien participation in the retail
trade has been attended by a pernicious and intolerable practices, the mention of a few of which would
suffice for our purposes; that at some time or other they have cornered the market of essential
commodities, like corn and rice, creating artificial scarcities to justify and enhance profits to
unreasonable proportions; that they have hoarded essential foods to the inconvenience and prejudice of
the consuming public, so much so that the Government has had to establish the National Rice and Corn
Corporation to save the public from their continuous hoarding practices and tendencies; that they have
violated price control laws, especially on foods and essential commodities, such that the legislature had to
enact a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic deportation for
price control convictions; that they have secret combinations among themselves to control prices,
cheating the operation of the law of supply and demand; that they have connived to boycott honest
merchants and traders who would not cater or yield to their demands, in unlawful restraint of freedom of
trade and enterprise. They are believed by the public to have evaded tax laws, smuggled goods and
money into and out of the land, violated import and export prohibitions, control laws and the like, in
derision and contempt of lawful authority. It is also believed that they have engaged in corrupting public
officials with fabulous bribes, indirectly causing the prevalence of graft and corruption in the Government.
As a matter of fact appeals to unscrupulous aliens have been made both by the Government and by their
own lawful diplomatic representatives, action which impliedly admits a prevailing feeling about the
existence of many of the above practices.
The circumstances above set forth create well founded fears that worse things may come in the future.
The present dominance of the alien retailer, especially in the big centers of population, therefore,
becomes a potential source of danger on occasions of war or other calamity. We do not have here in this
country isolated groups of harmless aliens retailing goods among nationals; what we have are well
organized and powerful groups that dominate the distribution of goods and commodities in the
communities and big centers of population. They owe no allegiance or loyalty to the State, and the State
cannot rely upon them in times of crisis or emergency. While the national holds his life, his person and his
property subject to the needs of his country, the alien may even become the potential enemy of the State.

f. Law enacted in interest of national economic survival and security. —

We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is not
the product of racial hostility, prejudice or discrimination, but the expression of the legitimate desire and
determination of the people, thru their authorized representatives, to free the nation from the economic
situation that has unfortunately been saddled upon it rightly or wrongly, to its disadvantage. The law is
clearly in the interest of the public, nay of the national security itself, and indisputably falls within the
scope of police power, thru which and by which the State insures its existence and security and the
supreme welfare of its citizens.

VI. The Equal Protection Limitation

a. Objections to alien participation in retail trade. — The next question that now poses solution is, Does
the law deny the equal protection of the laws? As pointed out above, the mere fact of alienage is the root
and cause of the distinction between the alien and the national as a trader. The alien resident owes
allegiance to the country of his birth or his adopted country; his stay here is for personal convenience; he
is attracted by the lure of gain and profit. His aim or purpose of stay, we admit, is neither illegitimate nor
immoral, but he is naturally lacking in that spirit of loyalty and enthusiasm for this country where he
temporarily stays and makes his living, or of that spirit of regard, sympathy and consideration for his
Filipino customers as would prevent him from taking advantage of their weakness and exploiting them.
The faster he makes his pile, the earlier can the alien go back to his beloved country and his beloved kin
and countrymen. The experience of the country is that the alien retailer has shown such utter disregard
for his customers and the people on whom he makes his profit, that it has been found necessary to adopt
the legislation, radical as it may seem.

Another objection to the alien retailer in this country is that he never really makes a genuine contribution
to national income and wealth. He undoubtedly contributes to general distribution, but the gains and
profits he makes are not invested in industries that would help the country's economy and increase
national wealth. The alien's interest in this country being merely transient and temporary, it would
indeed be ill-advised to continue entrusting the very important function of retail distribution to his hands.

The practices resorted to by aliens in the control of distribution, as already pointed out above, their
secret manipulations of stocks of commodities and prices, their utter disregard of the welfare of their
customers and of the ultimate happiness of the people of the nation of which they are mere guests, which
practices, manipulations and disregard do not attend the exercise of the trade by the nationals, show the
existence of real and actual, positive and fundamental differences between an alien and a national which
fully justify the legislative classification adopted in the retail trade measure. These differences are
certainly a valid reason for the State to prefer the national over the alien in the retail trade. We would be
doing violence to fact and reality were we to hold that no reason or ground for a legitimate distinction
can be found between one and the other.

b. Difference in alien aims and purposes sufficient basis for distinction. —

The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual
and real, furnish sufficient grounds for legislative classification of retail traders into nationals and aliens.
Some may disagree with the wisdom of the legislature's classification. To this we answer, that this is the
prerogative of the law-making power. Since the Court finds that the classification is actual, real and
reasonable, and all persons of one class are treated alike, and as it cannot be said that the classification is
patently unreasonable and unfounded, it is in duty bound to declare that the legislature acted within its
legitimate prerogative and it can not declare that the act transcends the limit of equal protection
established by the Constitution.

Broadly speaking, the power of the legislature to make distinctions and classifications among persons is
not curtailed or denied by the equal protection of the laws clause. The legislative power admits of a wide
scope of discretion, and a law can be violative of the constitutional limitation only when the classification
is without reasonable basis. In addition to the authorities we have earlier cited, we can also refer to the
case of Linsey vs. Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined the
application of equal protection clause to a law sought to be voided as contrary thereto:

. . . . "1. The equal protection clause of the Fourteenth Amendment does not take from the state the
power to classify in the adoption of police laws, but admits of the exercise of the wide scope of
discretion in that regard, and avoids what is done only when it is without any reasonable basis,
and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend
against that clause merely because it is not made with mathematical nicety, or because in practice
it results in some inequality. 3. When the classification in such a law is called in question, if any
state of facts reasonably can be conceived that would sustain it, the existence of that state of facts
at the time the law was enacted must be assumed. 4. One who assails the classification in such a
law must carry the burden of showing that it does not rest upon any reasonable basis but is
essentially arbitrary."

c. Authorities recognizing citizenship as basis for classification. —

The question as to whether or not citizenship is a legal and valid ground for classification has already
been affirmatively decided in this jurisdiction as well as in various courts in the United States. In the case
of Smith Bell & Co. vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the Philippine
Legislature was in issue, because of a condition therein limiting the ownership of vessels engaged in
coastwise trade to corporations formed by citizens of the Philippine Islands or the United States, thus
denying the right to aliens, it was held that the Philippine Legislature did not violate the equal protection
clause of the Philippine Bill of Rights. The legislature in enacting the law had as ultimate purpose the
encouragement of Philippine shipbuilding and the safety for these Islands from foreign interlopers. We
held that this was a valid exercise of the police power, and all presumptions are in favor of its
constitutionality. In substance, we held that the limitation of domestic ownership of vessels engaged in
coastwise trade to citizens of the Philippines does not violate the equal protection of the law and due
process or law clauses of the Philippine Bill of Rights. In rendering said decision we quoted with approval
the concurring opinion of Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:

"Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts
licensing gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly of
that character, and forms part of an extensive system, the object of which is to encourage
American shipping, and place them on an equal footing with the shipping of other nations. Almost
every commercial nation reserves to its own subjects a monopoly of its coasting trade; and a
countervailing privilege in favor of American shipping is contemplated, in the whole legislation of
the United States on this subject. It is not to give the vessel an American character, that the license
is granted; that effect has been correctly attributed to the act of her enrollment. But it is to confer
on her American privileges, as contra distinguished from foreign; and to preserve the Government
from fraud by foreigners; in surreptitiously intruding themselves into the American commercial
marine, as well as frauds upon the revenue in the trade coastwise, that this whole system is
projected."
The rule in general is as follows:

Aliens are under no special constitutional protection which forbids a classification otherwise
justified simply because the limitation of the class falls along the lines of nationality. That would
be requiring a higher degree of protection for aliens as a class than for similar classes than for
similar classes of American citizens. Broadly speaking, the difference in status between citizens
and aliens constitutes a basis for reasonable classification in the exercise of police power. (2 Am.,
Jur. 468-469.)

In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of hawkers and
peddlers, which provided that no one can obtain a license unless he is, or has declared his intention, to
become a citizen of the United States, was held valid, for the following reason: It may seem wise to the
legislature to limit the business of those who are supposed to have regard for the welfare, good order and
happiness of the community, and the court cannot question this judgment and conclusion. In Bloomfield
vs. State, 99 N. E. 309 (Ohio, 1912), a statute which prevented certain persons, among them aliens, from
engaging in the traffic of liquors, was found not to be the result of race hatred, or in hospitality, or a
deliberate purpose to discriminate, but was based on the belief that an alien cannot be sufficiently
acquainted with "our institutions and our life as to enable him to appreciate the relation of this particular
business to our entire social fabric", and was not, therefore, invalid. In Ohio ex rel. Clarke vs. Deckebach,
274 U. S. 392, 71 L. ed. 115 (1926), the U.S. Supreme Court had under consideration an ordinance of the
city of Cincinnati prohibiting the issuance of licenses (pools and billiard rooms) to aliens. It held that
plainly irrational discrimination against aliens is prohibited, but it does not follow that alien race and
allegiance may not bear in some instances such a relation to a legitimate object of legislation as to be
made the basis of permitted classification, and that it could not state that the legislation is clearly wrong;
and that latitude must be allowed for the legislative appraisement of local conditions and for the
legislative choice of methods for controlling an apprehended evil. The case of State vs. Carrol, 124 N. E.
129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30 (Washington,
1922), the business of pawn brooking was considered as having tendencies injuring public interest, and
limiting it to citizens is within the scope of police power. A similar statute denying aliens the right to
engage in auctioneering was also sustained in Wright vs. May, L.R.A., 1915 P. 151 (Minnesota, 1914). So
also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that aliens are judicially known to
have different interests, knowledge, attitude, psychology and loyalty, hence the prohibitions of issuance
of licenses to them for the business of pawnbroker, pool, billiard, card room, dance hall, is not an
infringement of constitutional rights. In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058
(Michigan, 1902), a law prohibiting the licensing of aliens as barbers was held void, but the reason for the
decision was the court's findings that the exercise of the business by the aliens does not in any way affect
the morals, the health, or even the convenience of the community. In Takahashi vs. Fish and Game
Commission, 92 L. ed. 1479 (1947), a California statute banning the issuance of commercial fishing
licenses to person ineligible to citizenship was held void, because the law conflicts with Federal power
over immigration, and because there is no public interest in the mere claim of ownership of the waters
and the fish in them, so there was no adequate justification for the discrimination. It further added that
the law was the outgrowth of antagonism toward the persons of Japanese ancestry. However, two
Justices dissented on the theory that fishing rights have been treated traditionally as natural resources.
In Fraser vs. McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed a tax
on every employer of foreign-born unnaturalized male persons over 21 years of age, was declared void
because the court found that there was no reason for the classification and the tax was an arbitrary
deduction from the daily wage of an employee.

d. Authorities contra explained. —

It is true that some decisions of the Federal court and of the State courts in the United States hold that the
distinction between aliens and citizens is not a valid ground for classification. But in this decision the
laws declared invalid were found to be either arbitrary, unreasonable or capricious, or were the result or
product of racial antagonism and hostility, and there was no question of public interest involved or
pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared
invalid a Philippine law making unlawful the keeping of books of account in any language other than
English, Spanish or any other local dialect, but the main reasons for the decisions are: (1) that if Chinese
were driven out of business there would be no other system of distribution, and (2) that the Chinese
would fall prey to all kinds of fraud, because they would be deprived of their right to be advised of their
business and to direct its conduct. The real reason for the decision, therefore, is the court's belief that no
public benefit would be derived from the operations of the law and on the other hand it would deprive
Chinese of something indispensable for carrying on their business. In Yick Wo vs. Hopkins, 30 L. ed 220
(1885) an ordinance conferring powers on officials to withhold consent in the operation of laundries
both as to persons and place, was declared invalid, but the court said that the power granted was
arbitrary, that there was no reason for the discrimination which attended the administration and
implementation of the law, and that the motive thereof was mere racial hostility. In State vs. Montgomery,
47 A. 165 (Maine, 1900), a law prohibiting aliens to engage as hawkers and peddlers was declared void,
because the discrimination bore no reasonable and just relation to the act in respect to which the
classification was proposed.

The case at bar is radically different, and the facts make them so. As we already have said, aliens do not
naturally possess the sympathetic consideration and regard for the customers with whom they come in
daily contact, nor the patriotic desire to help bolster the nation's economy, except in so far as it enhances
their profit, nor the loyalty and allegiance which the national owes to the land. These limitations on the
qualifications of the aliens have been shown on many occasions and instances, especially in times of crisis
and emergency. We can do no better than borrow the language of Anton vs. Van Winkle, 297 F. 340, 342,
to drive home the reality and significance of the distinction between the alien and the national, thus:

. . . . It may be judicially known, however, that alien coming into this country are without the
intimate knowledge of our laws, customs, and usages that our own people have. So it is likewise
known that certain classes of aliens are of different psychology from our fellow countrymen.
Furthermore, it is natural and reasonable to suppose that the foreign born, whose allegiance is
first to their own country, and whose ideals of governmental environment and control have been
engendered and formed under entirely different regimes and political systems, have not the same
inspiration for the public weal, nor are they as well disposed toward the United States, as those
who by citizenship, are a part of the government itself. Further enlargement, is unnecessary. I
have said enough so that obviously it cannot be affirmed with absolute confidence that the
Legislature was without plausible reason for making the classification, and therefore appropriate
discriminations against aliens as it relates to the subject of legislation. . . . .

VII. The Due Process of Law Limitation.

a. Reasonability, the test of the limitation; determination by legislature decisive. —

We now come to due process as a limitation on the exercise of the police power. It has been stated by the
highest authority in the United States that:

. . . . And the guaranty of due process, as has often been held, demands only that the law shall not
be unreasonable, arbitrary or capricious, and that the means selected shall have a real and
substantial relation to the subject sought to be attained. . . . .

xxx xxx xxx

So far as the requirement of due process is concerned and in the absence of other constitutional
restriction a state is free to adopt whatever economic policy may reasonably be deemed to
promote public welfare, and to enforce that policy by legislation adapted to its purpose. The courts
are without authority either to declare such policy, or, when it is declared by the legislature, to
override it. If the laws passed are seen to have a reasonable relation to a proper legislative
 purpose, and are neither arbitrary nor discriminatory, the requirements of due process are
satisfied, and judicial determination to that effect renders a court functus officio. . . . (Nebbia vs.
New York, 78 L. ed. 940, 950, 957.)

Another authority states the principle thus:

. . . . Too much significance cannot be given to the word "reasonable" in considering the scope of
the police power in a constitutional sense, for the test used to determine the constitutionality of
the means employed by the legislature is to inquire whether the restriction it imposes on rights
secured to individuals by the Bill of Rights are unreasonable, and not whether it imposes any
restrictions on such rights. . . .

xxx xxx xxx

. . . . A statute to be within this power must also be reasonable in its operation upon the persons
whom it affects, must not be for the annoyance of a particular class, and must not be unduly
oppressive. (11 Am. Jur. Sec. 302., 1:1)- 1074-1075.)

In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:

. . . . 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. . . .

Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of constitutionality:

In determining whether a given act of the Legislature, passed in the exercise of the police power to
regulate the operation of a business, is or is not constitutional, one of the first questions to be
considered by the court is whether the power as exercised has a sufficient foundation in reason in
connection with the matter involved, or is an arbitrary, oppressive, and capricious use of that
power, without substantial relation to the health, safety, morals, comfort, and general welfare of
the public.

b. Petitioner's argument considered. —

Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long
ago recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and
honest occupation and therefore beyond the power of the legislature to prohibit and penalized. This
arguments overlooks fact and reality and rests on an incorrect assumption and premise, i.e., that in this
country where the occupation is engaged in by petitioner, it has been so engaged by him, by the alien in
an honest creditable and unimpeachable manner, without harm or injury to the citizens and without
ultimate danger to their economic peace, tranquility and welfare. But the Legislature has found, as we
have also found and indicated, that the privilege has been so grossly abused by the alien, thru the
illegitimate use of pernicious designs and practices, that he now enjoys a monopolistic control of the
occupation and threatens a deadly stranglehold on the nation's economy endangering the national
security in times of crisis and emergency.

The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the
facts and circumstances, but this, Is the exclusion in the future of aliens from the retail trade
unreasonable. Arbitrary capricious, taking into account the illegitimate and pernicious form and manner
in which the aliens have heretofore engaged therein? As thus correctly stated the answer is clear. The law
in question is deemed absolutely necessary to bring about the desired legislative objective, i.e., to free
national economy from alien control and dominance. It is not necessarily unreasonable because it affects
private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is the
appropriateness or adequacy under all circumstances of the means adopted to carry out its purpose into
effect (Id.) Judged by this test, disputed legislation, which is not merely reasonable but actually necessary,
must be considered not to have infringed the constitutional limitation of reasonableness.

The necessity of the law in question is explained in the explanatory note that accompanied the bill, which
later was enacted into law:

This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not
citizens of the Philippines from having a strangle hold upon our economic life. If the persons who
control this vital artery of our economic life are the ones who owe no allegiance to this Republic,
who have no profound devotion to our free institutions, and who have no permanent stake in our
people's welfare, we are not really the masters of our destiny. All aspects of our life, even our
national security, will be at the mercy of other people.

In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are
not citizens of the Philippines of their means of livelihood. While this bill seeks to take away from
the hands of persons who are not citizens of the Philippines a power that can be wielded to
paralyze all aspects of our national life and endanger our national security it respects existing
rights.

The approval of this bill is necessary for our national survival.

If political independence is a legitimate aspiration of a people, then economic independence is none the
less legitimate. Freedom and liberty are not real and positive if the people are subject to the economic
control and domination of others, especially if not of their own race or country. The removal and
eradication of the shackles of foreign economic control and domination, is one of the noblest motives that
a national legislature may pursue. It is impossible to conceive that legislation that seeks to bring it about
can infringe the constitutional limitation of due process. The attainment of a legitimate aspiration of a
people can never be beyond the limits of legislative authority.

c. Law expressly held by Constitutional Convention to be within the sphere of legislative action. —

The framers of the Constitution could not have intended to impose the constitutional restrictions of due
process on the attainment of such a noble motive as freedom from economic control and domination,
thru the exercise of the police power. The fathers of the Constitution must have given to the legislature
full authority and power to enact legislation that would promote the supreme happiness of the people,
their freedom and liberty. On the precise issue now before us, they expressly made their voice clear; they
adopted a resolution expressing their belief that the legislation in question is within the scope of the
legislative power. Thus they declared the their Resolution:

That it is the sense of the Convention that the public interest requires the nationalization of retail
trade; but it abstain from approving the amendment introduced by the Delegate for Manila, Mr.
Araneta, and others on this matter because it is convinced that the National Assembly is
authorized to promulgate a law which limits to Filipino and American citizens the privilege to
engage in the retail trade. (11 Aruego, The Framing of the Philippine Constitution, quoted on pages
66 and 67 of the Memorandum for the Petitioner.)

It would do well to refer to the nationalistic tendency manifested in various provisions of the Constitution.
Thus in the preamble, a principle objective is the conservation of the patrimony of the nation and as
corollary the provision limiting to citizens of the Philippines the exploitation, development and utilization
of its natural resources. And in Section 8 of Article XIV, it is provided that "no franchise, certificate, or any
other form of authorization for the operation of the public utility shall be granted except to citizens of the
Philippines." The nationalization of the retail trade is only a continuance of the nationalistic protective
policy laid down as a primary objective of the Constitution. Can it be said that a law imbued with the
same purpose and spirit underlying many of the provisions of the Constitution is unreasonable, invalid
and unconstitutional?

The seriousness of the Legislature's concern for the plight of the nationals as manifested in the approval
of the radical measures is, therefore, fully justified. It would have been recreant to its duties towards the
country and its people would it view the sorry plight of the nationals with the complacency and refuse or
neglect to adopt a remedy commensurate with the demands of public interest and national survival. As
the repository of the sovereign power of legislation, the Legislature was in duty bound to face the
problem and meet, through adequate measures, the danger and threat that alien domination of retail
trade poses to national economy.

d. Provisions of law not unreasonable. —

A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the
Legislature has been. The law is made prospective and recognizes the right and privilege of those already
engaged in the occupation to continue therein during the rest of their lives; and similar recognition of the
right to continue is accorded associations of aliens. The right or privilege is denied to those only upon
conviction of certain offenses. In the deliberations of the Court on this case, attention was called to the
fact that the privilege should not have been denied to children and heirs of aliens now engaged in the
retail trade. Such provision would defeat the law itself, its aims and purposes. Beside, the exercise of
legislative discretion is not subject to judicial review. It is well settled that the Court will not inquire into
the motives of the Legislature, nor pass upon general matters of legislative judgment. The Legislature is
primarily the judge of the necessity of an enactment or of any of its provisions, and every presumption is
in favor of its validity, and though the Court may hold views inconsistent with the wisdom of the law, it
may not annul the legislation if not palpably in excess of the legislative power. Furthermore, the test of
the validity of a law attacked as a violation of due process, is not its reasonableness, but its
unreasonableness, and we find the provisions are not unreasonable. These principles also answer various
other arguments raised against the law, some of which are: that the law does not promote general
welfare; that thousands of aliens would be thrown out of employment; that prices will increase because
of the elimination of competition; that there is no need for the legislation; that adequate replacement is
problematical; that there may be general breakdown; that there would be repercussions from foreigners;
etc. Many of these arguments are directed against the supposed wisdom of the law which lies solely
within the legislative prerogative; they do not import invalidity.

VIII. Alleged defect in the title of the law

A subordinate ground or reason for the alleged invalidity of the law is the claim that the title thereof is
misleading or deceptive, as it conceals the real purpose of the bill which is to nationalize the retail
business and prohibit aliens from engaging therein. The constitutional provision which is claimed to be
violated in Section 21 (1) of Article VI, which reads:

No bill which may be enacted in the law shall embrace more than one subject which shall be
expressed in the title of the bill.

What the above provision prohibits is duplicity, that is, if its title completely fails to appraise the
legislators or the public of the nature, scope and consequences of the law or its operation (I Sutherland,
Statutory Construction, Sec. 1707, p. 297.) A cursory consideration of the title and the provisions of the
bill fails to show the presence of duplicity. It is true that the term "regulate" does not and may not readily
and at first glance convey the idea of "nationalization" and "prohibition", which terms express the two
main purposes and objectives of the law. But "regulate" is a broader term than either prohibition or
nationalization. Both of these have always been included within the term regulation.

Under the title of an act to "regulate", the sale of intoxicating liquors, the Legislature may prohibit
the sale of intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
 Within the meaning of the Constitution requiring that the subject of every act of the Legislature
shall be stated in the tale, the title to regulate the sale of intoxicating liquors, etc." sufficiently
expresses the subject of an actprohibiting the sale of such liquors to minors and to persons in the
habit of getting intoxicated; such matters being properly included within the subject of regulating
the sale. (Williams vs. State, 48 Ind. 306, 308, quoted in p. 42 of Answer.)

The word "regulate" is of broad import, and necessarily implies some degree of restraint and
prohibition of acts usually done in connection with the thing to be regulated. While word regulate
does not ordinarily convey meaning of prohibit, there is no absolute reason why it should not have
such meaning when used in delegating police power in connection with a thing the best or only
efficacious regulation of which involves suppression. (State vs. Morton, 162 So. 718, 182 La. 887,
quoted in p. 42 of Answer.)

The general rule is for the use of general terms in the title of a bill; it has also been said that the title need
not be an index to the entire contents of the law (I Sutherland, Statutory Construction, See. 4803, p. 345.)
The above rule was followed the title of the Act in question adopted the more general term "regulate"
instead of "nationalize" or "prohibit". Furthermore, the law also contains other rules for the regulation of
the retail trade which may not be included in the terms "nationalization" or "prohibition"; so were the
title changed from "regulate" to "nationalize" or "prohibit", there would have been many provisions not
falling within the scope of the title which would have made the Act invalid. The use of the term "regulate",
therefore, is in accord with the principle governing the drafting of statutes, under which a simple or
general term should be adopted in the title, which would include all other provisions found in the body of
the Act.

One purpose of the constitutional directive that the subject of a bill should be embraced in its title is to
apprise the legislators of the purposes, the nature and scope of its provisions, and prevent the enactment
into law of matters which have received the notice, action and study of the legislators or of the public. In
the case at bar it cannot be claimed that the legislators have been appraised of the nature of the law,
especially the nationalization and the prohibition provisions. The legislators took active interest in the
discussion of the law, and a great many of the persons affected by the prohibitions in the law conducted a
campaign against its approval. It cannot be claimed, therefore, that the reasons for declaring the law
invalid ever existed. The objection must therefore, be overruled.

IX. Alleged violation of international treaties and obligations

Another subordinate argument against the validity of the law is the supposed violation thereby of the
Charter of the United Nations and of the Declaration of the Human Rights adopted by the United Nations
General Assembly. We find no merit in the Nations Charter imposes no strict or legal obligations
regarding the rights and freedom of their subjects (Hans Kelsen, The Law of the United Nations, 1951 ed.
pp. 29-32), and the Declaration of Human Rights contains nothing more than a mere recommendation or
a common standard of achievement for all peoples and all nations (Id. p. 39.) That such is the import of
the United Nations Charter aid of the Declaration of Human Rights can be inferred the fact that members
of the United Nations Organizations, such as Norway and Denmark, prohibit foreigners from engaging in
retail trade, and in most nations of the world laws against foreigners engaged in domestic trade are
adopted.

The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18, 1947
is also claimed to be violated by the law in question. All that the treaty guarantees is equality of treatment
to the Chinese nationals "upon the same terms as the nationals of any other country." But the nationals of
China are not discriminating against because nationals of all other countries, except those of the United
States, who are granted special rights by the Constitution, are all prohibited from engaging in the retail
trade. But even supposing that the law infringes upon the said treaty, the treaty is always subject to
qualification or amendment by a subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260), and the same
may never curtail or restrict the scope of the police power of the State (plaston vs. Pennsylvania, 58 L. ed.
539.)

X. Conclusion

Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real
actual threat and danger to national economy posed by alien dominance and control of the retail business
and free citizens and country from dominance and control; that the enactment clearly falls within the
scope of the police power of the State, thru which and by which it protects its own personality and
insures its security and future; that the law does not violate the equal protection clause of the
Constitution because sufficient grounds exist for the distinction between alien and citizen in the exercise
of the occupation regulated, nor the due process of law clause, because the law is prospective in
operation and recognizes the privilege of aliens already engaged in the occupation and reasonably
protects their privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us to
be plainly evident — as a matter of fact it seems not only appropriate but actually necessary — and that
in any case such matter falls within the prerogative of the Legislature, with whose power and discretion
the Judicial department of the Government may not interfere; that the provisions of the law are clearly
embraced in the title, and this suffers from no duplicity and has not misled the legislators or the segment
of the population affected; and that it cannot be said to be void for supposed conflict with treaty
obligations because no treaty has actually been entered into on the subject and the police power may not
be curtailed or surrendered by any treaty or any other conventional agreement.

Some members of the Court are of the opinion that the radical effects of the law could have been made
less harsh in its impact on the aliens. Thus it is stated that the more time should have been given in the
law for the liquidation of existing businesses when the time comes for them to close. Our legal duty,
however, is merely to determine if the law falls within the scope of legislative authority and does not
transcend the limitations of due process and equal protection guaranteed in the Constitution. Remedies
against the harshness of the law should be addressed to the Legislature; they are beyond our power and
jurisdiction.

The petition is hereby denied, with costs against petitioner.

Paras, C.J., Bengzon, Reyes, A., Bautista Angelo, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.

[G.R. No. 141284. August 15, 2000]

INTEGRATED BAR OF THE PHILIPPINES, petitioner, vs. HON. RONALDO B. ZAMORA, GEN. PANFILO M.
LACSON, GEN. EDGAR B. AGLIPAY, and GEN. ANGELO REYES, respondents.

DECISION
KAPUNAN, J.:

At bar is a special civil action for certiorari and prohibition with prayer for issuance of a temporary
restraining order seeking to nullify on constitutional grounds the order of President Joseph Ejercito
Estrada commanding the deployment of the Philippine Marines (the Marines) to join the Philippine
National Police (the PNP) in visibility patrols around the metropolis.
In view of the alarming increase in violent crimes in Metro Manila, like robberies, kidnappings and
carnappings, the President, in a verbal directive, ordered the PNP and the Marines to conduct joint
visibility patrols for the purpose of crime prevention and suppression. The Secretary of National Defense,
the Chief of Staff of the Armed Forces of the Philippines (the AFP), the Chief of the PNP and the Secretary
of the Interior and Local Government were tasked to execute and implement the said order. In
compliance with the presidential mandate, the PNP Chief, through Police Chief Superintendent Edgar B.
Aglipay, formulated Letter of Instruction 02/2000[1] (the LOI) which detailed the manner by which the
joint visibility patrols, called Task Force Tulungan, would be conducted.[2] Task Force Tulungan was
placed under the leadership of the Police Chief of Metro Manila.
Subsequently, the President confirmed his previous directive on the deployment of the Marines in a
Memorandum, dated 24 January 2000, addressed to the Chief of Staff of the AFP and the PNP Chief.[3] In
the Memorandum, the President expressed his desire to improve the peace and order situation in Metro
Manila through a more effective crime prevention program including increased police patrols. [4] The
President further stated that to heighten police visibility in the metropolis, augmentation from the AFP is
necessary.[5] Invoking his powers as Commander-in-Chief under Section 18, Article VII of the Constitution,
the President directed the AFP Chief of Staff and PNP Chief to coordinate with each other for the proper
deployment and utilization of the Marines to assist the PNP in preventing or suppressing criminal or
lawless violence.[6] Finally, the President declared that the services of the Marines in the anti-crime
campaign are merely temporary in nature and for a reasonable period only, until such time when the
situation shall have improved.[7]
The LOI explains the concept of the PNP-Philippine Marines joint visibility patrols as follows:
xxx

2. PURPOSE:

The Joint Implementing Police Visibility Patrols between the PNP NCRPO and the Philippine Marines
partnership in the conduct of visibility patrols in Metro Manila for the suppression of crime prevention and
other serious threats to national security.

3. SITUATION:

Criminal incidents in Metro Manila have been perpetrated not only by ordinary criminals but also by
organized syndicates whose members include active and former police/military personnel whose training,
skill, discipline and firepower prove well-above the present capability of the local police alone to handle. The
deployment of a joint PNP NCRPO-Philippine Marines in the conduct of police visibility patrol in urban areas
will reduce the incidence of crimes specially those perpetrated by active or former police/military personnel.

4. MISSION:

The PNP NCRPO will organize a provisional Task Force to conduct joint NCRPO-PM visibility patrols to keep
Metro Manila streets crime-free, through a sustained street patrolling to minimize or eradicate all forms of
high-profile crimes especially those perpetrated by organized crime syndicates whose members include
those that are well-trained, disciplined and well-armed active or former PNP/Military personnel.

5. CONCEPT IN JOINT VISIBILITY PATROL OPERATIONS:

a. The visibility patrols shall be conducted jointly by the NCRPO [National Capital Regional Police Office] and
the Philippine Marines to curb criminality in Metro Manila and to preserve the internal security of the state
against insurgents and other serious threat to national security, although the primary responsibility over
Internal Security Operations still rests upon the AFP.

b. The principle of integration of efforts shall be applied to eradicate all forms of high-profile crimes
perpetrated by organized crime syndicates operating in Metro Manila. This concept requires the military
and police to work cohesively and unify efforts to ensure a focused, effective and holistic approach in
addressing crime prevention. Along this line, the role of the military and police aside from neutralizing crime
syndicates is to bring a wholesome atmosphere wherein delivery of basic services to the people and
development is achieved. Hand-in-hand with this joint NCRPO-Philippine Marines visibility patrols, local
Police Units are responsible for the maintenance of peace and order in their locality.
c. To ensure the effective implementation of this project, a provisional Task Force TULUNGAN shall be
organized to provide the mechanism, structure, and procedures for the integrated planning, coordinating,
monitoring and assessing the security situation.

xxx.[8]
The selected areas of deployment under the LOI are: Monumento Circle, North Edsa (SM City),
Araneta Shopping Center, Greenhills, SM Megamall, Makati Commercial Center, LRT/MRT Stations and
the NAIA and Domestic Airport.[9]
On 17 January 2000, the Integrated Bar of the Philippines (the IBP) filed the instant petition to annul
LOI 02/2000 and to declare the deployment of the Philippine Marines, null and void and unconstitutional,
arguing that:
I

THE DEPLOYMENT OF THE PHILIPPINE MARINES IN METRO MANILA IS VIOLATIVE OF THE

CONSTITUTION, IN THAT:

A) NO EMERGENCY SITUATION OBTAINS IN METRO MANILA AS WOULD JUSTIFY, EVEN ONLY

REMOTELY, THE DEPLOYMENT OF SOLDIERS FOR LAW ENFORCEMENT WORK; HENCE, SAID
DEPLOYMENT IS IN DEROGATION OF ARTICLE II, SECTION 3 OF THE CONSTITUTION;

B) SAID DEPLOYMENT CONSTITUTES AN INSIDIOUS INCURSION BY THE MILITARY IN A CIVILIAN

FUNCTION OF GOVERNMENT (LAW ENFORCEMENT) IN DEROGATION OF ARTICLE XVI, SECTION 5 (4),
OF THE CONSTITUTION;

C) SAID DEPLOYMENT CREATES A DANGEROUS TENDENCY TO RELY ON THE MILITARY TO PERFORM

THE CIVILIAN FUNCTIONS OF THE GOVERNMENT.

II

IN MILITARIZING LAW ENFORCEMENT IN METRO MANILA, THE ADMINISTRATION IS UNWITTINGLY

MAKING THE MILITARY MORE POWERFUL THAN WHAT IT SHOULD REALLY BE UNDER THE
CONSTITUTION.[10]

Asserting itself as the official organization of Filipino lawyers tasked with the bounden duty to
uphold the rule of law and the Constitution, the IBP questions the validity of the deployment and
utilization of the Marines to assist the PNP in law enforcement.
Without granting due course to the petition, the Court in a Resolution, [11] dated 25 January 2000,
required the Solicitor General to file his Comment on the petition. On 8 February 2000, the Solicitor
General submitted his Comment.
The Solicitor General vigorously defends the constitutionality of the act of the President in deploying
the Marines, contending, among others, that petitioner has no legal standing; that the question of
deployment of the Marines is not proper for judicial scrutiny since the same involves a political
question; that the organization and conduct of police visibility patrols, which feature the team-up of one
police officer and one Philippine Marine soldier, does not violate the civilian supremacy clause in the
Constitution.
The issues raised in the present petition are: (1) Whether or not petitioner has legal standing;
(2) Whether or not the Presidents factual determination of the necessity of calling the armed forces is
subject to judicial review; and, (3) Whether or not the calling of the armed forces to assist the PNP in joint
visibility patrols violates the constitutional provisions on civilian supremacy over the military and the
civilian character of the PNP.
The petition has no merit.
 First, petitioner failed to sufficiently show that it is in possession of the requisites of standing to raise
the issues in the petition. Second, the President did not commit grave abuse of discretion amounting to
lack or excess of jurisdiction nor did he commit a violation of the civilian supremacy clause of the
Constitution.
The power of judicial review is set forth in Section 1, Article VIII of the Constitution, to wit:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.

When questions of constitutional significance are raised, the Court can exercise its power of judicial
review only if the following requisites are complied with, namely: (1) the existence of an actual and
appropriate case; (2) a personal and substantial interest of the party raising the constitutional question;
(3) the exercise of judicial review is pleaded at the earliest opportunity; and (4) the constitutional
question is the lis mota of the case.[12]

The IBP has not sufficiently complied with the requisites of standing in this case.

Legal standing or locus standi has been defined as a personal and substantial interest in the case such
that the party has sustained or will sustain direct injury as a result of the governmental act that is being
challenged.[13] The term interest means a material interest, an interest in issue affected by the decree, as
distinguished from mere interest in the question involved, or a mere incidental interest. [14] The gist of the
question of standing is whether a party alleges such personal stake in the outcome of the controversy as
to assure that concrete adverseness which sharpens the presentation of issues upon which the court
depends for illumination of difficult constitutional questions.[15]
In the case at bar, the IBP primarily anchors its standing on its alleged responsibility to uphold the
rule of law and the Constitution. Apart from this declaration, however, the IBP asserts no other basis in
support of its locus standi. 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. Based on the standards
above-stated, the IBP has failed to present a specific and substantial interest in the resolution of the
case. Its fundamental purpose which, under Section 2, Rule 139-A of the Rules of Court, is to elevate the
standards of the law profession and to improve the administration of justice is alien to, and cannot be
affected by the deployment of the Marines. It should also be noted that the interest of the National
President of the IBP who signed the petition, is his alone, absent a formal board resolution authorizing
him to file the present action. To be sure, members of the BAR, those in the judiciary included, have
varying opinions on the issue. Moreover, the IBP, assuming that it has duly authorized the National
President to file the petition, has not shown any specific injury which it has suffered or may suffer by
virtue of the questioned governmental act. Indeed, none of its members, whom the IBP purportedly
represents, has sustained any form of injury as a result of the operation of the joint visibility
patrols. Neither is it alleged that any of its members has been arrested or that their civil liberties have
been violated by the deployment of the Marines. What the IBP projects as injurious is the supposed
militarization of law enforcement which might threaten Philippine democratic institutions and may cause
more harm than good in the long run. Not only is the presumed injury not personal in character, it is
likewise too vague, highly speculative and uncertain to satisfy the requirement of standing. Since
petitioner has not successfully established a direct and personal injury as a consequence of the
questioned act, it does not possess the personality to assail the validity of the deployment of the
Marines. This Court, however, does not categorically rule that the IBP has absolutely no standing to raise
constitutional issues now or in the future. The IBP must, by way of allegations and proof, satisfy this
Court that it has sufficient stake to obtain judicial resolution of the controversy.
Having stated the foregoing, it must be emphasized that this Court has the discretion to take
cognizance of a suit which does not satisfy the requirement of legal standing when paramount interest is
involved.[16] In not a few cases, the Court has adopted a liberal attitude on the locus standi of a petitioner
where the petitioner is able to craft an issue of transcendental significance to the people.[17] Thus, when
the issues raised are of paramount importance to the public, the Court may brush aside technicalities of
procedure.[18] In this case, a reading of the petition shows that the IBP has advanced constitutional issues
which deserve the attention of this Court in view of their seriousness, novelty and weight as
precedents. Moreover, because peace and order are under constant threat and lawless violence occurs in
increasing tempo, undoubtedly aggravated by the Mindanao insurgency problem, the legal controversy
raised in the petition almost certainly will not go away. It will stare us in the face again. It, therefore,
behooves the Court to relax the rules on standing and to resolve the issue now, rather than later.

The President did not commit grave abuse of discretion in calling out the Marines.

In the case at bar, the bone of contention concerns the factual determination of the President of the
necessity of calling the armed forces, particularly the Marines, to aid the PNP in visibility patrols. In this
regard, the IBP admits that the deployment of the military personnel falls under the Commander-in-Chief
powers of the President as stated in Section 18, Article VII of the Constitution, specifically, the power to
call out the armed forces to prevent or suppress lawless violence, invasion or rebellion. What the IBP
questions, however, is the basis for the calling of the Marines under the aforestated provision. According
to the IBP, no emergency exists that would justify the need for the calling of the military to assist the
police force. It contends that no lawless violence, invasion or rebellion exist to warrant the calling of the
Marines. Thus, the IBP prays that this Court review the sufficiency of the factual basis for said troop
[Marine] deployment.[19]
The Solicitor General, on the other hand, contends that the issue pertaining to the necessity of calling
the armed forces is not proper for judicial scrutiny since it involves a political question and the resolution
of factual issues which are beyond the review powers of this Court.
As framed by the parties, the underlying issues are the scope of presidential powers and limits, and
the extent of judicial review. But, while this Court gives considerable weight to the parties formulation of
the issues, the resolution of the controversy may warrant a creative approach that goes beyond the
narrow confines of the issues raised. Thus, while the parties are in agreement that the power exercised
by the President is the power to call out the armed forces, the Court is of the view that the power
involved may be no more than the maintenance of peace and order and promotion of the general
welfare.[20] For one, the realities on the ground do not show that there exist a state of warfare,
widespread civil unrest or anarchy. Secondly, the full brunt of the military is not brought upon the
citizenry, a point discussed in the latter part of this decision. In the words of the late Justice Irene Cortes
in Marcos v. Manglapus:

More particularly, this case calls for the exercise of the Presidents powers as protector of the
peace. [Rossiter, The American Presidency]. The power of the President to keep the peace is not limited
merely to exercising the commander-in-chief powers in times of emergency or to leading the State
against external and internal threats to its existence. The President is not only clothed with extraordinary
powers in times of emergency, but is also tasked with attending to the day-to-day problems of
maintaining peace and order and ensuring domestic tranquility in times when no foreign foe appears on
the horizon. Wide discretion, within the bounds of law, in fulfilling presidential duties in times of peace is
not in any way diminished by the relative want of an emergency specified in the commander-in-chief
provision. For in making the President commander-in-chief the enumeration of powers that follow
cannot be said to exclude the Presidents exercising as Commander-in-Chief powers short of the calling of
the armed forces, or suspending the privilege of the writ of habeas corpus or declaring martial law, in
order to keep the peace, and maintain public order and security.

xxx[21]
Nonetheless, even if it is conceded that the power involved is the Presidents power to call out the
armed forces to prevent or suppress lawless violence, invasion or rebellion, the resolution of the
controversy will reach a similar result.
We now address the Solicitor Generals argument that the issue involved is not susceptible to review
by the judiciary because it involves a political question, and thus, not justiciable.
As a general proposition, a controversy is justiciable if it refers to a matter which is appropriate for
court review.[22] It pertains to issues which are inherently susceptible of being decided on grounds
recognized by law. Nevertheless, the Court does not automatically assume jurisdiction over actual
constitutional cases brought before it even in instances that are ripe for resolution.One class of cases
wherein the Court hesitates to rule on are political questions. The reason is that political questions are
concerned with issues dependent upon the wisdom, not the legality, of a particular act or measure being
assailed. Moreover, the political question being a function of the separation of powers, the courts will not
normally interfere with the workings of another co-equal branch unless the case shows a clear need for
the courts to step in to uphold the law and the Constitution.
As Taada v. Cuenco[23] puts it, political questions refer to those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full
discretionary authority has been delegated to the legislative or executive branch of government. Thus, if
an issue is clearly identified by the text of the Constitution as matters for discretionary action by a
particular branch of government or to the people themselves then it is held to be a political question. In
the classic formulation of Justice Brennan in Baker v. Carr,[24] [p]rominent on the surface of any case held
to involve a political question is found a textually demonstrable constitutional commitment of the issue to
a coordinate political department; or a lack of judicially discoverable and manageable standards for
resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for
nonjudicial discretion; or the impossibility of a courts undertaking independent resolution without
expressing lack of the respect due coordinate branches of government; or an unusual need for
unquestioning adherence to a political decision already made; or the potentiality of embarassment from
multifarious pronouncements by various departments on the one question.
The 1987 Constitution expands the concept of judicial review by providing that (T)he Judicial power
shall be vested in one Supreme Court and in such lower courts as may be established by law. Judicial
power includes the duty of the courts of justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.[25] Under this definition, the Court cannot agree with the Solicitor General that the issue
involved is a political question beyond the jurisdiction of this Court to review. When the grant of power is
qualified, conditional or subject to limitations, the issue of whether the prescribed qualifications or
conditions have been met or the limitations respected, is justiciable - the problem being one of legality or
validity, not its wisdom.[26] Moreover, the jurisdiction to delimit constitutional boundaries has been given
to this Court.[27] When political questions are involved, the Constitution limits the determination as to
whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of the official whose action is being questioned.[28]
By grave abuse of discretion is meant simply capricious or whimsical exercise of judgment that is
patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary
and despotic manner by reason of passion or hostility.[29] Under this definition, a court is without power
to directly decide matters over which full discretionary authority has been delegated. But while this
Court has no power to substitute its judgment for that of Congress or of the President, it may look into the
question of whether such exercise has been made in grave abuse of discretion. [30] A showing that plenary
power is granted either department of government, may not be an obstacle to judicial inquiry, for the
improvident exercise or abuse thereof may give rise to justiciable controversy.[31]
When the President calls the armed forces to prevent or suppress lawless violence, invasion or
rebellion, he necessarily exercises a discretionary power solely vested in his wisdom. This is clear from
the intent of the framers and from the text of the Constitution itself. The Court, thus, cannot be called
upon to overrule the Presidents wisdom or substitute its own. However, 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. In view of the constitutional intent to
give the President full discretionary power to determine the necessity of calling out the armed forces, it is
incumbent upon the petitioner to show that the Presidents decision is totally bereft of factual basis. The
present petition fails to discharge such heavy burden as there is no evidence to support the assertion that
there exist no justification for calling out the armed forces. There is, likewise, no evidence to support the
proposition that grave abuse was committed because the power to call was exercised in such a manner as
to violate the constitutional provision on civilian supremacy over the military. In the performance of this
Courts duty of purposeful hesitation[32] before declaring an act of another branch as unconstitutional,
only where such grave abuse of discretion is clearly shown shall the Court interfere with the Presidents
judgment. To doubt is to sustain.
There is a clear textual commitment under the Constitution to bestow on the President full
discretionary power to call out the armed forces and to determine the necessity for the exercise of such
power. Section 18, Article VII of the Constitution, which embodies the powers of the President as
Commander-in-Chief, provides in part:

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.

xxx
The full discretionary power of the President to determine the factual basis for the exercise of the
calling out power is also implied and further reinforced in the rest of Section 18, Article VII which reads,
thus:
xxx

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 basis 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.

Under the foregoing provisions, Congress may revoke such proclamation or suspension and the
Court may review the sufficiency of the factual basis thereof. However, there is no such equivalent
provision dealing with the revocation or review of the Presidents action to call out the armed forces. The
distinction places the calling out power in a different category from the power to declare martial law and
the power to suspend the privilege of the writ of habeas corpus, otherwise, the framers of the
Constitution would have simply lumped together the three powers and provided for their revocation and
review without any qualification. Expressio unius est exclusio alterius. Where the terms are expressly
limited to certain matters, it may not, by interpretation or construction, be extended to other
matters.[33] That the intent of the Constitution is exactly what its letter says, i.e., that the power to call is
fully discretionary to the President, is extant in the deliberation of the Constitutional Commission, to wit:

FR. BERNAS. It will not make any difference. I may add that there is a graduated power of the President as
Commander-in-Chief. First, he can call out such Armed Forces as may be necessary to suppress lawless
violence; then he can suspend the privilege of the writ of habeas corpus, then he can impose martial
law. This is a graduated sequence.

When he judges that it is necessary to impose martial law or suspend the privilege of the writ of habeas
corpus, his judgment is subject to review. We are making it subject to review by the Supreme Court and
subject to concurrence by the National Assembly. But when he exercises this lesser power of calling on
the Armed Forces, when he says it is necessary, it is my opinion that his judgment cannot be reviewed by
anybody.

xxx

FR. BERNAS. Let me just add that when we only have imminent danger, the matter can be handled by the
first sentence: The President may call out such armed forces to prevent or suppress lawless violence,
invasion or rebellion. So we feel that that is sufficient for handling imminent danger.

MR. DE LOS REYES. So actually, if a President feels that there is imminent danger, the matter can be
handled by the First Sentence: The President....may call out such Armed Forces to prevent or suppress
lawless violence, invasion or rebellion. So we feel that that is sufficient for handling imminent danger, of
invasion or rebellion, instead of imposing martial law or suspending the writ of habeas corpus, he must
necessarily have to call the Armed Forces of the Philippines as their Commander-in-Chief. Is that the idea?

MR. REGALADO. That does not require any concurrence by the legislature nor is it subject to judicial
review.[34]

The reason for the difference in the treatment of the aforementioned powers highlights the intent to
grant the President the widest leeway and broadest discretion in using the power to call out because it is
considered as the lesser and more benign power compared to the power to suspend the privilege of the
writ of habeas corpus and the power to impose martial law, both of which involve the curtailment and
suppression of certain basic civil rights and individual freedoms, and thus necessitating safeguards by
Congress and review by this Court.
Moreover, under Section 18, Article VII of the Constitution, in the exercise of the power to suspend
the privilege of the writ of habeas corpus or to impose martial law, two conditions must concur: (1) there
must be an actual invasion or rebellion and, (2) public safety must require it. These conditions are not
required in the case of the power to call out the armed forces. The only criterion is that whenever it
becomes necessary, the President may call the armed forces to prevent or suppress lawless violence,
invasion or rebellion." The implication is that the President is given full discretion and wide latitude in
the exercise of the power to call as compared to the two other powers.
If the petitioner fails, by way of proof, to support the assertion that the President acted without
factual basis, then this Court cannot undertake an independent investigation beyond the pleadings. The
factual necessity of calling out the armed forces is not easily quantifiable and cannot be objectively
established since matters considered for satisfying the same is a combination of several factors which are
not always accessible to the courts. Besides the absence of textual standards that the court may use to
judge necessity, information necessary to arrive at such judgment might also prove unmanageable for the
courts. Certain pertinent information might be difficult to verify, or wholly unavailable to the courts. In
many instances, the evidence upon which the President might decide that there is a need to call out the
armed forces may be of a nature not constituting technical proof.
On the other hand, the President as Commander-in-Chief has a vast intelligence network to gather
information, some of which may be classified as highly confidential or affecting the security of the
state. In the exercise of the power to call, on-the-spot decisions may be imperatively necessary in
emergency situations to avert great loss of human lives and mass destruction of property. Indeed, the
decision to call out the military to prevent or suppress lawless violence must be done swiftly and
decisively if it were to have any effect at all. Such a scenario is not farfetched when we consider the
present situation in Mindanao, where the insurgency problem could spill over the other parts of the
country. The determination of the necessity for the calling out power if subjected to unfettered judicial
scrutiny could be a veritable prescription for disaster, as such power may be unduly straitjacketed by an
injunction or a temporary restraining order every time it is exercised.
Thus, it is the unclouded intent of the Constitution to vest upon the President, as Commander-in-
Chief of the Armed Forces, full discretion to call forth the military when in his judgment it is necessary to
do so in order to prevent or suppress lawless violence, invasion or rebellion. Unless the petitioner can
show that the exercise of such discretion was gravely abused, the Presidents exercise of judgment
deserves to be accorded respect from this Court.
The President has already determined the necessity and factual basis for calling the armed forces. In
his Memorandum, he categorically asserted that, [V]iolent crimes like bank/store robberies, holdups,
kidnappings and carnappings continue to occur in Metro Manila...[35] We do not doubt the veracity of the
Presidents assessment of the situation, especially in the light of present developments. The Court takes
judicial notice of the recent bombings perpetrated by lawless elements in the shopping malls, public
utilities, and other public places. These are among the areas of deployment described in the LOI
2000. Considering all these facts, we hold that the President has sufficient factual basis to call for military
aid in law enforcement and in the exercise of this constitutional power.

The deployment of the Marines does not violate the civilian supremacy clause nor does it infringe the civilian
character of the police force.

Prescinding from its argument that no emergency situation exists to justify the calling of the Marines,
the IBP asserts that by the deployment of the Marines, the civilian task of law enforcement is militarized
in violation of Section 3, Article II[36] of the Constitution.
We disagree. The deployment of the Marines does not constitute a breach of the civilian supremacy
clause. The calling of the Marines in this case constitutes permissible use of military assets for civilian law
enforcement. The participation of the Marines in the conduct of joint visibility patrols is appropriately
circumscribed. The limited participation of the Marines is evident in the provisions of the LOI itself,
which sufficiently provides the metes and bounds of the Marines authority. It is noteworthy that the local
police forces are the ones in charge of the visibility patrols at all times, the real authority belonging to the
PNP. In fact, the Metro Manila Police Chief is the overall leader of the PNP-Philippine Marines joint
visibility patrols.[37] Under the LOI, the police forces are tasked to brief or orient the soldiers on police
patrol procedures.[38] It is their responsibility to direct and manage the deployment of the Marines. [39] It
is, likewise, their duty to provide the necessary equipment to the Marines and render logistical support to
these soldiers.[40] In view of the foregoing, it cannot be properly argued that military authority is supreme
over civilian authority. Moreover, the deployment of the Marines to assist the PNP does not unmake the
civilian character of the police force. Neither does it amount to an insidious incursion of the military in
the task of law enforcement in violation of Section 5(4), Article XVI of the Constitution.[41]
In this regard, it is not correct to say that General Angelo Reyes, Chief of Staff of the AFP, by his
alleged involvement in civilian law enforcement, has been virtually appointed to a civilian post in
derogation of the aforecited provision. The real authority in these operations, as stated in the LOI, is
lodged with the head of a civilian institution, the PNP, and not with the military. Such being the case, it
does not matter whether the AFP Chief actually participates in the Task Force Tulungan since he does not
exercise any authority or control over the same. Since none of the Marines was incorporated or enlisted
as members of the PNP, there can be no appointment to civilian position to speak of. Hence, the
deployment of the Marines in the joint visibility patrols does not destroy the civilian character of the PNP.
Considering the above circumstances, the Marines render nothing more than assistance required in
conducting the patrols. As such, there can be no insidious incursion of the military in civilian affairs nor
can there be a violation of the civilian supremacy clause in the Constitution.
It is worth mentioning that military assistance to civilian authorities in various forms persists in
Philippine jurisdiction. The Philippine experience reveals that it is not averse to requesting the assistance
of the military in the implementation and execution of certain traditionally civil functions. As correctly
pointed out by the Solicitor General, some of the multifarious activities wherein military aid has been
rendered, exemplifying the activities that bring both the civilian and the military together in a
relationship of cooperation, are:
1. Elections;[42]
2. Administration of the Philippine National Red Cross;[43]
3. Relief and rescue operations during calamities and disasters;[44]
4. Amateur sports promotion and development;[45]
5. Development of the culture and the arts;[46]
6. Conservation of natural resources;[47]
7. Implementation of the agrarian reform program;[48]
8. Enforcement of customs laws;[49]
9. Composite civilian-military law enforcement activities;[50]
10. Conduct of licensure examinations;[51]
11. Conduct of nationwide tests for elementary and high school students;[52]
12. Anti-drug enforcement activities;[53]
13. Sanitary inspections;[54]
14. Conduct of census work;[55]
15. Administration of the Civil Aeronautics Board;[56]
16. Assistance in installation of weather forecasting devices;[57]
17. Peace and order policy formulation in local government units.[58]
This unquestionably constitutes a gloss on executive power resulting from a systematic, unbroken,
executive practice, long pursued to the knowledge of Congress and, yet, never before questioned. [59] What
we have here is mutual support and cooperation between the military and civilian authorities, not
derogation of civilian supremacy.
In the United States, where a long tradition of suspicion and hostility towards the use of military
force for domestic purposes has persisted,[60] and whose Constitution, unlike ours, does not expressly
provide for the power to call, the use of military personnel by civilian law enforcement officers is allowed
under circumstances similar to those surrounding the present deployment of the Philippine
Marines. Under the Posse Comitatus Act[61] of the US, the use of the military in civilian law enforcement is
generally prohibited, except in certain allowable circumstances. A provision of the Act states:

1385. Use of Army and Air Force as posse comitatus

Whoever, except in cases and under circumstances expressly authorized by the Constitution or Act of
Congress, willfully uses any part of the Army or the Air Force as posse comitatus or otherwise to execute
the laws shall be fined not more than $10,000 or imprisoned not more than two years, or both.[62]

To determine whether there is a violation of the Posse Comitatus Act in the use of military personnel,
the US courts[63] apply the following standards, to wit:

Were Army or Air Force personnel used by the civilian law enforcement officers at Wounded Knee in
such a manner that the military personnel subjected the citizens to the exercise of military power which
was regulatory, proscriptive, or compulsory[64] George Washington Law Review, pp. 404-433 (1986),
which discusses the four divergent standards for assessing acceptable involvement of military personnel
in civil law enforcement. See likewise HONORED IN THE BREECH: PRESIDENTIAL AUTHORITY TO
EXECUTE THE LAWS WITH MILITARY FORCE, 83 Yale Law Journal, pp. 130-152, 1973. 64 in nature,
either presently or prospectively?

xxx

When this concept is transplanted into the present legal context, we take it to mean that military
involvement, even when not expressly authorized by the Constitution or a statute, does not violate the
Posse Comitatus Act unless it actually regulates, forbids or compels some conduct on the part of those
claiming relief. A mere threat of some future injury would be insufficient.(emphasis supplied)

Even if the Court were to apply the above rigid standards to the present case to determine whether
there is permissible use of the military in civilian law enforcement, the conclusion is inevitable that no
violation of the civilian supremacy clause in the Constitution is committed. On this point, the Court agrees
with the observation of the Solicitor General:

3. The designation of tasks in Annex A[65] does not constitute the exercise of regulatory, proscriptive,
or compulsory military power. First, the soldiers do not control or direct the operation. This is
evident from Nos. 6,[66]8(k)[67] and 9(a)[68] of Annex A. These soldiers, second, also have no power to
prohibit or condemn. In No. 9(d)[69] of Annex A, all arrested persons are brought to the nearest police
stations for proper disposition. And last, these soldiers apply no coercive force. The materials or
equipment issued to them, as shown in No. 8(c)[70] of Annex A, are all low impact and defensive in
character. The conclusion is that there being no exercise of regulatory, proscriptive or compulsory
military power, the deployment of a handful of Philippine Marines constitutes no impermissible use
of military power for civilian law enforcement.[71]

It appears that the present petition is anchored on fear that once the armed forces are deployed, the
military will gain ascendancy, and thus place in peril our cherished liberties. Such apprehensions,
however, are unfounded. The power to call the armed forces is just that - calling out the armed
forces. Unless, petitioner IBP can show, which it has not, that in the deployment of the Marines, the
President has violated the fundamental law, exceeded his authority or jeopardized the civil liberties of
the people, this Court is not inclined to overrule the Presidents determination of the factual basis for the
calling of the Marines to prevent or suppress lawless violence.
One last point. Since the institution of the joint visibility patrol in January, 2000, not a single citizen
has complained that his political or civil rights have been violated as a result of the deployment of the
Marines. It was precisely to safeguard peace, tranquility and the civil liberties of the people that the joint
visibility patrol was conceived. Freedom and democracy will be in full bloom only when people feel
secure in their homes and in the streets, not when the shadows of violence and anarchy constantly lurk in
their midst.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
[G.R. No. 47800. December 2, 1940.]

MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.

Maximo Calalang in his own behalf.

Solicitor General Ozaeta and Assistant Solicitor General Amparo for respondents Williams, Fragante and
Bayan

City Fiscal Mabanag for the other respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No. 648; DELEGATION OF

LEGISLATIVE POWER; AUTHORITY OF DIRECTOR OF PUBLIC WORKS AND SECRETARY OF PUBLIC
WORKS AND COMMUNICATIONS TO PROMULGATE RULES AND REGULATIONS. — The provisions of
section 1 of Commonwealth Act No. 648 do not confer legislative power upon the Director of Public
Works and the Secretary of Public Works and Communications. The authority therein conferred upon
them and under which they promulgated the rules and regulations now complained of is not to
determine what public policy demands but merely to carry out the legislative policy laid down by the
National Assembly in said Act, to wit, "to promote safe transit upon, and avoid obstructions on, roads and
streets designated as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines" and to close them temporarily to any or all classes of traffic "whenever the
condition of the road or the traffic thereon makes such action necessary or advisable in the public
convenience and interest." The delegated power, if at all, therefore, is not the determination of what the
law shall be, but merely the ascertainment of the facts and circumstances upon which the application of
said law is to be predicated. To promulgate rules and regulations on the use of national roads and to
determine when and how long a national road should be closed to traffic, in view of the condition of the
road or the traffic thereon and the requirements of public convenience and interest, is an administrative
function which cannot be directly discharged by the National Assembly. It must depend on the discretion
of some other government official to whom is confided the duty of determining whether the proper
occasion exists for executing the law. But it cannot be said that the exercise of such discretion is the
making of the law.

2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY. — Commonwealth Act
No. 548 was passed by the National Assembly in the exercise of the paramount police power of the state.
Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote
safe transit upon and avoid obstructions on national roads, in the interest and convenience of the public.
In enacting said law, therefore, the National Assembly was prompted by considerations of public
convenience and welfare. It was inspired by a desire to relieve congestion of traffic, which is, to say the
least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and
the state in order to promote the general welfare may interfere with personal liberty, with property, and
with business and occupations. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state (U.S. v. Gomer Jesus,
31 Phil., 218). To this fundamental aim of our Government the rights of the individual are subordinated.
Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over
authority because then society will fall into anarchy. Neither should authority be made to prevail over
liberty because then the individual will fall into slavery. The citizen should achieve the required balance
of liberty and authority in his mind through education and, personal discipline, so that there may be
established the resultant equilibrium, which means peace and order and happiness for all. The moment
greater authority is conferred upon the government, logically so much is withdrawn from the residuum
of liberty which resides in the people. The paradox lies in the fact that the apparent curtailment of liberty
is precisely the very means of insuring its preservation.

3. ID.; ID.; SOCIAL JUSTICE. — Social justice is "neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception may at least be approximated. Social justice
means the promotion of the welfare of all the people, the adoption by the Government of measures
calculated to insure economic stability of all the competent elements of society, through the maintenance
of a proper economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through
the exercise of powers underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex. Social justice, therefore, must be founded on the recognition of the necessity of
interdependence among divers and diverse units of a society and of the protection that should be equally
and evenly extended to all groups as a combined force in our social and economic life, consistent with the
fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all
persons, and of bringing about "the greatest good to the greatest number."

DECISION

LAUREL, J.:

Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before this court
this petition for a writ of prohibition against the respondents, A. D. Williams, as Chairman of the National
Traffic Commission; Vicente Fragante, as Director of Public Works; Sergio Bayan, as Acting Secretary of
Public Works and Communications; Eulogio Rodriguez, as Mayor of the City of Manila; and Juan
Dominguez, as Acting Chief of Police of Manila.

It is alleged in the petition that the National Traffic Commission, in its resolution of July 17, 1940,
resolved to recommend to the Director of Public Works and to the Secretary of Public Works and
Communications that animal-drawn vehicles be prohibited from passing along Rosario Street extending
from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m. to 12:30 p.m. and from 1:30 p.m. to
5:30 p.m.; and along Rizal Avenue extending from the railroad crossing at Antipolo Street to Echague
Street, from 7 a.m. to 11 p.m., from a period of one year from the date of the opening of the Colgante
Bridge to traffic; that the Chairman of the National Traffic Commission, on July 18, 1940 recommended to
the Director of Public Works the adoption of the measure proposed in the resolution aforementioned, in
pursuance of the provisions of Commonwealth Act No. 548 which authorizes said Director of Public
Works, with the approval of the Secretary of Public Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on national roads; that on August 2, 1940, the
Director of Public Works, in his first indorsement to the Secretary of Public Works and Communications,
recommended to the latter the approval of the recommendation made by the Chairman of the National
Traffic Commission as aforesaid, with the modification that the closing of Rizal Avenue to traffic to
animal-drawn vehicles be limited to the portion thereof extending from the railroad crossing at Antipolo
Street to Azcarraga Street; that on August 10, 1940, the Secretary of Public Works and Communications,
in his second indorsement addressed to the Director of Public Works, approved the recommendation of
the latter that Rosario Street and Rizal Avenue be closed to traffic of animal-drawn vehicles, between the
points and during the hours as above indicated, for a period of one year from the date of the opening of
the Colgante Bridge to traffic; that the Mayor of Manila and the Acting Chief of Police of Manila have
enforced and caused to be enforced the rules and regulations thus adopted; that as a consequence of such
enforcement, all animal-drawn vehicles are not allowed to pass and pick up passengers in the places
above-mentioned to the detriment not only of their owners but of the riding public as well.

It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of Public Works,
with the approval of the Secretary of Public Works and Communications, is authorized to promulgate
rules and regulations for the regulation and control of the use of and traffic on national roads and streets
is unconstitutional because it constitutes an undue delegation of legislative power. This contention is
untenable. As was observed by this court in Rubi v. Provincial Board of Mindoro (39 Phil, 660, 700), "The
rule has nowhere been better stated than in the early Ohio case decided by Judge Ranney, and since
followed in a multitude of cases, namely: ’The true distinction therefore is between the delegation of
power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an
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.’ (Cincinnati, W. & Z. R. Co. v. Comm’rs.
Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman v. Southard (10
Wheat., 1) may be committed by the Legislature to an executive department or official. The Legislature
may make decisions of executive departments or subordinate officials thereof, to whom it has committed
the execution of certain acts, final on questions of fact. (U.S. v. Kinkead, 248 Fed., 141.) The growing
tendency in the decisions is to give prominence to the ’necessity’ of the case."cralaw virtua1aw library

Section 1 of Commonwealth Act No. 548 reads as follows:jgc:chanrobles.com.ph

"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets designated as
national roads by acts of the National Assembly or by executive orders of the President of the Philippines,
the Director of Public Works, with the approval of the Secretary of Public Works and Communications,
shall promulgate the necessary rules and regulations to regulate and control the use of and traffic on such
roads and streets. Such rules and regulations, with the approval of the President, may contain provisions
controlling or regulating the construction of buildings or other structures within a reasonable distance
from along the national roads. Such roads may be temporarily closed to any or all classes of traffic by the
Director of Public Works and his duly authorized representatives whenever the condition of the road or
the traffic thereon makes such action necessary or advisable in the public convenience and interest, or for
a specified period, with the approval of the Secretary of Public Works and Communications."cralaw
virtua1aw library

The above provisions of law do not confer legislative power upon the Director of Public Works and the
Secretary of Public Works and Communications. The authority therein conferred upon them and under
which they promulgated the rules and regulations now complained of is not to determine what public
policy demands but merely to carry out the legislative policy laid down by the National Assembly in said
Act, to wit, "to promote safe transit upon and avoid obstructions on, roads and streets designated as
national roads by acts of the National Assembly or by executive orders of the President of the
Philippines" and to close them temporarily to any or all classes of traffic "whenever the condition of the
road or the traffic makes such action necessary or advisable in the public convenience and interest." The
delegated power, if at all, therefore, is not the determination of what the law shall be, but merely the
ascertainment of the facts and circumstances upon which the application of said law is to be predicated.
To promulgate rules and regulations on the use of national roads and to determine when and how long a
national road should be closed to traffic, in view of the condition of the road or the traffic thereon and the
requirements of public convenience and interest, is an administrative function which cannot be directly
discharged by the National Assembly. It must depend on the discretion of some other government official
to whom is confided the duty of determining whether the proper occasion exists for executing the law.
But it cannot be said that the exercise of such discretion is the making of the law. As was said in Locke’s
Appeal (72 Pa. 491): "To assert that a law is less than a law, because it is made to depend on a future
event or act, is to rob the Legislature of the power to act wisely for the public welfare whenever a law is
passed relating to a state of affairs not yet developed, or to things future and impossible to fully know."
The proper distinction the court said was this: "The Legislature cannot delegate its power to make the
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 depend. To deny this would be to stop the wheels of
government. There are many things upon which wise and useful legislation must depend which cannot be
known to the law-making power, and, must, therefore, be a subject of inquiry and determination outside
of the halls of legislation." (Field v. Clark, 143 U. S. 649, 694; 36 L. Ed. 294.)

In the case of People v. Rosenthal and Osmeña, G.R. Nos. 46076 and 46077, promulgated June 12, 1939,
and in Pangasinan Transportation v. The Public Service Commission, G.R. No. 47065, promulgated June
26, 1940, this Court had occasion to observe that the principle of separation of powers has been made to
adapt itself to 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. Accordingly, with the growing complexity of modern life, the multiplication of
the subjects of governmental regulations, and the increased difficulty of administering the laws, the
rigidity of the theory of separation of governmental powers has, to a large extent, been relaxed by
permitting the delegation of greater powers by the legislative and vesting a larger amount of discretion in
administrative and executive officials, not only in the execution of the laws, but also in the promulgation
of certain rules and regulations calculated to promote public interest.

The petitioner further contends that the rules and regulations promulgated by the respondents pursuant
to the provisions of Commonwealth Act No. 548 constitute an unlawful interference with legitimate
business or trade and abridge the right to personal liberty and freedom of locomotion. Commonwealth
Act No. 548 was passed by the National Assembly in the exercise of the paramount police power of the
state.

Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to promote
safe transit upon and avoid obstructions on national roads, in the interest and convenience of the public.
In enacting said law, therefore, the National Assembly was prompted by considerations of public
convenience and welfare. It was inspired by a desire to relieve congestion of traffic. which is, to say the
least, a menace to public safety. Public welfare, then, lies at the bottom of the enactment of said law, and
the state in order to promote the general welfare may interfere with personal liberty, with property, and
with business and occupations. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state (U.S. v. Gomez Jesus,
31 Phil., 218). To this fundamental aim of our Government the rights of the individual are subordinated.
Liberty is a blessing without which life is a misery, but liberty should not be made to prevail over
authority because then society will fall into anarchy. Neither should authority be made to prevail over
liberty because then the individual will fall into slavery. The citizen should achieve the required balance
of liberty and authority in his mind through education and personal discipline, so that there may be
established the resultant equilibrium, which means peace and order and happiness for all. The moment
greater authority is conferred upon the government, logically so much is withdrawn from the residuum
of liberty which resides in the people. The paradox lies in the fact that the apparent curtailment of liberty
is precisely the very means of insuring its preservation.

The scope of police power keeps expanding as civilization advances. As was said in the case of Dobbins v.
Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police power is a continuing one,
and a business lawful today may in the future, because of the changed situation, the growth of population
or other causes, become a menace to the public health and welfare, and be required to yield to the public
good." And in People v. Pomar (46 Phil., 440), it was observed that "advancing civilization is bringing
within the police power of the state today things which were not thought of as being within such power
yesterday. The development of civilization, the rapidly increasing population, the growth of public
opinion, with an increasing desire on the part of the masses and of the government to look after and care
for the interests of the individuals of the state, have brought within the police power many questions for
regulation which formerly were not so considered."cralaw virtua1aw library

The petitioner finally avers that the rules and regulations complained of infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-being and economic security of all the
people. The promotion of social justice, however, is to be achieved not through a mistaken sympathy
towards any given group. Social justice is "neither communism, nor despotism, nor atomism, nor
anarchy," but the humanization of laws and the equalization of social and economic forces by the State so
that justice in its rational and objectively secular conception may at least be approximated. Social justice
means the promotion of the welfare of all the people, the adoption by the Government of measures
calculated to insure economic stability of all the competent elements of society, through the maintenance
of a proper economic and social equilibrium in the interrelations of the members of the community,
constitutionally, through the adoption of measures legally justifiable, or extra-constitutionally, through
the exercise of powers underlying the existence of all governments on the time-honored principle of salus
populi est suprema lex.

Social justice, therefore, must be founded on the recognition of the necessity of interdependence among
divers and diverse units of a society and of the protection that should be equally and evenly extended to
all groups as a combined force in our social and economic life, consistent with the fundamental and
paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of
bringing about "the greatest good to the greatest number."cralaw virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against the
petitioner. So ordered.

Avanceña, C.J., Imperial, Diaz. and Horrilleno. JJ. concur.

G.R. No. 101083 July 30, 1993

JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and represented by
their parents ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor, represented by her
parents CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD and PATRISHA, all surnamed FLORES,
minors and represented by their parents ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN, minor,
represented by her parents SIGRID and DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all
surnamed MISA, minors and represented by their parents GEORGE and MYRA MISA, BENJAMIN ALAN V.
PESIGAN, minor, represented by his parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO, minor,
represented by her parents JOSE and MARIA VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor,
represented by her parents FREDENIL and JANE CASTRO, JOHANNA DESAMPARADO,
minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T. NARVASA,
minor, represented by his parents GREGORIO II and CRISTINE CHARITY NARVASA, MA. MARGARITA,
JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE, all surnamed SAENZ, minors, represented by their
parents ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN,
all surnamed KING, minors, represented by their parents MARIO and HAYDEE KING, DAVID, FRANCISCO
and THERESE VICTORIA, all surnamed ENDRIGA, minors, represented by their parents BALTAZAR and
TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA, minors, represented by their
parents ANTONIO and MARICA ABAYA, MARILIN, MARIO, JR. and MARIETTE, all surnamed CARDAMA,
minors, represented by their parents MARIO and LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and
IMEE LYN, all surnamed OPOSA, minors and represented by their parents RICARDO and MARISSA OPOSA,
PHILIP JOSEPH, STEPHEN JOHN and ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their
parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and FRANCISCO, all
surnamed BIBAL, minors, represented by their parents FRANCISCO, JR. and MILAGROS BIBAL, and THE
PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners,
vs.
THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department of
Environment and Natural Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of
the RTC, Makati, Branch 66, respondents.

Oposa Law Office for petitioners.

The Solicitor General for respondents.

DAVIDE, JR., J.:

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology
which the petitioners dramatically associate with the twin concepts of "inter-generational responsibility"
and "inter-generational justice." Specifically, it touches on the issue of whether the said petitioners have a
cause of action to "prevent the misappropriation or impairment" of Philippine rainforests and "arrest the
unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth."

The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro
Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The principal plaintiffs therein,
now the principal petitioners, are all minors duly represented and joined by their respective parents.
Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, non-
stock and non-profit corporation organized for the purpose of, inter alia, engaging in concerted action
geared for the protection of our environment and natural resources. The original defendant was the
Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of Environment and Natural
Resources (DENR). His substitution in this petition by the new Secretary, the Honorable Angel C. Alcala,
was subsequently ordered upon proper motion by the petitioners.1 The complaint2 was instituted as a
taxpayers' class suit3 and alleges that the plaintiffs "are all citizens of the Republic of the Philippines,
taxpayers, and entitled to the full benefit, use and enjoyment of the natural resource treasure that is the
country's virgin tropical forests." The same was filed for themselves and others who are equally
concerned about the preservation of said resource but are "so numerous that it is impracticable to bring
them all before the Court." The minors further asseverate that they "represent their generation as well as
generations yet unborn."4 Consequently, it is prayed for that judgment be rendered:

. . . ordering defendant, his agents, representatives and other persons acting in his behalf to
—

(1) Cancel all existing timber license agreements in the country;

(2) Cease and desist from receiving, accepting, processing, renewing or approving new
timber license agreements.

and granting the plaintiffs ". . . such other reliefs just and equitable under the premises."5

The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a
land area of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests
in which varied, rare and unique species of flora and fauna may be found; these rainforests contain a
genetic, biological and chemical pool which is irreplaceable; they are also the habitat of indigenous
Philippine cultures which have existed, endured and flourished since time immemorial; scientific
evidence reveals that in order to maintain a balanced and healthful ecology, the country's land area
should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent
(46%) for agricultural, residential, industrial, commercial and other uses; the distortion and disturbance
of this balance as a consequence of deforestation have resulted in a host of environmental tragedies, such
as (a) water shortages resulting from drying up of the water table, otherwise known as the "aquifer," as
well as of rivers, brooks and streams, (b) salinization of the water table as a result of the intrusion therein
of salt water, incontrovertible examples of which may be found in the island of Cebu and the Municipality
of Bacoor, Cavite, (c) massive erosion and the consequential loss of soil fertility and agricultural
productivity, with the volume of soil eroded estimated at one billion (1,000,000,000) cubic meters per
annum — approximately the size of the entire island of Catanduanes, (d) the endangering and extinction
of the country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation of cultural
communities, including the disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers
and seabeds and consequential destruction of corals and other aquatic life leading to a critical reduction
in marine resource productivity, (g) recurrent spells of drought as is presently experienced by the entire
country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i) the
floodings of lowlands and agricultural plains arising from the absence of the absorbent mechanism of
forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams constructed and
operated for the purpose of supplying water for domestic uses, irrigation and the generation of electric
power, and (k) the reduction of the earth's capacity to process carbon dioxide gases which has led to
perplexing and catastrophic climatic changes such as the phenomenon of global warming, otherwise
known as the "greenhouse effect."

Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation
are so capable of unquestionable demonstration that the same may be submitted as a matter of judicial
notice. This notwithstanding, they expressed their intention to present expert witnesses as well as
documentary, photographic and film evidence in the course of the trial.

As their cause of action, they specifically allege that:

CAUSE OF ACTION

7. Plaintiffs replead by reference the foregoing allegations.

8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of
rainforests constituting roughly 53% of the country's land mass.

9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million
hectares of said rainforests or four per cent (4.0%) of the country's land area.

10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth
rainforests are left, barely 2.8% of the entire land mass of the Philippine archipelago and
about 3.0 million hectares of immature and uneconomical secondary growth forests.

11. Public records reveal that the defendant's, predecessors have granted timber license
agreements ('TLA's') to various corporations to cut the aggregate area of 3.89 million
hectares for commercial logging purposes.

A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex
"A".

12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25
hectares per hour — nighttime, Saturdays, Sundays and holidays included — the
Philippines will be bereft of forest resources after the end of this ensuing decade, if not
earlier.

13. The adverse effects, disastrous consequences, serious injury and irreparable damage of
this continued trend of deforestation to the plaintiff minor's generation and to generations
yet unborn are evident and incontrovertible. As a matter of fact, the environmental
damages enumerated in paragraph 6 hereof are already being felt, experienced and
suffered by the generation of plaintiff adults.

14. The continued allowance by defendant of TLA holders to cut and deforest the remaining
forest stands will work great damage and irreparable injury to plaintiffs — especially
plaintiff minors and their successors — who may never see, use, benefit from and enjoy
this rare and unique natural resource treasure.

This act of defendant constitutes a misappropriation and/or impairment of the natural

resource property he holds in trust for the benefit of plaintiff minors and succeeding
generations.

15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and
are entitled to protection by the State in its capacity as the parens patriae.

16. Plaintiff have exhausted all administrative remedies with the defendant's office. On
March 2, 1990, plaintiffs served upon defendant a final demand to cancel all logging
permits in the country.

A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B".

17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing
serious damage and extreme prejudice of plaintiffs.

18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of
the rights of plaintiffs, especially plaintiff minors who may be left with a country that is
desertified (sic), bare, barren and devoid of the wonderful flora, fauna and indigenous
cultures which the Philippines had been abundantly blessed with.

19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the
public policy enunciated in the Philippine Environmental Policy which, in pertinent part,
states that it is the policy of the State —

(a) to create, develop, maintain and improve conditions under which man and nature can
thrive in productive and enjoyable harmony with each other;

(b) to fulfill the social, economic and other requirements of present and future generations
of Filipinos and;

(c) to ensure the attainment of an environmental quality that is conductive to a life of

dignity and well-being. (P.D. 1151, 6 June 1977)

20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is

contradictory to the Constitutional policy of the State to —

a. effect "a more equitable distribution of opportunities, income and wealth" and "make full
and efficient use of natural resources (sic)." (Section 1, Article XII of the Constitution);

b. "protect the nation's marine wealth." (Section 2, ibid);

c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14,
Article XIV, id.);
 d. "protect and advance the right of the people to a balanced and healthful ecology in
accord with the rhythm and harmony of nature." (Section 16, Article II, id.)

21. Finally, defendant's act is contrary to the highest law of humankind — the natural law
— and violative of plaintiffs' right to self-preservation and perpetuation.

22. There is no other plain, speedy and adequate remedy in law other than the instant
action to arrest the unabated hemorrhage of the country's vital life support systems and
continued rape of Mother Earth. 6

On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint
based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue
raised by the plaintiffs is a political question which properly pertains to the legislative or executive
branches of Government. In their 12 July 1990 Opposition to the Motion, the petitioners maintain that (1)
the complaint shows a clear and unmistakable cause of action, (2) the motion is dilatory and (3) the
action presents a justiciable question as it involves the defendant's abuse of discretion.

On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. 7 In
the said order, not only was the defendant's claim — that the complaint states no cause of action against
him and that it raises a political question — sustained, the respondent Judge further ruled that the
granting of the relief prayed for would result in the impairment of contracts which is prohibited by the
fundamental law of the land.

Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of
Court and ask this Court to rescind and set aside the dismissal order on the ground that the respondent
Judge gravely abused his discretion in dismissing the action. Again, the parents of the plaintiffs-minors
not only represent their children, but have also joined the latter in this case.8

On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their
respective Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf of the
respondents and the petitioners filed a reply thereto.

Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains
sufficient allegations concerning their right to a sound environment based on Articles 19, 20 and 21 of
the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section
3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy), Section 16, Article II of the
1987 Constitution recognizing the right of the people to a balanced and healthful ecology, the concept of
generational genocide in Criminal Law and the concept of man's inalienable right to self-preservation and
self-perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative
obligation per Section 4 of E.O. No. 192, to safeguard the people's right to a healthful environment.

It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in
granting Timber License Agreements (TLAs) to cover more areas for logging than what is available
involves a judicial question.

Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners
maintain that the same does not apply in this case because TLAs are not contracts. They likewise submit
that even if TLAs may be considered protected by the said clause, it is well settled that they may still be
revoked by the State when the public interest so requires.

On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific
legal right violated by the respondent Secretary for which any relief is provided by law. They see nothing
in the complaint but vague and nebulous allegations concerning an "environmental right" which
supposedly entitles the petitioners to the "protection by the state in its capacity as parens patriae." Such
allegations, according to them, do not reveal a valid cause of action. They then reiterate the theory that
the question of whether logging should be permitted in the country is a political question which should
be properly addressed to the executive or legislative branches of Government. They therefore assert that
the petitioners' resources is not to file an action to court, but to lobby before Congress for the passage of a
bill that would ban logging totally.

As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the
State without due process of law. Once issued, a TLA remains effective for a certain period of time —
usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor cancelled
unless the holder has been found, after due notice and hearing, to have violated the terms of the
agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs
indiscriminately cancelled without the requisite hearing would be violative of the requirements of due
process.

Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil
Case No. 90-777 as a class suit. The original defendant and the present respondents did not take issue
with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class suit. The subject
matter of the complaint is of common and general interest not just to several, but to all citizens of the
Philippines. Consequently, since the parties are so numerous, it, becomes impracticable, if not totally
impossible, to bring all of them before the court. We likewise declare that the plaintiffs therein are
numerous and representative enough to ensure the full protection of all concerned interests. Hence, all
the requisites for the filing of a valid class suit under Section 12, Rule 3 of the Revised Rules of Court are
present both in the said civil case and in the instant petition, the latter being but an incident to the former.

This case, however, has a special and novel element. Petitioners minors assert that they represent their
generation as well as generations yet unborn. We find no difficulty in ruling that they can, for themselves,
for others of their generation and for the succeeding generations, file a class suit. Their personality to sue
in behalf of the succeeding generations can only be based on the concept of intergenerational
responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right, as
hereinafter expounded, considers
the "rhythm and harmony of nature." Nature means the created world in its entirety. Such rhythm and
9

harmony indispensably include, inter alia, the judicious disposition, utilization, management, renewal
and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and
other natural resources to the end that their exploration, development and utilization be equitably
accessible to the present as well as future generations. 10Needless to say, every generation has a
responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and
healthful ecology. Put a little differently, the minors' assertion of their right to a sound environment
constitutes, at the same time, the performance of their obligation to ensure the protection of that right for
the generations to come.

The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the
petition.

After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the
issues raised and arguments adduced by the parties, We do not hesitate to find for the petitioners and
rule against the respondent Judge's challenged order for having been issued with grave abuse of
discretion amounting to lack of jurisdiction. The pertinent portions of the said order reads as follows:

xxx xxx xxx

After a careful and circumspect evaluation of the Complaint, the Court cannot help but
agree with the defendant. For although we believe that plaintiffs have but the noblest of all
intentions, it (sic) fell short of alleging, with sufficient definiteness, a specific legal right
they are seeking to enforce and protect, or a specific legal wrong they are seeking to
 prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court notes that the Complaint
is replete with vague assumptions and vague conclusions based on unverified data. In fine,
plaintiffs fail to state a cause of action in its Complaint against the herein defendant.

Furthermore, the Court firmly believes that the matter before it, being impressed with
political color and involving a matter of public policy, may not be taken cognizance of by
this Court without doing violence to the sacred principle of "Separation of Powers" of the
three (3) co-equal branches of the Government.

The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist from receiving, accepting,
processing, renewing or approving new timber license agreements. For to do otherwise
would amount to "impairment of contracts" abhored (sic) by the fundamental law. 11

We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient
definiteness a specific legal right involved or a specific legal wrong committed, and that the complaint is
replete with vague assumptions and conclusions based on unverified data. A reading of the complaint
itself belies these conclusions.

The complaint focuses on one specific fundamental legal right — the right to a balanced and healthful
ecology which, for the first time in our nation's constitutional history, is solemnly incorporated in the
fundamental law. Section 16, Article II of the 1987 Constitution explicitly provides:

Sec. 16. The State shall protect and advance the right of the people to a balanced and
healthful ecology in accord with the rhythm and harmony of nature.

This right unites with the right to health which is provided for in the preceding section of
the same article:

Sec. 15. The State shall protect and promote the right to health of the people and instill
health consciousness among them.

While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and
State Policies and not under the Bill of Rights, it does not follow that it is less important than any of the
civil and political rights enumerated in the latter. Such a right belongs to a different category of rights
altogether for it concerns nothing less than self-preservation and self-perpetuation — aptly and fittingly
stressed by the petitioners — the advancement of which may even be said to predate all governments
and constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for
they are assumed to exist from the inception of humankind. If they are now explicitly mentioned in the
fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a
balanced and healthful ecology and to health are mandated as state policies by the Constitution itself,
thereby highlighting their continuing importance and imposing upon the state a solemn obligation to
preserve the first and protect and advance the second, the day would not be too far when all else would
be lost not only for the present generation, but also for those to come — generations which stand to
inherit nothing but parched earth incapable of sustaining life.

The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing
the environment. During the debates on this right in one of the plenary sessions of the 1986
Constitutional Commission, the following exchange transpired between Commissioner Wilfrido Villacorta
and Commissioner Adolfo Azcuna who sponsored the section in question:

MR. VILLACORTA:
 Does this section mandate the State to provide sanctions against all forms of
pollution — air, water and noise pollution?

MR. AZCUNA:

Yes, Madam President. The right to healthful (sic) environment necessarily

carries with it the correlative duty of not impairing the same and, therefore,
sanctions may be provided for impairment of environmental balance. 12

The said right implies, among many other things, the judicious management and conservation of the
country's forests.

Without such forests, the ecological or environmental balance would be irreversiby disrupted.

Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well
as the other related provisions of the Constitution concerning the conservation, development and
utilization of the country's natural resources, 13 then President Corazon C. Aquino promulgated on 10
June 1987 E.O. No. 192, 14 Section 4 of which expressly mandates that the Department of Environment
and Natural Resources "shall be the primary government agency responsible for the conservation,
management, development and proper use of the country's environment and natural resources,
specifically forest and grazing lands, mineral, resources, including those in reservation and watershed
areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as
may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the
welfare of the present and future generations of Filipinos." Section 3 thereof makes the following
statement of policy:

Sec. 3. Declaration of Policy. — It is hereby declared the policy of the State to ensure the
sustainable use, development, management, renewal, and conservation of the country's
forest, mineral, land, off-shore areas and other natural resources, including the protection
and enhancement of the quality of the environment, and equitable access of the different
segments of the population to the development and the use of the country's natural
resources, not only for the present generation but for future generations as well. It is also
the policy of the state to recognize and apply a true value system including social and
environmental cost implications relative to their utilization, development and conservation
of our natural resources.

This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of
1987,15 specifically in Section 1 thereof which reads:

Sec. 1. Declaration of Policy. — (1) The State shall ensure, for the benefit of the Filipino
people, the full exploration and development as well as the judicious disposition, utilization,
management, renewal and conservation of the country's forest, mineral, land, waters,
fisheries, wildlife, off-shore areas and other natural resources, consistent with the necessity
of maintaining a sound ecological balance and protecting and enhancing the quality of the
environment and the objective of making the exploration, development and utilization of
such natural resources equitably accessible to the different segments of the present as well
as future generations.

(2) The State shall likewise recognize and apply a true value system that takes into account
social and environmental cost implications relative to the utilization, development and
conservation of our natural resources.

The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and
enhancing the quality of the environment." Section 2 of the same Title, on the other hand, specifically
speaks of the mandate of the DENR; however, it makes particular reference to the fact of the agency's
being subject to law and higher authority. Said section provides:

Sec. 2. Mandate. — (1) The Department of Environment and Natural Resources shall be
primarily responsible for the implementation of the foregoing policy.

(2) It shall, subject to law and higher authority, be in charge of carrying out the State's
constitutional mandate to control and supervise the exploration, development, utilization,
and conservation of the country's natural resources.

Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the
bases for policy formulation, and have defined the powers and functions of the DENR.

It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes
already paid special attention to the "environmental right" of the present and future generations. On 6
June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152 (Philippine Environment
Code) were issued. The former "declared a continuing policy of the State (a) to create, develop, maintain
and improve conditions under which man and nature can thrive in productive and enjoyable harmony
with each other, (b) to fulfill the social, economic and other requirements of present and future
generations of Filipinos, and (c) to insure the attainment of an environmental quality that is conducive to
a life of dignity and well-being." 16 As its goal, it speaks of the "responsibilities of each generation as
trustee and guardian of the environment for succeeding generations." 17 The latter statute, on the other
hand, gave flesh to the said policy.

Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as
clear as the DENR's duty — under its mandate and by virtue of its powers and functions under E.O. No.
192 and the Administrative Code of 1987 — to protect and advance the said right.

A denial or violation of that right by the other who has the corelative duty or obligation to respect or
protect the same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs, which
they claim was done with grave abuse of discretion, violated their right to a balanced and healthful
ecology; hence, the full protection thereof requires that no further TLAs should be renewed or granted.

A cause of action is defined as:

. . . an act or omission of one party in violation of the legal right or rights of the other; and
its essential elements are legal right of the plaintiff, correlative obligation of the defendant,
and act or omission of the defendant in violation of said legal right. 18

It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to
state a cause of action, 19 the question submitted to the court for resolution involves the sufficiency of the
facts alleged in the complaint itself. No other matter should be considered; furthermore, the truth of
falsity of the said allegations is beside the point for the truth thereof is deemed hypothetically admitted.
The only issue to be resolved in such a case is: admitting such alleged facts to be true, may the court
render a valid judgment in accordance with the prayer in the complaint? 20 In Militante vs.
Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care and
circumspection in passing upon a motion to dismiss on the ground of the absence thereof [cause of action]
lest, by its failure to manifest a correct appreciation of the facts alleged and deemed hypothetically
admitted, what the law grants or recognizes is effectively nullified. If that happens, there is a blot on the
legal order. The law itself stands in disrepute."

After careful examination of the petitioners' complaint, We find the statements under the introductory
affirmative allegations, as well as the specific averments under the sub-heading CAUSE OF ACTION, to be
adequate enough to show, prima facie, the claimed violation of their rights. On the basis thereof, they may
thus be granted, wholly or partly, the reliefs prayed for. It bears stressing, however, that insofar as the
cancellation of the TLAs is concerned, there is the need to implead, as party defendants, the grantees
thereof for they are indispensable parties.

The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or
determination by the executive or legislative branches of Government is not squarely put in issue. What
is principally involved is the enforcement of a right vis-a-vis policies already formulated and expressed in
legislation. It must, nonetheless, be emphasized that the political question doctrine is no longer, the
insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects
executive and legislative actions from judicial inquiry or review. The second paragraph of section 1,
Article VIII of the Constitution states that:

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether
or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction
on the part of any branch or instrumentality of the Government.

Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a
distinguished member of this Court, says:

The first part of the authority represents the traditional concept of judicial power,
involving the settlement of conflicting rights as conferred as law. The second part of the
authority represents a broadening of judicial power to enable the courts of justice to
review what was before forbidden territory, to wit, the discretion of the political
departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court,
the power to rule upon even the wisdom of the decisions of the executive and the
legislature and to declare their acts invalid for lack or excess of jurisdiction because tainted
with grave abuse of discretion. The catch, of course, is the meaning of "grave abuse of
discretion," which is a very elastic phrase that can expand or contract according to the
disposition of the judiciary.

In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted:

In the case now before us, the jurisdictional objection becomes even less tenable and
decisive. The reason is that, even if we were to assume that the issue presented before us
was political in nature, we would still not be precluded from revolving it under the
expanded jurisdiction conferred upon us that now covers, in proper cases, even the
political question. Article VII, Section 1, of the Constitution clearly provides: . . .

The last ground invoked by the trial court in dismissing the complaint is the non-impairment of contracts
clause found in the Constitution. The court a quo declared that:

The Court is likewise of the impression that it cannot, no matter how we stretch our
jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber
license agreements in the country and to cease and desist from receiving, accepting,
processing, renewing or approving new timber license agreements. For to do otherwise
would amount to "impairment of contracts" abhored (sic) by the fundamental law. 24

We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping
pronouncement. In the first place, the respondent Secretary did not, for obvious reasons, even invoke in
his motion to dismiss the non-impairment clause. If he had done so, he would have acted with utmost
infidelity to the Government by providing undue and unwarranted benefits and advantages to the timber
license holders because he would have forever bound the Government to strictly respect the said licenses
according to their terms and conditions regardless of changes in policy and the demands of public
interest and welfare. He was aware that as correctly pointed out by the petitioners, into every timber
license must be read Section 20 of the Forestry Reform Code (P.D. No. 705) which provides:

. . . Provided, That when the national interest so requires, the President may amend, modify,
replace or rescind any contract, concession, permit, licenses or any other form of privilege
granted herein . . .

Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a
contract, property or a property right protested by the due process clause of the Constitution.
In Tan vs. Director of Forestry, 25 this Court held:

. . . A timber license is an instrument by which the State regulates the utilization and
disposition of forest resources to the end that public welfare is promoted. A timber license
is not a contract within the purview of the due process clause; it is only a license or
privilege, which can be validly withdrawn whenever dictated by public interest or public
welfare as in this case.

A license is merely a permit or privilege to do what otherwise would be unlawful, and is not
a contract between the authority, federal, state, or municipal, granting it and the person to
whom it is granted; neither is it property or a property right, nor does it create a vested
right; nor is it taxation (37 C.J. 168). Thus, this Court held that the granting of license does
not create irrevocable rights, neither is it property or property rights (People vs. Ong Tin,
54 O.G. 7576).

We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26

. . . Timber licenses, permits and license agreements are the principal instruments by which
the State regulates the utilization and disposition of forest resources to the end that public
welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege
granted by the State to qualified entities, and do not vest in the latter a permanent or
irrevocable right to the particular concession area and the forest products therein. They
may be validly amended, modified, replaced or rescinded by the Chief Executive when
national interests so require. Thus, they are not deemed contracts within the purview of
the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as
amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA
302].

Since timber licenses are not contracts, the non-impairment clause, which reads:

Sec. 10. No law impairing, the obligation of contracts shall be passed. 27

cannot be invoked.

In the second place, even if it is to be assumed that the same are contracts, the instant case does not
involve a law or even an executive issuance declaring the cancellation or modification of existing timber
licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting further that
a law has actually been passed mandating cancellations or modifications, the same cannot still be
stigmatized as a violation of the non-impairment clause. This is because by its very nature and purpose,
such as law could have only been passed in the exercise of the police power of the state for the purpose of
advancing the right of the people to a balanced and healthful ecology, promoting their health and
enhancing the general welfare. In Abe vs. Foster Wheeler
Corp. 28 this Court stated:
 The freedom of contract, under our system of government, is not meant to be absolute. The
same is understood to be subject to reasonable legislative regulation aimed at the
promotion of public health, moral, safety and welfare. In other words, the constitutional
guaranty of non-impairment of obligations of contract is limited by the exercise of the
police power of the State, in the interest of public health, safety, moral and general welfare.

The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life
Insurance Co. vs. Auditor General,30 to wit:

Under our form of government the use of property and the making of contracts are
normally matters of private and not of public concern. The general rule is that both shall be
free of governmental interference. But neither property rights nor contract rights are
absolute; for government cannot exist if the citizen may at will use his property to the
detriment of his fellows, or exercise his freedom of contract to work them harm. Equally
fundamental with the private right is that of the public to regulate it in the common interest.

In short, the non-impairment clause must yield to the police power of the state. 31

Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with
respect to the prayer to enjoin the respondent Secretary from receiving, accepting, processing, renewing
or approving new timber licenses for, save in cases of renewal, no contract would have as of yet existed in
the other instances. Moreover, with respect to renewal, the holder is not entitled to it as a matter of right.

WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged
Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The
petitioners may therefore amend their complaint to implead as defendants the holders or grantees of the
questioned timber license agreements.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B.

ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO,
FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE,
TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. ARRESTO,
CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO,
PAULINO D. TOLENTINO and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO,
EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME
ABOGADO, CONRADO AVANCENA and ROBERTO TAAY, respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,

vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES, respondents.

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his
way to Mycenae after performing his eleventh labor. The two wrestled mightily and Hercules flung his
adversary to the ground thinking him dead, but Antaeus rose even stronger to resume their struggle. This
happened several times to Hercules' increasing amazement. Finally, as they continued grappling, it
dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his body
was touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond the
reach of the sustaining soil, and crushed him to death.

Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful
Antaeus weakened and died.

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of
life and death, of men and women who, like Antaeus need the sustaining strength of the precious earth to
stay alive.

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this
precious resource among our people. But it is more than a slogan. Through the brooding centuries, it has
become a battle-cry dramatizing the increasingly urgent demand of the dispossessed among us for a plot
of earth as their place in the sun.

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-
being and economic security of all the people," 1 especially the less privileged. In 1973, the new
Constitution affirmed this goal adding specifically that "the State shall regulate the acquisition, ownership,
use, enjoyment and disposition of private property and equitably diffuse property ownership and
profits." 2 Significantly, there was also the specific injunction to "formulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the soil." 3

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one
whole and separate Article XIII on Social Justice and Human Rights, containing grandiose but
undoubtedly sincere provisions for the uplift of the common people. These include a call in the following
words for the adoption by the State of an agrarian reform program:

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right
of farmers and regular farmworkers, who are landless, to own directly or collectively the
lands they till or, in the case of other farmworkers, to receive a just share of the fruits
thereof. To this end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention limits as the Congress
may prescribe, taking into account ecological, developmental, or equity considerations and
subject to the payment of just compensation. In determining retention limits, the State shall
 respect the right of small landowners. The State shall further provide incentives for
voluntary land-sharing.

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been
enacted by the Congress of the Philippines on August 8, 1963, in line with the above-stated principles.
This was substantially superseded almost a decade later by P.D. No. 27, which was promulgated on
October 21, 1972, along with martial law, to provide for the compulsory acquisition of private lands for
distribution among tenant-farmers and to specify maximum retention limits for landowners.

The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian
reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228, declaring full land
ownership in favor of the beneficiaries of P.D. No. 27 and providing for the valuation of still unvalued
lands covered by the decree as well as the manner of their payment. This was followed on July 22, 1987
by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.

Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative
power from the President and started its own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of spirited debate, was the
enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, which
President Aquino signed on June 10, 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect insofar as they are not inconsistent with its
provisions. 4

The above-captioned cases have been consolidated because they involve common legal questions,
including serious challenges to the constitutionality of the several measures mentioned above. They will
be the subject of one common discussion and resolution, The different antecedents of each case will
require separate treatment, however, and will first be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No.
6657.

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner
Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and owned by petitioner
Augustin Hermano, Jr. The tenants were declared full owners of these lands by E.O. No. 228 as qualified
farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation
of powers, due process, equal protection and the constitutional limitation that no private property shall
be taken for public use without just compensation.

They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The
said measure is invalid also for violation of Article XIII, Section 4, of the Constitution, for failure to
provide for retention limits for small landowners. Moreover, it does not conform to Article VI, Section
25(4) and the other requisites of a valid appropriation.

In connection with the determination of just compensation, the petitioners argue that the same may be
made only by a court of justice and not by the President of the Philippines. They invoke the recent cases
of EPZA v. Dulay 5 andManotok v. National Food Authority. 6 Moreover, the just compensation
contemplated by the Bill of Rights is payable in money or in cash and not in the form of bonds or other
things of value.
In considering the rentals as advance payment on the land, the executive order also deprives the
petitioners of their property rights as protected by due process. The equal protection clause is also
violated because the order places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other properties.

The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the
lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse,
the measure would not solve the agrarian problem because even the small farmers are deprived of their
lands and the retention rights guaranteed by the Constitution.

In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier
cases ofChavez v. Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the
Philippines, Inc. v. The National Land Reform Council. 9 The determination of just compensation by the
executive authorities conformably to the formula prescribed under the questioned order is at best initial
or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any rate,
the challenge to the order is premature because no valuation of their property has as yet been made by
the Department of Agrarian Reform. The petitioners are also not proper parties because the lands owned
by them do not exceed the maximum retention limit of 7 hectares.

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention
limits on tenanted lands and that in any event their petition is a class suit brought in behalf of landowners
with landholdings below 24 hectares. They maintain that the determination of just compensation by the
administrative authorities is a final ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was
the validity of the imposition of martial law.

In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229
(except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute
should itself also be declared unconstitutional because it suffers from substantially the same infirmities
as the earlier measures.

A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83-
hectare land, who complained that the DAR was insisting on the implementation of P.D. No. 27 and E.O.
No. 228 despite a compromise agreement he had reached with his tenant on the payment of rentals. In a
subsequent motion dated April 10, 1989, he adopted the allegations in the basic amended petition that
the above- mentioned enactments have been impliedly repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros
Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400 planter-
members. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as
decreed by the Constitution belongs to Congress and not the President. Although they agree that the
President could exercise legislative power until the Congress was convened, she could do so only to enact
emergency measures during the transition period. At that, even assuming that the interim legislative
power of the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be
annulled for violating the constitutional provisions on just compensation, due process, and equal
protection.

They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund,
an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the
Comprehensive Agrarian Reform Program from 1987 to 1992 which shall be sourced from the receipts of
the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten wealth received
through the Presidential Commission on Good Government and such other sources as government may
deem appropriate. The amounts collected and accruing to this special fund shall be considered
automatically appropriated for the purpose authorized in this Proclamation the amount appropriated is
in futuro, not in esse. The money needed to cover the cost of the contemplated expropriation has yet to be
raised and cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is
traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of
the E.O. No. 229. On the contrary, Section 6, thereof provides that the Land Bank of the Philippines "shall
compensate the landowner in an amount to be established by the government, which shall be based on
the owner's declaration of current fair market value as provided in Section 4 hereof, but subject to certain
controls to be defined and promulgated by the Presidential Agrarian Reform Council." This compensation
may not be paid fully in money but in any of several modes that may consist of part cash and part bond,
with interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed upon
by the beneficiary and the landowner or as may be prescribed or approved by the PARC.

The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful
study of the sugar planters' situation. There is no tenancy problem in the sugar areas that can justify the
application of the CARP to them. To the extent that the sugar planters have been lumped in the same
legislation with other farmers, although they are a separate group with problems exclusively their own,
their right to equal protection has been violated.

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters
(NASP) which claims a membership of at least 20,000 individual sugar planters all over the country. On
September 10, 1987, another motion for intervention was filed, this time by Manuel Barcelona, et al.,
representing coconut and riceland owners. Both motions were granted by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in
any event, the appropriation is invalid because of uncertainty in the amount appropriated. Section 2 of
Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial appropriation of fifty billion
pesos and thus specifies the minimum rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually
available.

Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing
evidence the necessity for the exercise of the powers of eminent domain, and the violation of the
fundamental right to own property.

The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the
said land for an amount equal to the government assessor's valuation of the land for tax purposes. On the
other hand, if the landowner declares his own valuation he is unjustly required to immediately pay the
corresponding taxes on the land, in violation of the uniformity rule.

In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in
favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for the expropriation as explained
in the "whereas" clauses of the Proclamation and submits that, contrary to the petitioner's contention, a
pilot project to determine the feasibility of CARP and a general survey on the people's opinion thereon
are not indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to show that they
belong to a different class and should be differently treated. The Comment also suggests the possibility of
Congress first distributing public agricultural lands and scheduling the expropriation of private
agricultural lands later. From this viewpoint, the petition for prohibition would be premature.

The public respondent also points out that the constitutional prohibition is against the payment of public
money without the corresponding appropriation. There is no rule that only money already in existence
can be the subject of an appropriation law. Finally, the earmarking of fifty billion pesos as Agrarian
Reform Fund, although denominated as an initial amount, is actually the maximum sum appropriated.
The word "initial" simply means that additional amounts may be appropriated later when necessary.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the
constitutionality of E.O. No. 229. In addition to the arguments already raised, Serrano contends that the
measure is unconstitutional because:

(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;

(3) The power of the President to legislate was terminated on July 2, 1987; and

(4) The appropriation of a P50 billion special fund from the National Treasury did not
originate from the House of Representatives.

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due
process and the requirement for just compensation, placed his landholding under the coverage of
Operation Land Transfer. Certificates of Land Transfer were subsequently issued to the private
respondents, who then refused payment of lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under
Operation Land transfer and asked for the recall and cancellation of the Certificates of Land Transfer in
the name of the private respondents. He claims that on December 24, 1986, his petition was denied
without hearing. On February 17, 1987, he filed a motion for reconsideration, which had not been acted
upon when E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to the private respondents.

The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.

(2) The said executive orders are violative of the constitutional provision that no private
property shall be taken without due process or just compensation.

(3) The petitioner is denied the right of maximum retention provided for under the 1987
Constitution.

The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is
anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative power
granted to the President under the Transitory Provisions refers only to emergency measures that may be
promulgated in the proper exercise of the police power.

The petitioner also invokes his rights not to be deprived of his property without due process of law and
to the retention of his small parcels of riceholding as guaranteed under Article XIII, Section 4 of the
Constitution. He likewise argues that, besides denying him just compensation for his land, the provisions
of E.O. No. 228 declaring that:

Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall
be considered as advance payment for the land.

is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even
small landowners in the program along with other landowners with lands consisting of seven hectares or
more is undemocratic.

In his Comment, the Solicitor General submits that the petition is premature because the motion for
reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the validity of the
issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to Section 6, Article XVIII of
the Transitory Provisions of the 1987 Constitution which reads:

The incumbent president shall continue to exercise legislative powers until the first Congress is convened.

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21.
1972, the tenant-farmer of agricultural land was deemed the owner of the land he was tilling. The
leasehold rentals paid after that date should therefore be considered amortization payments.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on
December 14, 1987. An appeal to the Office of the President would be useless with the promulgation of
E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public respondent's acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn
lands not exceeding seven hectares as long as they are cultivating or intend to cultivate the same. Their
respective lands do not exceed the statutory limit but are occupied by tenants who are actually
cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected
or removed from his farmholding until such time as the respective rights of the tenant-
farmers and the landowner shall have been determined in accordance with the rules and
regulations implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention
because the Department of Agrarian Reform has so far not issued the implementing rules required under
the above-quoted decree. They therefore ask the Court for a writ of mandamus to compel the respondent
to issue the said rules.

In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing
any right of retention from persons who own other agricultural lands of more than 7 hectares in
aggregate area or lands used for residential, commercial, industrial or other purposes from which they
derive adequate income for their family. And even assuming that the petitioners do not fall under its
terms, the regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated
July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an accompanying Retention
Guide Table), Memorandum Circular No. 11 dated April 21, 1978, (Implementation Guidelines of LOI No.
474), Memorandum Circular No. 18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of
P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985
(Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of
their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the
corresponding applications for retention under these measures, the petitioners are now barred from
invoking this right.

The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the issuance
of the implementing rules, assuming this has not yet been done, involves the exercise of discretion which
cannot be controlled through the writ of mandamus. This is especially true if this function is entrusted, as
in this case, to a separate department of the government.

In their Reply, the petitioners insist that the above-cited measures are not applicable to them because
they do not own more than seven hectares of agricultural land. Moreover, assuming arguendo that the
rules were intended to cover them also, the said measures are nevertheless not in force because they
have not been published as required by law and the ruling of this Court in Tanada v. Tuvera.10 As for LOI
474, the same is ineffective for the additional reason that a mere letter of instruction could not have
repealed the presidential decree.

Although holding neither purse nor sword and so regarded as the weakest of the three departments of
the government, the judiciary is nonetheless vested with the power to annul the acts of either the
legislative or the executive or of both when not conformable to the fundamental law. This is the reason
for what some quarters call the doctrine of judicial supremacy. Even so, this power is not lightly assumed
or readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint,
born of the nature of their functions and of their respect for the other departments, in striking down the
acts of the legislative and the executive as unconstitutional. The policy, indeed, is a blend of courtesy and
caution. To doubt is to sustain. The theory is that before the act was done or the law was enacted, earnest
studies were made by Congress or the President, or both, to insure that the Constitution would not be
breached.

In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality,
requiring therefor the concurrence of a majority of the members of the Supreme Court who took part in
the deliberations and voted on the issue during their session en banc.11 And as established by judge made
doctrine, the Court will assume jurisdiction over a constitutional question only if it is shown that the
essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an
actual case or controversy involving a conflict of legal rights susceptible of judicial determination, the
constitutional question must have been opportunely raised by the proper party, and the resolution of the
question is unavoidably necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party as applied in the cases before us, we hold that
the same is satisfied by the petitioners and intervenors because each of them has sustained or is in
danger of sustaining an immediate injury as a result of the acts or measures complained of. 13 And even if,
strictly speaking, they are not covered by the definition, it is still within the wide discretion of the Court
to waive the requirement and so remove the impediment to its addressing and resolving the serious
constitutional questions raised.

In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the
constitutionality of several executive orders issued by President Quirino although they were invoking
only an indirect and general interest shared in common with the public. The Court dismissed the
objection that they were not proper parties and ruled that "the transcendental importance to the public
of these cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in many other cases. 15

The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid when it
is convinced that this must be done. In arriving at this conclusion, its only criterion will be the
Constitution as God and its conscience give it the light to probe its meaning and discover its purpose.
Personal motives and political considerations are irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.

For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the
hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of these departments, or
of any public official, betray the people's will as expressed in the Constitution.

It need only be added, to borrow again the words of Justice Laurel, that —

... when the judiciary mediates to allocate constitutional boundaries, it does not assert any
superiority over the other departments; it does not in reality nullify or invalidate an act of
the Legislature, but only asserts the solemn and sacred obligation assigned to it by the
Constitution to determine conflicting claims of authority under the Constitution and to
establish for the parties in an actual controversy the rights which that instrument secures
and guarantees to them. This is in truth all that is involved in what is termed "judicial
supremacy" which properly is the power of judicial review under the Constitution. 16

The cases before us categorically raise constitutional questions that this Court must categorically resolve.
And so we shall.

II

We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these petitions.

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has
already been sustained in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue.
As for the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same
was authorized under Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.

The said measures were issued by President Aquino before July 27, 1987, when the Congress of the
Philippines was formally convened and took over legislative power from her. They are not "midnight"
enactments intended to pre-empt the legislature because E.O. No. 228 was issued on July 17, 1987, and
the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it
correct to say that these measures ceased to be valid when she lost her legislative power for, like any
statute, they continue to be in force unless modified or repealed by subsequent law or declared invalid by
the courts. A statute does not ipso facto become inoperative simply because of the dissolution of the
legislature that enacted it. By the same token, President Aquino's loss of legislative power did not have
the effect of invalidating all the measures enacted by her when and as long as she possessed it.

Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially
affirmed the challenged measures and has specifically provided that they shall be suppletory to R.A. No.
6657 whenever not inconsistent with its provisions. 17 Indeed, some portions of the said measures, like
the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229,
have been incorporated by reference in the CARP Law. 18

That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the
requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is
not an appropriation measure even if it does provide for the creation of said fund, for that is not its
principal purpose. An appropriation law is one the primary and specific purpose of which is to authorize
the release of public funds from the treasury. 19 The creation of the fund is only incidental to the main
objective of the proclamation, which is agrarian reform.

It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of
Article VI, are not applicable. With particular reference to Section 24, this obviously could not have been
complied with for the simple reason that the House of Representatives, which now has the exclusive
power to initiate appropriation measures, had not yet been convened when the proclamation was issued.
The legislative power was then solely vested in the President of the Philippines, who embodied, as it were,
both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated
because they do not provide for retention limits as required by Article XIII, Section 4 of the Constitution is
no longer tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the law, which in fact is
one of its most controversial provisions. This section declares:

Retention Limits. — Except as otherwise provided in this Act, no person may own or retain,
directly or indirectly, any public or private agricultural land, the size of which shall vary
according to factors governing a viable family-sized farm, such as commodity produced,
terrain, infrastructure, and soil fertility as determined by the Presidential Agrarian Reform
Council (PARC) created hereunder, but in no case shall retention by the landowner exceed
five (5) hectares. Three (3) hectares may be awarded to each child of the landowner,
subject to the following qualifications: (1) that he is at least fifteen (15) years of age; and (2)
that he is actually tilling the land or directly managing the farm; Provided, That landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the
area originally retained by them thereunder, further, That original homestead grantees or
direct compulsory heirs who still own the original homestead at the time of the approval of
this Act shall retain the same areas as long as they continue to cultivate said homestead.

The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one
subject, to be expressed in its title, deserves only short attention. It is settled that the title of the bill does
not have to be a catalogue of its contents and will suffice if the matters embodied in the text are relevant
to each other and may be inferred from the title. 20

The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever
name it was called, had the force and effect of law because it came from President Marcos. Such are the
ways of despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744, that LOI 474 could not
have repealed P.D. No. 27 because the former was only a letter of instruction. The important thing is that
it was issued by President Marcos, whose word was law during that time.

But for all their peremptoriness, these issuances from the President Marcos still had to comply with the
requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless published in the
Official Gazette in accordance with Article 2 of the Civil Code, they could not have any force and effect if
they were among those enactments successfully challenged in that case. LOI 474 was published, though,
in the Official Gazette dated November 29,1976.)

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus
cannot issue to compel the performance of a discretionary act, especially by a specific department of the
government. That is true as a general proposition but is subject to one important qualification. Correctly
and categorically stated, the rule is that mandamus will lie to compel the discharge of the discretionary
duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to
require action only but not specific action.

Whenever a duty is imposed upon a public official and an unnecessary and unreasonable
delay in the exercise of such duty occurs, if it is a clear duty imposed by law, the courts will
 intervene by the extraordinary legal remedy of mandamus to compel action. If the duty is
purely ministerial, the courts will require specific action. If the duty is purely discretionary,
the courts by mandamus will require action only. For example, if an inferior court, public
official, or board should, for an unreasonable length of time, fail to decide a particular
question to the great detriment of all parties concerned, or a court should refuse to take
jurisdiction of a cause when the law clearly gave it jurisdiction mandamus will issue, in the
first case to require a decision, and in the second to require that jurisdiction be taken of the
cause. 22

And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and
adequate remedy available from the administrative authorities, resort to the courts may still be
permitted if the issue raised is a question of law. 23

III

There are traditional distinctions between the police power and the power of eminent domain that
logically preclude the application of both powers at the same time on the same subject. In the case of City
of Baguio v. NAWASA, 24for example, where a law required the transfer of all municipal waterworks
systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the power
being exercised was eminent domain because the property involved was wholesome and intended for a
public use. Property condemned under the police power is noxious or intended for a noxious purpose,
such as a building on the verge of collapse, which should be demolished for the public safety, or obscene
materials, which should be destroyed in the interest of public morals. The confiscation of such property is
not compensable, unlike the taking of property under the power of expropriation, which requires the
payment of just compensation to the owner.

In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in
a famous aphorism: "The general rule at least is that while property may be regulated to a certain extent,
if regulation goes too far it will be recognized as a taking." The regulation that went "too far" was a law
prohibiting mining which might cause the subsidence of structures for human habitation constructed on
the land surface. This was resisted by a coal company which had earlier granted a deed to the land over
its mine but reserved all mining rights thereunder, with the grantee assuming all risks and waiving any
damage claim. The Court held the law could not be sustained without compensating the grantor. Justice
Brandeis filed a lone dissent in which he argued that there was a valid exercise of the police power. He
said:

Every restriction upon the use of property imposed in the exercise of the police power
deprives the owner of some right theretofore enjoyed, and is, in that sense, an abridgment
by the State of rights in property without making compensation. But restriction imposed to
protect the public health, safety or morals from dangers threatened is not a taking. The
restriction here in question is merely the prohibition of a noxious use. The property so
restricted remains in the possession of its owner. The state does not appropriate it or make
any use of it. The state merely prevents the owner from making a use which interferes with
paramount rights of the public. Whenever the use prohibited ceases to be noxious — as it
may because of further changes in local or social conditions — the restriction will have to
be removed and the owner will again be free to enjoy his property as heretofore.

Recent trends, however, would indicate not a polarization but a mingling of the police power and the
power of eminent domain, with the latter being used as an implement of the former like the power of
taxation. The employment of the taxing power to achieve a police purpose has long been accepted. 26 As
for the power of expropriation, Prof. John J. Costonis of the University of Illinois College of Law (referring
to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:
 Euclid, moreover, was decided in an era when judges located the Police and eminent
domain powers on different planets. Generally speaking, they viewed eminent domain as
encompassing public acquisition of private property for improvements that would be
available for public use," literally construed. To the police power, on the other hand, they
assigned the less intrusive task of preventing harmful externalities a point reflected in the
Euclid opinion's reliance on an analogy to nuisance law to bolster its support of zoning. So
long as suppression of a privately authored harm bore a plausible relation to some
legitimate "public purpose," the pertinent measure need have afforded no compensation
whatever. With the progressive growth of government's involvement in land use, the
distance between the two powers has contracted considerably. Today government often
employs eminent domain interchangeably with or as a useful complement to the police
power-- a trend expressly approved in the Supreme Court's 1954 decision in Berman v.
Parker, which broadened the reach of eminent domain's "public use" test to match that of
the police power's standard of "public purpose." 27

The Berman case sustained a redevelopment project and the improvement of blighted areas in the
District of Columbia as a proper exercise of the police power. On the role of eminent domain in the
attainment of this purpose, Justice Douglas declared:

If those who govern the District of Columbia decide that the Nation's Capital should be
beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.

Once the object is within the authority of Congress, the right to realize it through the
exercise of eminent domain is clear.

For the power of eminent domain is merely the means to the end. 28

In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S Supreme
Court sustained the respondent's Landmarks Preservation Law under which the owners of the Grand
Central Terminal had not been allowed to construct a multi-story office building over the Terminal, which
had been designated a historic landmark. Preservation of the landmark was held to be a valid objective of
the police power. The problem, however, was that the owners of the Terminal would be deprived of the
right to use the airspace above it although other landowners in the area could do so over their respective
properties. While insisting that there was here no taking, the Court nonetheless recognized certain
compensatory rights accruing to Grand Central Terminal which it said would "undoubtedly mitigate" the
loss caused by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in
this wise:

In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to
transfer to neighboring properties the authorized but unused rights accruing to the site prior to the
Terminal's designation as a landmark — the rights which would have been exhausted by the 59-story
building that the city refused to countenance atop the Terminal. Prevailing bulk restrictions on
neighboring sites were proportionately relaxed, theoretically enabling Penn Central to recoup its losses
at the Terminal site by constructing or selling to others the right to construct larger, hence more
profitable buildings on the transferee sites. 30

The cases before us present no knotty complication insofar as the question of compensable taking is
concerned. To the extent that the measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of private property in accordance
with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such
owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a
taking under the power of eminent domain for which payment of just compensation is imperative. The
taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of
the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in
favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of
eminent domain.

Whether as an exercise of the police power or of the power of eminent domain, the several measures
before us are challenged as violative of the due process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are
prescribed has already been discussed and dismissed. It is noted that although they excited many bitter
exchanges during the deliberation of the CARP Law in Congress, the retention limits finally agreed upon
are, curiously enough, not being questioned in these petitions. We therefore do not discuss them here.
The Court will come to the other claimed violations of due process in connection with our examination of
the adequacy of just compensation as required under the power of expropriation.

The argument of the small farmers that they have been denied equal protection because of the absence of
retention limits has also become academic under Section 6 of R.A. No. 6657. Significantly, they too have
not questioned the area of such limits. There is also the complaint that they should not be made to share
the burden of agrarian reform, an objection also made by the sugar planters on the ground that they
belong to a particular class with particular interests of their own. However, no evidence has been
submitted to the Court that the requisites of a valid classification have been violated.

Classification has been defined as the grouping of persons or things similar to each other in certain
particulars and different from each other in these same particulars. 31 To be valid, it must conform to the
following requirements: (1) it must be based on substantial distinctions; (2) it must be germane to the
purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to
all the members of the class. 32 The Court finds that all these requisites have been met by the measures
here challenged as arbitrary and discriminatory.

Equal protection simply means that all persons or things similarly situated must be treated alike both as
to the rights conferred and the liabilities imposed. 33 The petitioners have not shown that they belong to a
different class and entitled to a different treatment. The argument that not only landowners but also
owners of other properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that is clearly visible
except to those who will not see. There is no need to elaborate on this matter. In any event, the Congress
is allowed a wide leeway in providing for a valid classification. Its decision is accorded recognition and
respect by the courts of justice except only where its discretion is abused to the detriment of the Bill of
Rights.

It is worth remarking at this juncture that a statute may be sustained under the police power only if there
is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests of the public
generally as distinguished from those of a particular class require the interference of the State and, no
less important, the means employed are reasonably necessary for the attainment of the purpose sought
to be achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian
reform have been laid down by the Constitution itself, we may say that the first requirement has been
satisfied. What remains to be examined is the validity of the method employed to achieve the
constitutional goal.

One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with the Constitution. Mere expediency
will not excuse constitutional shortcuts. There is no question that not even the strongest moral conviction
or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an
individual's rights. It is no exaggeration to say that a, person invoking a right guaranteed under Article III
of the Constitution is a majority of one even as against the rest of the nation who would deny him that
right.
That right covers the person's life, his liberty and his property under Section 1 of Article III of the
Constitution. With regard to his property, the owner enjoys the added protection of Section 9, which
reaffirms the familiar rule that private property shall not be taken for public use without just
compensation.

This brings us now to the power of eminent domain.

IV

Eminent domain is an inherent power of the State that enables it to forcibly acquire private
lands intended for public use upon payment of just compensation to the owner. Obviously,
there is no need to expropriate where the owner is willing to sell under terms also
acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by
the parties. 35 It is only where the owner is unwilling to sell, or cannot accept the price or
other conditions offered by the vendee, that the power of eminent domain will come into
play to assert the paramount authority of the State over the interests of the property owner.
Private rights must then yield to the irresistible demands of the public interest on the time-
honored justification, as in the case of the police power, that the welfare of the people is the
supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no
power is absolute). The limitation is found in the constitutional injunction that "private property shall not
be taken for public use without just compensation" and in the abundant jurisprudence that has evolved
from the interpretation of this principle. Basically, the requirements for a proper exercise of the power
are: (1) public use and (2) just compensation.

Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first
distribute public agricultural lands in the pursuit of agrarian reform instead of immediately disturbing
property rights by forcibly acquiring private agricultural lands. Parenthetically, it is not correct to say
that only public agricultural lands may be covered by the CARP as the Constitution calls for "the just
distribution of all agricultural lands." In any event, the decision to redistribute private agricultural lands
in the manner prescribed by the CARP was made by the legislative and executive departments in the
exercise of their discretion. We are not justified in reviewing that discretion in the absence of a clear
showing that it has been abused.

A becoming courtesy admonishes us to respect the decisions of the political departments when they
decide what is known as the political question. As explained by Chief Justice Concepcion in the case
of Tañada v. Cuenco: 36

The term "political question" connotes what it means in ordinary parlance, namely, a
question of policy. It refers to "those questions which, under the Constitution, are to be
decided by the people in their sovereign capacity; or in regard to which full discretionary
authority has been delegated to the legislative or executive branch of the government." It is
concerned with issues dependent upon the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been constricted with the enlargement of judicial
power, which now includes the authority of the courts "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." 37 Even so, this should not be construed as a license for us to reverse
the other departments simply because their views may not coincide with ours.

The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first
provided for, while also continuing apace under the Public Land Act and other cognate laws). The Court
sees no justification to interpose its authority, which we may assert only if we believe that the political
decision is not unwise, but illegal. We do not find it to be so.

In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's
river between the American bank and the international line, as well as all of the upland
north of the present ship canal, throughout its entire length, was "necessary for the
purpose of navigation of said waters, and the waters connected therewith," that
determination is conclusive in condemnation proceedings instituted by the United States
under that Act, and there is no room for judicial review of the judgment of Congress ... .

As earlier observed, the requirement for public use has already been settled for us by the Constitution
itself No less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural
lands are to be taken from their owners, subject to the prescribed maximum retention limits. The
purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the
constitutional injunction that the State adopt the necessary measures "to encourage and undertake the
just distribution of all agricultural lands to enable farmers who are landless to own directly or collectively
the lands they till." That public use, as pronounced by the fundamental law itself, must be binding on us.

The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful
examination.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the
expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the taker's gain but
the owner's loss. 40 The word "just" is used to intensify the meaning of the word "compensation" to
convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial,
full, ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a mere
regulation of the use of private lands under the police power. We deal here with an actual taking of
private agricultural lands that has dispossessed the owners of their property and deprived them of all its
beneficial use and enjoyment, to entitle them to the just compensation mandated by the Constitution.

As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following
conditions concur: (1) the expropriator must enter a private property; (2) the entry must be for more
than a momentary period; (3) the entry must be under warrant or color of legal authority; (4) the
property must be devoted to public use or otherwise informally appropriated or injuriously affected; and
(5) the utilization of the property for public use must be in such a way as to oust the owner and deprive
him of beneficial enjoyment of the property. All these requisites are envisioned in the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking
possession of the condemned property, as "the compensation is a public charge, the good faith of the
public is pledged for its payment, and all the resources of taxation may be employed in raising the
amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:

Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the
DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall
take immediate possession of the land and shall request the proper Register of Deeds to
issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines.
The DAR shall thereafter proceed with the redistribution of the land to the qualified
beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is
entrusted to the administrative authorities in violation of judicial prerogatives. Specific reference is made
to Section 16(d), which provides that in case of the rejection or disregard by the owner of the offer of the
government to buy his land-

... the DAR shall conduct summary administrative proceedings to determine the
compensation for the land by requiring the landowner, the LBP and other interested
parties to submit evidence as to the just compensation for the land, within fifteen (15) days
from the receipt of the notice. After the expiration of the above period, the matter is
deemed submitted for decision. The DAR shall decide the case within thirty (30) days after
it is submitted for decision.

To be sure, the determination of just compensation is a function addressed to the courts of justice and
may not be usurped by any other branch or official of the government. EPZA v. Dulay 44 resolved a
challenge to several decrees promulgated by President Marcos providing that the just compensation for
property under expropriation should be either the assessment of the property by the government or the
sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional,
the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court inutile
in a matter which under this Constitution is reserved to it for final determination.

Thus, although in an expropriation proceeding the court technically would still have the
power to determine the just compensation for the property, following the applicable
decrees, its task would be relegated to simply stating the lower value of the property as
declared either by the owner or the assessor. As a necessary consequence, it would be
useless for the court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not had before the
actual taking. However, the strict application of the decrees during the proceedings would
be nothing short of a mere formality or charade as the court has only to choose between
the valuation of the owner and that of the assessor, and its choice is always limited to the
lower of the two. The court cannot exercise its discretion or independence in determining
what is just or fair. Even a grade school pupil could substitute for the judge insofar as the
determination of constitutional just compensation is concerned.

xxx

In the present petition, we are once again confronted with the same question of whether
the courts under P.D. No. 1533, which contains the same provision on just compensation as
its predecessor decrees, still have the power and authority to determine just compensation,
independent of what is stated by the decree and to this effect, to appoint commissioners for
such purpose.

This time, we answer in the affirmative.

xxx

It is violative of due process to deny the owner the opportunity to prove that the valuation
in the tax documents is unfair or wrong. And it is repulsive to the basic concepts of justice
and fairness to allow the haphazard work of a minor bureaucrat or clerk to absolutely
prevail over the judgment of a court promulgated only after expert commissioners have
actually viewed the property, after evidence and arguments pro and con have been
 presented, and after all factors and considerations essential to a fair and just determination
have been judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness
that rendered the challenged decrees constitutionally objectionable. Although the proceedings are
described as summary, the landowner and other interested parties are nevertheless allowed an
opportunity to submit evidence on the real value of the property. But more importantly, the
determination of the just compensation by the DAR is not by any means final and conclusive upon the
landowner or any other interested party, for Section 16(f) clearly provides:

Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties concerned.
Otherwise, the courts of justice will still have the right to review with finality the said determination in
the exercise of what is admittedly a judicial function.

The second and more serious objection to the provisions on just compensation is not as easily resolved.

This refers to Section 18 of the CARP Law providing in full as follows:

SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner
in such amount as may be agreed upon by the landowner and the DAR and the LBP, in
accordance with the criteria provided for in Sections 16 and 17, and other pertinent
provisions hereof, or as may be finally determined by the court, as the just compensation
for the land.

The compensation shall be paid in one of the following modes, at the option of the
landowner:

(1) Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as the excess
hectarage is concerned — Twenty-five percent (25%) cash, the
balance to be paid in government financial instruments
negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to fifty

(50) hectares — Thirty percent (30%) cash, the balance to be
paid in government financial instruments negotiable at any
time.

(c) For lands twenty-four (24) hectares and below — Thirty-

five percent (35%) cash, the balance to be paid in government
financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares,

physical assets or other qualified investments in accordance with guidelines set by the
PARC;

(3) Tax credits which can be used against any tax liability;

(4) LBP bonds, which shall have the following features:

 (a) Market interest rates aligned with 91-day treasury bill
rates. Ten percent (10%) of the face value of the bonds shall
mature every year from the date of issuance until the tenth
(10th) year: Provided, That should the landowner choose to
forego the cash portion, whether in full or in part, he shall be
paid correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be

used by the landowner, his successors-in- interest or his
assigns, up to the amount of their face value, for any of the
following:

(i) Acquisition of land or other real properties of the

government, including assets under the Asset Privatization
Program and other assets foreclosed by government financial
institutions in the same province or region where the lands for
which the bonds were paid are situated;

(ii) Acquisition of shares of stock of government-owned or

controlled corporations or shares of stock owned by the
government in private corporations;

(iii) Substitution for surety or bail bonds for the provisional

release of accused persons, or for performance bonds;

(iv) Security for loans with any government financial

institution, provided the proceeds of the loans shall be invested
in an economic enterprise, preferably in a small and medium-
scale industry, in the same province or region as the land for
which the bonds are paid;

(v) Payment for various taxes and fees to government:

Provided, That the use of these bonds for these purposes will
be limited to a certain percentage of the outstanding balance of
the financial instruments; Provided, further, That the PARC
shall determine the percentages mentioned above;

(vi) Payment for tuition fees of the immediate family of the

original bondholder in government universities, colleges, trade
schools, and other institutions;

(vii) Payment for fees of the immediate family of the original

bondholder in government hospitals; and

(viii) Such other uses as the PARC may from time to time allow.

The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar
as it requires the owners of the expropriated properties to accept just compensation therefor in less than
money, which is the only medium of payment allowed. In support of this contention, they cite
jurisprudence holding that:

The fundamental rule in expropriation matters is that the owner of the property
expropriated is entitled to a just compensation, which should be neither more nor less,
whenever it is possible to make the assessment, than the money equivalent of said
property. Just compensation has always been understood to be the just and complete
 equivalent of the loss which the owner of the thing expropriated has to suffer by reason of
the expropriation . 45 (Emphasis supplied.)

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

It is well-settled that just compensation means the equivalent for the value of the property
at the time of its taking. Anything beyond that is more, and anything short of that is less,
than just compensation. It means a fair and full equivalent for the loss sustained, which is
the measure of the indemnity, not whatever gain would accrue to the expropriating entity.
The market value of the land taken is the just compensation to which the owner of
condemned property is entitled, the market value being that sum of money which a person
desirous, but not compelled to buy, and an owner, willing, but not compelled to sell, would
agree on as a price to be given and received for such property. (Emphasis supplied.)

In the United States, where much of our jurisprudence on the subject has been derived, the weight of
authority is also to the effect that just compensation for property expropriated is payable only in money
and not otherwise. Thus —

The medium of payment of compensation is ready money or cash. The condemnor cannot
compel the owner to accept anything but money, nor can the owner compel or require the
condemnor to pay him on any other basis than the value of the property in money at the
time and in the manner prescribed by the Constitution and the statutes. When the power of
eminent domain is resorted to, there must be a standard medium of payment, binding upon
both parties, and the law has fixed that standard as money in cash. 47 (Emphasis supplied.)

Part cash and deferred payments are not and cannot, in the nature of things, be regarded as
a reliable and constant standard of compensation. 48

"Just compensation" for property taken by condemnation means a fair equivalent in money,
which must be paid at least within a reasonable time after the taking, and it is not within
the power of the Legislature to substitute for such payment future obligations, bonds, or
other valuable advantage. 49(Emphasis supplied.)

It cannot be denied from these cases that the traditional medium for the payment of just compensation is
money and no other. And so, conformably, has just compensation been paid in the past solely in that
medium. However, we do not deal here with the traditional excercise of the power of eminent domain.
This is not an ordinary expropriation where only a specific property of relatively limited area is sought to
be taken by the State from its owner for a specific and perhaps local purpose.

What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as
long as they are in excess of the maximum retention limits allowed their owners. This kind of
expropriation is intended for the benefit not only of a particular community or of a small segment of the
population but of the entire Filipino nation, from all levels of our society, from the impoverished farmer
to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the
sacrifice of the present generation of Filipinos. Generations yet to come are as involved in this program as
we are today, although hopefully only as beneficiaries of a richer and more fulfilling life we will guarantee
to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that it is no less
than the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution"
among the farmers of lands that have heretofore been the prison of their dreams but can now become the
key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast
areas of land subject to expropriation under the laws before us, we estimate that hundreds of billions of
pesos will be needed, far more indeed than the amount of P50 billion initially appropriated, which is
already staggering as it is by our present standards. Such amount is in fact not even fully available at this
time.

We assume that the framers of the Constitution were aware of this difficulty when they called for
agrarian reform as a top priority project of the government. It is a part of this assumption that when they
envisioned the expropriation that would be needed, they also intended that the just compensation would
have to be paid not in the orthodox way but a less conventional if more practical method. There can be no
doubt that they were aware of the financial limitations of the government and had no illusions that there
would be enough money to pay in cash and in full for the lands they wanted to be distributed among the
farmers. We may therefore assume that their intention was to allow such manner of payment as is now
provided for by the CARP Law, particularly the payment of the balance (if the owner cannot be paid fully
with money), or indeed of the entire amount of the just compensation, with other things of value. We may
also suppose that what they had in mind was a similar scheme of payment as that prescribed in P.D. No.
27, which was the law in force at the time they deliberated on the new Charter and with which they
presumably agreed in principle.

The Court has not found in the records of the Constitutional Commission any categorical agreement
among the members regarding the meaning to be given the concept of just compensation as applied to
the comprehensive agrarian reform program being contemplated. There was the suggestion to "fine tune"
the requirement to suit the demands of the project even as it was also felt that they should "leave it to
Congress" to determine how payment should be made to the landowner and reimbursement required
from the farmer-beneficiaries. Such innovations as "progressive compensation" and "State-subsidized
compensation" were also proposed. In the end, however, no special definition of the just compensation
for the lands to be expropriated was reached by the Commission. 50

On the other hand, there is nothing in the records either that militates against the assumptions we are
making of the general sentiments and intention of the members on the content and manner of the
payment to be made to the landowner in the light of the magnitude of the expenditure and the limitations
of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just compensation
provided for in the afore- quoted Section 18 of the CARP Law is not violative of the Constitution. We do
not mind admitting that a certain degree of pragmatism has influenced our decision on this issue, but
after all this Court is not a cloistered institution removed from the realities and demands of society or
oblivious to the need for its enhancement. The Court is as acutely anxious as the rest of our people to see
the goal of agrarian reform achieved at last after the frustrations and deprivations of our peasant masses
during all these disappointing decades. We are aware that invalidation of the said section will result in
the nullification of the entire program, killing the farmer's hopes even as they approach realization and
resurrecting the spectre of discontent and dissent in the restless countryside. That is not in our view the
intention of the Constitution, and that is not what we shall decree today.

Accepting the theory that payment of the just compensation is not always required to be made fully in
money, we find further that the proportion of cash payment to the other things of value constituting the
total payment, as determined on the basis of the areas of the lands expropriated, is not unduly oppressive
upon the landowner. It is noted that the smaller the land, the bigger the payment in money, primarily
because the small landowner will be needing it more than the big landowners, who can afford a bigger
balance in bonds and other things of value. No less importantly, the government financial instruments
making up the balance of the payment are "negotiable at any time." The other modes, which are likewise
available to the landowner at his option, are also not unreasonable because payment is made in shares of
stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent to the
amount of just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a
little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that
these countrymen of ours, conscious as we know they are of the need for their forebearance and even
sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of agrarian reform.
Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.

The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be
viable any more as it appears that Section 4 of the said Order has been superseded by Section 14 of the
CARP Law. This repeats the requisites of registration as embodied in the earlier measure but does not
provide, as the latter did, that in case of failure or refusal to register the land, the valuation thereof shall
be that given by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says that
the just compensation shall be ascertained on the basis of the factors mentioned in its Section 17 and in
the manner provided for in Section 16.

The last major challenge to CARP is that the landowner is divested of his property even before actual
payment to him in full of just compensation, in contravention of a well- accepted principle of eminent
domain.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the
expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is
consistent both here and in other democratic jurisdictions. Thus:

Title to property which is the subject of condemnation proceedings does not vest the condemnor until the
judgment fixing just compensation is entered and paid, but the condemnor's title relates back to the date
on which the petition under the Eminent Domain Act, or the commissioner's report under the Local
Improvement Act, is filed. 51

... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to
the property taken remains in the owner until payment is actually made. 52 (Emphasis supplied.)

In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property does
not pass to the condemnor until just compensation had actually been made. In fact, the decisions appear
to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was held that "actual payment
to the owner of the condemned property was a condition precedent to the investment of the title to the
property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the Court
of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the
State until the payment of the compensation although the authority to enter upon and appropriate the
land was complete prior to the payment. Kennedy further said that "both on principle and authority the
rule is ... that the right to enter on and use the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but that the title does not pass from the owner
without his consent, until just compensation has been made to him."

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the preceding discussion are attentively
examined it will be apparent that the method of expropriation adopted in this jurisdiction
is such as to afford absolute reassurance that no piece of land can be finally and irrevocably
taken from an unwilling owner until compensation is paid ... . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and
declared that he shall "be deemed the owner" of a portion of land consisting of a family-sized farm except
that "no title to the land owned by him was to be actually issued to him unless and until he had become a
full-fledged member of a duly recognized farmers' cooperative." It was understood, however, that full
payment of the just compensation also had to be made first, conformably to the constitutional
requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the
land they acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of full-
fledged membership in the farmers' cooperatives and full payment of just compensation. Hence, it was
also perfectly proper for the Order to also provide in its Section 2 that the "lease rentals paid to the
landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after full
payment of just compensation), shall be considered as advance payment for the land."

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the
government on receipt by the landowner of the corresponding payment or the deposit by the DAR of the
compensation in cash or LBP bonds with an accessible bank. Until then, title also remains with the
landowner. 57 No outright change of ownership is contemplated either.

Hence, the argument that the assailed measures violate due process by arbitrarily transferring title
before the land is fully paid for must also be rejected.

It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as
recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This should counter-
balance the express provision in Section 6 of the said law that "the landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by them
thereunder, further, That original homestead grantees or direct compulsory heirs who still own the
original homestead at the time of the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead."

In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the
petitioners with the Office of the President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude immediate resort to judicial action,
there are factual issues that have yet to be examined on the administrative level, especially the claim that
the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the
subjects of their petition.

Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet
exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657, which in fact are on the whole more liberal than those
granted by the decree.

The CARP Law and the other enactments also involved in these cases have been the subject of bitter
attack from those who point to the shortcomings of these measures and ask that they be scrapped
entirely. To be sure, these enactments are less than perfect; indeed, they should be continuously re-
examined and rehoned, that they may be sharper instruments for the better protection of the farmer's
rights. But we have to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar
ground but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The CARP
Law is not a tried and tested project. On the contrary, to use Justice Holmes's words, "it is an experiment,
as all life is an experiment," and so we learn as we venture forward, and, if necessary, by our own
mistakes. We cannot expect perfection although we should strive for it by all means. Meantime, we
struggle as best we can in freeing the farmer from the iron shackles that have unconscionably, and for so
long, fettered his soul to the soil.

By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program
are removed, to clear the way for the true freedom of the farmer. We may now glimpse the day he will be
released not only from want but also from the exploitation and disdain of the past and from his own
feelings of inadequacy and helplessness. At last his servitude will be ended forever. At last the farm on
which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the
staff of life but also the joy of living. And where once it bred for him only deep despair, now can he see in
it the fruition of his hopes for a more fulfilling future. Now at last can he banish from his small plot of
earth his insecurities and dark resentments and "rebuild in it the music and the dream."

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED
against all the constitutional objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to the State only upon full
payment of compensation to their respective owners.

3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and
recognized.

4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall
enjoy the retention rights granted by R.A. No. 6657 under the conditions therein prescribed.

5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without
pronouncement as to costs.

SO ORDERED.

G.R. No. 103882 November 25, 1998

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.
THE HONORABLE COURT OF APPEALS AND REPUBLIC REAL ESTATE CORPORATION, respondents,
CULTURAL CENTER OF THE PHILIPPINES, intervenor.

G.R. No. 105276 November 25, 1998

PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners,

vs.
COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.

PURISIMA, J.:

At bar are two consolidated petitions for review on certiorari under Rule 45 of the Revised Rules of Court.
Here, the Court is confronted with a case commenced before the then Court of First Instance (now
Regional Trial Court) of Rizal in Pasay City, in 1961, more than 3 decades back, that has spanned six
administrations of the Republic and outlasted the tenure of ten (10) Chief Justices of the Supreme Court.

In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision, dated January 29,
1992 and Amended Decision, dated April 28, 1992, of the Court of Appeals 1 which affirmed with
modification the Decision of the former Court of First Instance of Rizal (Branch 7, Pasay City) in Civil Case
No. 2229-P, entitled "Republic of the Philippines vs. Pasay City and Republic Real Estate Corporation".

The facts that matter are, as follows:

Republic Act No. 1899 ("RA 1899"), which was approved on June 22, 1957, authorized the reclamation of
foreshore lands by chartered cities and municipalities. Section I of said law, reads:

Sec. 1. Authority is hereby granted to all municipalities and chartered cities to undertake
and carry out at their own expense the reclamation by dredging, filling, or other means, of
any foreshore lands bordering them, and to establish, provide, construct, maintain and
repair proper and adequate docking and harbor facilities as such municipalities and
chartered cities may determine in consultation with the Secretary of Finance and the
Secretary of Public Works and Communications.

On May 6, 1958, invoking the a forecited provision of RA 1899, the Pasay City Council passed Ordinance
No. 121, for the reclamation of Three Hundred (300) hectares of foreshore lands in Pasay City,
empowering the City Mayor to award and enter into reclamation contracts, and prescribing terms and
conditions therefor. The said Ordinance was amended on April 21, 1959 by Ordinance No. 158, which
authorized the Republic Real Estate Corporation ("RREC") to reclaim foreshore lands of Pasay City under
certain terms and conditions.

On April 24, 1959, Pasay City and RREC entered into an Agreement 2 for the reclamation of the foreshore
lands in Pasay City.

On December 19, 1961, the Republic of the Philippines ("Republic") filed a Complaint 3 for Recovery of
Possession and Damages with Writ of Preliminary Preventive injunction and Mandatory Injunction,
docketed as Civil Case No. 2229-P before the former Court of First Instance of Rizal, (Branch 7, Pasay
City).

On March 5, 1962, the Republic of the Philippines filed an Amended Complaint 4 questioning subject
Agreement between Pasay City and RREC (Exhibit "P") on the grounds that the subject-matter of such
Agreement is outside the commerce of man, that its terms and conditions are violative of RA 1899, and
that the said Agreement was executed without any public bidding.

The Answers 5 of RREC and Pasay City, dated March 10 and March 14, 1962, respectively, averred that the
subject-matter of said Agreement is within the commerce of man, that the phrase "foreshore lands"
within the contemplation of RA 1899 has a broader meaning than the cited definition of the term in the
Words and Phrases and in the Webster's Third New International Dictionary and the plans and
specifications of the reclamation involved were approved by the authorities concerned.

On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former Court of First Instance of Rizal
(Branch 7, Pasay City) issued an Order6 the dispositive portion of which was to the following effect:

WHEREFORE, the court hereby orders the defendants, their agents, and all persons
claiming under them, to refrain from "further reclaiming or committing acts of
dispossession or dispoilation over any area within the Manila Bay or the Manila Bay Beach
Resort", until further orders of the court.

On the following day, the same trial court issued a writ of preliminary injunction 7 which enjoined the
defendants, RREC and Pasay City, their agents, and all persons claiming under them "from further
reclaiming or committing acts of dispossession."

Thereafter, a Motion to Intervene8, dated June 27, 1962, was filed by Jose L. Bautista, Emiliano Custodio,
Renato Custodio, Roger de la Rosa, Belen Gonzales, Norma Martiner, Emilia E. Paez, Ambrosio R. Parreno,
Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, Zamora Enterprises, Inc., Industrial and
Commercial Factors, Inc., Metropolitan Distributors of the Philippines, and Bayview Hotel, Inc.
stating inter alia that they were buyers of lots in the Manila Bay area being reclaimed by RREC, whose
rights would be affected by whatever decision to be rendered in the case. The Motion was granted by the
trial court and the Answer attached thereto admitted.9

The defendants and the intervenors then moved to dismiss 10 the Complaint of the Republic, placing
reliance on Section 3 of Republic Act No. 5187, which reads:

Sec. 3. Miscellaneous Projects

xxx xxx xxx

m. For the construction of seawall and limited access highway from the south boundary of
the City of Manila to Cavite City, to the south, and from the north boundary of the City of
Manila to the municipality of Mariveles, province of Bataan, to the north, including the
reclamation of the foreshore and submerged areas: Provided, That priority in the
construction of such seawalls, highway and attendant reclamation works shall be given to
any corporation and/or corporations that may offer to undertake at its own expense such
projects, in which case the President of the Philippines may, after competitive didding,
award contracts for the construction of such project, with the winning bidder shouldering
all costs thereof, the same to be paid in terms of percentage fee of the contractor which
shall not exceed fifty percent of the area reclaimed by the contractor and shall represent
full compensation for the purpose, the provisions of the Public Land Law concerning
disposition of reclaimed and foreshore lands to the contrary notwithstanding: Provided,
finally, that the foregoing provisions and those of other laws, executive orders, rules and
regulations to the contrary notwithstanding, existing rights, projects and/or contracts of city
or municipal governments for the reclamation of foreshore and submerged lands shall be
respected. . . . . (emphasis ours).

Since the aforecited law provides that existing contracts shall be respected, movants contended
that the issues raised by the pleadings have become "moot, academic and of no further validity or
effect."

Meanwhile, the Pasay Law and Conscience Union, Inc. ("PLCU") moved to intervene 11, alleging as legal
interest in the matter in litigation the avowed purpose of the organization for the promotion of good
government in Pasay City. In its Order of June 10, 1969, the lower court of origin allowed the said
intervention 12.

On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:

WHEREFORE, after carefully considering (1) the original complaint, (2) the first Amended
Complaint, (3) the Answer of Defendant Republic Real Estate Corporation to the first
Amended Complaint, (4) the Answer of Defendant Pasay City to the first Amended
Complaint, (5) the Second Amended Complaint, (6) the Answer of Defendant Republic Real
Estate Corporation to the Second Amended Complaint, (7) the Answer of Defendant Pasay
City to the Second Amended Complaint, (8) the Memorandum in Support of Preliminary
Injunction of Plaintiff, (9) the Memorandum In Support of the Opposition to the Issuance of
Preliminary Injunction of Defendant Pasay City and Defendant Republic Real Estate
Corporation, (10) the Answer in Intervention of Intervenors Bautista, et. al., (11) Plaintiff's
Opposition to Motion to Intervene, (12) the Reply to Opposition to Motion to Intervene of
Intervenors Bautista, et. al., (13) the Stipulation of Facts by all the parties, (14) the Motion
for Leave to Intervene of Intervenor Pasay Law and Conscience Union, Inc., (15) the
Opposition to Motion For Leave to Intervene of Intervenors Bautista, et. al., (16) the Reply
 of Intervenor Pasay Law and Conscience Union, Inc., (17) the Supplement to Opposition to
Motion to Intervene of Defendant Pasay City and Republic Real Estate Corporation (18) the
Complain in Intervention of Intervenor Pasay Law and Conscience Union, Inc., (19) the
Answer of Defendant Republic Real Estate Corporation, (20) the Answer of Intervenor Jose
L. Bautista, et. al., to Complaint in Intervention, (21) the Motion to Dismiss of Defendant
Republic Real Estate Corporation, and Intervenors Bautista, et. al., (22) the Opposition of
Plaintiff to said Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law and
Conscience Union, Inc., (24) the Memorandum of the Defendant Republic Real Estate
Corporation, (25) the Memorandum for the Intervenor Pasay Law and Conscience Union,
Inc., (26) the Manifestation of Plaintiff filed by the Office of the Solicitor General, and all the
documentary evidence by the parties to wit: (a) Plaintiff's Exhibits "A" to "YYY- 4", (b)
Defendant Republic Real Estate Corporation's Exhibits "1-RREC" to "40-a" and (c)
Intervenor Pasay Law and Conscience Union, Inc's., Exhibits "A-PLACU" to "C-PLACU", the
Court hereby:

(1) Denies the "Motion to Dismiss" filed on January 10, 1968, by Defendant Republic Real
Estate Corporation and Intervenors Bautista, et. al., as it is the finding of this Court that
Republic Act No. 5187 was not passed by Congress to cure any defect in the ordinance and
agreement in question and that the passage of said Republic Act No. 5187 did not make the
legal issues raised in the pleadings "moot, academic and of no further validity or effect;"
and

(2) Renders judgment:

(a) dismissing the Plaintiff's Complaint;

(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law and Conscience
Union, Inc.,

(c) Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City to have
all the plans and specifications in the reclamation approved by the Director of Public Works
and to have all the contracts and sub-contracts for said reclamation awarded by means of,
and only after, public bidding; and

(d) Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon as
Defendant Republic Real Estate Corporation and Defendant Pasay City shall have submitted
the corresponding plans and specifications to the Director of Public Works, and shall have
obtained approval thereof, and as soon as the corresponding public bidding for the award
to the contractor and sub-contractor that will undertake the reclamation project shall have
been effected.

No pronouncement as to costs.

SO ORDERED. (See Court of Appeals' Decision dated January 28, 1992; pp. 6-8)

Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of Appeals. However,
on January 11, 1973, before the appeal could be resolved, Presidential Decree No. 3-A issued, amending
Presidential Decree No. 3, thus:

Sec. 1. Section 7 of Presidential Decree No. 3, dated September 26, 1972, is hereby amended
by the addition of the following paragraphs:

The provisions of any law to the contrary notwithstanding, the reclamation of areas under
water, whether foreshore or inland, shall be limited to the National Government or any
person authorized by it under a proper contract.
 All reclamations made in violation of this provision shall be forfeited to the State without
need of judicial action.

Contracts for reclamation still legally existing or whose validity has been accepted by the
National Government shall be taken over by the National Government on the basis
of quantum meruit, for proper prosecution of the project involved by administration.

On November 20, 1973, the Republic and the Construction Development Corporation of the Philippines
("CDCP") signed a Contract13 for the Manila-Cavite Coastal Road Project (Phases I and II) which contract
included the reclamation and development of areas covered by the Agreement between Pasay City and
RREC. Then, there was issued Presidential Decree No. 1085 which transferred to the Public Estate
Authority ("PEA") the rights and obligations of the Republic of the Philippines under the contract
between the Republic and CDCP.

Attempts to settle amicably the dispute between representatives of the Republic, on the one hand, and
those of Pasay City and RREC, on the other, did not work out. The parties involved failed to hammer out a
compromise.

On January 28, 1992, the Court of Appeals came out with a Decision 14 dismissing the appeal of the
Republic and holding, thus:

WHEREFORE, the decision appealed from is hereby AFFIRMED with the following
modifications:

1. The requirement by the trial court on public bidding and submission of RREC's plans
specification to the Department Public Works and Highways in order that RREC may
continue the implementation of the reclamation work is deleted for being moot and
academic;

2. Ordering the plaintiff-appellant to turn over to Pasay City the ownership and possession
over all vacant spaces in the twenty-one hectare area already reclaimed by Pasay City and
RREC at the time it took over the same. Areas thereat over which permanent structures has
(sic) been introduced shall, including the structures, remain in the possession of the
present possessor, subject to any negotiation between Pasay City and the said present
possessor, as regards the continued possession and ownership of the latter area.

3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the Twenty-One
(21) hectares of land already reclaimed by it, to be exercised within one (1) year from the
finality of this decision, at the same terms and condition embodied in the Pasay City-RREC
reclamation contract, and enjoining appellee Pasay City to respect RREC's option.

SO ORDERED.

On February 14, 1992, Pasay City and RREC presented a Motion for Reconsideration of such Decision of
the Court of Appeals, contending, among others, that RREC had actually reclaimed Fifty-Five (55)
hectares, and not only Twenty-one (21) hectares, and the respondent Court of Appeals erred in not
awarding damages to them, movants.

On April 28, 1992, the Court of Appeals acted favorably on the said Motion for Reconsideration, by
amending the dispositive portion of its judgment of January 28, 1992, to read as follows:

WHEREFORE, the dispositive portion of our Decision dated January 28, 1992 is hereby
AMENDED to read as follows:
 1. The requirement by the trial court on public bidding and the submission of the RREC's
plans and specification to the Department of Public Works and Highways in order that
RREC may continue the implementation of the reclamation work is deleted for being moot
and academic.

2. Ordering plaintiff-appellant to turn over to Pasay City the ownership and possession of
the above enumerated lots (1 to 9).

3. Sustaining RREC's irrevocable option to purchase sixty (60%) percent of the land
referred to in No. 2 of this dispositive portion, to be exercised within one (1) year from the
finality of this Decision, at the same terms and condition embodied in the Pasay City-RREC
reclamation contract, and enjoining Pasay City to respect RREC's irrevocable option.

SO ORDERED.

From the Decision and Amended Decision of the Court of Appeals aforementioned, the Republic of the
Philippines, as well as Pasay City and RREC, have come to this Court to seek relief, albeit with different
prayers.

On September 10, 1997, the Court commissioned the former thirteenth Division of Court of Appeals to
hear and receive evidence on the controversy. The corresponding Commissioner's Report, dated
November 25, 1997, was submitted and now forms part of the records.

On October 11, 1997, the Cultural Center of the Philippines ("CCP") filed a Petition in Intervention,
theorizing that it has a direct interest in the case being the owner of subject nine (9) lots titled in its (CCP)
name, which the respondent Court of Appeals ordered to be turned over to Pasay City. The CCP, as such
intervenor, was allowed to present its evidence, as it did, before the Court of Appeals, which evidence has
been considered in the formulation of this disposition.

In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of errors, that:

THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF PASAY

CITY ORDINANCE NO. 158 DATED APRIL 21, 1959 AND THE RECLAMATION
CONTRACT ENTERED INTO BETWEEN PASAY CITY AND RREC;

II

THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD RECLAIMED

55 HECTARES AND IN ORDERING THE TURN-OVER TO PASAY CITY OF THE
OWNERSHIP AND POSSESSION OF NINE (9) LOTS TITLED IN THE NAME OF
CCP.

In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that:

THE COURT OF APPEALS ERRED IN NOT DECLARING PRESIDENTIAL

DECREE NO. 3-A UNCONSTITUTIONAL;

II

THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN FAVOR

OF PASAY CITY AND RREC.
Let us first tackle the issues posed in G.R. No. 103882.

On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21, 1959 and the
Agreement dated April 24, 1959 between Pasay City and RREC, we rule in the negative.

Sec. 1 of RA 1899, reads:

Sec. 1. Authority is hereby granted to all municipalities and chartered cities

to undertake and carry out at their own expense the reclamation by dredging,
filling, or other means, of any foreshore lands bordering them, and to
establish, provide, construct, maintain and repair proper and adequate
docking and harbor facilities as such municipalities and chartered cities may
determine in consultation with the Secretary of Finance and the Secretary of
Public Works and Communications.

It is the submission of the petitioner, Republic of the Philippines, that there are no foreshore lands along
the seaside of Pasay City 15; that what Pasay City has are submerged or offshore areas outside the
commerce of man which could not be a proper subject matter of the Agreement between Pasay City and
RREC in question as the area affected is within the National Park, known as Manila Bay Beach Resort,
established under Proclamation No. 41, dated July 5, 1954, pursuant to Act No. 3915, of which area it
(Republic) has been in open, continuous and peaceful possession since time immemorial.

Petitioner faults the respondent court for unduly expanding what may be considered "foreshore land"
through the following disquisition:

The former Secretary of Justice Alejo Mabanag, in response to a request for

an opinion from the then Secretary of Public Works and Communications as
to whether the term, "foreshore areas" as used in Section I of the
immediately aforequoted law is that defined in Webster's Dictionary and the
Law of Waters so as to make any dredging or filling beyond its prescribed
limit illegal, opined:

According to the basic letter of the Director of Public Works,

the law of Waters speaks of "shore" and defines it thus: "that
space movement of the tide. Its interior or terrestrial limit in
the line reached by highest equinoctial tides."

Webster's definition of foreshore reads as follows:

That part of the shore between high water and low-water

marks usually fixed at the line to which the ordinary means
tide flows: also, by extension, the beach, the shore near the
water's edge.

If we were to be strictly literal the term foreshore or foreshore

lands should be confined to but a portion of the shore, in itself
a very limited area. (p. 6, Intervenors-appellees' brief).

Bearing in mind the (Webster's and Law of Waters) definitions

of "shore" and of foreshore lands, one is struck with the
apparent inconsistency between the areas thus described and
the purpose to which that area, when reclaimed under the
provision of Republic Act No. 1899, shall be devoted. Section I
(of said Law) authorizes the construction thereat of "adequate
 docking and harbor facilities". This purpose is repeated in
Sections 3 and 4 of the Act.

And yet, it is well known fact that foreshore lands normally

extend only from 10 to 20 meters along the coast. Not very
much more if at all. In fact certain parts in Manila bordering on
Manila Bay, has no foreshore to speak of since the sea washes
the sea wall.

It does not seem logical, then, that Congress had in mind.

Webster's limited concept of foreshore when it enacted
Republic Act No. 1899, unless it intends that the wharves, piers,
docks, etc. should be constructed parallel to the shore, which is
impractical.

Since it is to be presumed that Congress could not have

intended to enact an ineffectual measure not one that would
lead to absurd consequences, it would seem that it used
"foreshore" in a sense wider in scope that defined by
Webster. . . .

To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant

could not offer any refutation or contrary opinion. Neither can we. In fact, the
above construction is consistent with the "rule on context" in statutory
construction which provides that in construing a statute, the same must be
construed as a whole. The particular words, clauses and phrases should not
be studied as detached and isolated expressions, but the whole and every
part of the statute must be considered in fixing the meaning of any of its
parts in order to produce a harmonious whole (see Araneta vs. Concepcion,
99 Phil. 709). There are two reasons for this. Firstly, the force and
significance of particular expressions will largely depend upon the
connection in which they are found and their relation to the general subject-
matter of the law. The legislature must be understood to have expressed its
whole mind on the special object to which the legislative act is directed but
the vehicle for the expressions of that meaning is the statute, considered as
one entire and continuous act, and not as an agglomeration of unrelated
clauses. Each clause or provision will be illuminated by those which are
cognate to it and by the general tenor of the whole statute and thus
obscurities end ambiguities may often be cleared up by the most direct and
natural means. Secondly effect must be given, if it is possible, to every word
and clause of the statute, so that nothing shall be left devoid of meaning or
destitute of force. To this end, each provision of the statute should be read in
the light of the whole. For the general meaning of the legislature, as gathered
from the entire act, may often prevail over the construction which would
appear to be the most natural and obvious on the face of a particular clause.
If is by this means that contradiction and repugnance between the different
parts of the statute may be avoided. (See Black, Interpretation of Laws, 2nd
Ed., pp. 317-319).

Resorting to extrinsic aids, the "Explanatory Note" to House Bill No. 3830,
which was subsequently enacted as Republic Act No. 1899, reads:

In order to develop and expand the Maritime Commerce of the

Philippines, it is necessary that harbor facilities be
 correspondingly improved and, where necessary, expanded
and developed. The national government is not in a financial
position to handle all this work. On the other hand, with a
greater autonomy many chartered cities and provinces are
financially able to have credit position which will allow them to
undertake these projects. Some cities, such as the City of
Bacolod under R.A. 161, has been authorized to reclaim
foreshore lands bordering it.

Other cities end provinces have continuously been requesting

for authority to reclaim foreshore lands on the basis of the
Bacolod City pattern, and to undertake work to establish,
construct on the reclaimed area and maintain such port
facilities as may be necessary. In order not to unduly delay the
undertaking of these projects, and inorder to obviate the
passage of individual pieces of legislation for every chartered
city and province, it is hereby recommended that the
accompanying bill be approved. It covers Authority for All
chartered cities and provinces to undertake this work. . . .
(emphasis supplied)

Utilizing the above explanatory note in interpreting and construing the

provisions of R.A. 1899, then Secretary of Justice Mabanag opined:

It is clear that the "Bacolod City pattern" was the basis of the
enactment of the aforementioned bill of general application.
This so-called "Bacolod City pattern" appears to be composed
of 3 parts, namely: Republic Ad No. 161, which grants authority
to Bacolod City to undertake or carry out . . . the reclamation . . .
of any [sic] carry out the reclamation project conformably with
Republic Act No. 161; and Republic Act No. 1132 authorizing
Bacolod City to contract indebtedness or to issue bonds in the
amount not exceeding six million pesos to finance the
reclamation of land in said city.

Republic Act No. 161 did not in itself specify the precise space
therein referred to as "foreshore" lands, but it provided that
docking and harbor facilities should be erected on the
reclaimed portions thereof, while not conclusive would
indicate that Congress used the word "foreshore" in its
broadest sense. Significantly, the plan of reclamation of
foreshore drawn up by the Bureau of Public Works maps out
an area of approximately 1,600,000 square meters, the
boundaries of which clearly extend way beyond Webster's
limited concept of the term "foreshore". As a contemporaneous
construction by that branch of the Government empowered to
oversee at least, the conduct of the work, such an
interpretation deserves great weight. Finally, Congress in
enacting Republic Act No. 1132 (supplement to RA 161), tacitly
confirmed and approved the Bureau's interpretation of the
term 'foreshore' when instead of taking the occasion to correct
the Bureau of over extending its plan, it authorized the city of
Bacolod to raise the full estimated cost of reclaiming the total
area covered by the plan. The explanatory note to House Bill
 No. 1249 which became Republic Act No. 1132 states among
the things:

The Bureau of Public Works already prepared a plan for the

reclamation of about 1,600,000 square meters of land at an
estimated costs of about P6,000,000.00. The project is self-
supporting because the proceeds from the sales or leases of
lands so reclaimed will be more than sufficient to cover the
cost of the project.

Consequently, when Congress passed Republic Act No. 1899 in

order to facilitate the reclamation by local governments of
foreshore lands on the basis of the Bacolod City pattern and in
order to obviate the passage of individual pieces of legislation
for every chartered city and provinces requesting authority to
undertake such projects, the lawmaking body could not have
had in mind the limited area described by Webster as
"foreshore" lands. . . . .

If it was really the intention of Congress to limit the area to the strict literal
meaning of "foreshore" lands which may be reclaimed by chartered cities and
municipalities, Congress would have excluded the cities of Manila, Iloilo,
Cebu, Zamboanga and Davao from the operation of RA 1899 as suggested by
Senator Cuenco during the deliberation of the bill considering that these
cities do not have 'foreshore' lands in the strict meaning of the term. Yet,
Congress did not approve the proposed amendment of Senator Cuenco,
implying therefore, that Congress intended not to limit the area that may be
reclaimed to the strict definition of "foreshore" lands.

The opinion of the then Secretary of Justice Mabanag, who was at that time
the chief law officer and legal adviser of the government and whose office is
required by law to issue opinions for the guidance of the various
departments of the government, there being then no judicial interpretation
to the contrary, is entitled to respect (see Bengzon vs. Secretary of Justice and
Insular Auditor, 68 Phil. 912).

We are not unmindful of the Supreme Court Resolution dated February 3,

1965 inPonce vs. Gomez (L-21870) and Ponce vs. City of Cebu (L-2266), by a
unanimous vote of six (6) justices (the other five (5) members deemed it
unnecessary to express their view because in their opinion the questions
raised were not properly brought before the court), which in essence applied
the strict dictionary meaning of "foreshore lands" as used in RA 1899 in the
case of the city of Cebu. But this was promulgated long after the then
Secretary of Justice Mabanag rendered the above opinion on November 16,
1959 and long after RREC has started the subject reclamation project.

Furthermore, as held by the lower court, Congress, after the Supreme Court
issued the aforementioned Resolution, enacted RA 5187. In Sec. 3 (m) of said
law, Congress appropriated money "for the construction of the seawall and
limited access highway from the South boundary of the city of Manila to
Cavite City, to the South, and from the North boundary of the city of Manila to
the municipality of Mariveles, province of Bataan, to the North (including the
reclamation of foreshore and submerged areas . . . provided . . . that . . .
existing projects and/or contracts of city or municipal governments for the
 reclamation of foreshore and submerged lands shall be respected . . ." This is
a clear manifestation that Congress in enacting RA 1899, did not intend to
limit the interpretation of the term "foreshore land" to its dictionary meaning.

It is presumed that the legislature was acquainted with and had in mind the
judicial construction given to a former statute on the subject, and that the
statute on the subject, and that the statute was enacted having in mind the
judicial construction that the prior enactment had received, or in the light of
such existing judicial decisions as have direct bearing upon it (see 50 Am. Jur.,
Sec. 321, pp. 312-313). But notwithstanding said interpretation by the
Supreme Court of RA 1899 in the Ponce cases, Congress enacted a law
covering the same areas previously embraced in a RA 1899 (as mentioned
earlier, cities without foreshore lands which were sought to be excluded
from the operation of RA 1899 were not excluded), providing that respect be
given the reclamation of not only foreshore lands but also of submerged
lands signifying its non-conformity to the judicial construction given to RA
1899. If Congress was in accord with the interpretation and construction
made by the Supreme Court on RA 1899, it would have mentioned
reclamation of "foreshore lands" only in RA 5187, but Congress included
"submerged lands" in order to clarify the intention on the grant of authority
to cities and municipalities in the reclamation of lands bordering them as
provided in RA 1899. It is, therefore, our opinion that it is actually the
intention of Congress in RA 1899 not to limit the authority granted to cities
and municipalities to reclaim foreshore lands in its strict dictionary meaning
but rather in its wider scope as to include submerged lands.

The Petition is impressed with merit.

To begin with, erroneous and unsustainable is the opinion of respondent court that under RA 1899, the
term "foreshore lands" includes submerged areas. As can be gleaned from its disquisition and
rationalization aforequoted, the respondent court unduly stretched and broadened the meaning of
"foreshore lands", beyond the intentment of the law, and against the recognized legal connotation of
"foreshore lands". Well entrenched, to the point of being elementary, is the rule that when the law speaks
in clear and categorical language, there is no reason for interpretation or construction, but only for
application. 16 So also, resort to extrinsic aids, like the records of the constitutional convention, is
unwarranted, the language of the law being plain and unambiguous. 17 Then, too, opinions of the
Secretary of Justice are unavailing to supplant or rectify any mistake or omission in the law. 18 To repeat,
the term "foreshore lands" refers to:

The strip of land that lies between the high and low water marks and that is
alternately wet and dry according to the flow of the tide. (Words and Phrases,
"Foreshore")

A strip of land margining a body of water (as a lake or stream); the part of a
seashore between the low-water line usually at the seaward margin of a low-
tide terrace and the upper limit of wave wash at high tide usually marked by
a beach scarp or berm. (Webster's Third New International Dictionary)

The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its
meaning, much less widen the coverage thereof. If the intention of Congress were to include submerged
areas, it should have provided expressly. That Congress did not so provide could only signify the
exclusion of submerged areas from the term "foreshore lands".
Neither is there any valid ground to disregard the Resolution of this Court dated February 3, 1965
in Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) despite the enactment of Republic Act
No. 5187 ("RA 5187"), the relevant portion of which, reads:

Sec. 3. Miscellaneous Projects

xxx xxx xxx

m. For the construction of seawall and limited access highway from the south
boundary of the City of Manila to Cavite City, to the south, and from the north
boundary of the City of Manila to the municipality of Mariveles, province of
Bataan, to the north, including the reclamation of the foreshore and
submerged areas:Provided, That priority in the construction of such seawalls,
highway and attendant reclamation works shell be given to any corporation
and/or corporations that may offer to undertake at its own expense such
projects, in which case the President of the Philippines may, after
competitive bidding, award contracts for the construction of such projects,
with the winning bidder shouldering all costs thereof, the same to be paid in
terms of percentage fee of the contractor which shall not exceed fifty percent
of the area reclaimed by the contractor and shall represent full compensation
for the purpose, the provisions of the Public Land Law concerning disposition
of reclaimed and foreshore lands to the contrary notwithstanding:Provided,
finally, that the foregoing provisions and those of other laws, executive
orders, rules and regulations to the contrary notwithstanding, existing rights,
projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected. . . . .

There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden the scope of
"foreshore lands." The said law is not amendatory to RA 1899. It is an Appropriations Act, entitled — "AN
ACT APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE SAME WITH PREVIOUS
PUBLIC WORKS APPROPRIATIONS."

All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-21870)
and Ponce v. City of Cebu (L-22669) that the term "foreshore" refers to "that part of the land adjacent to
the sea which is alternately covered and left dry by the ordinary flow of the tides." As opined by this
Court in said cases:

WHEREAS, six (6) members of the Court (Justices Bautista Angelo,

Concepcion, Reyes, Barrera, Dizon and Jose P. Bengzon) opine that said city
ordinance and contracts are ultra vires and hence, null and void, insofar as the
remaining 60% of the area aforementioned, because the term "foreshore lands"
as used in Republic Act No. 1899 should be understood in the sense attached
thereto by common parlance; (emphasis ours)

The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his opinion dated
December 22, 1966, in a case with analogous facts as the present one, to wit:

December 22, 1966

The Secretary of Agriculture

and Natural Resources

Diliman, Quezon City

Sir:

xxx xxx xxx

I. Facts —

1. On January 19, 1961, pursuant to the provisions of Republic Act No. 1899,
the Municipality of Navotas enacted Ordinance No. 1 authorizing the
Municipal Mayor to enter into a reclamation contract with Mr. Chuanico.

2. On March 15, 1961, a reclamation contract was concluded between the

Municipality of Navotas, represented by the Municipal Mayor, and Mr.
Chuanico in accordance with the above ordinance. Thereunder, Mr. Chuanico
shall be the attorney-in-fact of the Municipality in prosecuting the
reclamation project and shall advance the money needed therefor; that the
actual expenses incurred shall be deemed a loan to the Municipality; that Mr.
Chuanico shall have the irrevocable option to buy 70% of the reclaimed area
at P7.00 per square meter; that he shall have the full and irrevocable powers
to do any and all things necessary and proper in and about the premises,"
including the power to hire necessary personnel for the prosecution of the
work, purchase materials and supplies, and purchase or lease construction
machineries and equipment, but any and all contracts to be concluded by him
in behalf of the Municipality shall be submitted to public bidding.

xxx xxx xxx

3. On March 16, 1961, the Municipal Council of Navotas passed Resolution No.
22 approving and ratifying the contract.

xxx xxx xxx

III. Comments —

1. The above reclamation contract was concluded on the basis of Navotas

Ordinance No. 1 which, in turn, had been enacted avowedly pursuant to
Republic Act No. 1899. This being so, the contract, in order to be valid, must
conform to the provisions of the said law.

By authorizing local governments "to execute by administration any

reclamation work," (Republic Act No. 1899 impliedly forbids the execution of
said project bycontract. Thus, in the case or Ponce et al. vs. Gomez (February
3, 1966), five justices of the Supreme Court voted to annul the contract
between Cebu Development Corporation and Cebu City for the reclamation of
foreshore lands because "the provisions of said . . . contract are not . . . in
accordance with the provisions of Republic Act No. 1899," as against one
Justice who opined that the contract substantially complied with the
provisions of the said law. (Five Justices expressed no opinion on this point.)

Inasmuch as the Navotas reclamation contract is substantially similar to the

Cebu reclamation contract, it is believed that the former is likewise fatally
defective.

2. The Navotas reclamation project envisages the construction of a channel

along the Manila Bay periphery of that town and the reclamation of
approximately 650 hectares of land from said channel to a seaward distance
 of one kilometer. In the basic letter it is stated that "practically, all the 650
hectares of lands proposed to be reclaimed under the agreement" do not
constitute foreshore lands and that "the greater portion of the area . . . is in
fact navigable and presently being used as a fishing harbor by deep-sea
fishing operators as well as a fishing ground of sustenance fisherman.
Assuming the correctness of these averments, the Navotas reclamation
contract evidently transcends the authority granted under Republic Act No.
1899, which empowers the local governments to reclaim nothing more than
"foreshore lands, i.e., "that part of the land adjacent to the see which is
alternately covered and left dry by the ordinary flow of the tides." (26 C.J.
890.) It was for this reason that in the cited case Ponce case, the Supreme
Court, by a vote of 6-0 with five Justices abstaining, declared ultra vires and
void the contractual stipulation for the reclamation of submerged lands off
Cebu City, and permanently enjoined its execution under Republic Act No.
1899.

xxx xxx xxx

In accordance with the foregoing, I have the honor to submit the view that
the Navotas reclamation contract is not binding and should be disregarded
for non-compliance with law.

Very truly yours,

(SGD) CLAUDIO
TEEHANKEE

Secretary of Justice

The said opinion of Justice Secretary Teehankee who became Associate Justice, and later Chief Justice, of
this Court, did, in our considered view, supersede the earlier opinion of former justice Secretary Alejo
Mabanag, aforestated, as the cases, in connection with which subject opinions were sought, were with
similar facts. The said Teehankee opinion accords with RA 1899.

It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by Ordinance No.
158, and the Agreement under attack, have been found to be outside the intendment and scope of RA
1899, and therefore ultra vires and null and void.

What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.

Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed 55 hectares.
The letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that RREC had reclaimed 55
hectares. Said letter was just referring to a tentative schedule of work to be done by RREC, even as it
required RREC to submit the pertinent papers to show its supposed accomplishment, to secure approval
by the Ministry of Public Works and Highways to the reclamation plan, and to submit to a public bidding
all contracts and sub-contracts for subject reclamation project but RREC never complied with such
requirements and conditions sine qua non.

No contracts or sub-contracts or agreements, plans, designs, and/or specifications of the reclamation

project were presented to reflect any accomplishment. Not even any statement or itemization of works
accomplished by contractors or subcontractors or vouchers and other relevant papers were introduced
to describe the extent of RREC's accomplishment. Neither was the requisite certification from the City
Engineer concerned that "portions of the reclamation project not less than 50 hectares in area shall have
been accomplished or completed" obtained and presented by RREC.
As a matter of fact, no witness ever testified on any reclamation work done by RREC, and extent thereof,
as of April 26, 1962. Not a single contractor, sub-contractor, engineer, surveyor, or any other witness
involved in the alleged reclamation work of RREC testified on the 55 hectares supposedly reclaimed by
RREC. What work was done, who did the work, where was it commenced, and when was it completed,
was never brought to light by any witness before the court. Certainly, onus probandi was on RREC and
Pasay City to show and point out the as yet unidentified 55 hectares they allegedly reclaimed. But this
burden of proof RREC and Pasay City miserably failed to discharge.

So also, in the decision of the Pasay Court of First Instance dismissing the complaint of plaintiff-appellant,
now petitioner Republic of the Philippines, the lifting of the writ of Preliminary Injunction issued on April
26, 1962 would become effective only "as soon as Defendant Republic Real Estate Corporation and
Defendant Pasay City shall have submitted the corresponding plans and specifications to the Director of
Public Work, and shall have obtained approval thereof, and as soon as corresponding public bidding for
the award to the contractor and sub-contractor that will undertake the reclamation project shall have
been effected." (Rollo, pp. 127-129, G.R. No. 103882)

From the records on hand, it is abundantly clear that RREC and Pasay City never complied with such
prerequisites for the lifting of the writ of Preliminary Injunction. Consequently, RREC had no authority to
resume its reclamation work which was stopped by said writ of preliminary injunction issued on April 26,
1962.

From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit "21-A" for RREC before
the lower court, and Exhibit "EE" for CCP before the Court of Appeals, it can be deduced that only on
November 26, 1960 did RREC contract out the dredging work to C and A Construction Company, Inc., for
the reclamation of the 55 hectares initially programmed to be reclaimed by it. But, as stated by RREC
itself in the position paper filed with this Court on July 15, 1997, with reference to CDCP's reclamation
work, mobilization of the reclamation team would take one year before a reclamation work could actually
begin. Therefore, the reclamation work undertaker by RREC could not have started before November 26,
1961.

Considering that on April 26, 1962 RREC was enjoined from proceeding any further with its reclamation
work, it had barely five (5) months, from November, 1961 to April, 1962, to work on subject reclamation
project. It was thus physically impossible for RREC to reclaim 55 hectares, with the stipulated
specifications and elevation, in such a brief span of time. In the report of RREC (Exhibit "DD" for CCP), it
was conceded that due to the writ of preliminary injunction issued on April 26, 1962, C and A
Construction Co., Inc. had suspended its dredging operation since May, 1962.

The "graphical report" on the Pasay Reclamation project, as of April 30, 1962, attached to the Progress
Report marked Exhibit "DD", is a schematic representation of the work accomplishment referred to in
such Progress Report, indicating the various elevations of the land surface it embraced, ranging from 0.00
meters to the highest elevation of 2.5 meters above MLLW. Such portrayal of work accomplished is
crucial in our determination of whether or not RREC had actually "reclaimed" any land as under its
Contract for Dredging Work with C and A Construction Company (Exhibit "EE", the required final
elevation for a completely reclaimed land was 3.5 meters above MLLW, as explicitly provided in said
Contract for Dredging Work. So, the irresistible conclusion is — when the work on subject RREC-Pasay
City reclamation project stopped in April, 1962 in compliance with the writ of preliminary injunction
issued by the trial court of origin, no portion of the reclamation project worked on by RREC had reached
the stipulated elevation of 3.5 meters above MLLW. The entire area it worked on was only at sea level or
0.00 meter above MLLW. In short, RREC had not yet reclaimed any area when the writ of preliminary
injunction issued in April 1962.

On this point, the testimonies of Architect Ruben M. Protacio, Architect and Managing partner of Leandro
V. Locsin and partners, Architect and City Planner Manuel T. Mañoza, Jr. of Planning Resources and
Operation System, Inc., Rose D. Cruz, Executive Assistant, Office of the President, from 1966 to 1970, and
Dr. Lucrecia Kasilag, National Artist and member of CCP Advisory Committee, come to the fore. These
credible, impartial and knowledgeable witnesses recounted on the witness stand that when the
construction of the Main Building of the Cultural Center of the Philippines (CCP) began in 1966, the only
surface land available was the site for the said building (TSN, Sept. 29, 1997, pages 8, 14 and 50), what
could be seen in front of and behind it was all water (TSN, Sept. 29, 1997 pages 127-128). When the CCP
Main Building was being constructed, from 1968 to 1969, the land above sea level thereat was only
where the CCP Main Building was erected and the rest of the surroundings were all under water,
particularly the back portion fronting the bay. (TSN, Sept. 13, 1997, pp. 181, 182, 185, 186, 188). Dr.
Lucrecia R. Kasilag stressed that on April 16, 1966, during the ground breaking for the CCP Main Building,
it was water all around (TSN, Sept. 30, 1997, pp. 320, 324, 325).

There was indeed no legal and factual basis for the Court of Appeals to order and declare that "the
requirement by the trial court on public bidding and the submission of RREC's plans and specification to
the Department of Public Works and Highways in order that RREC may continue the implementation of
the reclamation work is deleted for being moot and academic." Said requirement has never become moot
and academic. It has remained indispensable, as ever, and non-compliance therewith restrained RREC
from lawfully resuming the reclamation work under controversy, notwithstanding the rendition below of
the decision in its favor.

Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with the prescribed
elevation of 3.5 meters above MLLW, so much so that in 1978, it (RREC) opted to file with the former
Ministry of Public Highways, a claim for compensation of P30,396,878.20, for reclamation work allegedly
done before the CDCP started working on the reclamation of the CCP grounds. On September 7, 1979,
RREC asked the Solicitor General to settle its subject claim for compensation at the same amount of
P30,396,878.20. But on June 10, 1981, guided by the cost data, work volume accomplished and other
relevant information gathered by the former Ministry of Public Highways, the Solicitor General informed
RREC that the value of what it had accomplished, based on 1962 price levels, was only P8,344,741.29, and
the expenses for mobilization of equipment amounted to P2,581,330.00. The aforesaid evaluation made
by the government, through the then Minister of Public Highways, is factual and realistic, so much so that
on June 25, 1981, RREC, in its reply letter to the Solicitor General, stated:

We regret that we are not agreeable to the amount of P10,926,071.29, based

on 1962 cost data, etc., as compensation based on quantum meruit. The least
we would consider is the amount of P10,926,071.29 plus interest at the rate
of 6% per annum from 1962 to the time of payment. We feel that 6% is very
much less than the accepted rate of inflation that has supervened since 1962
to the present, and even less than the present legal rate of 12% per annum. 19

Undoubtedly, what RREC claimed for was compensation for what it had done, and for the dredge fill of
1,558,395 cubic meters it used, on subject reclamation project.

Respondent Court likewise erred in ordering the turn-over to Pasay City of the following titled lots, to wit:

LOT NO. BUILDING AREA OCT/TCT

42 Gloria Maris 9,516 sq.m. OCT 159 in the

Restaurant name of GSIS

3 Asean Garden 76,299 sq.m. OCT 10251 in the

name of CCP

12 Folk Arts Theater 1.7503 hec. TCT 18627 in the

 and PICC parking name of CCP

space

22 landscaped with 132,924 sq.m. TCT 75676 in the

sculpture of Asean name of CCP

Artists-site of

Boom na Boom

23 open space, back 34,346 sq.m. TCT 75677 in the

of Philcite name of CCP

24 Parking space for 10,352 sq.m. TCT 75678 in the

Star City, CCP, name of CCP

Philcite

25 open space 11,323 sq.m. TCT 75679 in the

occupied by Star name of CCP

City

28 open space, 27,689 sq.m. TCT 75684 in the

beside PICC name of CCP

29 open space, 106,067 sq.m. TCT 75681 in the

leased by El name of CCP

Shaddai

We discern no factual basis nor any legal justification therefor. In the first place, in their answer to
the Complaint and Amended Complaint below, RREC and Pasay City never prayed for the transfer
to Pasay City of subject lots, title to which had long become indefeasible in favor of the rightful title
holders, CCP and GSIS, respectively.

The annotation of a notice of lis pendens on the certificates of title covering the said lots is of no moment.
It did not vest in Pasay City and RREC any real right superior to the absolute ownership thereover of CCP
and GSIS. Besides, the nature of the action did not really warrant the issuance of a notice of lis pendens.

Sec. 14 of Rule 13, Revised Rules of Civil Procedure, reads:

Sec. 14. Notice of lis pendens. — In an action affecting the title or the right of
possession of real properly, the plaintiff and the defendant, when affirmative
relief is claimed in his answer, may record in the office of the registry of
deeds of the province in which the property is situated a notice of the
pendency of the action. Said notice shall contain the names of the parties and
the object of the action or defense, and a description of the property in that
province affected thereby. Only from the time of filing such notice for record
 shall a purchaser, or encumbrancer of the property affected thereby, be
deemed to have constructive notice of the pendency of the action, and only of
its pendency against the parties designated by their real names.

The notice of lis pendens herein above mentioned may be cancelled only upon
order of the court, after proper showing that the notice is for the purpose of
molesting the adverse party, or that it is not necessary to protect the rights of
the party who caused it to be recorded.

Under the aforecited provision of law in point, a notice of lis pendens is necessary when the action is for
recovery of possession or ownership of a parcel of land. In the present litigation, RREC and Pasay City, as
defendants in the main case, did not counterclaim for the turnover to Pasay City of the titled lots
aforementioned.

What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens title,
whether fraudulently issued or not, may be posed only in an action brought to impugn or annul it. (Halili
vs. National Labor Relations Commission, 257 SCRA 174, Cimafranca vs. Intermediate Appellate Court,
147 SCRA 611.) Unmistakable, and cannot be ignored, is the germane provision of Section 48 of P.D. 1529,
that a certificate of title can never be the subject of a collateral attack. It cannot be altered, modified, or
cancelled except in a direct proceeding instituted in accordance with law.

Although Pasay City and RREC did not succeed in their undertaking to reclaim any area within subject
reclamation project, it appearing that something compensable was accomplished by them, following the
applicable provision of law and hearkening to the dictates of equity, that no one, not even the
government, shall unjustly enrich oneself/itself at the expense of another 20, we believe; and so hold, that
Pasay City and RREC should be paid for the said actual work done and dredge-fill poured in, worth
P10,926,071.29, as verified by the former Ministry of Public Highways, and as claimed by RREC itself in
its aforequoted letter dated June 25, 1981.

It is fervently hoped that long after the end of our sojourn in this valley of tears, the court, for its herein
historic disposition, will be exalted by the future generations of Filipinos, for the preservation of the
national patrimony and promotion of our cultural heritage. As writer Channing rightly puts it: "Whatever
expands the affections, or enlarges the sphere of our sympathies — Whatever makes us feel our relation to
the universe and all that it inherits in time and in eternity, and to the great and beneficent cause of all, must
unquestionably refine our nature, and elevate us in the scale of being."

WHEREFORE:

In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January 28, 1992, and Amended
Decision, dated April 28, 1992, of the Court of Appeals, are both SET ASIDE; and Pasay City Ordinance No.
121, dated May 6, 1958, and Ordinance No. 158, dated April 21, 1959, as well as the Reclamation
Agreements entered into by Pasay City and Republic Real Estate Corporation (RREC) as authorized by
said city ordinances, are declared NULL and VOID for being ultra vires, and contrary to Rep. Act 1899.

The writ of preliminary injunction issued on April 26, 1962 by the trial court a quo in Civil Case No. 2229-
P is made permanent and the notice of lis pendens issued by the Court of Appeals in CA G.R. CV No. 51349
ordered CANCELLED. The Register of Deeds of Pasay City is directed to take note of and annotate on the
certificates of title involved, the cancellation of subject notice of lis pendens.

The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay City and Republic Real Estate
Corporation the sum of TEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND SEVENTY-ONE AND
TWENTY-NINE CENTAVOS (P10,926,071.29) PESOS, plus interest thereon of six (6%) percent per annum
from May 1, 1962 until full payment, which amount shall be divided by Pasay City and RREC, share and
share alike.
In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.

G.R. No. 135385 December 6, 2000

ISAGANI CRUZ and CESAR EUROPA, petitioners,

vs.
SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES, SECRETARY OF BUDGET AND
MANAGEMENT and CHAIRMAN and COMMISSIONERS OF THE NATIONAL COMMISSION ON
INDIGENOUS PEOPLES, respondents.
HON. JUAN M .FLAVIER, HON. PONCIANO BENNAGEN, BAYANI ASCARRAGA, EDTAMI
MANSAYANGAN, BASILIO WANDAG, EVELYN DUNUAN, YAOM TUGAS, ALFREMO CARPIANO,
LIBERATO A. GABIN, MATERNIDAD M. COLAS, NARCISA M. DALUPINES, BAI KIRAM-CONNIE
SATURNO, BAE MLOMO-BEATRIZ T. ABASALA, DATU BALITUNGTUNG-ANTONIO D. LUMANDONG,
DATU MANTUMUKAW TEOFISTO SABASALES, DATU EDUAARDO BANDA, DATU JOEL UNAD, DATU
RAMON BAYAAN, TIMUAY JOSE ANOY, TIMUAY MACARIO D. SALACAO, TIMUAY EDWIN B. ENDING,
DATU SAHAMPONG MALANAW VI, DATU BEN PENDAO CABIGON, BAI NANAPNAY-LIZA SAWAY,
BAY INAY DAYA-MELINDA S. REYMUNDO, BAI TINANGHAGA HELINITA T. PANGAN, DATU
MAKAPUKAW ADOLINO L. SAWAY, DATU MAUDAYAW-CRISPEN SAWAY, VICKY MAKAY, LOURDES
D. AMOS, GILBERT P. HOGGANG, TERESA GASPAR, MANUEL S. ONALAN, MIA GRACE L. GIRON,
ROSEMARIE G. PE, BENITO CARINO, JOSEPH JUDE CARANTES, LYNETTE CARANTES-VIVAL,
LANGLEY SEGUNDO, SATUR S. BUGNAY, CARLING DOMULOT, ANDRES MENDIOGRIN, LEOPOLDO
ABUGAN, VIRGILIO CAYETANO, CONCHITA G. DESCAGA, LEVY ESTEVES, ODETTE G. ESTEVEZ,
RODOLFO C. AGUILAR, MAURO VALONES, PEPE H. ATONG, OFELIA T. DAVI, PERFECTO B.
GUINOSAO, WALTER N. TIMOL, MANUEL T. SELEN, OSCAR DALUNHAY, RICO O. SULATAN, RAFFY
MALINDA, ALFREDO ABILLANOS, JESSIE ANDILAB, MIRLANDO H. MANGKULINTAS, SAMIE
SATURNO, ROMEO A. LINDAHAY, ROEL S. MANSANG-CAGAN, PAQUITO S. LIESES, FILIPE G. SAWAY,
HERMINIA S. SAWAY, JULIUS S. SAWAY, LEONARDA SAWAY, JIMMY UGYUB, SALVADOR TIONGSON,
VENANCIO APANG, MADION MALID, SUKIM MALID, NENENG MALID, MANGKATADONG AUGUSTO
DIANO, JOSEPHINE M. ALBESO, MORENO MALID, MARIO MANGCAL, FELAY DIAMILING, SALOME P.
SARZA, FELIPE P. BAGON, SAMMY SALNUNGAN, ANTONIO D. EMBA, NORMA MAPANSAGONOS,
ROMEO SALIGA, SR., JERSON P. GERADA, RENATO T. BAGON, JR., SARING MASALONG, SOLEDAD M.
GERARDA, ELIZABETH L. MENDI, MORANTE S. TIWAN, DANILO M. MALUDAO, MINORS MARICEL
MALID, represented by her father CORNELIO MALID, MARCELINO M. LADRA, represented by her
father MONICO D. LADRA, JENNYLYN MALID, represented by her father TONY MALID, ARIEL M.
EVANGELISTA, represented by her mother LINAY BALBUENA, EDWARD M. EMUY, SR., SUSAN
BOLANIO, OND, PULA BATO B'LAAN TRIBAL FARMER'S ASSOCIATION, INTER-PEOPLE'S EXCHANGE,
INC. and GREEN FORUM-WESTERN VISAYAS, intervenors.
COMMISSION ON HUMAN RIGHTS, intervenor.
IKALAHAN INDIGENOUS PEOPLE and HARIBON FOUNDATION FOR THE CONSERVATION OF
NATURAL RESOURCES, INC., intervenor.

RESOLUTION

PER CURIAM:

Petitioners Isagani Cruz and Cesar Europa brought this suit for prohibition and mandamus as citizens
and taxpayers, assailing the constitutionality of certain provisions of Republic Act No. 8371 (R.A. 8371),
otherwise known as the Indigenous Peoples Rights Act of 1997 (IPRA), and its Implementing Rules and
Regulations (Implementing Rules).

In its resolution of September 29, 1998, the Court required respondents to comment. 1 In compliance,
respondents Chairperson and Commissioners of the National Commission on Indigenous Peoples (NCIP),
the government agency created under the IPRA to implement its provisions, filed on October 13, 1998
their Comment to the Petition, in which they defend the constitutionality of the IPRA and pray that the
petition be dismissed for lack of merit.

On October 19, 1998, respondents Secretary of the Department of Environment and Natural Resources
(DENR) and Secretary of the Department of Budget and Management (DBM) filed through the Solicitor
General a consolidated Comment. The Solicitor General is of the view that the IPRA is partly
unconstitutional on the ground that it grants ownership over natural resources to indigenous peoples
and prays that the petition be granted in part.

On November 10, 1998, a group of intervenors, composed of Sen. Juan Flavier, one of the authors of the
IPRA, Mr. Ponciano Bennagen, a member of the 1986 Constitutional Commission, and the leaders and
members of 112 groups of indigenous peoples (Flavier, et. al), filed their Motion for Leave to Intervene.
They join the NCIP in defending the constitutionality of IPRA and praying for the dismissal of the petition.

On March 22, 1999, the Commission on Human Rights (CHR) likewise filed a Motion to Intervene and/or
to Appear as Amicus Curiae. The CHR asserts that IPRA is an expression of the principle of parens patriae
and that the State has the responsibility to protect and guarantee the rights of those who are at a serious
disadvantage like indigenous peoples. For this reason it prays that the petition be dismissed.

On March 23, 1999, another group, composed of the Ikalahan Indigenous People and the Haribon
Foundation for the Conservation of Natural Resources, Inc. (Haribon, et al.), filed a motion to Intervene
with attached Comment-in-Intervention. They agree with the NCIP and Flavier, et al. that IPRA is
consistent with the Constitution and pray that the petition for prohibition and mandamus be dismissed.

The motions for intervention of the aforesaid groups and organizations were granted.

Oral arguments were heard on April 13, 1999. Thereafter, the parties and intervenors filed their
respective memoranda in which they reiterate the arguments adduced in their earlier pleadings and
during the hearing.

Petitioners assail the constitutionality of the following provisions of the IPRA and its Implementing Rules
on the ground that they amount to an unlawful deprivation of the State’s ownership over lands of the
public domain as well as minerals and other natural resources therein, in violation of the regalian
doctrine embodied in Section 2, Article XII of the Constitution:

"(1) Section 3(a) which defines the extent and coverage of ancestral domains, and Section 3(b) which, in
turn, defines ancestral lands;

"(2) Section 5, in relation to section 3(a), which provides that ancestral domains including inalienable
public lands, bodies of water, mineral and other resources found within ancestral domains are private
but community property of the indigenous peoples;

"(3) Section 6 in relation to section 3(a) and 3(b) which defines the composition of ancestral domains and
ancestral lands;

"(4) Section 7 which recognizes and enumerates the rights of the indigenous peoples over the ancestral
domains;

(5) Section 8 which recognizes and enumerates the rights of the indigenous peoples over the ancestral
lands;

"(6) Section 57 which provides for priority rights of the indigenous peoples in the harvesting, extraction,
development or exploration of minerals and other natural resources within the areas claimed to be their
ancestral domains, and the right to enter into agreements with nonindigenous peoples for the
development and utilization of natural resources therein for a period not exceeding 25 years, renewable
for not more than 25 years; and

"(7) Section 58 which gives the indigenous peoples the responsibility to maintain, develop, protect and
conserve the ancestral domains and portions thereof which are found to be necessary for critical
watersheds, mangroves, wildlife sanctuaries, wilderness, protected areas, forest cover or reforestation."2

Petitioners also content that, by providing for an all-encompassing definition of "ancestral domains" and
"ancestral lands" which might even include private lands found within said areas, Sections 3(a) and 3(b)
violate the rights of private landowners.3

In addition, petitioners question the provisions of the IPRA defining the powers and jurisdiction of the
NCIP and making customary law applicable to the settlement of disputes involving ancestral domains and
ancestral lands on the ground that these provisions violate the due process clause of the Constitution.4

These provisions are:

"(1) sections 51 to 53 and 59 which detail the process of delineation and recognition of ancestral
domains and which vest on the NCIP the sole authority to delineate ancestral domains and
ancestral lands;

"(2) Section 52[i] which provides that upon certification by the NCIP that a particular area is an
ancestral domain and upon notification to the following officials, namely, the Secretary of
Environment and Natural Resources, Secretary of Interior and Local Governments, Secretary of
Justice and Commissioner of the National Development Corporation, the jurisdiction of said
officials over said area terminates;

"(3) Section 63 which provides the customary law, traditions and practices of indigenous peoples
shall be applied first with respect to property rights, claims of ownership, hereditary succession
and settlement of land disputes, and that any doubt or ambiguity in the interpretation thereof
shall be resolved in favor of the indigenous peoples;

"(4) Section 65 which states that customary laws and practices shall be used to resolve disputes
involving indigenous peoples; and

"(5) Section 66 which vests on the NCIP the jurisdiction over all claims and disputes involving
rights of the indigenous peoples."5

Finally, petitioners assail the validity of Rule VII, Part II, Section 1 of the NCIP Administrative Order No. 1,
series of 1998, which provides that "the administrative relationship of the NCIP to the Office of the
President is characterized as a lateral but autonomous relationship for purposes of policy and program
coordination." They contend that said Rule infringes upon the President’s power of control over
executive departments under Section 17, Article VII of the Constitution.6

Petitioners pray for the following:

"(1) A declaration that Sections 3, 5, 6, 7, 8, 52[I], 57, 58, 59, 63, 65 and 66 and other related
provisions of R.A. 8371 are unconstitutional and invalid;

"(2) The issuance of a writ of prohibition directing the Chairperson and Commissioners of the
NCIP to cease and desist from implementing the assailed provisions of R.A. 8371 and its
Implementing Rules;
 "(3) The issuance of a writ of prohibition directing the Secretary of the Department of
Environment and Natural Resources to cease and desist from implementing Department of
Environment and Natural Resources Circular No. 2, series of 1998;

"(4) The issuance of a writ of prohibition directing the Secretary of Budget and Management to
cease and desist from disbursing public funds for the implementation of the assailed provisions of
R.A. 8371; and

"(5) The issuance of a writ of mandamus commanding the Secretary of Environment and Natural
Resources to comply with his duty of carrying out the State’s constitutional mandate to control
and supervise the exploration, development, utilization and conservation of Philippine natural
resources."7

After due deliberation on the petition, the members of the Court voted as follows:

Seven (7) voted to dismiss the petition. Justice Kapunan filed an opinion, which the Chief Justice and
Justices Bellosillo, Quisumbing, and Santiago join, sustaining the validity of the challenged provisions of
R.A. 8371. Justice Puno also filed a separate opinion sustaining all challenged provisions of the law with
the exception of Section 1, Part II, Rule III of NCIP Administrative Order No. 1, series of 1998, the Rules
and Regulations Implementing the IPRA, and Section 57 of the IPRA which he contends should be
interpreted as dealing with the large-scale exploitation of natural resources and should be read in
conjunction with Section 2, Article XII of the 1987 Constitution. On the other hand, Justice Mendoza voted
to dismiss the petition solely on the ground that it does not raise a justiciable controversy and petitioners
do not have standing to question the constitutionality of R.A. 8371.

Seven (7) other members of the Court voted to grant the petition. Justice Panganiban filed a separate
opinion expressing the view that Sections 3 (a)(b), 5, 6, 7 (a)(b), 8, and related provisions of R.A. 8371 are
unconstitutional. He reserves judgment on the constitutionality of Sections 58, 59, 65, and 66 of the law,
which he believes must await the filing of specific cases by those whose rights may have been violated by
the IPRA. Justice Vitug also filed a separate opinion expressing the view that Sections 3(a), 7, and 57 of
R.A. 8371 are unconstitutional. Justices Melo, Pardo, Buena, Gonzaga-Reyes, and De Leon join in the
separate opinions of Justices Panganiban and Vitug.

As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was
redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant
to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.

Attached hereto and made integral parts thereof are the separate opinions of Justices Puno, Vitug,
Kapunan, Mendoza, and Panganiban.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Melo, Quisumbing, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon,
Jr., JJ., concur.
Puno, Vitug, Kapunan, Mendoza and Panganiban JJ., see separate opinion

Footnotes

1 Rollo, p. 114.

2 Petition, Rollo, pp. 16-23.

 3 Id. at 23-25.

4 Section1, Article III of the Constitution states: "No person shall be deprived of life, liberty or
property without due process of law, nor shall any person be denied the equal protection of the
laws."

5 Rollo, pp. 25-27.

6 Id. at 27-28.

7 Transcript of Stenographic Notes of the hearing held on April 13, 1999, pp. 5-6.

The Lawphil Project - Arellano Law Foundation

SEPARATE OPINION

PUNO, J.:

PRECIS

A classic essay on the utility of history was written in 1874 by Friedrich Nietzsche entitled "On the Uses
and Disadvantages of History for Life." Expounding on Nietzsche's essay, Judge Richard Posner1 wrote:2

"Law is the most historically oriented, or if you like the most backward-looking, the most 'past-
dependent,' of the professions. It venerates tradition, precedent, pedigree, ritual, custom, ancient
practices, ancient texts, archaic terminology, maturity, wisdom, seniority, gerontocracy, and
interpretation conceived of as a method of recovering history. It is suspicious of innovation,
discontinuities, 'paradigm shifts,' and the energy and brashness of youth. These ingrained attitudes are
obstacles to anyone who wants to re-orient law in a more pragmatic direction. But, by the same
token, pragmatic jurisprudence must come to terms with history."

When Congress enacted the Indigenous Peoples Rights Act (IPRA), it introduced radical concepts into
the Philippine legal system which appear to collide with settled constitutional and jural precepts on state
ownership of land and other natural resources. The sense and subtleties of this law cannot be
appreciated without considering its distinct sociology and the labyrinths of its history. This Opinion
attempts to interpret IPRA by discovering its soul shrouded by the mist of our history. After all, the IPRA
was enacted by Congress not only to fulfill the constitutional mandate of protecting the indigenous
cultural communities' right to their ancestral land but more importantly, to correct a grave historical
injustice to our indigenous people.

This Opinion discusses the following:

I. The Development of the Regalian Doctrine in the Philippine Legal System.

A. The Laws of the Indies

B. Valenton v. Murciano

C. The Public Land Acts and the Torrens System

D. The Philippine Constitutions

II. The Indigenous Peoples Rights Act (IPRA).

A. Indigenous Peoples

1. Indigenous Peoples: Their History

2. Their Concept of Land

III. The IPRA is a Novel Piece of Legislation.

A. Legislative History

IV. The Provisions of the IPRA Do Not Contravene the Constitution.

A. Ancestral domains and ancestral lands are the private property of indigenous peoples and do
not constitute part of the land of the public domain.

1. The right to ancestral domains and ancestral lands: how acquired

2. The concept of native title

(a) Cariño v. Insular Government

(b) Indian Title to land

(c) Why the Cariño doctrine is unique

3. The option of securing a torrens title to the ancestral land

B. The right of ownership and possession by the ICCs/IPs to their ancestral domains is a limited
form of ownership and does not include the right to alienate the same.

1. The indigenous concept of ownership and customary law

C. Sections 7 (a), 7 (b) and 57 of the IPRA do not violate the Regalian Doctrine enshrined in Section
2, Article XII of the 1987 Constitution.

1. The rights of ICCs/IPs over their ancestral domains and lands

2. The right of ICCs/IPs to develop lands and natural resources within the ancestral
domains does not deprive the State of ownership over the natural resources, control and
supervision in their development and exploitation.

(a) Section 1, Part II, Rule III of the Implementing Rules goes beyond the parameters
of Section 7(a) of the law on ownership of ancestral domains and is ultra vires.

(b) The small-scale utilization of natural resources in Section 7 (b) of the IPRA is
allowed under Paragraph 3, Section 2, Article XII of the 1987 Consitution.

(c) The large-scale utilization of natural resources in Section 57 of the IPRA may be
harmonized with Paragraphs 1 and 4, Section 2, Article XII of the 1987 Constitution.

V. The IPRA is a Recognition of Our Active Participation in the International Indigenous Movement.

DISCUSSION
I. THE DEVELOPMENT OF THE REGALIAN DOCTRINE IN THE PHILIPPINE LEGAL SYSTEM.

A. The Laws of the Indies

The capacity of the State to own or acquire property is the state's power of dominium.3 This was the
foundation for the early Spanish decrees embracing the feudal theory of jura regalia. The "Regalian
Doctrine" or jura regalia is a Western legal concept that was first introduced by the Spaniards into the
country through the Laws of the Indies and the Royal Cedulas. The Laws of the Indies, i.e., more
specifically, Law 14, Title 12, Book 4 of the Novisima Recopilacion de Leyes de las Indias, set the policy of
the Spanish Crown with respect to the Philippine Islands in the following manner:

"We, having acquired full sovereignty over the Indies, and all lands, territories, and possessions not
heretofore ceded away by our royal predecessors, or by us, or in our name, still pertaining to the royal
crown and patrimony, it is our will that all lands which are held without proper and true deeds of grant
be restored to us as they belong to us, in order that after reserving before all what to us or to our viceroys,
audiencias, and governors may seem necessary for public squares, ways, pastures, and commons in those
places which are peopled, taking into consideration not only their present condition, but also their future
and their probable increase, and after distributing to the natives what may be necessary for tillage and
pasturage, confirming them in what they now have and giving them more if necessary, all the rest of said
lands may remain free and unencumbered for us to dispose of as we may wish.

We therefore order and command that all viceroys and presidents of pretorial courts designate at such
time as shall to them seem most expedient, a suitable period within which all possessors of tracts, farms,
plantations, and estates shall exhibit to them and to the court officers appointed by them for this purpose,
their title deeds thereto. And those who are in possession by virtue of proper deeds and receipts, or by
virtue of just prescriptive right shall be protected, and all the rest shall be restored to us to be disposed of
at our will."4

The Philippines passed to Spain by virtue of "discovery" and conquest. Consequently, all lands became
the exclusive patrimony and dominion of the Spanish Crown. The Spanish Government took charge of
distributing the lands by issuing royal grants and concessions to Spaniards, both military and
civilian.5 Private land titles could only be acquired from the government either by purchase or by the
various modes of land grant from the Crown.6

The Laws of the Indies were followed by the Ley Hipotecaria, or the Mortgage Law of 1893.7 The
Spanish Mortgage Law provided for the systematic registration of titles and deeds as well as possessory
claims. The law sought to register and tax lands pursuant to the Royal Decree of 1880. The Royal Decree
of 1894, or the "Maura Law," was partly an amendment of the Mortgage Law as well as the Laws of the
Indies, as already amended by previous orders and decrees.8 This was the last Spanish land law
promulgated in the Philippines. It required the "adjustment" or registration of all agricultural lands,
otherwise the lands shall revert to the state.

Four years later, by the Treaty of Paris of December 10, 1898, Spain ceded to the government of the
United States all rights, interests and claims over the national territory of the Philippine Islands. In 1903,
the United States colonial government, through the Philippine Commission, passed Act No. 926, the first
Public Land Act.

B. Valenton v. Murciano

In 1904, under the American regime, this Court decided the case of Valenton v. Murciano.9

Valenton resolved the question of which is the better basis for ownership of land: long-time occupation
or paper title. Plaintiffs had entered into peaceful occupation of the subject land in 1860. Defendant's
predecessor-in-interest, on the other hand, purchased the land from the provincial treasurer of Tarlac in
1892. The lower court ruled against the plaintiffs on the ground that they had lost all rights to the land by
not objecting to the administrative sale. Plaintiffs appealed the judgment, asserting that their 30-year
adverse possession, as an extraordinary period of prescription in the Partidas and the Civil Code, had
given them title to the land as against everyone, including the State; and that the State, not owning the
land, could not validly transmit it.

The Court, speaking through Justice Willard, decided the case on the basis of "those special laws which
from earliest time have regulated the disposition of the public lands in the colonies."10 The question
posed by the Court was: "Did these special laws recognize any right of prescription as against the State as
to these lands; and if so, to what extent was it recognized?"

Prior to 1880, the Court said, there were no laws specifically providing for the disposition of land in the
Philippines. However, it was understood that in the absence of any special law to govern a specific colony,
the Laws of the Indies would be followed. Indeed, in the Royal Order of July 5, 1862, it was decreed that
until regulations on the subject could be prepared, the authorities of the Philippine Islands should follow
strictly the Laws of the Indies, the Ordenanza of the Intendentes of 1786, and the Royal Cedula of
1754.11

Quoting the preamble of Law 14, Title 12, Book 4 of the Recopilacion de Leyes de las Indias, the court
interpreted it as follows:

"In the preamble of this law there is, as is seen, a distinct statement that all those lands belong to the
Crown which have not been granted by Philip, or in his name, or by the kings who preceded him. This
statement excludes the idea that there might be lands not so granted, that did not belong to the
king. It excludes the idea that the king was not still the owner of all ungranted lands, because some
private person had been in the adverse occupation of them. By the mandatory part of the law all the
occupants of the public lands are required to produce before the authorities named, and within a time to
be fixed by them, their title papers. And those who had good title or showed prescription were to be
protected in their holdings. It is apparent that it was not the intention of the law that mere possession for
a length of time should make the possessors the owners of the land possessed by them without any action
on the part of the authorities."12

The preamble stated that all those lands which had not been granted by Philip, or in his name, or by the
kings who preceded him, belonged to the Crown.13 For those lands granted by the king, the decree
provided for a system of assignment of such lands. It also ordered that all possessors of agricultural land
should exhibit their title deed, otherwise, the land would be restored to the Crown.14

The Royal Cedula of October 15, 1754 reinforced the Recopilacion when it ordered the Crown's principal
subdelegate to issue a general order directing the publication of the Crown's instructions:

"x x x to the end that any and all persons who, since the year 1700, and up to the date of the promulgation
and publication of said order, shall have occupied royal lands, whether or not x x x cultivated or tenanted,
may x x x appear and exhibit to said subdelegates the titles and patents by virtue of which said lands are
occupied. x x x. Said subdelegates will at the same time warn the parties interested that in case of their
failure to present their title deeds within the term designated, without a just and valid reason therefor,
they will be deprived of and evicted from their lands, and they will be granted to others."15

On June 25, 1880, the Crown adopted regulations for the adjustment of lands "wrongfully occupied" by
private individuals in the Philippine Islands. Valenton construed these regulations together with
contemporaneous legislative and executive interpretations of the law, and concluded that plaintiffs' case
fared no better under the 1880 decree and other laws which followed it, than it did under the earlier ones.
Thus as a general doctrine, the Court stated:
"While the State has always recognized the right of the occupant to a deed if he proves a possession for a
sufficient length of time, yet it has always insisted that he must make that proof before the proper
administrative officers, and obtain from them his deed, and until he did that the State remained
the absolute owner."16

In conclusion, the Court ruled: "We hold that from 1860 to 1892 there was no law in force in these
Islands by which the plaintiffs could obtain the ownership of these lands by prescription, without any
action by the State."17 Valenton had no rights other than those which accrued to mere possession.
Murciano, on the other hand, was deemed to be the owner of the land by virtue of the grant by the
provincial secretary. In effect, Valenton upheld the Spanish concept of state ownership of public land.

As a fitting observation, the Court added that "[t]he policy pursued by the Spanish Government from
earliest times, requiring settlers on the public lands to obtain title deeds therefor from the State,
has been continued by the American Government in Act No. 926."18

C. The Public Land Acts and the Torrens System

Act No. 926, the first Public Land Act, was passed in pursuance of the provisions of the the Philippine Bill
of 1902. The law governed the disposition of lands of the public domain. It prescribed rules and
regulations for the homesteading, selling, and leasing of portions of the public domain of the Philippine
Islands, and prescribed the terms and conditions to enable persons to perfect their titles to public lands
in the Islands. It also provided for the "issuance of patents to certain native settlers upon public lands,"
for the establishment of town sites and sale of lots therein, for the completion of imperfect titles, and for
the cancellation or confirmation of Spanish concessions and grants in the Islands." In short, the Public
Land Act operated on the assumption that title to public lands in the Philippine Islands remained in the
government;19 and that the government's title to public land sprung from the Treaty of Paris and other
subsequent treaties between Spain and the United States. 20 The term "public land" referred to all lands of
the public domain whose title still remained in the government and are thrown open to private
appropriation and settlement,21 and excluded the patrimonial property of the government and the friar
lands.22

Act No. 926 was superseded in 1919 by Act 2874, the second Public Land Act. This new law was
passed under the Jones Law. It was more comprehensive in scope but limited the exploitation of
agricultural lands to Filipinos and Americans and citizens of other countries which gave Filipinos the
same privileges.23 After the passage of the 1935 Constitution, Act 2874 was amended in 1936
by Commonwealth Act No. 141. Commonwealth Act No. 141 remains the present Public Land Law and it
is essentially the same as Act 2874. The main difference between the two relates to the transitory
provisions on the rights of American citizens and corporations during the Commonwealth period at par
with Filipino citizens and corporations.24

Grants of public land were brought under the operation of the Torrens system under Act 496, or
the Land Registration Law of 1903. Enacted by the Philippine Commission, Act 496 placed all public
and private lands in the Philippines under the Torrens system. The law is said to be almost a verbatim
copy of the Massachussetts Land Registration Act of 1898,25 which, in turn, followed the principles and
procedure of the Torrens system of registration formulated by Sir Robert Torrens who patterned it after
the Merchant Shipping Acts in South Australia. The Torrens system requires that the government issue an
official certificate of title attesting to the fact that the person named is the owner of the property
described therein, subject to such liens and encumbrances as thereon noted or the law warrants or
reserves.26 The certificate of title is indefeasible and imprescriptible and all claims to the parcel of land
are quieted upon issuance of said certificate. This system highly facilitates land conveyance and
negotiation.27

D. The Philippine Constitutions

The Regalian doctrine was enshrined in the 1935 Constitution. One of the fixed and dominating
objectives of the 1935 Constitutional Convention was the nationalization and conservation of the natural
resources of the country.28There was an overwhelming sentiment in the Convention in favor of the
principle of state ownership of natural resources and the adoption of the Regalian
doctrine.29 State ownership of natural resources was seen as a necessary starting point to secure
recognition of the state's power to control their disposition, exploitation, development, or
utilization.30 The delegates to the Constitutional Convention very well knew that the concept of State
ownership of land and natural resources was introduced by the Spaniards, however, they were not
certain whether it was continued and applied by the Americans. To remove all doubts, the Convention
approved the provision in the Constitution affirming the Regalian doctrine.31

Thus, the 1935 Constitution, in Section 1 of Article XIII on "Conservation and Utilization of Natural
Resources," reads as follows:

"Sec. 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other natural resources of
the Philippines belong to the State, and their disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease,
or concession at the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land, shall not be
alienated, and no license, concession, or lease for the exploitation, development, or utilization of any of
the natural resources shall be granted for a period exceeding twenty-five years, except as to water rights
for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in
which cases beneficial use may be the measure and the limit of the grant."

The 1973 Constitution reiterated the Regalian doctrine in Section 8, Article XIV on the "National
Economy and the Patrimony of the Nation," to wit:

"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines
belong to the State. With the exception of agricultural, industrial or commercial, residential, and
resettlement lands of the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or utilization of any of the
natural resources shall be granted for a period exceeding twenty-five years, renewable for not
more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases beneficial use may be the
measure and the limit of the grant."

The 1987 Constitution reaffirmed the Regalian doctrine in Section 2 of Article XII on "National Economy
and Patrimony," to wit:

"Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration, development and utilization of natural
resources shall be under the full control and supervision of the State. The State may directly
undertake such activities or it may enter into co-production, joint venture, or production-sharing
agreements with Filipino citizens, or corporations or associations at least sixty per centum of
whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-
five years, renewable for not more than twenty-five years, and under such terms and conditions as may
be provided by law. In cases of water rights for irrigation, water supply, fisheries, or industrial uses other
than the development of water power, beneficial use may be the measure and limit of the grant.
x x x."

Simply stated, all lands of the public domain as well as all natural resources enumerated therein,
whether on public or private land, belong to the State. It is this concept of State ownership that
petitioners claim is being violated by the IPRA.

II. THE INDIGENOUS PEOPLES RIGHTS ACT.

Republic Act No. 8371 is entitled "An Act to Recognize, Protect and Promote the Rights of Indigenous
Cultural Communities/ Indigenous Peoples, Creating a National Commission on Indigenous Peoples,
Establishing Implementing Mechanisms, Appropriating Funds Therefor, and for Other Purposes." It is
simply known as "The Indigenous Peoples Rights Act of 1997" or the IPRA.

The IPRA recognizes the existence of the indigenous cultural communities or indigenous
peoples (ICCs/IPs) as a distinct sector in Philippine society. It grants these people the ownership and
possession of their ancestral domains and ancestral lands, and defines the extent of these lands
and domains. The ownership given is the indigenous concept of ownership under customary law
which traces its origin to native title.

Other rights are also granted the ICCs/IPs, and these are:

- the right to develop lands and natural resources;

- the right to stay in the territories;

- the right in case of displacement;

- the right to safe and clean air and water;

- the right to claim parts of reservations;

- the right to resolve conflict;32

- the right to ancestral lands which include

a. the right to transfer land/property to/among members of the same ICCs/IPs, subject to
customary laws and traditions of the community concerned;

b. the right to redemption for a period not exceeding 15 years from date of transfer, if the
transfer is to a non-member of the ICC/IP and is tainted by vitiated consent of the ICC/IP,
or if the transfer is for an unconscionable consideration.33

Within their ancestral domains and ancestral lands, the ICCs/IPs are given the right to self-governance
and empowerment,34 social justice and human rights,35 the right to preserve and protect their culture,
traditions, institutions and community intellectual rights, and the right to develop their own sciences and
technologies.36

To carry out the policies of the Act, the law created the National Commission on Indigenous Peoples
(NCIP). The NCIP is an independent agency under the Office of the President and is composed of seven (7)
Commissioners belonging to ICCs/IPs from each of the ethnographic areas- Region I and the Cordilleras;
Region II; the rest of Luzon; Island groups including Mindoro, Palawan, Romblon, Panay and the rest of
the Visayas; Northern and Western Mindanao; Southern and Eastern Mindanao; and Central
Mindanao.37 The NCIP took over the functions of the Office for Northern Cultural Communities and the
Office for Southern Cultural Communities created by former President Corazon Aquino which were
merged under a revitalized structure.38
Disputes involving ICCs/IPs are to be resolved under customary laws and practices. When still
unresolved, the matter may be brought to the NCIP, which is granted quasi-judicial powers.39 The NCIP's
decisions may be appealed to the Court of Appeals by a petition for review.

Any person who violates any of the provisions of the Act such as, but not limited to, unauthorized and/or
unlawful intrusion upon ancestral lands and domains shall be punished in accordance with customary
laws or imprisoned from 9 months to 12 years and/or fined from ₱100,000.00 to ₱500,000.00 and
obliged to pay damages.40

A. Indigenous Peoples

The IPRA is a law dealing with a specific group of people, i.e., the Indigenous Cultural Communities (ICCs)
or the Indigenous Peoples (IPs). The term "ICCs" is used in the 1987 Constitution while that of "IPs" is the
contemporary international language in the International Labor Organization (ILO) Convention
16941 and the United Nations (UN) Draft Declaration on the Rights of Indigenous Peoples.42

ICCs/IPs are defined by the IPRA as:

"Sec. 3 [h]. Indigenous Cultural Communities/ Indigenous Peoples- refer to a group of people or
homogeneous societies identified by self-ascription and ascription by others, who have continuously
lived as organized community on communally bounded and defined territory, and who have, under
claims of ownership since time immemorial, occupied, possessed and utilized such territories, sharing
common bonds of language, customs, traditions and other distinctive cultural traits, or who have, through
resistance to political, social and cultural inroads of colonization, non-indigenous religions and cultures,
became historically differentiated from the majority of Filipinos. ICCs/IPs shall likewise include peoples
who are regarded as indigenous on account of their descent from the populations which inhabited the
country, at the time of conquest or colonization, or at the time of inroads of non-indigenous religions and
cultures, or the establishment of present state boundaries, who retain some or all of their own social,
economic, cultural and political institutions, but who may have been displaced from their traditional
domains or who may have resettled outside their ancestral domains."

Indigenous Cultural Communities or Indigenous Peoples refer to a group of people or

homogeneous societies who have continuously lived as an organized community on communally
bounded and defined territory. These groups of people have actually occupied, possessed and utilized
their territories under claim of ownership since time immemorial. They share common bonds of language,
customs, traditions and other distinctive cultural traits, or, they, by their resistance to political, social and
cultural inroads of colonization, non-indigenous religions and cultures, became historically differentiated
from the Filipino majority. ICCs/IPs also include descendants of ICCs/IPs who inhabited the country at
the time of conquest or colonization, who retain some or all of their own social, economic, cultural and
political institutions but who may have been displaced from their traditional territories or who may have
resettled outside their ancestral domains.

1. Indigenous Peoples: Their History

Presently, Philippine indigenous peoples inhabit the interiors and mountains of Luzon, Mindanao,
Mindoro, Negros, Samar, Leyte, and the Palawan and Sulu group of islands. They are composed of 110
tribes and are as follows:

1. In the Cordillera Autonomous Region- Kankaney, Ibaloi, Bontoc, Tinggian or Itneg, Ifugao,
Kalinga, Yapayao, Aeta or Agta or Pugot, and Bago of Ilocos Norte and Pangasinan; Ibanag of
Isabela, Cagayan; Ilongot of Quirino and Nueva Vizcaya; Gaddang of Quirino, Nueva Vizcaya, Itawis
of Cagayan; Ivatan of Batanes, Aeta of Cagayan, Quirino and Isabela.

2. In Region III- Aetas.

 3. In Region IV- Dumagats of Aurora, Rizal; Remontado of Aurora, Rizal, Quezon; Alangan or
Mangyan, Batangan, Buid or Buhid, Hanunuo and Iraya of Oriental and Occidental Mindoro;
Tadyawan of Occidental Mindoro; Cuyonon, Palawanon, Tagbanua and Tao't bato of Palawan.

4. In Region V- Aeta of Camarines Norte and Camarines Sur; Aeta-Abiyan, Isarog, and Kabihug of
Camarines Norte; Agta, and Mayon of Camarines Sur; Itom of Albay, Cimaron of Sorsogon; and the
Pullon of Masbate and Camarines Sur.

5. In Region VI- Ati of Negros Occidental, Iloilo and Antique, Capiz; the Magahat of Negros
Occidental; the Corolano and Sulod.

6. In Region VII- Magahat of Negros Oriental and Eskaya of Bohol.

7. In Region IX- the Badjao numbering about 192,000 in Tawi-Tawi, Zamboanga del Sur; the
Kalibugan of Basilan, the Samal, Subanon and Yakat.

8. Region X- Numbering 1.6 million in Region X alone, the IPs are: the Banwaon, Bukidnon,
Matigsalog, Talaanding of Bukidnon; the Camiguin of Camiguin Island; the Higa-unon of Agusan
del Norte, Agusan del Sur, Bukidnon and Misamis Occidental; the Tigwahanon of Agusan del Sur,
Misamis Oriental and and Misamis Occidental, the Manobo of the Agusan provinces, and the
Umayamnon of Agusan and Bukidnon.

9. In Region XI- There are about 1,774,065 IPs in Region XI. They are tribes of the Dibabaon,
Mansaka of Davao del Norte; B'laan, Kalagan, Langilad, T'boli and Talaingod of Davao del Sur;
Mamamanua of Surigao del Sur; Mandaya of the Surigao provinces and Davao Oriental; Manobo
Blit of South Cotabato; the Mangguangon of Davao and South Cotabato; Matigsalog of Davao del
Norte and Del Sur; Tagakaolo, Tasaday and Ubo of South Cotabato; and Bagobo of Davao del sur
and South Cotabato.

10. In Region XII- Ilianen, Tiruray, Maguindanao, Maranao, Tausug, Yakan/Samal, and Iranon.43

How these indigenous peoples came to live in the Philippines goes back to as early as 25,000 to
30,000 B.C.

Before the time of Western contact, the Philippine archipelago was peopled largely by the Negritos,
Indonesians and Malays.44 The strains from these groups eventually gave rise to common cultural
features which became the dominant influence in ethnic reformulation in the archipelago. Influences
from the Chinese and Indian civilizations in the third or fourth millenium B.C. augmented these ethnic
strains. Chinese economic and socio-cultural influences came by way of Chinese porcelain, silk and
traders. Indian influence found their way into the religious-cultural aspect of pre-colonial society.45

The ancient Filipinos settled beside bodies of water. Hunting and food gathering became supplementary
activities as reliance on them was reduced by fishing and the cultivation of the soil.46 From the hinterland,
coastal, and riverine communities, our ancestors evolved an essentially homogeneous culture, a basically
common way of life where nature was a primary factor. Community life throughout the archipelago
was influenced by, and responded to, common ecology. The generally benign tropical climate and the
largely uniform flora and fauna favored similarities, not differences.47 Life was essentially subsistence but
not harsh.48

The early Filipinos had a culture that was basically Malayan in structure and form. They had languages
that traced their origin to the Austronesian parent-stock and used them not only as media of daily
communication but also as vehicles for the expression of their literary moods. 49 They fashioned concepts
and beliefs about the world that they could not see, but which they sensed to be part of their lives. 50 They
had their own religion and religious beliefs. They believed in the immortality of the soul and life after
death. Their rituals were based on beliefs in a ranking deity whom they called Bathalang Maykapal, and a
host of other deities, in the environmental spirits and in soul spirits. The early Filipinos adored the sun,
the moon, the animals and birds, for they seemed to consider the objects of Nature as something to be
respected. They venerated almost any object that was close to their daily life, indicating the importance of
the relationship between man and the object of nature.51

The unit of government was the "barangay," a term that derived its meaning from the Malay word
"balangay," meaning, a boat, which transported them to these shores.52 The barangay was basically a
family-based community and consisted of thirty to one hundred families. Each barangay was different
and ruled by a chieftain called a "dato." It was the chieftain's duty to rule and govern his subjects and
promote their welfare and interests. A chieftain had wide powers for he exercised all the functions of
government. He was the executive, legislator and judge and was the supreme commander in time of
war.53

Laws were either customary or written. Customary laws were handed down orally from
generation to generation and constituted the bulk of the laws of the barangay. They were preserved
in songs and chants and in the memory of the elder persons in the community.54 The written laws were
those that the chieftain and his elders promulgated from time to time as the necessity arose. 55 The oldest
known written body of laws was the Maragtas Code by Datu Sumakwel at about 1250 A.D. Other old
codes are the Muslim Code of Luwaran and the Principal Code of Sulu. 56 Whether customary or written,
the laws dealt with various subjects, such as inheritance, divorce, usury, loans, partnership, crime and
punishment, property rights, family relations and adoption. Whenever disputes arose, these were
decided peacefully through a court composed by the chieftain as "judge" and the barangay elders as
"jury." Conflicts arising between subjects of different barangays were resolved by arbitration in which a
board composed of elders from neutral barangays acted as arbiters.57

Baranganic society had a distinguishing feature: the absence of private property in land. The chiefs
merely administered the lands in the name of the barangay. The social order was an extension of the
family with chiefs embodying the higher unity of the community. Each individual, therefore, participated
in the community ownership of the soil and the instruments of production as a member of the
barangay.58 This ancient communalism was practiced in accordance with the concept of mutual sharing
of resources so that no individual, regardless of status, was without sustenance. Ownership of land was
non-existent or unimportant and the right of usufruct was what regulated the development of
lands.59 Marine resources and fishing grounds were likewise free to all. Coastal communities depended
for their economic welfare on the kind of fishing sharing concept similar to those in land
communities.60 Recognized leaders, such as the chieftains and elders, by virtue of their positions of
importance, enjoyed some economic privileges and benefits. But their rights, related to either land and
sea, were subject to their responsibility to protect the communities from danger and to provide them
with the leadership and means of survival.61

Sometime in the 13th century, Islam was introduced to the archipelago in Maguindanao. The
Sultanate of Sulu was established and claimed jurisdiction over territorial areas represented today by
Tawi-tawi, Sulu, Palawan, Basilan and Zamboanga. Four ethnic groups were within this jurisdiction: Sama,
Tausug, Yakan and Subanon.62The Sultanate of Maguindanao spread out from Cotabato toward Maranao
territory, now Lanao del Norte and Lanao del Sur.63

The Muslim societies evolved an Asiatic form of feudalism where land was still held in common
but was private in use. This is clearly indicated in the Muslim Code of Luwaran. The Code contains a
provision on the lease of cultivated lands. It, however, has no provision for the acquisition, transfer,
cession or sale of land.64

The societies encountered by Magellan and Legaspi therefore were primitive economies where most
production was geared to the use of the producers and to the fulfillment of kinship obligations. They were
not economies geared to exchange and profit.65 Moreover, the family basis of barangay membership as
well as of leadership and governance worked to splinter the population of the islands into numerous
small and separate communities.66

When the Spaniards settled permanently in the Philippines in 1565, they found the Filipinos
living in barangay settlements scattered along water routes and river banks. One of the first tasks
imposed on the missionaries and the encomenderos was to collect all scattered Filipinos together in
a reduccion.67 As early as 1551, the Spanish government assumed an unvarying solicitous attitude
towards the natives.68 The Spaniards regarded it a sacred "duty to conscience and humanity to civilize
these less fortunate people living in the obscurity of ignorance" and to accord them the "moral and
material advantages" of community life and the "protection and vigilance afforded them by the same
laws."69

The Spanish missionaries were ordered to establish pueblos where the church and convent would be
constructed. All the new Christian converts were required to construct their houses around the church
and the unbaptized were invited to do the same.70 With the reduccion, the Spaniards attempted to "tame"
the reluctant Filipinos through Christian indoctrination using the convento/casa real/plaza complex as
focal point. The reduccion, to the Spaniards, was a "civilizing" device to make the Filipinos law-abiding
citizens of the Spanish Crown, and in the long run, to make them ultimately adopt Hispanic culture and
civilization.71

All lands lost by the old barangays in the process of pueblo organization as well as all lands not
assigned to them and the pueblos, were now declared to be crown lands or realengas, belonging to
the Spanish king. It was from the realengas that land grants were made to non-Filipinos.72

The abrogation of the Filipinos' ancestral rights in land and the introduction of the concept of
public domain were the most immediate fundamental results of Spanish colonial theory and
law.73 The concept that the Spanish king was the owner of everything of value in the Indies or
colonies was imposed on the natives, and the natives were stripped of their ancestral rights to
land.74

Increasing their foothold in the Philippines, the Spanish colonialists, civil and religious, classified the
Filipinos according to their religious practices and beliefs, and divided them into three types . First were
the Indios, the Christianized Filipinos, who generally came from the lowland populations. Second, were
the Moros or the Muslim communities, and third, were the infieles or the indigenous communities.75

The Indio was a product of the advent of Spanish culture. This class was favored by the Spaniards and
was allowed certain status although below the Spaniards. The Moros and infieles were regarded as the
lowest classes.76

The Moros and infieles resisted Spanish rule and Christianity. The Moros were driven from Manila
and the Visayas to Mindanao; while the infieles, to the hinterlands. The Spaniards did not pursue them
into the deep interior. The upland societies were naturally outside the immediate concern of Spanish
interest, and the cliffs and forests of the hinterlands were difficult and inaccessible, allowing
the infieles, in effect, relative security.77 Thus, the infieles, which were peripheral to colonial
administration, were not only able to preserve their own culture but also thwarted the Christianization
process, separating themselves from the newly evolved Christian community.78 Their own political,
economic and social systems were kept constantly alive and vibrant.

The pro-Christian or pro-Indio attitude of colonialism brought about a generally mutual feeling of
suspicion, fear, and hostility between the Christians on the one hand and the non-Christians on the other.
Colonialism tended to divide and rule an otherwise culturally and historically related populace through a
colonial system that exploited both the virtues and vices of the Filipinos.79
President McKinley, in his instructions to the Philippine Commission of April 7, 1900, addressed
the existence of the infieles:

"In dealing with the uncivilized tribes of the Islands, the Commission should adopt the same
course followed by Congress in permitting the tribes of our North American Indians to maintain
their tribal organization and government, and under which many of those tribes are now living in
peace and contentment, surrounded by civilization to which they are unable or unwilling to conform.
Such tribal government should, however, be subjected to wise and firm regulation; and, without undue or
petty interference, constant and active effort should be exercised to prevent barbarous practices and
introduce civilized customs."80

Placed in an alternative of either letting the natives alone or guiding them in the path of civilization, the
American government chose "to adopt the latter measure as one more in accord with humanity and with
the national conscience."81

The Americans classified the Filipinos into two: the Christian Filipinos and the non-Christian
Filipinos. The term "non-Christian" referred not to religious belief, but to a geographical area, and more
directly, "to natives of the Philippine Islands of a low grade of civilization, usually living in tribal
relationship apart from settled communities."82

Like the Spaniards, the Americans pursued a policy of assimilation. In 1903, they passed Act No.
253 creating the Bureau of Non-Christian Tribes (BNCT). Under the Department of the Interior, the
BNCT's primary task was to conduct ethnographic research among unhispanized Filipinos, including
those in Muslim Mindanao, with a "special view to determining the most practicable means for bringing
about their advancement in civilization and prosperity." The BNCT was modeled after the bureau
dealing with American Indians. The agency took a keen anthropological interest in Philippine cultural
minorities and produced a wealth of valuable materials about them.83

The 1935 Constitution did not carry any policy on the non-Christian Filipinos. The raging issue
then was the conservation of the national patrimony for the Filipinos.

In 1957, the Philippine Congress passed R.A. No. 1888, an "Act to effectuate in a more rapid and
complete manner the economic, social, moral and political advancement of the non-Christian Filipinos or
national cultural minorities and to render real, complete, and permanent the integration of all said
national cultural minorities into the body politic, creating the Commission on National
Integration charged with said functions." The law called for a policy of integration of indigenous
peoples into the Philippine mainstream and for this purpose created the Commission on National
Integration (CNI).84 The CNI was given, more or less, the same task as the BNCT during the American
regime. The post-independence policy of integration was like the colonial policy of assimilation
understood in the context of a guardian-ward relationship.85

The policy of assimilation and integration did not yield the desired result. Like the Spaniards and
Americans, government attempts at integration met with fierce resistance. Since World War II, a
tidal wave of Christian settlers from the lowlands of Luzon and the Visayas swamped the highlands and
wide open spaces in Mindanao.86Knowledge by the settlers of the Public Land Acts and the Torrens
system resulted in the titling of several ancestral lands in the settlers' names. With government
initiative and participation, this titling displaced several indigenous peoples from their
lands. Worse, these peoples were also displaced by projects undertaken by the national government in
the name of national development.87

It was in the 1973 Constitution that the State adopted the following provision:

"The State shall consider the customs, traditions, beliefs, and interests of national cultural communities in
the formulation and implementation of State policies."88
For the first time in Philippine history, the "non-Christian tribes" or the "cultural minorities" were
addressed by the highest law of the Republic, and they were referred to as "cultural
communities." More importantly this time, their "uncivilized" culture was given some recognition and
their "customs, traditions, beliefs and interests" were to be considered by the State in the formulation
and implementation of State policies. President Marcos abolished the CNI and transferred its functions
to the Presidential Adviser on National Minorities (PANAMIN). The PANAMIN was tasked to
integrate the ethnic groups that sought full integration into the larger community, and at the same time
"protect the rights of those who wish to preserve their original lifeways beside the larger
community."89 In short, while still adopting the integration policy, the decree recognized the right
of tribal Filipinos to preserve their way of life.90

In 1974, President Marcos promulgated P.D. No. 410, otherwise known as the Ancestral Lands
Decree. The decree provided for the issuance of land occupancy certificates to members of the national
cultural communities who were given up to 1984 to register their claims.91 In 1979, the Commission on
the Settlement of Land Problems was created under E.O. No. 561 which provided a mechanism for the
expeditious resolution of land problems involving small settlers, landowners, and tribal Filipinos.92

Despite the promulgation of these laws, from 1974 to the early 1980's, some 100,000 Kalingas and
Bontoks of the Cordillera region were displaced by the Chico River dam project of the National Power
Corporation (NPC). The Manobos of Bukidnon saw their land bulldozed by the Bukidnon Sugar Industries
Company (BUSCO). In Agusan del Sur, the National Development Company was authorized by law in
1979 to take approximately 40,550 hectares of land that later became the NDC-Guthrie plantation in
Agusan del Sur. Most of the land was possessed by the Agusan natives. 93 Timber concessions, water
projects, plantations, mining, and cattle ranching and other projects of the national government led not
only to the eviction of the indigenous peoples from their land but also to the reduction and destruction of
their natural environment.94

The Aquino government signified a total shift from the policy of integration to one of
preservation. Invoking her powers under the Freedom Constitution, President Aquino created the Office
of Muslim Affairs, Office for Northern Cultural Communities and the Office for Southern Cultural
Communities all under the Office of the President.95

The 1987 Constitution carries at least six (6) provisions which insure the right of tribal Filipinos
to preserve their way of life.96 This Constitution goes further than the 1973 Constitution by
expressly guaranteeing the rights of tribal Filipinos to their ancestral domains and ancestral
lands. By recognizing their right to their ancestral lands and domains, the State has effectively
upheld their right to live in a culture distinctly their own.

2. Their Concept of Land

Indigenous peoples share distinctive traits that set them apart from the Filipino mainstream. They are
non-Christians. They live in less accessible, marginal, mostly upland areas. They have a system of self-
government not dependent upon the laws of the central administration of the Republic of the Philippines.
They follow ways of life and customs that are perceived as different from those of the rest of the
population.97 The kind of response the indigenous peoples chose to deal with colonial threat worked well
to their advantage by making it difficult for Western concepts and religion to erode their customs and
traditions. The "infieles societies" which had become peripheral to colonial administration, represented,
from a cultural perspective, a much older base of archipelagic culture. The political systems were still
structured on the patriarchal and kinship oriented arrangement of power and authority. The economic
activities were governed by the concepts of an ancient communalism and mutual help. The social
structure which emphasized division of labor and distinction of functions, not status, was maintained.
The cultural styles and forms of life portraying the varieties of social courtesies and ecological
adjustments were kept constantly vibrant.98
Land is the central element of the indigenous peoples' existence. There is no traditional concept of
permanent, individual, land ownership. Among the Igorots, ownership of land more accurately applies to
the tribal right to use the land or to territorial control. The people are the secondary owners or stewards
of the land and that if a member of the tribe ceases to work, he loses his claim of ownership, and the land
reverts to the beings of the spirit world who are its true and primary owners. Under the concept of
"trusteeship," the right to possess the land does not only belong to the present generation but the future
ones as well.99

Customary law on land rests on the traditional belief that no one owns the land except the gods and
spirits, and that those who work the land are its mere stewards.100 Customary law has a strong
preference for communal ownership, which could either be ownership by a group of individuals or
families who are related by blood or by marriage,101 or ownership by residents of the same locality who
may not be related by blood or marriage. The system of communal ownership under customary laws
draws its meaning from the subsistence and highly collectivized mode of economic production. The
Kalingas, for instance, who are engaged in team occupation like hunting, foraging for forest products, and
swidden farming found it natural that forest areas, swidden farms, orchards, pasture and burial grounds
should be communally-owned.102 For the Kalingas, everybody has a common right to a common
economic base. Thus, as a rule, rights and obligations to the land are shared in common.

Although highly bent on communal ownership, customary law on land also sanctions individual
ownership.The residential lots and terrace rice farms are governed by a limited system of individual
ownership. It is limited because while the individual owner has the right to use and dispose of the
property, he does not possess all the rights of an exclusive and full owner as defined under our Civil
Code.103 Under Kalinga customary law, the alienation of individually-owned land is strongly discouraged
except in marriage and succession and except to meet sudden financial needs due to sickness, death in
the family, or loss of crops.104 Moreover, and to be alienated should first be offered to a clan-member
before any village-member can purchase it, and in no case may land be sold to a non-member of the ili.105

Land titles do not exist in the indigenous peoples' economic and social system. The concept of
individual land ownership under the civil law is alien to them. Inherently colonial in origin, our
national land laws and governmental policies frown upon indigenous claims to ancestral lands.
Communal ownership is looked upon as inferior, if not inexistent.106

III. THE IPRA IS A NOVEL PIECE OF LEGISLATION.

A. The Legislative History of the IPRA

It was to address the centuries-old neglect of the Philippine indigenous peoples that the Tenth
Congress of the Philippines, by their joint efforts, passed and approved R.A. No. 8371, the Indigenous
Peoples Rights Act (IPRA) of 1997. The law was a consolidation of two Bills- Senate Bill No. 1728 and
House Bill No. 9125.

Principally sponsored by Senator Juan M. Flavier,107 Senate Bill No. 1728 was a consolidation of four
proposed measures referred to the Committees on Cultural Communities, Environment and Natural
Resources, Ways and Means, as well as Finance. It adopted almost en toto the comprehensive version of
Senate Bill Nos. 1476 and 1486 which was a result of six regional consultations and one national
consultation with indigenous peoples nationwide.108 At the Second Regular Session of the Tenth
Congress, Senator Flavier, in his sponsorship speech, gave a background on the situation of indigenous
peoples in the Philippines, to wit:

"The Indigenous Cultural Communities, including the Bangsa Moro, have long suffered from the
dominance and neglect of government controlled by the majority. Massive migration of their Christian
brothers to their homeland shrunk their territory and many of the tribal Filipinos were pushed to the
hinterlands. Resisting the intrusion, dispossessed of their ancestral land and with the massive
exploitation of their natural resources by the elite among the migrant population, they became
marginalized. And the government has been an indispensable party to this insidious conspiracy against
the Indigenous Cultural Communities (ICCs). It organized and supported the resettlement of people to
their ancestral land, which was massive during the Commonwealth and early years of the Philippine
Republic. Pursuant to the Regalian Doctrine first introduced to our system by Spain through the Royal
Decree of 13 February 1894 or the Maura Law, the government passed laws to legitimize the wholesale
landgrabbing and provide for easy titling or grant of lands to migrant homesteaders within the
traditional areas of the ICCs."109

Senator Flavier further declared:

"The IPs are the offsprings and heirs of the peoples who have first inhabited and cared for the land long
before any central government was established. Their ancestors had territories over which they ruled
themselves and related with other tribes. These territories- the land- include people, their dwelling, the
mountains, the water, the air, plants, forest and the animals. This is their environment in its totality. Their
existence as indigenous peoples is manifested in their own lives through political, economic, socio-
cultural and spiritual practices. The IPs culture is the living and irrefutable proof to this.

Their survival depends on securing or acquiring land rights; asserting their rights to it; and depending on
it. Otherwise, IPs shall cease to exist as distinct peoples."110

To recognize the rights of the indigenous peoples effectively, Senator Flavier proposed a bill based
on two postulates: (1) the concept of native title; and (2) the principle of parens patriae.

According to Senator Flavier, "[w]hile our legal tradition subscribes to the Regalian Doctrine reinstated in
Section 2, Article XII of the 1987 Constitution," our "decisional laws" and jurisprudence passed by the
State have "made exception to the doctrine." This exception was first laid down in the case of Cariño v.
Insular Government where:

"x x x the court has recognized long occupancy of land by an indigenous member of the cultural
communities as one of private ownership, which, in legal concept, is termed "native title." This ruling has
not been overturned. In fact, it was affirmed in subsequent cases."111

Following Cariño, the State passed Act No. 926, Act No. 2874, C.A. No. 141, P.D. 705, P.D. 410, P.D. 1529,
R.A. 6734 (the Organic Act for the Autonomous Region of Muslim Mindanao). These laws, explicitly or
implicitly, and liberally or restrictively, recognized "native title" or "private right" and the existence of
ancestral lands and domains. Despite the passage of these laws, however, Senator Flavier continued:

"x x x the executive department of government since the American occupation has not implemented the
policy. In fact, it was more honored in its breach than in its observance, its wanton disregard shown
during the period unto the Commonwealth and the early years of the Philippine Republic when
government organized and supported massive resettlement of the people to the land of the ICCs."

Senate Bill No. 1728 seeks to genuinely recognize the IPs right to own and possess their ancestral land.
The bill was prepared also under the principle of parens patriae inherent in the supreme power of the
State and deeply embedded in Philippine legal tradition. This principle mandates that persons suffering
from serious disadvantage or handicap, which places them in a position of actual inequality in their
relation or transaction with others, are entitled to the protection of the State.

Senate Bill No. 1728 was passed on Third Reading by twenty-one (21) Senators voting in favor and
none against, with no abstention.112

House Bill No. 9125 was sponsored by Rep. Zapata, Chairman of the Committee on Cultural
Communities. It was originally authored and subsequently presented and defended on the floor by Rep.
Gregorio Andolana of North Cotabato.113
Rep. Andolana's sponsorhip speech reads as follows:

"This Representation, as early as in the 8th Congress, filed a bill of similar implications that would
promote, recognize the rights of indigenous cultural communities within the framework of national unity
and development.

Apart from this, Mr. Speaker, is our obligation, the government's obligation to assure and ascertain that
these rights shall be well-preserved and the cultural traditions as well as the indigenous laws that
remained long before this Republic was established shall be preserved and promoted. There is a need, Mr.
Speaker, to look into these matters seriously and early approval of the substitute bill shall bring into
reality the aspirations, the hope and the dreams of more than 12 million Filipinos that they be considered
in the mainstream of the Philippine society as we fashion for the year 2000." 114

Rep. Andolana stressed that H.B. No. 9125 is based on the policy of preservation as mandated in the
Constitution. He also emphasized that the rights of IPs to their land was enunciated in Cariño v. Insular
Government which recognized the fact that they had vested rights prior to the establishment of the
Spanish and American regimes.115

After exhaustive interpellation, House Bill No. 9125, and its corresponding amendments, was
approved on Second Reading with no objections.

IV. THE PROVISIONS OF THE IPRA DO NOT CONTRAVENE THE CONSTITUTION.

A. Ancestral Domains and Ancestral Lands are the Private Property of Indigenous Peoples and Do
Not Constitute Part of the Land of the Public Domain.

The IPRA grants to ICCs/IPs a distinct kind of ownership over ancestral domains and ancestral
lands.Ancestral lands are not the same as ancestral domains. These are defined in Section 3 [a] and [b] of
the Indigenous Peoples Right Act, viz:

"Sec. 3 a) Ancestral Domains. - Subject to Section 56 hereof, refer to all areas generally belonging to
ICCs/IPs comprising lands, inland waters, coastal areas, and natural resources therein, held under a claim
of ownership, occupied or possessed by ICCs/IPs by themselves or through their ancestors, communally
or individually since time immemorial, continuously to the present except when interrupted by war,
force majeure or displacement by force, deceit, stealth or as a consequence of government projects or any
other voluntary dealings entered into by government and private individuals/corporations, and which
are necessary to ensure their economic, social and cultural welfare. It shall include ancestral lands,
forests, pasture, residential, agricultural, and other lands individually owned whether alienable and
disposable or otherwise, hunting grounds, burial grounds, worship areas, bodies of water, mineral and
other natural resources, and lands which may no longer be exclusively occupied by ICCs/IPs but from
which they traditionally had access to for their subsistence and traditional activities, particularly the
home ranges of ICCs/IPs who are still nomadic and/or shifting cultivators;

b) Ancestral Lands.- Subject to Section 56 hereof, refers to land occupied, possessed and utilized by
individuals, families and clans who are members of the ICCs/IPs since time immemorial, by themselves or
through their predecessors-in-interest, under claims of individual or traditional group ownership,
continuously, to the present except when interrupted by war, force majeure or displacement by force,
deceit, stealth, or as a consequence of government projects and other voluntary dealings entered into by
government and private individuals/corporations, including, but not limited to, residential lots, rice
terraces or paddies, private forests, swidden farms and tree lots."

Ancestral domains are all areas belonging to ICCs/IPs held under a claim of ownership, occupied or
possessed by ICCs/IPs by themselves or through their ancestors, communally or individually since time
immemorial, continuously until the present, except when interrupted by war, force majeure or
displacement by force, deceit, stealth or as a consequence of government projects or any other voluntary
dealings with government and/or private individuals or corporations. Ancestral domains comprise
lands, inland waters, coastal areas, and natural resources therein and includes ancestral lands,
forests, pasture, residential, agricultural, and other lands individually owned whether alienable
or not, hunting grounds, burial grounds, worship areas, bodies of water, mineral and other
natural resources. They also include lands which may no longer be exclusively occupied by ICCs/IPs but
from which they traditionally had access to for their subsistence and traditional activities, particularly
the home ranges of ICCs/IPs who are still nomadic and/or shifting cultivators.116

Ancestral lands are lands held by the ICCs/IPs under the same conditions as ancestral domains except
that these are limited to lands and that these lands are not merely occupied and possessed but are also
utilized by the ICCs/IPs under claims of individual or traditional group ownership. These lands include
but are not limited to residential lots, rice terraces or paddies, private forests, swidden farms and tree
lots.117

The procedures for claiming ancestral domains and lands are similar to the procedures embodied in
Department Administrative Order (DAO) No. 2, series of 1993, signed by then Secretary of the
Department of Environment and Natural Resources (DENR) Angel Alcala.118 DAO No. 2 allowed the
delineation of ancestral domains by special task forces and ensured the issuance of Certificates of
Ancestral Land Claims (CALC's) and Certificates of Ancestral Domain Claims (CADC's) to IPs.

The identification and delineation of these ancestral domains and lands is a power conferred by the IPRA
on the National Commission on Indigenous Peoples (NCIP).119 The guiding principle in identification and
delineation is self-delineation.120 This means that the ICCs/IPs have a decisive role in determining the
boundaries of their domains and in all the activities pertinent thereto.121

The procedure for the delineation and recognition of ancestral domains is set forth in Sections 51 and
52 of the IPRA. The identification, delineation and certification of ancestral lands is in Section 53 of said
law.

Upon due application and compliance with the procedure provided under the law and upon finding by
the NCIP that the application is meritorious, the NCIP shall issue a Certificate of Ancestral Domain Title
(CADT) in the name of the community concerned.122 The allocation of lands within the ancestral
domain to any individual or indigenous corporate (family or clan) claimants is left to the ICCs/IPs
concerned to decide in accordance with customs and traditions.123 With respect to ancestral lands
outside the ancestral domain, the NCIP issues a Certificate of Ancestral Land Title (CALT).124

CADT's and CALT's issued under the IPRA shall be registered by the NCIP before the Register of Deeds in
the place where the property is situated.125

(1) Right to Ancestral Domains and Ancestral Lands: How Acquired

The rights of the ICCs/IPs to their ancestral domains and ancestral lands may be acquired in two
modes: (1) by native title over both ancestral lands and domains; or (2) by torrens title under the
Public Land Act and the Land Registration Act with respect to ancestral lands only.

(2) The Concept of Native Title

Native title is defined as:

"Sec. 3 [l]. Native Title- refers to pre-conquest rights to lands and domains which, as far back as memory
reaches, have been held under a claim of private ownership by ICCs/IPs, have never been public lands
and are thus indisputably presumed to have been held that way since before the Spanish Conquest."126
Native title refers to ICCs/IPs' preconquest rights to lands and domains held under a claim of private
ownership as far back as memory reaches. These lands are deemed never to have been public lands and
are indisputably presumed to have been held that way since before the Spanish Conquest. The rights of
ICCs/IPs to their ancestral domains (which also include ancestral lands) by virtue of native title shall be
recognized and respected.127 Formal recognition, when solicited by ICCs/IPs concerned, shall be
embodied in a Certificate of Ancestral Domain Title (CADT), which shall recognize the title of the
concerned ICCs/IPs over the territories identified and delineated.128

Like a torrens title, a CADT is evidence of private ownership of land by native title. Native title, however,
is a right of private ownership peculiarly granted to ICCs/IPs over their ancestral lands and domains. The
IPRA categorically declares ancestral lands and domains held by native title as never to have
been public land. Domains and lands held under native title are, therefore, indisputably presumed to
have never been public lands and are private.

(a) Cariño v. Insular Government129

The concept of native title in the IPRA was taken from the 1909 case of Cariño v. Insular
Government.130 Cariñofirmly established a concept of private land title that existed irrespective of any
royal grant from the State.

In 1903, Don Mateo Cariño, an Ibaloi, sought to register with the land registration court 146 hectares of
land in Baguio Municipality, Benguet Province. He claimed that this land had been possessed and
occupied by his ancestors since time immemorial; that his grandfather built fences around the property
for the holding of cattle and that his father cultivated some parts of the land. Cariño inherited the land in
accordance with Igorot custom. He tried to have the land adjusted under the Spanish land laws, but no
document issued from the Spanish Crown.131 In 1901, Cariño obtained a possessory title to the land
under the Spanish Mortgage Law.132 The North American colonial government, however, ignored his
possessory title and built a public road on the land prompting him to seek a Torrens title to his property
in the land registration court. While his petition was pending, a U.S. military reservation 133 was
proclaimed over his land and, shortly thereafter, a military detachment was detailed on the property with
orders to keep cattle and trespassers, including Cariño, off the land.134

In 1904, the land registration court granted Cariño's application for absolute ownership to the land. Both
the Government of the Philippine Islands and the U.S. Government appealed to the C.F.I. of Benguet which
reversed the land registration court and dismissed Cariño's application. The Philippine Supreme
Court135 affirmed the C.F.I. by applying the Valenton ruling. Cariño took the case to the U.S. Supreme
Court.136 On one hand, the Philippine government invoked the Regalian doctrine and contended that
Cariño failed to comply with the provisions of the Royal Decree of June 25, 1880, which required
registration of land claims within a limited period of time. Cariño, on the other, asserted that he was the
absolute owner of the land jure gentium, and that the land never formed part of the public domain.

In a unanimous decision written by Justice Oliver Wendell Holmes, the U.S. Supreme Court held:

"It is true that Spain, in its earlier decrees, embodied the universal feudal theory that all lands were held
from the Crown, and perhaps the general attitude of conquering nations toward people not recognized as
entitled to the treatment accorded to those in the same zone of civilization with themselves. It is true, also,
that in legal theory, sovereignty is absolute, and that, as against foreign nations, the United States may
assert, as Spain asserted, absolute power. But it does not follow that, as against the inhabitants of the
Philippines, the United States asserts that Spain had such power. When theory is left on one side,
sovereignty is a question of strength, and may vary in degree. How far a new sovereign shall insist upon
the theoretical relation of the subjects to the head in the past, and how far it shall recognize actual facts,
are matters for it to decide."137
The U.S. Supreme Court noted that it need not accept Spanish doctrines. The choice was with the new
colonizer. Ultimately, the matter had to be decided under U.S. law.

The Cariño decision largely rested on the North American constitutionalist's concept of "due process" as
well as the pronounced policy "to do justice to the natives."138 It was based on the strong mandate
extended to the Islands via the Philippine Bill of 1902 that "No law shall be enacted in said islands which
shall deprive any person of life, liberty, or property without due process of law, or deny to any person
therein the equal protection of the laws." The court declared:

"The acquisition of the Philippines was not like the settlement of the white race in the United States.
Whatever consideration may have been shown to the North American Indians, the dominant purpose of
the whites in America was to occupy land. It is obvious that, however stated, the reason for our taking
over the Philippines was different. No one, we suppose, would deny that, so far as consistent with
paramount necessities, our first object in the internal administration of the islands is to do justice to the
natives, not to exploit their country for private gain. By the Organic Act of July 1, 1902, chapter 1369,
section 12 (32 Statutes at Large, 691), all the property and rights acquired there by the United States are
to be administered 'for the benefit of the inhabitants thereof.' It is reasonable to suppose that the attitude
thus assumed by the United States with regard to what was unquestionably its own is also its attitude in
deciding what it will claim for its own. The same statute made a bill of rights, embodying the safeguards
of the Constitution, and, like the Constitution, extends those safeguards to all. It provides that 'no law
shall be enacted in said islands which shall deprive any person of life, liberty, or property without due
process of law, or deny to any person therein the equal protection of the laws.' In the light of the
declaration that we have quoted from section 12, it is hard to believe that the United States was ready to
declare in the next breath that "any person" did not embrace the inhabitants of Benguet, or that it meant
by "property" only that which had become such by ceremonies of which presumably a large part of the
inhabitants never had heard, and that it proposed to treat as public land what they, by native custom and
by long association,- of the profoundest factors in human thought,- regarded as their own."139

The Court went further:

"Every presumption is and ought to be against the government in a case like the present. It might,
perhaps, be proper and sufficient to say that when, as far back as testimony or memory goes, the
land has been held by individuals under a claim of private ownership, it will be presumed to have
been held in the same way from before the Spanish conquest, and never to have been public
land. Certainly in a case like this, if there is doubt or ambiguity in the Spanish law, we ought to give the
applicant the benefit of the doubt."140

The court thus laid down the presumption of a certain title held (1) as far back as testimony or memory
went, and (2) under a claim of private ownership. Land held by this title is presumed to "never have been
public land."

Against this presumption, the U.S. Supreme Court analyzed the Spanish decrees upheld in the 1904
decision ofValenton v. Murciano. The U.S. Supreme Court found no proof that the Spanish decrees
did not honor native title. On the contrary, the decrees discussed in Valenton appeared to recognize that
the natives owned some land, irrespective of any royal grant. The Regalian doctrine declared in the
preamble of the Recopilacion was all "theory and discourse" and it was observed that titles were admitted
to exist beyond the powers of the Crown, viz:

"If the applicant's case is to be tried by the law of Spain, we do not discover such clear proof that it
was bad by that law as to satisfy us that he does not own the land. To begin with, the older decrees
and laws cited by the counsel for the plaintiff in error seem to indicate pretty clearly that the
natives were recognized as owning some lands, irrespective of any royal grant. In other words,
Spain did not assume to convert all the native inhabitants of the Philippines into trespassers or even into
tenants at will. For instance, Book 4, title 12, Law 14 of the the Recopilacion de Leyes de las Indias, cited
for a contrary conclusion in Valenton v. Murciano, 3 Philippine 537, while it commands viceroys and
others, when it seems proper, to call for the exhibition of grants, directs them to confirm those who hold
by good grants or justa prescripcion. It is true that it begins by the characteristic assertion of feudal
overlordship and the origin of all titles in the King or his predecessors. That was theory and
discourse. The fact was that titles were admitted to exist that owed nothing to the powers of Spain
beyond this recognition in their books." (Emphasis supplied).141

The court further stated that the Spanish "adjustment" proceedings never held sway over unconquered
territories. The wording of the Spanish laws were not framed in a manner as to convey to the natives that
failure to register what to them has always been their own would mean loss of such land. The registration
requirement was "not to confer title, but simply to establish it;" it was "not calculated to convey to the
mind of an Igorot chief the notion that ancient family possessions were in danger, if he had read every
word of it."

By recognizing this kind of title, the court clearly repudiated the doctrine of Valenton. It was frank
enough, however, to admit the possibility that the applicant might have been deprived of his land under
Spanish law because of the inherent ambiguity of the decrees and concomitantly, the various
interpretations which may be given them. But precisely because of the ambiguity and of the strong
"due process mandate" of the Constitution, the court validated this kind of title. 142 This title was
sufficient, even without government administrative action, and entitled the holder to a Torrens certificate.
Justice Holmes explained:

"It will be perceived that the rights of the applicant under the Spanish law present a problem not without
difficulties for courts of a legal tradition. We have deemed it proper on that account to notice the possible
effect of the change of sovereignty and the act of Congress establishing the fundamental principles now to
be observed. Upon a consideration of the whole case we are of the opinion that law and justice require
that the applicant should be granted what he seeks, and should not be deprived of what, by the practice
and belief of those among whom he lived, was his property, through a refined interpretation of an almost
forgotten law of Spain."143

Thus, the court ruled in favor of Cariño and ordered the registration of the 148 hectares in Baguio
Municipality in his name.144

Examining Cariño closer, the U.S. Supreme Court did not categorically refer to the title it upheld as
"native title." It simply said:

"The Province of Benguet was inhabited by a tribe that the Solicitor-General, in his argument,
characterized as a savage tribe that never was brought under the civil or military government of
the Spanish Crown. It seems probable, if not certain, that the Spanish officials would not have
granted to anyone in that province the registration to which formerly the plaintiff was entitled by
the Spanish Laws, and which would have made his title beyond question good. Whatever may have
been the technical position of Spain it does not follow that, in the view of the United States, he had lost all
rights and was a mere trespasser when the present government seized his land. The argument to that
effect seems to amount to a denial of native titles through an important part of the Island of Luzon, at
least, for the want of ceremonies which the Spaniards would not have permitted and had not the power
to enforce."145

This is the only instance when Justice Holmes used the term "native title" in the entire length of
the Cariño decision. It is observed that the widespread use of the term "native title" may be traced to
Professor Owen James Lynch, Jr., a Visiting Professor at the University of the Philippines College of Law
from the Yale University Law School. In 1982, Prof. Lynch published an article in the Philippine Law
Journal entitled Native Title, Private Right and Tribal Land Law.146 This article was made after
Professor Lynch visited over thirty tribal communities throughout the country and studied the origin and
development of Philippine land laws.147 He discussed Cariño extensively and used the term "native title"
to refer to Cariño's title as discussed and upheld by the U.S. Supreme Court in said case.

(b) Indian Title

In a footnote in the same article, Professor Lynch stated that the concept of "native title" as defined by
Justice Holmes in Cariño "is conceptually similar to "aboriginal title" of the American Indians. 148 This is
not surprising, according to Prof. Lynch, considering that during the American regime, government policy
towards ICCs/IPs was consistently made in reference to native Americans.149 This was clearly
demonstrated in the case of Rubi v. Provincial Board of Mindoro.150

In Rubi, the Provincial Board of Mindoro adopted a Resolution authorizing the provincial governor to
remove the Mangyans from their domains and place them in a permanent reservation in Sitio Tigbao,
Lake Naujan. Any Mangyan who refused to comply was to be imprisoned. Rubi and some Mangyans,
including one who was imprisoned for trying to escape from the reservation, filed for habeas corpus
claiming deprivation of liberty under the Board Resolution. This Court denied the petition on the ground
of police power. It upheld government policy promoting the idea that a permanent settlement was the
only successful method for educating the Mangyans, introducing civilized customs, improving their
health and morals, and protecting the public forests in which they roamed.151 Speaking through Justice
Malcolm, the court said:

"Reference was made in the President's instructions to the Commission to the policy adopted by the
United States for the Indian Tribes. The methods followed by the Government of the Philippine Islands in
its dealings with the so-called non-Christian people is said, on argument, to be practically identical with
that followed by the United States Government in its dealings with the Indian tribes. Valuable lessons, it is
insisted, can be derived by an investigation of the American-Indian policy.

From the beginning of the United States, and even before, the Indians have been treated as "in a state of
pupilage." The recognized relation between the Government of the United States and the Indians may be
described as that of guardian and ward. It is for the Congress to determine when and how the
guardianship shall be terminated. The Indians are always subject to the plenary authority of the United
States.152

x x x.

As to the second point, the facts in the Standing Bear case and the Rubi case are not exactly identical. But
even admitting similarity of facts, yet it is known to all that Indian reservations do exist in the United
States, that Indians have been taken from different parts of the country and placed on these reservations,
without any previous consultation as to their own wishes, and that, when once so located, they have been
made to remain on the reservation for their own good and for the general good of the country. If any
lesson can be drawn from the Indian policy of the United States, it is that the determination of this policy
is for the legislative and executive branches of the government and that when once so decided upon, the
courts should not interfere to upset a carefully planned governmental system. Perhaps, just as many
forceful reasons exist for the segregation of the Manguianes in Mindoro as existed for the segregation of
the different Indian tribes in the United States."153

Rubi applied the concept of Indian land grants or reservations in the Philippines. An Indian reservation is
a part of the public domain set apart by proper authority for the use and occupation of a tribe or tribes of
Indians.154 It may be set apart by an act of Congress, by treaty, or by executive order, but it cannot be
established by custom and prescription.155

Indian title to land, however, is not limited to land grants or reservations. It also covers the
"aboriginal right of possession or occupancy."156 The aboriginal right of possession depends on the
actual occupancy of the lands in question by the tribe or nation as their ancestral home, in the sense that
such lands constitute definable territory occupied exclusively by the particular tribe or nation. 157 It is a
right which exists apart from any treaty, statute, or other governmental action, although in numerous
instances treaties have been negotiated with Indian tribes, recognizing their aboriginal possession and
delimiting their occupancy rights or settling and adjusting their boundaries.158

American jurisprudence recognizes the Indians' or native Americans' rights to land they have
held and occupied before the "discovery" of the Americas by the Europeans. The earliest definitive
statement by the U.S. Supreme Court on the nature of aboriginal title was made in 1823 in Johnson
& Graham's Lessee v. M'Intosh.159

In Johnson, the plaintiffs claimed the land in question under two (2) grants made by the chiefs of two (2)
Indian tribes. The U.S. Supreme Court refused to recognize this conveyance, the plaintiffs being private
persons. The only conveyance that was recognized was that made by the Indians to the government of
the European discoverer. Speaking for the court, Chief Justice Marshall pointed out that the potentates of
the old world believed that they had made ample compensation to the inhabitants of the new world by
bestowing civilization and Christianity upon them; but in addition, said the court, they found it necessary,
in order to avoid conflicting settlements and consequent war, to establish the principle that discovery
gives title to the government by whose subjects, or by whose authority, the discovery was made,
against all other European governments, which title might be consummated by possession. 160 The
exclusion of all other Europeans gave to the nation making the discovery the sole right of acquiring the
soil from the natives and establishing settlements upon it. As regards the natives, the court further stated
that:

"Those relations which were to exist between the discoverer and the natives were to be regulated by
themselves. The rights thus acquired being exclusive, no other power could interpose between them.

In the establishment of these relations, the rights of the original inhabitants were, in no instance,
entirely disregarded; but were necessarily, to a considerable extent, impaired. They were admitted to
be the rightful occupants of the soil, with a legal as well as just claim to retain possession of it, and
to use it according to their own discretion; but their rights to complete sovereignty, as independent
nations, were necessarily diminished, and their power to dispose of the soil at their own will, to
whomsoever they pleased, was denied by the fundamental principle that discovery gave exclusive title to
those who made it.

While the different nations of Europe respected the right of the natives as occupants, they
asserted the ultimate dominion to be in themselves; and claimed and exercised, as a consequence
of this ultimate dominion, a power to grant the soil, while yet in possession of the natives. These
grants have been understood by all to convey a title to the grantees, subject only to the Indian
right of occupancy."161

Thus, the discoverer of new territory was deemed to have obtained the exclusive right to acquire Indian
land and extinguish Indian titles. Only to the discoverer- whether to England, France, Spain or Holland-
did this right belong and not to any other nation or private person. The mere acquisition of the right
nonetheless did not extinguish Indian claims to land. Rather, until the discoverer, by purchase or
conquest, exercised its right, the concerned Indians were recognized as the "rightful occupants of the soil,
with a legal as well as just claim to retain possession of it." Grants made by the discoverer to her subjects
of lands occupied by the Indians were held to convey a title to the grantees, subject only to the Indian
right of occupancy. Once the discoverer purchased the land from the Indians or conquered them, it was
only then that the discoverer gained an absolute title unrestricted by Indian rights.

The court concluded, in essence, that a grant of Indian lands by Indians could not convey a title
paramount to the title of the United States itself to other parties, saying:
"It has never been contended that the Indian title amounted to nothing. Their right of possession has
never been questioned. The claim of government extends to the complete ultimate title, charged
with this right of possession, and to the exclusive power of acquiring that right."162

It has been said that the history of America, from its discovery to the present day, proves the universal
recognition of this principle.163

The Johnson doctrine was a compromise. It protected Indian rights and their native lands without having
to invalidate conveyances made by the government to many U.S. citizens.164

Johnson was reiterated in the case of Worcester v. Georgia.165 In this case, the State of Georgia enacted a
law requiring all white persons residing within the Cherokee nation to obtain a license or permit from the
Governor of Georgia; and any violation of the law was deemed a high misdemeanor. The plaintiffs, who
were white missionaries, did not obtain said license and were thus charged with a violation of the Act.

The U.S. Supreme Court declared the Act as unconstitutional for interfering with the treaties established
between the United States and the Cherokee nation as well as the Acts of Congress regulating intercourse
with them. It characterized the relationship between the United States government and the Indians as:

"The Indian nations were, from their situation, necessarily dependent on some foreign potentate for the
supply of their essential wants, and for their protection from lawless and injurious intrusions into their
country. That power was naturally termed their protector. They had been arranged under the protection
of Great Britain; but the extinguishment of the British power in their neighborhood, and the
establishment of that of the United States in its place, led naturally to the declaration, on the part of the
Cherokees, that they were under the protection of the United States, and of no other power. They
assumed the relation with the United States which had before subsisted with Great Britain.

This relation was that of a nation claiming and receiving the protection of one more powerful, not that of
individuals abandoning their national character, and submitting as subjects to the laws of a master."166

It was the policy of the U.S. government to treat the Indians as nations with distinct territorial boundaries
and recognize their right of occupancy over all the lands within their domains. Thus:

"From the commencement of our government Congress has passed acts to regulate trade and intercourse
with the Indians; which treat them as nations, respect their rights, and manifest a firm purpose to afford
that protection which treaties stipulate. All these acts, and especially that of 1802, which is still in force,
manifestly consider the several Indian nations as distinct political communities, having territorial
boundaries, within which their authority is exclusive, and having a right to all the lands within
those boundaries, which is not only acknowledged, but guaranteed by the United States.

x x x.

"The Indian nations had always been considered as distinct, independent political communities,
retaining their original natural rights, as the undisputed possessors of the soil from time
immemorial, with the single exception of that imposed by irresistible power, which excluded them from
intercourse with any other European potentate than the first discoverer of the coast of the particular
region claimed: and this was a restriction which those European potentates imposed on themselves, as
well as on the Indians. The very term "nation," so generally applied to them, means "a people distinct
from others." x x x.167

The Cherokee nation, then, is a distinct community, occupying its own territory, with boundaries
accurately described, in which the laws of Georgia can have no force, and which the citizens of Georgia
have no right to enter but with the assent of the Cherokees themselves or in conformity with treaties and
with the acts of Congress. The whole intercourse between the United States and this nation is, by our
Constitution and laws, vested in the government of the United States."168
The discovery of the American continent gave title to the government of the discoverer as against all
other European governments. Designated as the naked fee,169 this title was to be consummated by
possession and was subject to the Indian title of occupancy. The discoverer acknowledged the Indians'
legal and just claim to retain possession of the land, the Indians being the original inhabitants of the land.
The discoverer nonetheless asserted the exclusive right to acquire the Indians' land- either by purchase,
"defensive" conquest, or cession- and in so doing, extinguish the Indian title. Only the discoverer could
extinguish Indian title because it alone asserted ultimate dominion in itself. Thus, while the different
nations of Europe respected the rights of the natives as occupants, they all asserted the ultimate
dominion and title to be in themselves.170

As early as the 19th century, it became accepted doctrine that although fee title to the lands
occupied by the Indians when the colonists arrived became vested in the sovereign- first the
discovering European nation and later the original 13 States and the United States- a right of
occupancy in the Indian tribes was nevertheless recognized. The Federal Government continued the
policy of respecting the Indian right of occupancy, sometimes called Indian title, which it accorded the
protection of complete ownership.171 But this aboriginal Indian interest simply constitutes "permission"
from the whites to occupy the land, and means mere possession not specifically recognized as ownership
by Congress.172 It is clear that this right of occupancy based upon aboriginal possession is not a property
right.173 It is vulnerable to affirmative action by the federal government who, as sovereign, possessed
exclusive power to extinguish the right of occupancy at will.174 Thus, aboriginal title is not the same as
legal title. Aboriginal title rests on actual, exclusive and continuous use and occupancy for a long
time.175 It entails that land owned by Indian title must be used within the tribe, subject to its laws and
customs, and cannot be sold to another sovereign government nor to any citizen. 176 Such title as Indians
have to possess and occupy land is in the tribe, and not in the individual Indian; the right of individual
Indians to share in the tribal property usually depends upon tribal membership, the property of the tribe
generally being held in communal ownership.177

As a rule, Indian lands are not included in the term "public lands," which is ordinarily used to designate
such lands as are subject to sale or other disposal under general laws.178 Indian land which has been
abandoned is deemed to fall into the public domain.179 On the other hand, an Indian reservation is a part
of the public domain set apart for the use and occupation of a tribe of Indians. 180 Once set apart by proper
authority, the reservation ceases to be public land, and until the Indian title is extinguished, no one but
Congress can initiate any preferential right on, or restrict the nation's power to dispose of, them. 181

The American judiciary struggled for more than 200 years with the ancestral land claims of
indigenous Americans.182 And two things are clear. First, aboriginal title is recognized. Second,
indigenous property systems are also recognized. From a legal point of view, certain benefits can be
drawn from a comparison of Philippine IPs to native Americans.183 Despite the similarities between
native title and aboriginal title, however, there are at present some misgivings on whether jurisprudence
on American Indians may be cited authoritatively in the Philippines. The U.S. recognizes the possessory
rights of the Indians over their land; title to the land, however, is deemed to have passed to the U.S. as
successor of the discoverer. The aboriginal title of ownership is not specifically recognized as ownership
by action authorized by Congress.184 The protection of aboriginal title merely guards against
encroachment by persons other than the Federal Government.185 Although there are criticisms against
the refusal to recognize the native Americans' ownership of these lands,186 the power of the State to
extinguish these titles has remained firmly entrenched.187

Under the IPRA, the Philippine State is not barred form asserting sovereignty over the ancestral domains
and ancestral lands.188 The IPRA, however, is still in its infancy and any similarities between its
application in the Philippines vis-à-vis American Jurisprudence on aboriginal title will depend on the
peculiar facts of each case.

(c) Why the Cariño doctrine is unique

In the Philippines, the concept of native title first upheld in Cariño and enshrined in the IPRA grants
ownership, albeit in limited form, of the land to the ICCs/IPs. Native title presumes that the land is private
and was never public. Cariño is the only case that specifically and categorically recognizes native
title. The long line of cases citing Cariño did not touch on native title and the private character of
ancestral domains and lands. Cariñowas cited by the succeeding cases to support the concept of
acquisitive prescription under the Public Land Act which is a different matter altogether. Under
the Public Land Act, land sought to be registered must be public agricultural land. When the conditions
specified in Section 48 [b] of the Public Land Act are complied with, the possessor of the land is deemed
to have acquired, by operation of law, a right to a grant of the land.189 The land ceases to be part of the
public domain,190 ipso jure,191 and is converted to private property by the mere lapse or completion of the
prescribed statutory period.

It was only in the case of Oh Cho v. Director of Lands192 that the court declared that the rule that all lands
that were not acquired from the government, either by purchase or grant, belong to the public domain
has an exception. This exception would be any land that should have been in the possession of an
occupant and of his predecessors-in-interest since time immemorial. It is this kind of possession that
would justify the presumption that the land had never been part of the public domain or that it had been
private property even before the Spanish conquest.193 Oh Cho, however, was decided under the
provisions of the Public Land Act and Cariño was cited to support the applicant's claim of acquisitive
prescription under the said Act.

All these years, Cariño had been quoted out of context simply to justify long, continuous, open and
adverse possession in the concept of owner of public agricultural land. It is this long, continuous, open
and adverse possession in the concept of owner of thirty years both for ordinary citizens194 and members
of the national cultural minorities195 that converts the land from public into private and entitles the
registrant to a torrens certificate of title.

(3) The Option of Securing a Torrens Title to the Ancestral Land Indicates that the Land is Private.

The private character of ancestral lands and domains as laid down in the IPRA is
further strengthened by the option given to individual ICCs/IPs over their individually-owned
ancestral lands. For purposes of registration under the Public Land Act and the Land Registration
Act, the IPRA expressly converts ancestral land into public agricultural land which may be
disposed of by the State. The necessary implication is that ancestral land is private. It, however,
has to be first converted to public agricultural land simply for registration purposes. To wit:

"Sec. 12. Option to Secure Certificate of Title Under Commonwealth Act 141, as amended, or the Land
Registration Act 496- Individual members of cultural communities, with respect to their individually-
owned ancestral lands who, by themselves or through their predecessors-in-interest, have been in
continuous possession and occupation of the same in the concept of owner since time immemorial or for
a period of not less than thirty (30) years immediately preceding the approval of this Act and
uncontested by the members of the same ICCs/IPs shall have the option to secure title to their ancestral
lands under the provisions of Commonwealth Act 141, as amended, or the Land Registration Act 496.

For this purpose, said individually-owned ancestral lands, which are agricultural in character and
actually used for agricultural, residential, pasture, and tree farming purposes, including those with a
slope of eighteen percent (18%) or more, are hereby classified as alienable and disposable agricultural
lands.

The option granted under this section shall be exercised within twenty (20) years from the approval of
this Act."196
ICCs/IPs are given the option to secure a torrens certificate of title over their individually-owned
ancestral lands. This option is limited to ancestral lands only, not domains, and such lands must be
individually, not communally, owned.

Ancestral lands that are owned by individual members of ICCs/IPs who, by themselves or through their
predecessors-in-interest, have been in continuous possession and occupation of the same in the concept
of owner since time immemorial197 or for a period of not less than 30 years, which claims are uncontested
by the members of the same ICCs/IPs, may be registered under C.A. 141, otherwise known as the Public
Land Act, or Act 496, the Land Registration Act. For purposes of registration, the individually-owned
ancestral lands are classified as alienable and disposable agricultural lands of the public domain,
provided, they are agricultural in character and are actually used for agricultural, residential, pasture and
tree farming purposes. These lands shall be classified as public agricultural lands regardless of whether
they have a slope of 18% or more.

The classification of ancestral land as public agricultural land is in compliance with the requirements of
the Public Land Act and the Land Registration Act. C.A. 141, the Public Land Act, deals specifically with
lands of the public domain.198 Its provisions apply to those lands "declared open to disposition or
concession" x x x "which have not been reserved for public or quasi-public purposes, nor appropriated by
the Government, nor in any manner become private property, nor those on which a private right
authorized and recognized by this Act or any other valid law x x x or which having been reserved or
appropriated, have ceased to be so."199 Act 496, the Land Registration Act, allows registration only of
private lands and public agricultural lands. Since ancestral domains and lands are private, if the
ICC/IP wants to avail of the benefits of C.A. 141 and Act 496, the IPRA itself converts his ancestral
land, regardless of whether the land has a slope of eighteen per cent (18%) or over, 200 from
private to public agricultural land for proper disposition.

The option to register land under the Public Land Act and the Land Registration Act has nonetheless a
limited period. This option must be exercised within twenty (20) years from October 29, 1997, the date of
approval of the IPRA.

Thus, ancestral lands and ancestral domains are not part of the lands of the public domain. They
are private and belong to the ICCs/IPs. Section 3 of Article XII on National Economy and Patrimony of
the 1987 Constitution classifies lands of the public domain into four categories: (a) agricultural, (b) forest
or timber, (c) mineral lands, and (d) national parks. Section 5 of the same Article XII mentions ancestral
lands and ancestral domains but it does not classify them under any of the said four categories. To
classify them as public lands under any one of the four classes will render the entire IPRA law a
nullity. The spirit of the IPRA lies in the distinct concept of ancestral domains and ancestral lands. The
IPRA addresses the major problem of the ICCs/IPs which is loss of land. Land and space are of vital
concern in terms of sheer survival of the ICCs/IPs.201

The 1987 Constitution mandates the State to "protect the rights of indigenous cultural
communities to their ancestral lands" and that "Congress provide for the applicability of
customary laws x x x in determining the ownership and extent of ancestral domain." 202 It is the
recognition of the ICCs/IPs distinct rights of ownership over their ancestral domains and lands
that breathes life into this constitutional mandate.

B. The right of ownership and possession by the ICCs/IPs of their ancestral domains is a limited
form of ownership and does not include the right to alienate the same.

Registration under the Public Land Act and Land Registration Act recognizes the concept of ownership
under the civil law. This ownership is based on adverse possession for a specified period, and harkens to
Section 44 of the Public Land Act on administrative legalization (free patent) of imperfect or incomplete
titles and Section 48 (b) and (c) of the same Act on the judicial confirmation of imperfect or incomplete
titles. Thus:
"Sec. 44. Any natural-born citizen of the Philippines who is not the owner of more than twenty-four
hectares and who since July fourth, 1926 or prior thereto, has continuously occupied and cultivated,
either by himself or through his predecessors-in-interest, a tract or tracts of agricultural public lands
subject to disposition, or who shall have paid the real estate tax thereon while the same has not been
occupied by any person shall be entitled, under the provisions of this chapter, to have a free patent issued
to him for such tract or tracts of such land not to exceed twenty-four hectares.

A member of the national cultural minorities who has continuously occupied and cultivated,
either by himself or through his predecessors-in-interest, a tract or tracts of land, whether
disposable or not since July 4, 1955, shall be entitled to the right granted in the preceding
paragraph of this section: Provided, That at the time he files his free patent application he is not
the owner of any real property secured or disposable under the provision of the Public Land
Law.203

x x x.

"Sec. 48. The following described citizens of the Philippines, occupying lands of the public domain or
claiming to own any such lands or an interest therein, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title therefor, under the Land Registration
Act, to wit:

(a) [perfection of Spanish titles] xxx.

(b) Those who by themselves or through their predecessors-in-interest have been in open,
continuous, exclusive, and notorious possession and occupation of agricultural lands of the public
domain, under a bona fide claim of acquisition or ownership, for at least thirty years immediately
preceding the filing of the application for confirmation of title except when prevented by war or
force majeure. These shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title under the provisions of
this Chapter.

(c) Members of the national cultural minorities who by themselves or through their
predecessors-in-interest have been in open, continuous, exclusive and notorious
possession and occupation of lands of the public domain suitable to agriculture, whether
disposable or not, under a bona fide claim of ownership for at least 30 years shall be
entitled to the rights granted in sub-section (b) hereof."204

Registration under the foregoing provisions presumes that the land was originally public agricultural
land but because of adverse possession since July 4, 1955 (free patent) or at least thirty years (judicial
confirmation), the land has become private. Open, adverse, public and continuous possession is sufficient,
provided, the possessor makes proper application therefor. The possession has to be confirmed judicially
or administratively after which a torrens title is issued.

A torrens title recognizes the owner whose name appears in the certificate as entitled to all the rights of
ownership under the civil law. The Civil Code of the Philippines defines ownership in Articles 427, 428
and 429. This concept is based on Roman Law which the Spaniards introduced to the Philippines through
the Civil Code of 1889. Ownership, under Roman Law, may be exercised over things or rights. It primarily
includes the right of the owner to enjoy and dispose of the thing owned. And the right to enjoy and
dispose of the thing includes the right to receive from the thing what it produces, 205 the right to consume
the thing by its use,206 the right to alienate, encumber, transform or even destroy the thing owned, 207 and
the right to exclude from the possession of the thing owned by any other person to whom the owner has
not transmitted such thing.208
1. The Indigenous Concept of Ownership and Customary Law.

Ownership of ancestral domains by native title does not entitle the ICC/IP to a torrens title but to a
Certificate of Ancestral Domain Title (CADT). The CADT formally recognizes the indigenous concept of
ownership of the ICCs/IPs over their ancestral domain. Thus:

"Sec. 5. Indigenous concept of ownership.- Indigenous concept of ownership sustains the view that
ancestral domains and all resources found therein shall serve as the material bases of their cultural
integrity. The indigenous concept of ownership generally holds that ancestral domains are the ICCs/IPs
private but community property which belongs to all generations and therefore cannot be sold, disposed
or destroyed. It likewise covers sustainable traditional resource rights."

The right of ownership and possession of the ICCs/IPs to their ancestral domains is held under the
indigenous concept of ownership. This concept maintains the view that ancestral domains are the
ICCs/IPs private but community property. It is private simply because it is not part of the public
domain. But its private character ends there. The ancestral domain is owned in common by the
ICCs/IPs and not by one particular person. The IPRA itself provides that areas within the ancestral
domains, whether delineated or not, are presumed to be communally held.209 These communal rights,
however, are not exactly the same as co-ownership rights under the Civil Code.210 Co-ownership
gives any co-owner the right to demand partition of the property held in common. The Civil Code
expressly provides that "no co-owner shall be obliged to remain in the co-ownership." Each co-owner
may demand at any time the partition of the thing in common, insofar as his share is concerned. 211 To
allow such a right over ancestral domains may be destructive not only of customary law of the
community but of the very community itself.212

Communal rights over land are not the same as corporate rights over real property, much less
corporate condominium rights. A corporation can exist only for a maximum of fifty (50) years subject
to an extension of another fifty years in any single instance.213 Every stockholder has the right to
disassociate himself from the corporation.214 Moreover, the corporation itself may be dissolved
voluntarily or involuntarily.215

Communal rights to the land are held not only by the present possessors of the land but extends to
all generations of the ICCs/IPs, past, present and future, to the domain. This is the reason why the
ancestral domain must be kept within the ICCs/IPs themselves. The domain cannot be transferred, sold
or conveyed to other persons. It belongs to the ICCs/IPs as a community.

Ancestral lands are also held under the indigenous concept of ownership. The lands are communal.
These lands, however, may be transferred subject to the following limitations: (a) only to the members of
the same ICCs/IPs; (b) in accord with customary laws and traditions; and (c) subject to the right of
redemption of the ICCs/IPs for a period of 15 years if the land was transferred to a non-member of the
ICCs/IPs.

Following the constitutional mandate that "customary law govern property rights or relations in
determining the ownership and extent of ancestral domains,"216 the IPRA, by legislative fiat,
introduces a new concept of ownership. This is a concept that has long existed under customary
law.217

Custom, from which customary law is derived, is also recognized under the Civil Code as a source
of law.218 Some articles of the Civil Code expressly provide that custom should be applied in cases where
no codal provision is applicable.219 In other words, in the absence of any applicable provision in the Civil
Code, custom, when duly proven, can define rights and liabilities.220

Customary law is a primary, not secondary, source of rights under the IPRA and uniquely applies to
ICCs/IPs. Its recognition does not depend on the absence of a specific provision in the civil law. The
indigenous concept of ownership under customary law is specifically acknowledged and recognized, and
coexists with the civil law concept and the laws on land titling and land registration.221

To be sure, the indigenous concept of ownership exists even without a paper title. The CADT is
merely a "formal recognition" of native title. This is clear from Section 11 of the IPRA, to wit:

"Sec. 11. Recognition of Ancestral Domain Rights.- The rights of ICCs/IPs to their ancestral domains by
virtue of Native Title shall be recognized and respected. Formal recognition, when solicited by ICCs/IPs
concerned shall be embodied in a Certificate of Ancestral Domain Title, which shall recognize the title of
the concerned ICCs/IPs over the territories identified and delineated."

The moral import of ancestral domain, native land or being native is "belongingness" to the land, being
people of the land- by sheer force of having sprung from the land since time beyond recall, and the
faithful nurture of the land by the sweat of one's brow. This is fidelity of usufructuary relation to the land-
the possession of stewardship through perduring, intimate tillage, and the mutuality of blessings between
man and land; from man, care for land; from the land, sustenance for man.222

C. Sections 7 (a), 7 (b) and 57 of the IPRA Do Not Violate the Regalian Doctrine Enshrined in
Section 2, Article XII of the 1987 Constitution.

1. The Rights of ICCs/IPs Over Their Ancestral Domains and Lands

The IPRA grants the ICCs/IPs several rights over their ancestral domains and ancestral lands. Section 7
provides for the rights over ancestral domains:

"Sec. 7. Rights to Ancestral Domains.- The rights of ownership and possession of ICCs/IPs to their
ancestral domains shall be recognized and protected. Such rights include:

a) Right of Ownership.- The right to claim ownership over lands, bodies of water traditionally
and actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds,
and all improvements made by them at any time within the domains;

b) Right to Develop Lands and Natural Resources.- Subject to Section 56 hereof, the right to
develop, control and use lands and territories traditionally occupied, owned, or used; to
manage and conserve natural resources within the territories and uphold the
responsibilities for future generations; to benefit and share the profits from allocation and
utilization of the natural resources found therein; the right to negotiate the terms and
conditions for the exploration of natural resources in the areas for the purpose of ensuring
ecological, environmental protection and the conservation measures, pursuant to national
and customary laws; the right to an informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect or impact upon the
ancestral domains and to receive just and fair compensation for any damages which they may
sustain as a result of the project; and the right to effective measures by the government to prevent
any interference with, alienation and encroachment upon these rights;"

c) Right to Stay in the Territories.- The right to stay in the territory and not to be removed
therefrom. No ICCs/IPs will be relocated without their free and prior informed consent, nor
through any means other than eminent domain. x x x;

d) Right in Case of Displacement.- In case displacement occurs as a result of natural catastrophes,

the State shall endeavor to resettle the displaced ICCs/IPs in suitable areas where they can have
temporary life support systems: x x x;

e) Right to Regulate the Entry of Migrants.- Right to regulate the entry of migrant settlers and
organizations into their domains;
 f) Right to Safe and Clean Air and Water.-For this purpose, the ICCs/IPs shall have access to
integrated systems for the management of their inland waters and air space;

g) Right to Claim Parts of Reservations.- The right to claim parts of the ancestral domains which
have been reserved for various purposes, except those reserved and intended for common and
public welfare and service;

h) Right to Resolve Conflict.- Right to resolve land conflicts in accordance with customary laws of
the area where the land is located, and only in default thereof shall the complaints be submitted to
amicable settlement and to the Courts of Justice whenever necessary."

Section 8 provides for the rights over ancestral lands:

"Sec. 8. Rights to Ancestral Lands.- The right of ownership and possession of the ICCs/IPs to their
ancestral lands shall be recognized and protected.

a) Right to transfer land/property.- Such right shall include the right to transfer land or property
rights to/among members of the same ICCs/IPs, subject to customary laws and traditions of the
community concerned.

b) Right to Redemption.- In cases where it is shown that the transfer of land/property rights by
virtue of any agreement or devise, to a non-member of the concerned ICCs/IPs is tainted by the
vitiated consent of the ICCs/IPs, or is transferred for an unconscionable consideration or price, the
transferor ICC/IP shall have the right to redeem the same within a period not exceeding fifteen
(15) years from the date of transfer."

Section 7 (a) defines the ICCs/IPs the right of ownership over their ancestral domains which covers (a)
lands, (b) bodies of water traditionally and actually occupied by the ICCs/IPs, (c) sacred places, (d)
traditional hunting and fishing grounds, and (e) all improvements made by them at any time within the
domains. The right of ownership includes the following rights: (1) the right to develop lands and
natural resources; (b) the right to stay in the territories; (c) the right to resettlement in case of
displacement; (d) the right to regulate the entry of migrants; (e) the right to safe and clean air and water;
(f) the right to claim parts of the ancestral domains as reservations; and (g) the right to resolve conflict in
accordance with customary laws.

Section 8 governs their rights to ancestral lands. Unlike ownership over the ancestral domains, Section 8
gives the ICCs/IPs also the right to transfer the land or property rights to members of the same ICCs/IPs
or non-members thereof. This is in keeping with the option given to ICCs/IPs to secure a torrens title
over the ancestral lands, but not to domains.

2. The Right of ICCs/IPs to Develop Lands and Natural Resources Within the Ancestral Domains Does Not
Deprive the State of Ownership Over the Natural Resources and Control and Supervision in their
Development and Exploitation.

The Regalian doctrine on the ownership, management and utilization of natural resources is declared
in Section 2, Article XII of the 1987 Constitution, viz:

"Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural lands, all other natural resources
shall not be alienated. The exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may directly undertake such
activities, or, it may enter into co-production, joint venture, or production-sharing agreements
with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is
owned by such citizens. Such agreements may be for a period not exceeding twenty-five years,
renewable for not more than twenty-five years, and under such terms and conditions as may be provided
by law. In cases of water rights for irrigation, water supply, fisheries, water supply, fisheries, or industrial
uses other than the development of water power, beneficial use may be the measure and limit of the
grant.

The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive
economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as
well as cooperative fish farming, with priority to subsistence fishermen and fishworkers in rivers, lakes,
bays, and lagoons.

The President may enter into agreements with foreign-owned corporations involving either technical or
financial assistance for large-scale exploration, development, and utilization of minerals, petroleum,
and other mineral oils according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such agreements, the state
shall promote the development and use of local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision,
within thirty days from its execution."223

All lands of the public domain and all natural resources- waters, minerals, coal, petroleum, and other
mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources- are owned by the State. The Constitution provides that in the exploration,
development and utilization of these natural resources, the State exercises full control and supervision,
and may undertake the same in four (4) modes:

1. The State may directly undertake such activities; or

2. The State may enter into co-production, joint venture or production-sharing agreements with
Filipino citizens or qualified corporations;

3. Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens;

4. For the large-scale exploration, development and utilization of minerals, petroleum and other
mineral oils, the President may enter into agreements with foreign-owned corporations involving
technical or financial assistance.

As owner of the natural resources, the State is accorded primary power and responsibility in the
exploration, development and utilization of these natural resources. The State may directly
undertake the exploitation and development by itself, or, it may allow participation by the private sector
through co-production,224joint venture,225 or production-sharing agreements.226 These agreements may
be for a period of 25 years, renewable for another 25 years. The State, through Congress, may allow the
small-scale utilization of natural resources by Filipino citizens. For the large-scale exploration of these
resources, specifically minerals, petroleum and other mineral oils, the State, through the President, may
enter into technical and financial assistance agreements with foreign-owned corporations.

Under the Philippine Mining Act of 1995, (R.A. 7942) and the People's Small-Scale Mining Act of 1991
(R.A. 7076) the three types of agreements, i.e., co-production, joint venture or production-sharing, may
apply to both large-scale227 and small-scale mining.228 "Small-scale mining" refers to "mining activities
which rely heavily on manual labor using simple implements and methods and do not use explosives or
heavy mining equipment."229
Examining the IPRA, there is nothing in the law that grants to the ICCs/IPs ownership over the
natural resources within their ancestral domains. The right of ICCs/IPs in their ancestral domains
includes ownership, but this "ownership" is expressly defined and limited in Section 7 (a) as:

"Sec. 7. a) Right of ownership- The right to claim ownership over lands, bodies of water traditionally and
actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains;"

The ICCs/IPs are given the right to claim ownership over "lands, bodies of water traditionally and
actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds, and all
improvements made by them at any time within the domains." It will be noted that this enumeration does
not mention bodies of water not occupied by the ICCs/IPs, minerals, coal, wildlife, flora and fauna in the
traditional hunting grounds, fish in the traditional fishing grounds, forests or timber in the sacred places,
etc. and all other natural resources found within the ancestral domains. Indeed, the right of ownership
under Section 7 (a) does not cover "waters, minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, forests or timber, wildlife, floraand fauna and all other
natural resources" enumerated in Section 2, Article XII of the 1987 Constitution as belonging to
the State.

The non-inclusion of ownership by the ICCs/IPs over the natural resources in Section 7(a) complies with
the Regalian doctrine.

(a) Section 1, Part II, Rule III of the Implementing Rules Goes Beyond the Parameters of Sec. 7 (a)
of the IPRA And is Unconstitutional.

The Rules Implementing the IPRA230 in Section 1, Part II, Rule III reads:

"Section 1. Rights of Ownership. ICCs/IPs have rights of ownership over lands, waters, and natural
resources and all improvements made by them at any time within the ancestral domains/ lands. These
rights shall include, but not limited to, the right over the fruits, the right to possess, the right to use, right
to consume, right to exclude and right to recover ownership, and the rights or interests over land and
natural resources. The right to recover shall be particularly applied to lands lost through fraud or any
form or vitiated consent or transferred for an unconscionable price."

Section 1 of the Implementing Rules gives the ICCs/IPs rights of ownership over "lands, waters and
natural resources." The term "natural resources" is not one of those expressly mentioned in Section 7 (a)
of the law. Our Constitution and jurisprudence clearly declare that the right to claim ownership over land
does not necessarily include the right to claim ownership over the natural resources found on or under
the land.231 The IPRA itself makes a distinction between land and natural resources. Section 7 (a)
speaks of the right of ownership only over the land within the ancestral domain. It is Sections 7 (b)
and 57 of the law that speak of natural resources, and these provisions, as shall be discussed later,
do not give the ICCs/IPs the right of ownership over these resources.

The constitutionality of Section 1, Part II, Rule III of the Implementing Rules was not specifically and
categorically challenged by petitioners. Petitioners actually assail the constitutionality of the
Implementing Rules in general.232Nevertheless, to avoid any confusion in the implementation of the law,
it is necessary to declare that the inclusion of "natural resources" in Section 1, Part II, Rule III of the
Implementing Rules goes beyond the parameters of Section 7 (b) of the law and is contrary to Section 2,
Article XII of the 1987 Constitution.

(b) The Small-Scale Utilization of Natural Resources In Sec. 7 (b) of the IPRA Is Allowed Under
Paragraph 3, Section 2 of Article XII of the Constitution.
Ownership over natural resources remain with the State and the IPRA in Section 7 (b) merely grants the
ICCs/IPs the right to manage them, viz:

"Sec. 7 (b) Right to Develop Lands and Natural Resources.- Subject to Section 56 hereof, right to develop,
control and use lands and territories traditionally occupied, owned, or used; to manage and conserve
natural resourceswithin the territories and uphold the responsibilities for future generations; to benefit
and share the profits from allocation and utilization of the natural resources found therein; the right to
negotiate the terms and conditions for the exploration of natural resources in the areas for the purpose of
ensuring ecological, environmental protection and the conservation measures, pursuant to national and
customary laws; the right to an informed and intelligent participation in the formulation and
implementation of any project, government or private, that will affect or impact upon the ancestral
domains and to receive just and fair compensation for any damages which they may sustain as a result of
the project; and the right to effective measures by the government to prevent any interference with,
alienation and encroachment upon these rights;"

The right to develop lands and natural resources under Section 7 (b) of the IPRA enumerates the
following rights:

a) the right to develop, control and use lands and territories traditionally occupied;

b) the right to manage and conserve natural resources within the territories and uphold the
responsibilities for future generations;

c) the right to benefit and share the profits from the allocation and utilization of the natural
resources found therein;

d) the right to negotiate the terms and conditions for the exploration of natural resources for the
purpose of ensuring ecological, environmental protection and the conservation measures,
pursuant to national and customary laws;

e) the right to an informed and intelligent participation in the formulation and implementation of
any project, government or private, that will affect or impact upon the ancestral domains and to
receive just and fair compensation for any damages which they may sustain as a result of the
project;

f) the right to effective measures by the government to prevent any interference with, alienation
and encroachment upon these rights.233

Ownership over the natural resources in the ancestral domains remains with the State and the
ICCs/IPs are merely granted the right to "manage and conserve" them for future generations,
"benefit and share" the profits from their allocation and utilization, and "negotiate the terms and
conditions for their exploration" for the purpose of "ensuring ecological and environmental
protection and conservation measures." It must be noted that the right to negotiate the terms and
conditions over the natural resources covers only their exploration which must be for the purpose of
ensuring ecological and environmental protection of, and conservation measures in the ancestral domain.
It does not extend to the exploitation and development of natural resources.

Simply stated, the ICCs/IPs' rights over the natural resources take the form of management or
stewardship. For the ICCs/IPs may use these resources and share in the profits of their utilization or
negotiate the terms for their exploration. At the same time, however, the ICCs/IPs must ensure that the
natural resources within their ancestral domains are conserved for future generations and that the
"utilization" of these resources must not harm the ecology and environment pursuant to national and
customary laws.234
The limited rights of "management and use" in Section 7 (b) must be taken to contemplate small-
scale utilization of natural resources as distinguished from large-scale. Small-scale utilization of
natural resources is expressly allowed in the third paragraph of Section 2, Article XII of the
Constitution "in recognition of the plight of forest dwellers, gold panners, marginal fishermen and others
similarly situated who exploit our natural resources for their daily sustenance and survival."235 Section 7
(b) also expressly mandates the ICCs/IPs to manage and conserve these resources and ensure
environmental and ecological protection within the domains, which duties, by their very nature,
necessarily reject utilization in a large-scale.

(c) The Large-Scale Utilization of Natural Resources In Section 57 of the IPRA Is Allowed Under
Paragraphs 1 and 4, Section 2, Article XII of the 1987 Constitution.

Section 57 of the IPRA provides:

"Sec. 57. Natural Resources within Ancestral Domains.- The ICCs/IPs shall have priority rights in
the harvesting, extraction, development or exploitation of any natural resources within the
ancestral domains. A non-member of the ICCs/IPs concerned may be allowed to take part in the
development and utilization of the natural resources for a period of not exceeding twenty-five (25) years
renewable for not more than twenty-five (25) years: Provided, That a formal and written agreement is
entered into with the ICCs/IPs concerned or that the community, pursuant to its own decision-making
process, has agreed to allow such operation: Provided finally, That the NCIP may exercise visitorial
powers and take appropriate action to safeguard the rights of the ICCs/IPs under the same contract."

Section 57 speaks of the "harvesting, extraction, development or exploitation of natural resources

within ancestral domains" and "gives the ICCs/IPs 'priority rights' therein." The terms "harvesting,
extraction, development or exploitation" of any natural resources within the ancestral domains
obviously refer to large-scale utilization. It is utilization not merely for subsistence but for commercial
or other extensive use that require technology other than manual labor.236 The law recognizes the
probability of requiring a non-member of the ICCs/IPs to participate in the development and utilization
of the natural resources and thereby allows such participation for a period of not more than 25 years,
renewable for another 25 years. This may be done on condition that a formal written agreement be
entered into by the non-member and members of the ICCs/IPs.

Section 57 of the IPRA does not give the ICCs/IPs the right to "manage and conserve" the natural
resources. Instead, the law only grants the ICCs/IPs "priority rights" in the development or exploitation
thereof. Priority means giving preference. Having priority rights over the natural resources does not
necessarily mean ownership rights. The grant of priority rights implies that there is a superior entity that
owns these resources and this entity has the power to grant preferential rights over the resources to
whosoever itself chooses.

Section 57 is not a repudiation of the Regalian doctrine. Rather, it is an affirmation of the said doctrine
that all natural resources found within the ancestral domains belong to the State. It incorporates by
implication the Regalian doctrine, hence, requires that the provision be read in the light of Section 2,
Article XII of the 1987 Constitution. Interpreting Section 2, Article XII of the 1987 Constitution237 in
relation to Section 57 of IPRA, the State, as owner of these natural resources, may directly
undertake the development and exploitation of the natural resources by itself, or in the
alternative, it may recognize the priority rights of the ICCs/IPs as owners of the land on which the
natural resources are found by entering into a co-production, joint venture, or production-
sharing agreement with them. The State may likewise enter into any of said agreements with a
non-member of the ICCs/IPs, whether natural or juridical, or enter into agreements with foreign-
owned corporations involving either technical or financial assistance for the large-scale
exploration, development and utilization of minerals, petroleum, and other mineral oils, or allow
such non-member to participate in its agreement with the ICCs/IPs. If the State decides to enter into
an agreement with a non-ICC/IP member, the National Commission on Indigenous Peoples (NCIP) shall
ensure that the rights of the ICCs/IPs under the agreement shall be protected. The agreement shall be for
a period of 25 years, renewable for another 25 years.

To reiterate, in the large-scale utilization of natural resources within the ancestral domains, the State, as
owner of these resources, has four (4) options: (1) it may, of and by itself, directly undertake the
development and exploitation of the natural resources; or (2) it may recognize the priority rights of the
ICCs/IPs by entering into an agreement with them for such development and exploitation; or (3) it may
enter into an agreement with a non-member of the ICCs/IPs, whether natural or juridical, local or foreign;
or (4) it may allow such non-member to participate in the agreement with the ICCs/IPs.

The rights granted by the IPRA to the ICCs/IPs over the natural resources in their ancestral
domains merely gives the ICCs/IPs, as owners and occupants of the land on which the resources
are found, the right to the small-scale utilization of these resources, and at the same time, a
priority in their large-scale development and exploitation. Section 57 does not mandate the State
to automatically give priority to the ICCs/IPs. The State has several options and it is within its
discretion to choose which option to pursue. Moreover, there is nothing in the law that gives the
ICCs/IPs the right to solely undertake the large-scale development of the natural resources within their
domains. The ICCs/IPs must undertake such endeavour always under State supervision or control. This
indicates that the State does not lose control and ownership over the resources even in their exploitation.
Sections 7 (b) and 57 of the law simply give due respect to the ICCs/IPs who, as actual occupants of the
land where the natural resources lie, have traditionally utilized these resources for their subsistence and
survival.

Neither is the State stripped of ownership and control of the natural resources by the following provision:

"Section 59. Certification Precondition.- All departments and other governmental agencies shall
henceforth be strictly enjoined from issuing, renewing or granting any concession, license or lease, or
entering into any production-sharing agreement. without prior certification from the NCIP that the area
affected does not overlap with any ancestral domain. Such certification shall only be issued after a field-
based investigation is conducted by the Ancestral Domains Office of the area concerned: Provided, That
no certification shall be issued by the NCIP without the free and prior informed and written consent of
the ICCs/IPs concerned: Provided, further, That no department, government agency or government-
owned or -controlled corporation may issue new concession, license, lease, or production sharing
agreement while there is a pending application for a CADT: Provided, finally, That the ICCs/IPs shall have
the right to stop or suspend, in accordance with this Act, any project that has not satisfied the
requirement of this consultation process."

Concessions, licenses, lease or production-sharing agreements for the exploitation of natural resources
shall not be issued, renewed or granted by all departments and government agencies without prior
certification from the NCIP that the area subject of the agreement does not overlap with any ancestral
domain. The NCIP certification shall be issued only after a field-based investigation shall have been
conducted and the free and prior informed written consent of the ICCs/IPs obtained. Non-compliance
with the consultation requirement gives the ICCs/IPs the right to stop or suspend any project granted by
any department or government agency.

As its subtitle suggests, this provision requires as a precondition for the issuance of any concession,
license or agreement over natural resources, that a certification be issued by the NCIP that the area
subject of the agreement does not lie within any ancestral domain. The provision does not vest the NCIP
with power over the other agencies of the State as to determine whether to grant or deny any concession
or license or agreement. It merely gives the NCIP the authority to ensure that the ICCs/IPs have been
informed of the agreement and that their consent thereto has been obtained. Note that the certification
applies to agreements over natural resources that do not necessarily lie within the ancestral domains. For
those that are found within the said domains, Sections 7(b) and 57 of the IPRA apply.
V. THE IPRA IS A RECOGNITION OF OUR ACTIVE PARTICIPATION IN THE INDIGENOUS
INTERNATIONAL MOVEMENT.

The indigenous movement can be seen as the heir to a history of anti-imperialism stretching back to
prehistoric times. The movement received a massive impetus during the 1960's from two sources. First,
the decolonization of Asia and Africa brought into the limelight the possibility of peoples controlling their
own destinies. Second, the right of self-determination was enshrined in the UN Declaration on Human
Rights.238 The rise of the civil rights movement and anti-racism brought to the attention of North
American Indians, Aborigines in Australia, and Maori in New Zealand the possibility of fighting for
fundamental rights and freedoms.

In 1974 and 1975, international indigenous organizations were founded,239 and during the 1980's,
indigenous affairs were on the international agenda. The people of the Philippine Cordillera were the first
Asians to take part in the international indigenous movement. It was the Cordillera People's Alliance that
carried out successful campaigns against the building of the Chico River Dam in 1981-82 and they have
since become one of the best-organized indigenous bodies in the world.240

Presently, there is a growing concern for indigenous rights in the international scene. This came as a
result of the increased publicity focused on the continuing disrespect for indigenous human rights and
the destruction of the indigenous peoples' environment, together with the national governments'
inability to deal with the situation.241Indigenous rights came as a result of both human rights and
environmental protection, and have become a part of today's priorities for the international agenda. 242

International institutions and bodies have realized the necessity of applying policies, programs and
specific rules concerning IPs in some nations. The World Bank, for example, first adopted a policy on IPs
as a result of the dismal experience of projects in Latin America.243 The World Bank now seeks to apply
its current policy on IPs to some of its projects in Asia. This policy has provided an influential model for
the projects of the Asian Development Bank.244

The 1987 Philippine Constitution formally recognizes the existence of ICCs/IPs and declares as a State
policy the promotion of their rights within the framework of national unity and development. 245 The
IPRA amalgamates the Philippine category of ICCs with the international category of IPs,246 and is heavily
influenced by both the International Labor Organization (ILO) Convention 169 and the United Nations
(UN) Draft Declaration on the Rights of Indigenous Peoples.247

ILO Convention No. 169 is entitled the "Convention Concerning Indigenous and Tribal Peoples in
Independent Countries"248 and was adopted on June 27, 1989. It is based on the Universal Declaration of
Human Rights, the International Covenant on Economic, Social and Cultural Rights, the International
Covenant on Civil and Political Rights, and many other international instruments on the prevention of
discrimination.249 ILO Convention No. 169 revised the "Convention Concerning the Protection and
Integration of Indigenous and Other Tribal and Semi-Tribal Populations in Independent Countries" (ILO
No. 107) passed on June 26, 1957. Developments in international law made it appropriate to adopt new
international standards on indigenous peoples "with a view to removing the assimilationist orientation of
the earlier standards," and recognizing the aspirations of these peoples to exercise control over their own
institutions, ways of life and economic development."250

CONCLUSION

The struggle of the Filipinos throughout colonial history had been plagued by ethnic and religious
differences. These differences were carried over and magnified by the Philippine government through the
imposition of a national legal order that is mostly foreign in origin or derivation. 251 Largely unpopulist,
the present legal system has resulted in the alienation of a large sector of society, specifically, the
indigenous peoples. The histories and cultures of the indigenes are relevant to the evolution of Philippine
culture and are vital to the understanding of contemporary problems.252 It is through the IPRA that an
attempt was made by our legislators to understand Filipino society not in terms of myths and biases but
through common experiences in the course of history. The Philippines became a democracy a centennial
ago and the decolonization process still continues. If the evolution of the Filipino people into a
democratic society is to truly proceed democratically, i.e., if the Filipinos as a whole are to participate
fully in the task of continuing democratization,253 it is this Court's duty to acknowledge the presence of
indigenous and customary laws in the country and affirm their co-existence with the land laws in our
national legal system.

With the foregoing disquisitions, I vote to uphold the constitutionality of the Indigenous Peoples Rights
Act of 1997.

G.R. No. 127882 January 27, 2004

LA BUGAL-B'LAAN TRIBAL ASSOCIATION, INC., represented by its Chairman F'LONG MIGUEL M.

LUMAYONG, WIGBERTO E. TAÑADA, PONCIANO BENNAGEN, JAIME TADEO, RENATO R.
CONSTANTINO, JR., F'LONG AGUSTIN M. DABIE, ROBERTO P. AMLOY, RAQIM L. DABIE, SIMEON H.
DOLOJO, IMELDA M. GANDON, LENY B. GUSANAN, MARCELO L. GUSANAN, QUINTOL A. LABUAYAN,
LOMINGGES D. LAWAY, BENITA P. TACUAYAN, minors JOLY L. BUGOY, represented by his father
UNDERO D. BUGOY, ROGER M. DADING, represented by his father ANTONIO L. DADING, ROMY M.
LAGARO, represented by his father TOTING A. LAGARO, MIKENY JONG B. LUMAYONG, represented
by his father MIGUEL M. LUMAYONG, RENE T. MIGUEL, represented by his mother EDITHA T.
MIGUEL, ALDEMAR L. SAL, represented by his father DANNY M. SAL, DAISY RECARSE, represented
by her mother LYDIA S. SANTOS, EDWARD M. EMUY, ALAN P. MAMPARAIR, MARIO L. MANGCAL,
ALDEN S. TUSAN, AMPARO S. YAP, VIRGILIO CULAR, MARVIC M.V.F. LEONEN, JULIA REGINA CULAR,
GIAN CARLO CULAR, VIRGILIO CULAR, JR., represented by their father VIRGILIO CULAR, PAUL
ANTONIO P. VILLAMOR, represented by his parents JOSE VILLAMOR and ELIZABETH PUA-
VILLAMOR, ANA GININA R. TALJA, represented by her father MARIO JOSE B. TALJA, SHARMAINE R.
CUNANAN, represented by her father ALFREDO M. CUNANAN, ANTONIO JOSE A. VITUG III,
represented by his mother ANNALIZA A. VITUG, LEAN D. NARVADEZ, represented by his father
MANUEL E. NARVADEZ, JR., ROSERIO MARALAG LINGATING, represented by her father RIO
OLIMPIO A. LINGATING, MARIO JOSE B. TALJA, DAVID E. DE VERA, MARIA MILAGROS L. SAN JOSE,
SR., SUSAN O. BOLANIO, OND, LOLITA G. DEMONTEVERDE, BENJIE L. NEQUINTO, 1 ROSE LILIA S.
ROMANO, ROBERTO S. VERZOLA, EDUARDO AURELIO C. REYES, LEAN LOUEL A. PERIA, represented
by his father ELPIDIO V. PERIA,2 GREEN FORUM PHILIPPINES, GREEN FORUM WESTERN VISAYAS,
(GF-WV), ENVIRONMETAL LEGAL ASSISTANCE CENTER (ELAC), PHILIPPINE KAISAHAN TUNGO SA
KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN (KAISAHAN),3 KAISAHAN TUNGO SA
KAUNLARAN NG KANAYUNAN AT REPORMANG PANSAKAHAN (KAISAHAN), PARTNERSHIP FOR
AGRARIAN REFORM and RURAL DEVELOPMENT SERVICES, INC. (PARRDS), PHILIPPINE
PART`NERSHIP FOR THE DEVELOPMENT OF HUMAN RESOURCES IN THE RURAL AREAS, INC.
(PHILDHRRA), WOMEN'S LEGAL BUREAU (WLB), CENTER FOR ALTERNATIVE DEVELOPMENT
INITIATIVES, INC. (CADI), UPLAND DEVELOPMENT INSTITUTE (UDI), KINAIYAHAN FOUNDATION,
INC., SENTRO NG ALTERNATIBONG LINGAP PANLIGAL (SALIGAN), LEGAL RIGHTS AND NATURAL
RESOURCES CENTER, INC. (LRC), petitioners,
vs.
VICTOR O. RAMOS, SECRETARY, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES
(DENR), HORACIO RAMOS, DIRECTOR, MINES AND GEOSCIENCES BUREAU (MGB-DENR), RUBEN
TORRES, EXECUTIVE SECRETARY, and WMC (PHILIPPINES), INC.4 respondents.

DECISION

CARPIO-MORALES, J.:

The present petition for mandamus and prohibition assails the constitutionality of Republic Act No.
7942,5 otherwise known as the PHILIPPINE MINING ACT OF 1995, along with the Implementing Rules
and Regulations issued pursuant thereto, Department of Environment and Natural Resources (DENR)
Administrative Order 96-40, and of the Financial and Technical Assistance Agreement (FTAA) entered
into on March 30, 1995 by the Republic of the Philippines and WMC (Philippines), Inc. (WMCP), a
corporation organized under Philippine laws.

On July 25, 1987, then President Corazon C. Aquino issued Executive Order (E.O.) No. 2796 authorizing
the DENR Secretary to accept, consider and evaluate proposals from foreign-owned corporations or
foreign investors for contracts or agreements involving either technical or financial assistance for large-
scale exploration, development, and utilization of minerals, which, upon appropriate recommendation of
the Secretary, the President may execute with the foreign proponent. In entering into such proposals, the
President shall consider the real contributions to the economic growth and general welfare of the country
that will be realized, as well as the development and use of local scientific and technical resources that
will be promoted by the proposed contract or agreement. Until Congress shall determine otherwise,
large-scale mining, for purpose of this Section, shall mean those proposals for contracts or agreements
for mineral resources exploration, development, and utilization involving a committed capital investment
in a single mining unit project of at least Fifty Million Dollars in United States Currency (US
$50,000,000.00).7

On March 3, 1995, then President Fidel V. Ramos approved R.A. No. 7942 to "govern the exploration,
development, utilization and processing of all mineral resources."8 R.A. No. 7942 defines the modes of
mineral agreements for mining operations,9 outlines the procedure for their filing and
approval,10 assignment/transfer11 and withdrawal,12and fixes their terms.13 Similar provisions govern
financial or technical assistance agreements.14

The law prescribes the qualifications of contractors15 and grants them certain rights, including
timber,16 water17 and easement18 rights, and the right to possess explosives.19 Surface owners, occupants,
or concessionaires are forbidden from preventing holders of mining rights from entering private lands
and concession areas.20 A procedure for the settlement of conflicts is likewise provided for.21

The Act restricts the conditions for exploration,22 quarry23 and other24 permits. It regulates the transport,
sale and processing of minerals,25 and promotes the development of mining communities, science and
mining technology,26and safety and environmental protection.27

The government's share in the agreements is spelled out and allocated, 28 taxes and fees are
imposed,29 incentives granted.30 Aside from penalizing certain acts,31 the law likewise specifies grounds
for the cancellation, revocation and termination of agreements and permits.32

On April 9, 1995, 30 days following its publication on March 10, 1995 in Malaya and Manila Times, two
newspapers of general circulation, R.A. No. 7942 took effect.33 Shortly before the effectivity of R.A. No.
7942, however, or on March 30, 1995, the President entered into an FTAA with WMCP covering 99,387
hectares of land in South Cotabato, Sultan Kudarat, Davao del Sur and North Cotabato.34

On August 15, 1995, then DENR Secretary Victor O. Ramos issued DENR Administrative Order (DAO) No.
95-23, s. 1995, otherwise known as the Implementing Rules and Regulations of R.A. No. 7942. This was
later repealed by DAO No. 96-40, s. 1996 which was adopted on December 20, 1996.

On January 10, 1997, counsels for petitioners sent a letter to the DENR Secretary demanding that the
DENR stop the implementation of R.A. No. 7942 and DAO No. 96-40,35 giving the DENR fifteen days from
receipt36 to act thereon. The DENR, however, has yet to respond or act on petitioners' letter.37

Petitioners thus filed the present petition for prohibition and mandamus, with a prayer for a temporary
restraining order. They allege that at the time of the filing of the petition, 100 FTAA applications had
already been filed, covering an area of 8.4 million hectares,38 64 of which applications are by fully
foreign-owned corporations covering a total of 5.8 million hectares, and at least one by a fully foreign-
owned mining company over offshore areas.39

Petitioners claim that the DENR Secretary acted without or in excess of jurisdiction:

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No.
7942, the latter being unconstitutional in that it allows fully foreign owned corporations to explore,
develop, utilize and exploit mineral resources in a manner contrary to Section 2, paragraph 4, Article XII
of the Constitution;

II

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No.
7942, the latter being unconstitutional in that it allows the taking of private property without the
determination of public use and for just compensation;

III

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No.
7942, the latter being unconstitutional in that it violates Sec. 1, Art. III of the Constitution;

IV

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No.
7942, the latter being unconstitutional in that it allows enjoyment by foreign citizens as well as fully
foreign owned corporations of the nation's marine wealth contrary to Section 2, paragraph 2 of Article XII
of the Constitution;

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No.
7942, the latter being unconstitutional in that it allows priority to foreign and fully foreign owned
corporations in the exploration, development and utilization of mineral resources contrary to Article XII
of the Constitution;

VI

x x x in signing and promulgating DENR Administrative Order No. 96-40 implementing Republic Act No.
7942, the latter being unconstitutional in that it allows the inequitable sharing of wealth contrary to
Sections [sic] 1, paragraph 1, and Section 2, paragraph 4[,] [Article XII] of the Constitution;

VII

x x x in recommending approval of and implementing the Financial and Technical Assistance Agreement
between the President of the Republic of the Philippines and Western Mining Corporation Philippines Inc.
because the same is illegal and unconstitutional.40

They pray that the Court issue an order:

(a) Permanently enjoining respondents from acting on any application for Financial or Technical
Assistance Agreements;
 (b) Declaring the Philippine Mining Act of 1995 or Republic Act No. 7942 as unconstitutional and
null and void;

(c) Declaring the Implementing Rules and Regulations of the Philippine Mining Act contained in
DENR Administrative Order No. 96-40 and all other similar administrative issuances as
unconstitutional and null and void; and

(d) Cancelling the Financial and Technical Assistance Agreement issued to Western Mining
Philippines, Inc. as unconstitutional, illegal and null and void.41

Impleaded as public respondents are Ruben Torres, the then Executive Secretary, Victor O. Ramos, the
then DENR Secretary, and Horacio Ramos, Director of the Mines and Geosciences Bureau of the DENR.
Also impleaded is private respondent WMCP, which entered into the assailed FTAA with the Philippine
Government. WMCP is owned by WMC Resources International Pty., Ltd. (WMC), "a wholly owned
subsidiary of Western Mining Corporation Holdings Limited, a publicly listed major Australian mining
and exploration company."42 By WMCP's information, "it is a 100% owned subsidiary of WMC
LIMITED."43

Respondents, aside from meeting petitioners' contentions, argue that the requisites for judicial inquiry
have not been met and that the petition does not comply with the criteria for prohibition and mandamus.
Additionally, respondent WMCP argues that there has been a violation of the rule on hierarchy of courts.

After petitioners filed their reply, this Court granted due course to the petition. The parties have since
filed their respective memoranda.

WMCP subsequently filed a Manifestation dated September 25, 2002 alleging that on January 23, 2001,
WMC sold all its shares in WMCP to Sagittarius Mines, Inc. (Sagittarius), a corporation organized under
Philippine laws.44WMCP was subsequently renamed "Tampakan Mineral Resources
Corporation."45 WMCP claims that at least 60% of the equity of Sagittarius is owned by Filipinos and/or
Filipino-owned corporations while about 40% is owned by Indophil Resources NL, an Australian
company.46 It further claims that by such sale and transfer of shares, "WMCP has ceased to be connected
in any way with WMC."47

By virtue of such sale and transfer, the DENR Secretary, by Order of December 18, 2001, 48 approved the
transfer and registration of the subject FTAA from WMCP to Sagittarius. Said Order, however, was
appealed by Lepanto Consolidated Mining Co. (Lepanto) to the Office of the President which upheld it by
Decision of July 23, 2002.49 Its motion for reconsideration having been denied by the Office of the
President by Resolution of November 12, 2002,50 Lepanto filed a petition for review51 before the Court of
Appeals. Incidentally, two other petitions for review related to the approval of the transfer and
registration of the FTAA to Sagittarius were recently resolved by this Court.52

It bears stressing that this case has not been rendered moot either by the transfer and registration of the
FTAA to a Filipino-owned corporation or by the non-issuance of a temporary restraining order or a
preliminary injunction to stay the above-said July 23, 2002 decision of the Office of the President. 53 The
validity of the transfer remains in dispute and awaits final judicial determination. This assumes, of course,
that such transfer cures the FTAA's alleged unconstitutionality, on which question judgment is reserved.

WMCP also points out that the original claimowners of the major mineralized areas included in the
WMCP FTAA, namely, Sagittarius, Tampakan Mining Corporation, and Southcot Mining Corporation, are
all Filipino-owned corporations,54 each of which was a holder of an approved Mineral Production Sharing
Agreement awarded in 1994, albeit their respective mineral claims were subsumed in the WMCP
FTAA;55 and that these three companies are the same companies that consolidated their interests in
Sagittarius to whom WMC sold its 100% equity in WMCP.56 WMCP concludes that in the event that the
FTAA is invalidated, the MPSAs of the three corporations would be revived and the mineral claims would
revert to their original claimants.57

These circumstances, while informative, are hardly significant in the resolution of this case, it involving
the validity of the FTAA, not the possible consequences of its invalidation.

Of the above-enumerated seven grounds cited by petitioners, as will be shown later, only the first and the
last need be delved into; in the latter, the discussion shall dwell only insofar as it questions the effectivity
of E. O. No. 279 by virtue of which order the questioned FTAA was forged.

Before going into the substantive issues, the procedural questions posed by respondents shall first be
tackled.

REQUISITES FOR JUDICIAL REVIEW

When an issue of constitutionality is raised, this Court can exercise its power of judicial review only if the
following requisites are present:

(1) The existence of an actual and appropriate case;

(2) A personal and substantial interest of the party raising the constitutional question;

(3) The exercise of judicial review is pleaded at the earliest opportunity; and

(4) The constitutional question is the lis mota of the case. 58

Respondents claim that the first three requisites are not present.

Section 1, Article VIII of the Constitution states that "(j)udicial power includes the duty of the courts of
justice to settle actual controversies involving rights which are legally demandable and enforceable." The
power of judicial review, therefore, is limited to the determination of actual cases and controversies.59

An actual case or controversy means an existing case or controversy that is appropriate or ripe for
determination, not conjectural or anticipatory,60 lest the decision of the court would amount to an
advisory opinion.61 The power does not extend to hypothetical questions62 since any attempt at
abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to
actualities.63

"Legal standing" or locus standi has been defined as a personal and substantial interest in the case such
that the party has sustained or will sustain direct injury as a result of the governmental act that is being
challenged,64alleging more than a generalized grievance.65 The gist of the question of standing is whether
a party alleges "such personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court depends for illumination of
difficult constitutional questions."66 Unless a person is injuriously affected in any of his constitutional
rights by the operation of statute or ordinance, he has no standing.67

Petitioners traverse a wide range of sectors. Among them are La Bugal B'laan Tribal Association, Inc., a
farmers and indigenous people's cooperative organized under Philippine laws representing a community
actually affected by the mining activities of WMCP, members of said cooperative, 68 as well as other
residents of areas also affected by the mining activities of WMCP.69 These petitioners have standing to
raise the constitutionality of the questioned FTAA as they allege a personal and substantial injury. They
claim that they would suffer "irremediable displacement"70 as a result of the implementation of the FTAA
allowing WMCP to conduct mining activities in their area of residence. They thus meet the appropriate
case requirement as they assert an interest adverse to that of respondents who, on the other hand, insist
on the FTAA's validity.

In view of the alleged impending injury, petitioners also have standing to assail the validity of E.O. No.
279, by authority of which the FTAA was executed.

Public respondents maintain that petitioners, being strangers to the FTAA, cannot sue either or both
contracting parties to annul it.71 In other words, they contend that petitioners are not real parties in
interest in an action for the annulment of contract.

Public respondents' contention fails. The present action is not merely one for annulment of contract but
for prohibition and mandamus. Petitioners allege that public respondents acted without or in excess of
jurisdiction in implementing the FTAA, which they submit is unconstitutional. As the case involves
constitutional questions, this Court is not concerned with whether petitioners are real parties in interest,
but with whether they have legal standing. As held in Kilosbayan v. Morato:72

x x x. "It is important to note . . . that standing because of its constitutional and public policy
underpinnings, is very different from questions relating to whether a particular plaintiff is the real party
in interest or has capacity to sue. Although all three requirements are directed towards ensuring that
only certain parties can maintain an action, standing restrictions require a partial consideration of the
merits, as well as broader policy concerns relating to the proper role of the judiciary in certain areas.["]
(FRIEDENTHAL, KANE AND MILLER, CIVIL PROCEDURE 328 [1985])

Standing is a special concern in constitutional law because in some cases suits are brought not by parties
who have been personally injured by the operation of a law or by official action taken, but by concerned
citizens, taxpayers or voters who actually sue in the public interest. Hence, the question in standing is
whether such parties have "alleged such a personal stake in the outcome of the controversy as to assure
that concrete adverseness which sharpens the presentation of issues upon which the court so largely
depends for illumination of difficult constitutional questions." (Baker v. Carr, 369 U.S. 186, 7 L.Ed.2d 633
[1962].)

As earlier stated, petitioners meet this requirement.

The challenge against the constitutionality of R.A. No. 7942 and DAO No. 96-40 likewise fulfills the
requisites of justiciability. Although these laws were not in force when the subject FTAA was entered into,
the question as to their validity is ripe for adjudication.

The WMCP FTAA provides:

14.3 Future Legislation

Any term and condition more favourable to Financial &Technical Assistance Agreement contractors
resulting from repeal or amendment of any existing law or regulation or from the enactment of a law,
regulation or administrative order shall be considered a part of this Agreement.

It is undisputed that R.A. No. 7942 and DAO No. 96-40 contain provisions that are more favorable to
WMCP, hence, these laws, to the extent that they are favorable to WMCP, govern the FTAA.

In addition, R.A. No. 7942 explicitly makes certain provisions apply to pre-existing agreements.

SEC. 112. Non-impairment of Existing Mining/Quarrying Rights. – x x x That the provisions of Chapter XIV
on government share in mineral production-sharing agreement and of Chapter XVI on incentives of this
Act shall immediately govern and apply to a mining lessee or contractor unless the mining lessee or
contractor indicates his intention to the secretary, in writing, not to avail of said provisions x x x Provided,
finally, That such leases, production-sharing agreements, financial or technical assistance agreements
shall comply with the applicable provisions of this Act and its implementing rules and regulations.

As there is no suggestion that WMCP has indicated its intention not to avail of the provisions of Chapter
XVI of R.A. No. 7942, it can safely be presumed that they apply to the WMCP FTAA.

Misconstruing the application of the third requisite for judicial review – that the exercise of the review is
pleaded at the earliest opportunity – WMCP points out that the petition was filed only almost two years
after the execution of the FTAA, hence, not raised at the earliest opportunity.

The third requisite should not be taken to mean that the question of constitutionality must be raised
immediately after the execution of the state action complained of. That the question of constitutionality
has not been raised before is not a valid reason for refusing to allow it to be raised later. 73 A contrary rule
would mean that a law, otherwise unconstitutional, would lapse into constitutionality by the mere failure
of the proper party to promptly file a case to challenge the same.

PROPRIETY OF PROHIBITION AND MANDAMUS

Before the effectivity in July 1997 of the Revised Rules of Civil Procedure, Section 2 of Rule 65 read:

SEC. 2. Petition for prohibition. – When the proceedings of any tribunal, corporation, board, or person,
whether exercising functions judicial or ministerial, are without or in excess of its or his jurisdiction, or
with grave abuse of discretion, and there is no appeal or any other plain, speedy, and adequate remedy in
the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court
alleging the facts with certainty and praying that judgment be rendered commanding the defendant to
desist from further proceeding in the action or matter specified therein.

Prohibition is a preventive remedy.74 It seeks a judgment ordering the defendant to desist from
continuing with the commission of an act perceived to be illegal.75

The petition for prohibition at bar is thus an appropriate remedy. While the execution of the contract
itself may be fait accompli, its implementation is not. Public respondents, in behalf of the Government,
have obligations to fulfill under said contract. Petitioners seek to prevent them from fulfilling such
obligations on the theory that the contract is unconstitutional and, therefore, void.

The propriety of a petition for prohibition being upheld, discussion of the propriety of the mandamus
aspect of the petition is rendered unnecessary.

HIERARCHY OF COURTS

The contention that the filing of this petition violated the rule on hierarchy of courts does not likewise lie.
The rule has been explained thus:

Between two courts of concurrent original jurisdiction, it is the lower court that should initially pass
upon the issues of a case. That way, as a particular case goes through the hierarchy of courts, it is shorn of
all but the important legal issues or those of first impression, which are the proper subject of attention of
the appellate court. This is a procedural rule borne of experience and adopted to improve the
administration of justice.

This Court has consistently enjoined litigants to respect the hierarchy of courts. Although this Court has
concurrent jurisdiction with the Regional Trial Courts and the Court of Appeals to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction, such concurrence does not give a
party unrestricted freedom of choice of court forum. The resort to this Court's primary jurisdiction to
issue said writs shall be allowed only where the redress desired cannot be obtained in the appropriate
courts or where exceptional and compelling circumstances justify such invocation. We held in People v.
Cuaresma that:

A becoming regard for judicial hierarchy most certainly indicates that petitions for the issuance of
extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and
those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original
jurisdiction to issue these writs should be allowed only where there are special and important reasons
therefor, clearly and specifically set out in the petition. This is established policy. It is a policy necessary
to prevent inordinate demands upon the Court's time and attention which are better devoted to those
matters within its exclusive jurisdiction, and to prevent further over-crowding of the Court's docket x x
x.76 [Emphasis supplied.]

The repercussions of the issues in this case on the Philippine mining industry, if not the national economy,
as well as the novelty thereof, constitute exceptional and compelling circumstances to justify resort to
this Court in the first instance.

In all events, this Court has the discretion to take cognizance of a suit which does not satisfy the
requirements of an actual case or legal standing when paramount public interest is involved. 77 When the
issues raised are of paramount importance to the public, this Court may brush aside technicalities of
procedure.78

II

Petitioners contend that E.O. No. 279 did not take effect because its supposed date of effectivity came
after President Aquino had already lost her legislative powers under the Provisional Constitution.

And they likewise claim that the WMC FTAA, which was entered into pursuant to E.O. No. 279, violates
Section 2, Article XII of the Constitution because, among other reasons:

(1) It allows foreign-owned companies to extend more than mere financial or technical assistance
to the State in the exploitation, development, and utilization of minerals, petroleum, and other
mineral oils, and even permits foreign owned companies to "operate and manage mining
activities."

(2) It allows foreign-owned companies to extend both technical and financial assistance, instead of
"either technical or financial assistance."

To appreciate the import of these issues, a visit to the history of the pertinent constitutional provision,
the concepts contained therein, and the laws enacted pursuant thereto, is in order.

Section 2, Article XII reads in full:

Sec. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces
of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are
owned by the State. With the exception of agricultural lands, all other natural resources shall not be
alienated. The exploration, development, and utilization of natural resources shall be under the full
control and supervision of the State. The State may directly undertake such activities or it may enter into
co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or
associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may
be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and
under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water
supply, fisheries, or industrial uses other than the development of water power, beneficial use may be the
measure and limit of the grant.
The State shall protect the nation's marine wealth in its archipelagic waters, territorial sea, and exclusive
economic zone, and reserve its use and enjoyment exclusively to Filipino citizens.

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence fishermen and fish-workers in rivers, lakes, bays,
and lagoons.

The President may enter into agreements with foreign-owned corporations involving either technical or
financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and
other mineral oils according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such agreements, the State
shall promote the development and use of local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision,
within thirty days from its execution.

THE SPANISH REGIME AND THE REGALIAN DOCTRINE

The first sentence of Section 2 embodies the Regalian doctrine or jura regalia. Introduced by Spain into
these Islands, this feudal concept is based on the State's power of dominium, which is the capacity of the
State to own or acquire property.79

In its broad sense, the term "jura regalia" refers to royal rights, or those rights which the King has by
virtue of his prerogatives. In Spanish law, it refers to a right which the sovereign has over anything in
which a subject has a right of property or propriedad. These were rights enjoyed during feudal times by
the king as the sovereign.

The theory of the feudal system was that title to all lands was originally held by the King, and while the
use of lands was granted out to others who were permitted to hold them under certain conditions, the
King theoretically retained the title. By fiction of law, the King was regarded as the original proprietor of
all lands, and the true and only source of title, and from him all lands were held. The theory of jura regalia
was therefore nothing more than a natural fruit of conquest.80

The Philippines having passed to Spain by virtue of discovery and conquest, 81 earlier Spanish decrees
declared that "all lands were held from the Crown."82

The Regalian doctrine extends not only to land but also to "all natural wealth that may be found in the
bowels of the earth."83 Spain, in particular, recognized the unique value of natural resources, viewing
them, especially minerals, as an abundant source of revenue to finance its wars against other
nations.84 Mining laws during the Spanish regime reflected this perspective.85

THE AMERICAN OCCUPATION AND THE CONCESSION REGIME

By the Treaty of Paris of December 10, 1898, Spain ceded "the archipelago known as the Philippine
Islands" to the United States. The Philippines was hence governed by means of organic acts that were in
the nature of charters serving as a Constitution of the occupied territory from 1900 to 1935. 86 Among the
principal organic acts of the Philippines was the Act of Congress of July 1, 1902, more commonly known
as the Philippine Bill of 1902, through which the United States Congress assumed the administration of
the Philippine Islands.87 Section 20 of said Bill reserved the disposition of mineral lands of the public
domain from sale. Section 21 thereof allowed the free and open exploration, occupation and purchase of
mineral deposits not only to citizens of the Philippine Islands but to those of the United States as well:

Sec. 21. That all valuable mineral deposits in public lands in the Philippine Islands, both surveyed and
unsurveyed, are hereby declared to be free and open to exploration, occupation and purchase, and the
land in which they are found, to occupation and purchase, by citizens of the United States or of said
Islands: Provided, That when on any lands in said Islands entered and occupied as agricultural lands
under the provisions of this Act, but not patented, mineral deposits have been found, the working of such
mineral deposits is forbidden until the person, association, or corporation who or which has entered and
is occupying such lands shall have paid to the Government of said Islands such additional sum or sums as
will make the total amount paid for the mineral claim or claims in which said deposits are located equal
to the amount charged by the Government for the same as mineral claims.

Unlike Spain, the United States considered natural resources as a source of wealth for its nationals and
saw fit to allow both Filipino and American citizens to explore and exploit minerals in public lands, and to
grant patents to private mineral lands.88 A person who acquired ownership over a parcel of private
mineral land pursuant to the laws then prevailing could exclude other persons, even the State, from
exploiting minerals within his property.89 Thus, earlier jurisprudence90 held that:

A valid and subsisting location of mineral land, made and kept up in accordance with the provisions of the
statutes of the United States, has the effect of a grant by the United States of the present and exclusive
possession of the lands located, and this exclusive right of possession and enjoyment continues during
the entire life of the location. x x x.

x x x.

The discovery of minerals in the ground by one who has a valid mineral location perfects his claim and
his location not only against third persons, but also against the Government. x x x. [Italics in the original.]

The Regalian doctrine and the American system, therefore, differ in one essential respect. Under the
Regalian theory, mineral rights are not included in a grant of land by the state; under the American
doctrine, mineral rights are included in a grant of land by the government.91

Section 21 also made possible the concession (frequently styled "permit", license" or
"lease")92 system.93 This was the traditional regime imposed by the colonial administrators for the
exploitation of natural resources in the extractive sector (petroleum, hard minerals, timber, etc.).94

Under the concession system, the concessionaire makes a direct equity investment for the purpose of
exploiting a particular natural resource within a given area.95 Thus, the concession amounts to complete
control by the concessionaire over the country's natural resource, for it is given exclusive and plenary
rights to exploit a particular resource at the point of extraction.96 In consideration for the right to exploit
a natural resource, the concessionaire either pays rent or royalty, which is a fixed percentage of the gross
proceeds.97

Later statutory enactments by the legislative bodies set up in the Philippines adopted the contractual
framework of the concession.98 For instance, Act No. 2932,99 approved on August 31, 1920, which
provided for the exploration, location, and lease of lands containing petroleum and other mineral oils and
gas in the Philippines, and Act No. 2719,100 approved on May 14, 1917, which provided for the leasing and
development of coal lands in the Philippines, both utilized the concession system.101

THE 1935 CONSTITUTION AND THE NATIONALIZATION OF NATURAL RESOURCES

By the Act of United States Congress of March 24, 1934, popularly known as the Tydings-McDuffie Law,
the People of the Philippine Islands were authorized to adopt a constitution. 102 On July 30, 1934, the
Constitutional Convention met for the purpose of drafting a constitution, and the Constitution
subsequently drafted was approved by the Convention on February 8, 1935.103 The Constitution was
submitted to the President of the United States on March 18, 1935.104 On March 23, 1935, the President of
the United States certified that the Constitution conformed substantially with the provisions of the Act of
Congress approved on March 24, 1934.105 On May 14, 1935, the Constitution was ratified by the Filipino
people.106
The 1935 Constitution adopted the Regalian doctrine, declaring all natural resources of the Philippines,
including mineral lands and minerals, to be property belonging to the State. 107 As adopted in a republican
system, the medieval concept of jura regalia is stripped of royal overtones and ownership of the land is
vested in the State.108

Section 1, Article XIII, on Conservation and Utilization of Natural Resources, of the 1935 Constitution
provided:

SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease,
or concession at the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land, shall not be
alienated, and no license, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-five years, except as to
water rights for irrigation, water supply, fisheries, or industrial uses other than the development
of water power, in which cases beneficial use may be the measure and the limit of the grant.

The nationalization and conservation of the natural resources of the country was one of the fixed and
dominating objectives of the 1935 Constitutional Convention.109 One delegate relates:

There was an overwhelming sentiment in the Convention in favor of the principle of state ownership of
natural resources and the adoption of the Regalian doctrine. State ownership of natural resources was
seen as a necessary starting point to secure recognition of the state's power to control their disposition,
exploitation, development, or utilization. The delegates of the Constitutional Convention very well knew
that the concept of State ownership of land and natural resources was introduced by the Spaniards,
however, they were not certain whether it was continued and applied by the Americans. To remove all
doubts, the Convention approved the provision in the Constitution affirming the Regalian doctrine.

The adoption of the principle of state ownership of the natural resources and of the Regalian doctrine
was considered to be a necessary starting point for the plan of nationalizing and conserving the natural
resources of the country. For with the establishment of the principle of state ownership of the natural
resources, it would not be hard to secure the recognition of the power of the State to control their
disposition, exploitation, development or utilization.110

The nationalization of the natural resources was intended (1) to insure their conservation for Filipino
posterity; (2) to serve as an instrument of national defense, helping prevent the extension to the country
of foreign control through peaceful economic penetration; and (3) to avoid making the Philippines a
source of international conflicts with the consequent danger to its internal security and independence.111

The same Section 1, Article XIII also adopted the concession system, expressly permitting the State to
grant licenses, concessions, or leases for the exploitation, development, or utilization of any of the natural
resources. Grants, however, were limited to Filipinos or entities at least 60% of the capital of which is
owned by Filipinos.lawph!l.ne+

The swell of nationalism that suffused the 1935 Constitution was radically diluted when on November
1946, the Parity Amendment, which came in the form of an "Ordinance Appended to the Constitution,"
was ratified in a plebiscite.112 The Amendment extended, from July 4, 1946 to July 3, 1974, the right to
utilize and exploit our natural resources to citizens of the United States and business enterprises owned
or controlled, directly or indirectly, by citizens of the United States:113
Notwithstanding the provision of section one, Article Thirteen, and section eight, Article Fourteen, of the
foregoing Constitution, during the effectivity of the Executive Agreement entered into by the President of
the Philippines with the President of the United States on the fourth of July, nineteen hundred and forty-
six, pursuant to the provisions of Commonwealth Act Numbered Seven hundred and thirty-three, but in
no case to extend beyond the third of July, nineteen hundred and seventy-four, the disposition,
exploitation, development, and utilization of all agricultural, timber, and mineral lands of the public
domain, waters, minerals, coals, petroleum, and other mineral oils, all forces and sources of potential
energy, and other natural resources of the Philippines, and the operation of public utilities, shall, if open
to any person, be open to citizens of the United States and to all forms of business enterprise owned or
controlled, directly or indirectly, by citizens of the United States in the same manner as to, and under the
same conditions imposed upon, citizens of the Philippines or corporations or associations owned or
controlled by citizens of the Philippines.

The Parity Amendment was subsequently modified by the 1954 Revised Trade Agreement, also known as
the Laurel-Langley Agreement, embodied in Republic Act No. 1355.114

THE PETROLEUM ACT OF 1949 AND THE CONCESSION SYSTEM

In the meantime, Republic Act No. 387,115 also known as the Petroleum Act of 1949, was approved on
June 18, 1949.

The Petroleum Act of 1949 employed the concession system for the exploitation of the nation's
petroleum resources. Among the kinds of concessions it sanctioned were exploration and exploitation
concessions, which respectively granted to the concessionaire the exclusive right to explore for116 or
develop117 petroleum within specified areas.

Concessions may be granted only to duly qualified persons118 who have sufficient finances, organization,
resources, technical competence, and skills necessary to conduct the operations to be undertaken. 119

Nevertheless, the Government reserved the right to undertake such work itself.120 This proceeded from
the theory that all natural deposits or occurrences of petroleum or natural gas in public and/or private
lands in the Philippines belong to the State.121 Exploration and exploitation concessions did not confer
upon the concessionaire ownership over the petroleum lands and petroleum deposits.122 However, they
did grant concessionaires the right to explore, develop, exploit, and utilize them for the period and under
the conditions determined by the law.123

Concessions were granted at the complete risk of the concessionaire; the Government did not guarantee
the existence of petroleum or undertake, in any case, title warranty.124

Concessionaires were required to submit information as maybe required by the Secretary of Agriculture
and Natural Resources, including reports of geological and geophysical examinations, as well as
production reports.125Exploration126 and exploitation127 concessionaires were also required to submit
work programs.lavvphi1.net

Exploitation concessionaires, in particular, were obliged to pay an annual exploitation tax,128 the object of
which is to induce the concessionaire to actually produce petroleum, and not simply to sit on the
concession without developing or exploiting it.129 These concessionaires were also bound to pay the
Government royalty, which was not less than 12½% of the petroleum produced and saved, less that
consumed in the operations of the concessionaire.130 Under Article 66, R.A. No. 387, the exploitation tax
may be credited against the royalties so that if the concessionaire shall be actually producing enough oil,
it would not actually be paying the exploitation tax.131

Failure to pay the annual exploitation tax for two consecutive years,132 or the royalty due to the
Government within one year from the date it becomes due,133 constituted grounds for the cancellation of
the concession. In case of delay in the payment of the taxes or royalty imposed by the law or by the
concession, a surcharge of 1% per month is exacted until the same are paid.134

As a rule, title rights to all equipment and structures that the concessionaire placed on the land belong to
the exploration or exploitation concessionaire.135 Upon termination of such concession, the
concessionaire had a right to remove the same.136

The Secretary of Agriculture and Natural Resources was tasked with carrying out the provisions of the
law, through the Director of Mines, who acted under the Secretary's immediate supervision and
control.137 The Act granted the Secretary the authority to inspect any operation of the concessionaire and
to examine all the books and accounts pertaining to operations or conditions related to payment of taxes
and royalties.138

The same law authorized the Secretary to create an Administration Unit and a Technical Board. 139 The
Administration Unit was charged, inter alia, with the enforcement of the provisions of the law.140 The
Technical Board had, among other functions, the duty to check on the performance of concessionaires
and to determine whether the obligations imposed by the Act and its implementing regulations were
being complied with.141

Victorio Mario A. Dimagiba, Chief Legal Officer of the Bureau of Energy Development, analyzed the
benefits and drawbacks of the concession system insofar as it applied to the petroleum industry:

Advantages of Concession. Whether it emphasizes income tax or royalty, the most positive aspect of the
concession system is that the State's financial involvement is virtually risk free and administration is
simple and comparatively low in cost. Furthermore, if there is a competitive allocation of the resource
leading to substantial bonuses and/or greater royalty coupled with a relatively high level of taxation,
revenue accruing to the State under the concession system may compare favorably with other financial
arrangements.

Disadvantages of Concession. There are, however, major negative aspects to this system. Because the
Government's role in the traditional concession is passive, it is at a distinct disadvantage in managing and
developing policy for the nation's petroleum resource. This is true for several reasons. First, even though
most concession agreements contain covenants requiring diligence in operations and production, this
establishes only an indirect and passive control of the host country in resource development. Second, and
more importantly, the fact that the host country does not directly participate in resource management
decisions inhibits its ability to train and employ its nationals in petroleum development. This factor could
delay or prevent the country from effectively engaging in the development of its resources. Lastly, a
direct role in management is usually necessary in order to obtain a knowledge of the international
petroleum industry which is important to an appreciation of the host country's resources in relation to
those of other countries.142

Other liabilities of the system have also been noted:

x x x there are functional implications which give the concessionaire great economic power arising from
its exclusive equity holding. This includes, first, appropriation of the returns of the undertaking, subject
to a modest royalty; second, exclusive management of the project; third, control of production of the
natural resource, such as volume of production, expansion, research and development; and fourth,
exclusive responsibility for downstream operations, like processing, marketing, and distribution. In short,
even if nominally, the state is the sovereign and owner of the natural resource being exploited, it has been
shorn of all elements of control over such natural resource because of the exclusive nature of the
contractual regime of the concession. The concession system, investing as it does ownership of natural
resources, constitutes a consistent inconsistency with the principle embodied in our Constitution that
natural resources belong to the state and shall not be alienated, not to mention the fact that the
concession was the bedrock of the colonial system in the exploitation of natural resources.143
Eventually, the concession system failed for reasons explained by Dimagiba:

Notwithstanding the good intentions of the Petroleum Act of 1949, the concession system could not have
properly spurred sustained oil exploration activities in the country, since it assumed that such a capital-
intensive, high risk venture could be successfully undertaken by a single individual or a small company.
In effect, concessionaires' funds were easily exhausted. Moreover, since the concession system practically
closed its doors to interested foreign investors, local capital was stretched to the limits. The old system
also failed to consider the highly sophisticated technology and expertise required, which would be
available only to multinational companies.144

A shift to a new regime for the development of natural resources thus seemed imminent.

PRESIDENTIAL DECREE NO. 87, THE 1973 CONSTITUTION AND THE SERVICE CONTRACT SYSTEM

The promulgation on December 31, 1972 of Presidential Decree No. 87, 145 otherwise known as The Oil
Exploration and Development Act of 1972 signaled such a transformation. P.D. No. 87 permitted the
government to explore for and produce indigenous petroleum through "service contracts."146

"Service contracts" is a term that assumes varying meanings to different people, and it has carried many
names in different countries, like "work contracts" in Indonesia, "concession agreements" in Africa,
"production-sharing agreements" in the Middle East, and "participation agreements" in Latin
America.147 A functional definition of "service contracts" in the Philippines is provided as follows:

A service contract is a contractual arrangement for engaging in the exploitation and development of
petroleum, mineral, energy, land and other natural resources by which a government or its agency, or a
private person granted a right or privilege by the government authorizes the other party (service
contractor) to engage or participate in the exercise of such right or the enjoyment of the privilege, in that
the latter provides financial or technical resources, undertakes the exploitation or production of a given
resource, or directly manages the productive enterprise, operations of the exploration and exploitation of
the resources or the disposition of marketing or resources.148

In a service contract under P.D. No. 87, service and technology are furnished by the service contractor for
which it shall be entitled to the stipulated service fee.149 The contractor must be technically competent
and financially capable to undertake the operations required in the contract.150

Financing is supposed to be provided by the Government to which all petroleum produced belongs. 151 In
case the Government is unable to finance petroleum exploration operations, the contractor may furnish
services, technology and financing, and the proceeds of sale of the petroleum produced under the
contract shall be the source of funds for payment of the service fee and the operating expenses due the
contractor.152 The contractor shall undertake, manage and execute petroleum operations, subject to the
government overseeing the management of the operations.153 The contractor provides all necessary
services and technology and the requisite financing, performs the exploration work obligations, and
assumes all exploration risks such that if no petroleum is produced, it will not be entitled to
reimbursement.154 Once petroleum in commercial quantity is discovered, the contractor shall operate the
field on behalf of the government.155

P.D. No. 87 prescribed minimum terms and conditions for every service contract. 156 It also granted the
contractor certain privileges, including exemption from taxes and payment of tariff duties, 157 and
permitted the repatriation of capital and retention of profits abroad.158

Ostensibly, the service contract system had certain advantages over the concession regime.159 It has been
opined, though, that, in the Philippines, our concept of a service contract, at least in the petroleum
industry, was basically a concession regime with a production-sharing element.160
On January 17, 1973, then President Ferdinand E. Marcos proclaimed the ratification of a new
Constitution.161Article XIV on the National Economy and Patrimony contained provisions similar to the
1935 Constitution with regard to Filipino participation in the nation's natural resources. Section 8, Article
XIV thereof provides:

Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces
of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State.
With the exception of agricultural, industrial or commercial, residential and resettlement lands of the
public domain, natural resources shall not be alienated, and no license, concession, or lease for the
exploration, development, exploitation, or utilization of any of the natural resources shall be granted for a
period exceeding twenty-five years, renewable for not more than twenty-five years, except as to water
rights for irrigation, water supply, fisheries, or industrial uses other than the development of water
power, in which cases beneficial use may be the measure and the limit of the grant.

While Section 9 of the same Article maintained the Filipino-only policy in the enjoyment of natural
resources, it also allowed Filipinos, upon authority of the Batasang Pambansa, to enter into service
contracts with any person or entity for the exploration or utilization of natural resources.

Sec. 9. The disposition, exploration, development, exploitation, or utilization of any of the natural
resources of the Philippines shall be limited to citizens, or to corporations or associations at least sixty
per centum of which is owned by such citizens. The Batasang Pambansa, in the national interest, may
allow such citizens, corporations or associations to enter into service contracts for financial, technical,
management, or other forms of assistance with any person or entity for the exploration, or utilization of
any of the natural resources. Existing valid and binding service contracts for financial, technical,
management, or other forms of assistance are hereby recognized as such. [Emphasis supplied.]

The concept of service contracts, according to one delegate, was borrowed from the methods followed by
India, Pakistan and especially Indonesia in the exploration of petroleum and mineral oils.162 The
provision allowing such contracts, according to another, was intended to "enhance the proper
development of our natural resources since Filipino citizens lack the needed capital and technical know-
how which are essential in the proper exploration, development and exploitation of the natural resources
of the country."163

The original idea was to authorize the government, not private entities, to enter into service contracts
with foreign entities.164 As finally approved, however, a citizen or private entity could be allowed by the
National Assembly to enter into such service contract.165 The prior approval of the National Assembly
was deemed sufficient to protect the national interest.166 Notably, none of the laws allowing service
contracts were passed by the Batasang Pambansa. Indeed, all of them were enacted by presidential
decree.

On March 13, 1973, shortly after the ratification of the new Constitution, the President promulgated
Presidential Decree No. 151.167 The law allowed Filipino citizens or entities which have acquired lands of
the public domain or which own, hold or control such lands to enter into service contracts for financial,
technical, management or other forms of assistance with any foreign persons or entity for the exploration,
development, exploitation or utilization of said lands.168

Presidential Decree No. 463,169 also known as The Mineral Resources Development Decree of 1974, was
enacted on May 17, 1974. Section 44 of the decree, as amended, provided that a lessee of a mining claim
may enter into a service contract with a qualified domestic or foreign contractor for the exploration,
development and exploitation of his claims and the processing and marketing of the product thereof.

Presidential Decree No. 704170 (The Fisheries Decree of 1975), approved on May 16, 1975, allowed
Filipinos engaged in commercial fishing to enter into contracts for financial, technical or other forms of
assistance with any foreign person, corporation or entity for the production, storage, marketing and
processing of fish and fishery/aquatic products.171

Presidential Decree No. 705172 (The Revised Forestry Code of the Philippines), approved on May 19, 1975,
allowed "forest products licensees, lessees, or permitees to enter into service contracts for financial,
technical, management, or other forms of assistance . . . with any foreign person or entity for the
exploration, development, exploitation or utilization of the forest resources."173

Yet another law allowing service contracts, this time for geothermal resources, was Presidential Decree
No. 1442,174 which was signed into law on June 11, 1978. Section 1 thereof authorized the Government to
enter into service contracts for the exploration, exploitation and development of geothermal resources
with a foreign contractor who must be technically and financially capable of undertaking the operations
required in the service contract.

Thus, virtually the entire range of the country's natural resources –from petroleum and minerals to
geothermal energy, from public lands and forest resources to fishery products – was well covered by
apparent legal authority to engage in the direct participation or involvement of foreign persons or
corporations (otherwise disqualified) in the exploration and utilization of natural resources through
service contracts.175

THE 1987 CONSTITUTION AND TECHNICAL OR FINANCIAL ASSISTANCE AGREEMENTS

After the February 1986 Edsa Revolution, Corazon C. Aquino took the reins of power under a
revolutionary government. On March 25, 1986, President Aquino issued Proclamation No.
3,176 promulgating the Provisional Constitution, more popularly referred to as the Freedom Constitution.
By authority of the same Proclamation, the President created a Constitutional Commission (CONCOM) to
draft a new constitution, which took effect on the date of its ratification on February 2, 1987.177

The 1987 Constitution retained the Regalian doctrine. The first sentence of Section 2, Article XII states:
"All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are
owned by the State."

Like the 1935 and 1973 Constitutions before it, the 1987 Constitution, in the second sentence of the same
provision, prohibits the alienation of natural resources, except agricultural lands.

The third sentence of the same paragraph is new: "The exploration, development and utilization of
natural resources shall be under the full control and supervision of the State." The constitutional policy of
the State's "full control and supervision" over natural resources proceeds from the concept of jura regalia,
as well as the recognition of the importance of the country's natural resources, not only for national
economic development, but also for its security and national defense.178 Under this provision, the State
assumes "a more dynamic role" in the exploration, development and utilization of natural resources.179

Conspicuously absent in Section 2 is the provision in the 1935 and 1973 Constitutions authorizing the
State to grant licenses, concessions, or leases for the exploration, exploitation, development, or utilization
of natural resources. By such omission, the utilization of inalienable lands of public domain through
"license, concession or lease" is no longer allowed under the 1987 Constitution.180

Having omitted the provision on the concession system, Section 2 proceeded to introduce "unfamiliar
language":181

The State may directly undertake such activities or it may enter into co-production, joint venture, or
production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per
centum of whose capital is owned by such citizens.
Consonant with the State's "full supervision and control" over natural resources, Section 2 offers the State
two "options."182 One, the State may directly undertake these activities itself; or two, it may enter into co-
production, joint venture, or production-sharing agreements with Filipino citizens, or entities at least 60%
of whose capital is owned by such citizens.

A third option is found in the third paragraph of the same section:

The Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens, as well as
cooperative fish farming, with priority to subsistence fishermen and fish-workers in rivers, lakes, bays,
and lagoons.

While the second and third options are limited only to Filipino citizens or, in the case of the former, to
corporations or associations at least 60% of the capital of which is owned by Filipinos, a fourth allows the
participation of foreign-owned corporations. The fourth and fifth paragraphs of Section 2 provide:

The President may enter into agreements with foreign-owned corporations involving either technical or
financial assistance for large-scale exploration, development, and utilization of minerals, petroleum, and
other mineral oils according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such agreements, the State
shall promote the development and use of local scientific and technical resources.

The President shall notify the Congress of every contract entered into in accordance with this provision,
within thirty days from its execution.

Although Section 2 sanctions the participation of foreign-owned corporations in the exploration,

development, and utilization of natural resources, it imposes certain limitations or conditions to
agreements with such corporations.

First, the parties to FTAAs. Only the President, in behalf of the State, may enter into these
agreements, and only with corporations. By contrast, under the 1973 Constitution, a Filipino
citizen, corporation or association may enter into a service contract with a "foreign person or
entity."

Second, the size of the activities: only large-scale exploration, development, and utilization is
allowed. The term "large-scale usually refers to very capital-intensive activities."183

Third, the natural resources subject of the activities is restricted to minerals, petroleum and other
mineral oils, the intent being to limit service contracts to those areas where Filipino capital may
not be sufficient.184

Fourth, consistency with the provisions of statute. The agreements must be in accordance with the
terms and conditions provided by law.

Fifth, Section 2 prescribes certain standards for entering into such agreements. The agreements
must be based on real contributions to economic growth and general welfare of the country.

Sixth, the agreements must contain rudimentary stipulations for the promotion of the
development and use of local scientific and technical resources.

Seventh, the notification requirement. The President shall notify Congress of every financial or
technical assistance agreement entered into within thirty days from its execution.

Finally, the scope of the agreements. While the 1973 Constitution referred to "service contracts for
financial, technical, management, or other forms of assistance" the 1987 Constitution provides for
"agreements. . . involving either financial or technical assistance." It bears noting that the phrases
 "service contracts" and "management or other forms of assistance" in the earlier constitution have
been omitted.

By virtue of her legislative powers under the Provisional Constitution,185 President Aquino, on July 10,
1987, signed into law E.O. No. 211 prescribing the interim procedures in the processing and approval of
applications for the exploration, development and utilization of minerals. The omission in the 1987
Constitution of the term "service contracts" notwithstanding, the said E.O. still referred to them in Section
2 thereof:

Sec. 2. Applications for the exploration, development and utilization of mineral resources, including
renewal applications and applications for approval of operating agreements and mining service contracts,
shall be accepted and processed and may be approved x x x. [Emphasis supplied.]

The same law provided in its Section 3 that the "processing, evaluation and approval of all mining
applications . . . operating agreements and service contracts . . . shall be governed by Presidential Decree
No. 463, as amended, other existing mining laws, and their implementing rules and regulations. . . ."

As earlier stated, on the 25th also of July 1987, the President issued E.O. No. 279 by authority of which
the subject WMCP FTAA was executed on March 30, 1995.

On March 3, 1995, President Ramos signed into law R.A. No. 7942. Section 15 thereof declares that the
Act "shall govern the exploration, development, utilization, and processing of all mineral resources." Such
declaration notwithstanding, R.A. No. 7942 does not actually cover all the modes through which the State
may undertake the exploration, development, and utilization of natural resources.

The State, being the owner of the natural resources, is accorded the primary power and responsibility in
the exploration, development and utilization thereof. As such, it may undertake these activities through
four modes:

The State may directly undertake such activities.

(2) The State may enter into co-production, joint venture or production-sharing agreements with
Filipino citizens or qualified corporations.

(3) Congress may, by law, allow small-scale utilization of natural resources by Filipino citizens.

(4) For the large-scale exploration, development and utilization of minerals, petroleum and other
mineral oils, the President may enter into agreements with foreign-owned corporations involving
technical or financial assistance.186

Except to charge the Mines and Geosciences Bureau of the DENR with performing researches and
surveys,187 and a passing mention of government-owned or controlled corporations,188 R.A. No. 7942
does not specify how the State should go about the first mode. The third mode, on the other hand, is
governed by Republic Act No. 7076189(the People's Small-Scale Mining Act of 1991) and other pertinent
laws.190 R.A. No. 7942 primarily concerns itself with the second and fourth modes.

Mineral production sharing, co-production and joint venture agreements are collectively classified by R.A.
No. 7942 as "mineral agreements."191 The Government participates the least in a mineral production
sharing agreement (MPSA). In an MPSA, the Government grants the contractor192 the exclusive right to
conduct mining operations within a contract area193 and shares in the gross output.194 The MPSA
contractor provides the financing, technology, management and personnel necessary for the agreement's
implementation.195 The total government share in an MPSA is the excise tax on mineral products under
Republic Act No. 7729,196 amending Section 151(a) of the National Internal Revenue Code, as amended.197
In a co-production agreement (CA),198 the Government provides inputs to the mining operations other
than the mineral resource,199 while in a joint venture agreement (JVA), where the Government enjoys the
greatest participation, the Government and the JVA contractor organize a company with both parties
having equity shares.200 Aside from earnings in equity, the Government in a JVA is also entitled to a share
in the gross output.201The Government may enter into a CA202 or JVA203 with one or more contractors.
The Government's share in a CA or JVA is set out in Section 81 of the law:

The share of the Government in co-production and joint venture agreements shall be negotiated by the
Government and the contractor taking into consideration the: (a) capital investment of the project, (b)
the risks involved, (c) contribution of the project to the economy, and (d) other factors that will provide
for a fair and equitable sharing between the Government and the contractor. The Government shall also
be entitled to compensations for its other contributions which shall be agreed upon by the parties, and
shall consist, among other things, the contractor's income tax, excise tax, special allowance, withholding
tax due from the contractor's foreign stockholders arising from dividend or interest payments to the said
foreign stockholders, in case of a foreign national and all such other taxes, duties and fees as provided for
under existing laws.

All mineral agreements grant the respective contractors the exclusive right to conduct mining operations
and to extract all mineral resources found in the contract area.204 A "qualified person" may enter into any
of the mineral agreements with the Government.205 A "qualified person" is

any citizen of the Philippines with capacity to contract, or a corporation, partnership, association, or
cooperative organized or authorized for the purpose of engaging in mining, with technical and financial
capability to undertake mineral resources development and duly registered in accordance with law at
least sixty per centum (60%) of the capital of which is owned by citizens of the Philippines x x x.206

The fourth mode involves "financial or technical assistance agreements." An FTAA is defined as "a
contract involving financial or technical assistance for large-scale exploration, development, and
utilization of natural resources."207 Any qualified person with technical and financial capability to
undertake large-scale exploration, development, and utilization of natural resources in the Philippines
may enter into such agreement directly with the Government through the DENR.208 For the purpose of
granting an FTAA, a legally organized foreign-owned corporation (any corporation, partnership,
association, or cooperative duly registered in accordance with law in which less than 50% of the capital is
owned by Filipino citizens)209 is deemed a "qualified person."210

Other than the difference in contractors' qualifications, the principal distinction between mineral
agreements and FTAAs is the maximum contract area to which a qualified person may hold or be
granted.211 "Large-scale" under R.A. No. 7942 is determined by the size of the contract area, as opposed to
the amount invested (US $50,000,000.00), which was the standard under E.O. 279.

Like a CA or a JVA, an FTAA is subject to negotiation.212 The Government's contributions, in the form of
taxes, in an FTAA is identical to its contributions in the two mineral agreements, save that in an FTAA:

The collection of Government share in financial or technical assistance agreement shall commence after
the financial or technical assistance agreement contractor has fully recovered its pre-operating expenses,
exploration, and development expenditures, inclusive.213

III

Having examined the history of the constitutional provision and statutes enacted pursuant thereto, a
consideration of the substantive issues presented by the petition is now in order.

THE EFFECTIVITY OF EXECUTIVE ORDER NO. 279

Petitioners argue that E.O. No. 279, the law in force when the WMC FTAA was executed, did not come into
effect.

E.O. No. 279 was signed into law by then President Aquino on July 25, 1987, two days before the opening
of Congress on July 27, 1987.214 Section 8 of the E.O. states that the same "shall take effect immediately."
This provision, according to petitioners, runs counter to Section 1 of E.O. No. 200,215 which provides:

SECTION 1. Laws shall take effect after fifteen days following the completion of their publication either in
the Official Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise
provided.216 [Emphasis supplied.]

On that premise, petitioners contend that E.O. No. 279 could have only taken effect fifteen days after its
publication at which time Congress had already convened and the President's power to legislate had
ceased.

Respondents, on the other hand, counter that the validity of E.O. No. 279 was settled in Miners
Association of the Philippines v. Factoran, supra. This is of course incorrect for the issue in Miners
Association was not the validity of E.O. No. 279 but that of DAO Nos. 57 and 82 which were issued
pursuant thereto.

Nevertheless, petitioners' contentions have no merit.

It bears noting that there is nothing in E.O. No. 200 that prevents a law from taking effect on a date other
than – even before – the 15-day period after its publication. Where a law provides for its own date of
effectivity, such date prevails over that prescribed by E.O. No. 200. Indeed, this is the very essence of the
phrase "unless it is otherwise provided" in Section 1 thereof. Section 1, E.O. No. 200, therefore, applies
only when a statute does not provide for its own date of effectivity.

What is mandatory under E.O. No. 200, and what due process requires, as this Court held in Tañada v.
Tuvera,217is the publication of the law for without such notice and publication, there would be no basis
for the application of the maxim "ignorantia legis n[eminem] excusat." It would be the height of injustice
to punish or otherwise burden a citizen for the transgression of a law of which he had no notice
whatsoever, not even a constructive one.

While the effectivity clause of E.O. No. 279 does not require its publication, it is not a ground for its
invalidation since the Constitution, being "the fundamental, paramount and supreme law of the nation," is
deemed written in the law.218 Hence, the due process clause,219 which, so Tañada held, mandates the
publication of statutes, is read into Section 8 of E.O. No. 279. Additionally, Section 1 of E.O. No. 200 which
provides for publication "either in the Official Gazette or in a newspaper of general circulation in the
Philippines," finds suppletory application. It is significant to note that E.O. No. 279 was actually published
in the Official Gazette220 on August 3, 1987.

From a reading then of Section 8 of E.O. No. 279, Section 1 of E.O. No. 200, and Tañada v. Tuvera, this
Court holds that E.O. No. 279 became effective immediately upon its publication in the Official Gazette on
August 3, 1987.

That such effectivity took place after the convening of the first Congress is irrelevant. At the time
President Aquino issued E.O. No. 279 on July 25, 1987, she was still validly exercising legislative powers
under the Provisional Constitution.221 Article XVIII (Transitory Provisions) of the 1987 Constitution
explicitly states:

Sec. 6. The incumbent President shall continue to exercise legislative powers until the first Congress is
convened.
The convening of the first Congress merely precluded the exercise of legislative powers by President
Aquino; it did not prevent the effectivity of laws she had previously enacted.

There can be no question, therefore, that E.O. No. 279 is an effective, and a validly enacted, statute.

THE CONSTITUTIONALITY OF THE WMCP FTAA

Petitioners submit that, in accordance with the text of Section 2, Article XII of the Constitution, FTAAs
should be limited to "technical or financial assistance" only. They observe, however, that, contrary to the
language of the Constitution, the WMCP FTAA allows WMCP, a fully foreign-owned mining corporation, to
extend more than mere financial or technical assistance to the State, for it permits WMCP to manage and
operate every aspect of the mining activity. 222

Petitioners' submission is well-taken. It is a cardinal rule in the interpretation of constitutions that the
instrument must be so construed as to give effect to the intention of the people who adopted it. 223 This
intention is to be sought in the constitution itself, and the apparent meaning of the words is to be taken as
expressing it, except in cases where that assumption would lead to absurdity, ambiguity, or
contradiction.224 What the Constitution says according to the text of the provision, therefore, compels
acceptance and negates the power of the courts to alter it, based on the postulate that the framers and the
people mean what they say.225 Accordingly, following the literal text of the Constitution, assistance
accorded by foreign-owned corporations in the large-scale exploration, development, and utilization of
petroleum, minerals and mineral oils should be limited to "technical" or "financial" assistance only.

WMCP nevertheless submits that the word "technical" in the fourth paragraph of Section 2 of E.O. No. 279
encompasses a "broad number of possible services," perhaps, "scientific and/or technological in
basis."226 It thus posits that it may also well include "the area of management or operations . . . so long as
such assistance requires specialized knowledge or skills, and are related to the exploration, development
and utilization of mineral resources."227

This Court is not persuaded. As priorly pointed out, the phrase "management or other forms of
assistance" in the 1973 Constitution was deleted in the 1987 Constitution, which allows only "technical
or financial assistance." Casus omisus pro omisso habendus est. A person, object or thing omitted from an
enumeration must be held to have been omitted intentionally. 228 As will be shown later, the management
or operation of mining activities by foreign contractors, which is the primary feature of service contracts,
was precisely the evil that the drafters of the 1987 Constitution sought to eradicate.

Respondents insist that "agreements involving technical or financial assistance" is just another term for
service contracts. They contend that the proceedings of the CONCOM indicate "that although the
terminology 'service contract' was avoided [by the Constitution], the concept it represented was not."
They add that "[t]he concept is embodied in the phrase 'agreements involving financial or technical
assistance.'"229 And point out how members of the CONCOM referred to these agreements as "service
contracts." For instance:

SR. TAN. Am I correct in thinking that the only difference between these future service contracts
and the past service contracts under Mr. Marcos is the general law to be enacted by the legislature
and the notification of Congress by the President? That is the only difference, is it not?

MR. VILLEGAS. That is right.

SR. TAN. So those are the safeguards[?]

MR. VILLEGAS. Yes. There was no law at all governing service contracts before.

SR. TAN. Thank you, Madam President.230 [Emphasis supplied.]

WMCP also cites the following statements of Commissioners Gascon, Garcia, Nolledo and Tadeo
who alluded to service contracts as they explained their respective votes in the approval of the
draft Article:

MR. GASCON. Mr. Presiding Officer, I vote no primarily because of two reasons: One, the provision
on service contracts. I felt that if we would constitutionalize any provision on service contracts,
this should always be with the concurrence of Congress and not guided only by a general law to be
promulgated by Congress. x x x.231 [Emphasis supplied.]

x x x.

MR. GARCIA. Thank you.

I vote no. x x x.

Service contracts are given constitutional legitimization in Section 3, even when they have been
proven to be inimical to the interests of the nation, providing as they do the legal loophole for the
exploitation of our natural resources for the benefit of foreign interests. They constitute a serious
negation of Filipino control on the use and disposition of the nation's natural resources, especially
with regard to those which are nonrenewable.232[Emphasis supplied.]

xxx

MR. NOLLEDO. While there are objectionable provisions in the Article on National Economy and
Patrimony, going over said provisions meticulously, setting aside prejudice and personalities will
reveal that the article contains a balanced set of provisions. I hope the forthcoming Congress will
implement such provisions taking into account that Filipinos should have real control over our
economy and patrimony, and if foreign equity is permitted, the same must be subordinated to the
imperative demands of the national interest.

x x x.

It is also my understanding that service contracts involving foreign corporations or entities are
resorted to only when no Filipino enterprise or Filipino-controlled enterprise could possibly
undertake the exploration or exploitation of our natural resources and that compensation under
such contracts cannot and should not equal what should pertain to ownership of capital. In other
words, the service contract should not be an instrument to circumvent the basic provision, that
the exploration and exploitation of natural resources should be truly for the benefit of Filipinos.

Thank you, and I vote yes.233 [Emphasis supplied.]

x x x.

MR. TADEO. Nais ko lamang ipaliwanag ang aking boto.

Matapos suriin ang kalagayan ng Pilipinas, ang saligang suliranin, pangunahin ang salitang
"imperyalismo." Ang ibig sabihin nito ay ang sistema ng lipunang pinaghaharian ng iilang
monopolyong kapitalista at ang salitang "imperyalismo" ay buhay na buhay sa National Economy
and Patrimony na nating ginawa. Sa pamamagitan ng salitang "based on," naroroon na ang free
trade sapagkat tayo ay mananatiling tagapagluwas ng hilaw na sangkap at tagaangkat ng yaring
produkto. Pangalawa, naroroon pa rin ang parity rights, ang service contract, ang 60-40 equity sa
natural resources. Habang naghihirap ang sambayanang Pilipino, ginagalugad naman ng mga
dayuhan ang ating likas na yaman. Kailan man ang Article on National Economy and Patrimony ay
hindi nagpaalis sa pagkaalipin ng ating ekonomiya sa kamay ng mga dayuhan. Ang solusyon sa
suliranin ng bansa ay dalawa lamang: ang pagpapatupad ng tunay na reporma sa lupa at ang
 national industrialization. Ito ang tinatawag naming pagsikat ng araw sa Silangan. Ngunit ang mga
landlords and big businessmen at ang mga komprador ay nagsasabi na ang free trade na ito, ang
kahulugan para sa amin, ay ipinipilit sa ating sambayanan na ang araw ay sisikat sa Kanluran.
Kailan man hindi puwedeng sumikat ang araw sa Kanluran. I vote no.234 [Emphasis supplied.]

This Court is likewise not persuaded.

As earlier noted, the phrase "service contracts" has been deleted in the 1987 Constitution's Article on
National Economy and Patrimony. If the CONCOM intended to retain the concept of service contracts
under the 1973 Constitution, it could have simply adopted the old terminology ("service contracts")
instead of employing new and unfamiliar terms ("agreements . . . involving either technical or financial
assistance"). Such a difference between the language of a provision in a revised constitution and that of a
similar provision in the preceding constitution is viewed as indicative of a difference in purpose. 235 If, as
respondents suggest, the concept of "technical or financial assistance" agreements is identical to that of
"service contracts," the CONCOM would not have bothered to fit the same dog with a new collar. To
uphold respondents' theory would reduce the first to a mere euphemism for the second and render the
change in phraseology meaningless.

An examination of the reason behind the change confirms that technical or financial assistance
agreements are not synonymous to service contracts.

[T]he Court in construing a Constitution should bear in mind the object sought to be accomplished by its
adoption, and the evils, if any, sought to be prevented or remedied. A doubtful provision will be examined
in light of the history of the times, and the condition and circumstances under which the Constitution was
framed. The object is to ascertain the reason which induced the framers of the Constitution to enact the
particular provision and the purpose sought to be accomplished thereby, in order to construe the whole
as to make the words consonant to that reason and calculated to effect that purpose.236

As the following question of Commissioner Quesada and Commissioner Villegas' answer shows the
drafters intended to do away with service contracts which were used to circumvent the capitalization
(60%-40%) requirement:

MS. QUESADA. The 1973 Constitution used the words "service contracts." In this particular Section
3, is there a safeguard against the possible control of foreign interests if the Filipinos go into
coproduction with them?

MR. VILLEGAS. Yes. In fact, the deletion of the phrase "service contracts" was our first attempt to
avoid some of the abuses in the past regime in the use of service contracts to go around the 60-40
arrangement. The safeguard that has been introduced – and this, of course can be refined – is
found in Section 3, lines 25 to 30, where Congress will have to concur with the President on any
agreement entered into between a foreign-owned corporation and the government involving
technical or financial assistance for large-scale exploration, development and utilization of natural
resources.237 [Emphasis supplied.]

In a subsequent discussion, Commissioner Villegas allayed the fears of Commissioner Quesada

regarding the participation of foreign interests in Philippine natural resources, which was
supposed to be restricted to Filipinos.

MS. QUESADA. Another point of clarification is the phrase "and utilization of natural resources
shall be under the full control and supervision of the State." In the 1973 Constitution, this was
limited to citizens of the Philippines; but it was removed and substituted by "shall be under the
full control and supervision of the State." Was the concept changed so that these particular
resources would be limited to citizens of the Philippines? Or would these resources only be under
 the full control and supervision of the State; meaning, noncitizens would have access to these
natural resources? Is that the understanding?

MR. VILLEGAS. No, Mr. Vice-President, if the Commissioner reads the next sentence, it states:

Such activities may be directly undertaken by the State, or it may enter into co-production, joint venture,
production-sharing agreements with Filipino citizens.

So we are still limiting it only to Filipino citizens.

x x x.

MS. QUESADA. Going back to Section 3, the section suggests that:

The exploration, development, and utilization of natural resources… may be directly undertaken by the
State, or it may enter into co-production, joint venture or production-sharing agreement with . . .
corporations or associations at least sixty per cent of whose voting stock or controlling interest is owned
by such citizens.

Lines 25 to 30, on the other hand, suggest that in the large-scale exploration, development and utilization
of natural resources, the President with the concurrence of Congress may enter into agreements with
foreign-owned corporations even for technical or financial assistance.

I wonder if this part of Section 3 contradicts the second part. I am raising this point for fear that foreign
investors will use their enormous capital resources to facilitate the actual exploitation or exploration,
development and effective disposition of our natural resources to the detriment of Filipino investors. I
am not saying that we should not consider borrowing money from foreign sources. What I refer to is that
foreign interest should be allowed to participate only to the extent that they lend us money and give us
technical assistance with the appropriate government permit. In this way, we can insure the enjoyment of
our natural resources by our own people.

MR. VILLEGAS. Actually, the second provision about the President does not permit foreign investors to
participate. It is only technical or financial assistance – they do not own anything – but on conditions that
have to be determined by law with the concurrence of Congress. So, it is very restrictive.

If the Commissioner will remember, this removes the possibility for service contracts which we said
yesterday were avenues used in the previous regime to go around the 60-40 requirement.238 [Emphasis
supplied.]

The present Chief Justice, then a member of the CONCOM, also referred to this limitation in scope in
proposing an amendment to the 60-40 requirement:

MR. DAVIDE. May I be allowed to explain the proposal?

MR. MAAMBONG. Subject to the three-minute rule, Madam President.

MR. DAVIDE. It will not take three minutes.

The Commission had just approved the Preamble. In the Preamble we clearly stated that the Filipino
people are sovereign and that one of the objectives for the creation or establishment of a government is
to conserve and develop the national patrimony. The implication is that the national patrimony or our
natural resources are exclusively reserved for the Filipino people. No alien must be allowed to enjoy,
exploit and develop our natural resources. As a matter of fact, that principle proceeds from the fact that
our natural resources are gifts from God to the Filipino people and it would be a breach of that special
blessing from God if we will allow aliens to exploit our natural resources.
I voted in favor of the Jamir proposal because it is not really exploitation that we granted to the alien
corporations but only for them to render financial or technical assistance. It is not for them to enjoy our
natural resources. Madam President, our natural resources are depleting; our population is increasing by
leaps and bounds. Fifty years from now, if we will allow these aliens to exploit our natural resources,
there will be no more natural resources for the next generations of Filipinos. It may last long if we will
begin now. Since 1935 the aliens have been allowed to enjoy to a certain extent the exploitation of our
natural resources, and we became victims of foreign dominance and control. The aliens are interested in
coming to the Philippines because they would like to enjoy the bounty of nature exclusively intended for
Filipinos by God.

And so I appeal to all, for the sake of the future generations, that if we have to pray in the Preamble "to
preserve and develop the national patrimony for the sovereign Filipino people and for the generations to
come," we must at this time decide once and for all that our natural resources must be reserved only to
Filipino citizens.

Thank you.239 [Emphasis supplied.]

The opinion of another member of the CONCOM is persuasive240 and leaves no doubt as to the intention
of the framers to eliminate service contracts altogether. He writes:

Paragraph 4 of Section 2 specifies large-scale, capital-intensive, highly technological undertakings for

which the President may enter into contracts with foreign-owned corporations, and enunciates strict
conditions that should govern such contracts. x x x.

This provision balances the need for foreign capital and technology with the need to maintain the
national sovereignty. It recognizes the fact that as long as Filipinos can formulate their own terms in their
own territory, there is no danger of relinquishing sovereignty to foreign interests.

Are service contracts allowed under the new Constitution? No. Under the new Constitution, foreign
investors (fully alien-owned) can NOT participate in Filipino enterprises except to provide: (1) Technical
Assistance for highly technical enterprises; and (2) Financial Assistance for large-scale enterprises.

The intent of this provision, as well as other provisions on foreign investments, is to prevent the practice
(prevalent in the Marcos government) of skirting the 60/40 equation using the cover of service
contracts.241 [Emphasis supplied.]

Furthermore, it appears that Proposed Resolution No. 496,242 which was the draft Article on National
Economy and Patrimony, adopted the concept of "agreements . . . involving either technical or financial
assistance" contained in the "Draft of the 1986 U.P. Law Constitution Project" (U.P. Law draft) which was
taken into consideration during the deliberation of the CONCOM.243 The former, as well as Article XII, as
adopted, employed the same terminology, as the comparative table below shows:

DRAFT OF THE UP LAW PROPOSED RESOLUTION NO. ARTICLE XII OF THE 1987
CONSTITUTION PROJECT 496 OF THE CONSTITUTIONAL CONSTITUTION
COMMISSION

Sec. 1. All lands of the public
domain, waters, minerals, coal,
petroleum and other mineral
oils, all forces of potential
energy, fisheries, flora and
fauna and other natural
Sec. 3. All lands of the public
domain, waters, minerals, coal,
petroleum and other mineral
oils, all forces of potential
energy, fisheries, forests, flora
and fauna, and other natural
Sec. 2. All lands of the public
domain, waters, minerals, coal,
petroleum, and other mineral
oils, all forces of potential
energy, fisheries, forests or
timber, wildlife, flora and fauna,
resources of the Philippines are
owned by the State. With the
exception of agricultural lands,
all other natural resources shall
not be alienated. The
exploration, development and
utilization of natural resources
shall be under the full control
and supervision of the State.
Such activities may be directly
undertaken by the state, or it
may enter into co-production,
joint venture, production
sharing agreements with
Filipino citizens or corporations
or associations sixty per cent of
whose voting stock or
controlling interest is owned by
such citizens for a period of not
more than twenty-five years,
renewable for not more than
twenty-five years and under
such terms and conditions as
may be provided by law. In case
as to water rights for irrigation,
water supply, fisheries, or
industrial uses other than the
development of water power,
beneficial use may be the
measure and limit of the grant.
The National Assembly may by
law allow small scale utilization
of natural resources by Filipino
citizens.
The National Assembly, may, by
two-thirds vote of all its
members by special law
provide the terms and
conditions under which a
foreign-owned corporation may
enter into agreements with the
government involving either
technical or financial
assistance for large-scale
exploration, development, or
utilization of natural resources.
[Emphasis supplied.]
resources are owned by the
State. With the exception of
agricultural lands, all other
natural resources shall not be
alienated. The exploration,
development, and utilization of
natural resources shall be
under the full control and
supervision of the State. Such
activities may be directly
undertaken by the State, or it
may enter into co-production,
joint venture, production-
sharing agreements with
Filipino citizens or corporations
or associations at least sixty per
cent of whose voting stock or
controlling interest is owned by
such citizens. Such agreements
shall be for a period of twenty-
five years, renewable for not
more than twenty-five years,
and under such term and
conditions as may be provided
by law. In cases of water rights
for irrigation, water supply,
fisheries or industrial uses
other than the development for
water power, beneficial use
may be the measure and limit
of the grant.
The Congress may by law allow
small-scale utilization of
natural resources by Filipino
citizens, as well as cooperative
fish farming in rivers, lakes,
bays, and lagoons.
The President with the
concurrence of Congress, by
special law, shall provide the
terms and conditions under
which a foreign-owned
corporation may enter into
agreements with the
government involving either
technical or financial
assistance for large-scale
exploration, development, and
utilization of natural resources.
[Emphasis supplied.]
and other natural resources are
owned by the State. With the
exception of agricultural lands,
all other natural resources shall
not be alienated. The
exploration, development, and
utilization of natural resources
shall be under the full control
and supervision of the State.
The State may directly
undertake such activities or it
may enter into co-production,
joint venture, or production-
sharing agreements with
Filipino citizens, or
corporations or associations at
least sixty per centum of whose
capital is owned by such
citizens. Such agreements may
be for a period not exceeding
twenty-five years, renewable
for not more than twenty-five
years, and under such terms
and conditions as may be
provided by law. In case of
water rights for irrigation,
water supply, fisheries, or
industrial uses other than the
development of water power,
beneficial use may be the
measure and limit of the grant.
The State shall protect the
nation's marine wealth in its
archipelagic waters, territorial
sea, and exclusive economic
zone, and reserve its use and
enjoyment exclusively to
Filipino citizens.
The Congress may, by law,
allow small-scale utilization of
natural resources by Filipino
citizens, as well as cooperative
fish farming, with priority to
subsistence fishermen and fish-
workers in rivers, lakes, bays,
and lagoons.
The President may enter into
agreements with foreign-
owned corporations
 involving either technical or
financial assistance for large-
scale exploration, development,
and utilization of minerals,
petroleum, and other mineral
oils according to the general
terms and conditions provided
by law, based on real
contributions to the economic
growth and general welfare of
the country. In such
agreements, the State shall
promote the development and
use of local scientific and
technical resources. [Emphasis
supplied.]

The President shall notify the

Congress of every contract
entered into in accordance with
this provision, within thirty
days from its execution.

The insights of the proponents of the U.P. Law draft are, therefore, instructive in interpreting the phrase
"technical or financial assistance."

In his position paper entitled Service Contracts: Old Wine in New Bottles?, Professor Pacifico A. Agabin,
who was a member of the working group that prepared the U.P. Law draft, criticized service contracts for
they "lodge exclusive management and control of the enterprise to the service contractor, which is
reminiscent of the old concession regime. Thus, notwithstanding the provision of the Constitution that
natural resources belong to the State, and that these shall not be alienated, the service contract system
renders nugatory the constitutional provisions cited."244 He elaborates:

Looking at the Philippine model, we can discern the following vestiges of the concession regime, thus:

1. Bidding of a selected area, or leasing the choice of the area to the interested party and then
negotiating the terms and conditions of the contract; (Sec. 5, P.D. 87)

2. Management of the enterprise vested on the contractor, including operation of the field if
petroleum is discovered; (Sec. 8, P.D. 87)

3. Control of production and other matters such as expansion and development; (Sec. 8)

4. Responsibility for downstream operations – marketing, distribution, and processing may be

with the contractor (Sec. 8);

5. Ownership of equipment, machinery, fixed assets, and other properties remain with contractor
(Sec. 12, P.D. 87);

6. Repatriation of capital and retention of profits abroad guaranteed to the contractor (Sec. 13, P.D.
87); and
 7. While title to the petroleum discovered may nominally be in the name of the government, the
contractor has almost unfettered control over its disposition and sale, and even the domestic
requirements of the country is relegated to a pro rata basis (Sec. 8).

In short, our version of the service contract is just a rehash of the old concession regime x x x. Some
people have pulled an old rabbit out of a magician's hat, and foisted it upon us as a new and different
animal.

The service contract as we know it here is antithetical to the principle of sovereignty over our natural
resources restated in the same article of the [1973] Constitution containing the provision for service
contracts. If the service contractor happens to be a foreign corporation, the contract would also run
counter to the constitutional provision on nationalization or Filipinization, of the exploitation of our
natural resources.245 [Emphasis supplied. Underscoring in the original.]

Professor Merlin M. Magallona, also a member of the working group, was harsher in his reproach of the
system:

x x x the nationalistic phraseology of the 1935 [Constitution] was retained by the [1973] Charter, but the
essence of nationalism was reduced to hollow rhetoric. The 1973 Charter still provided that the
exploitation or development of the country's natural resources be limited to Filipino citizens or
corporations owned or controlled by them. However, the martial-law Constitution allowed them, once
these resources are in their name, to enter into service contracts with foreign investors for financial,
technical, management, or other forms of assistance. Since foreign investors have the capital resources,
the actual exploitation and development, as well as the effective disposition, of the country's natural
resources, would be under their direction, and control, relegating the Filipino investors to the role of
second-rate partners in joint ventures.

Through the instrumentality of the service contract, the 1973 Constitution had legitimized at the highest
level of state policy that which was prohibited under the 1973 Constitution, namely: the exploitation of
the country's natural resources by foreign nationals. The drastic impact of [this] constitutional change
becomes more pronounced when it is considered that the active party to any service contract may be a
corporation wholly owned by foreign interests. In such a case, the citizenship requirement is completely
set aside, permitting foreign corporations to obtain actual possession, control, and [enjoyment] of the
country's natural resources.246 [Emphasis supplied.]

Accordingly, Professor Agabin recommends that:

Recognizing the service contract for what it is, we have to expunge it from the Constitution and reaffirm
ownership over our natural resources. That is the only way we can exercise effective control over our
natural resources.

This should not mean complete isolation of the country's natural resources from foreign investment.
Other contract forms which are less derogatory to our sovereignty and control over natural resources –
like technical assistance agreements, financial assistance [agreements], co-production agreements, joint
ventures, production-sharing – could still be utilized and adopted without violating constitutional
provisions. In other words, we can adopt contract forms which recognize and assert our sovereignty and
ownership over natural resources, and where the foreign entity is just a pure contractor instead of the
beneficial owner of our economic resources.247 [Emphasis supplied.]

Still another member of the working group, Professor Eduardo Labitag, proposed that:

2. Service contracts as practiced under the 1973 Constitution should be discouraged, instead the
government may be allowed, subject to authorization by special law passed by an extraordinary majority
to enter into either technical or financial assistance. This is justified by the fact that as presently worded
in the 1973 Constitution, a service contract gives full control over the contract area to the service
contractor, for him to work, manage and dispose of the proceeds or production. It was a subterfuge to get
around the nationality requirement of the constitution.248[Emphasis supplied.]

In the annotations on the proposed Article on National Economy and Patrimony, the U.P. Law draft
summarized the rationale therefor, thus:

5. The last paragraph is a modification of the service contract provision found in Section 9, Article XIV of
the 1973 Constitution as amended. This 1973 provision shattered the framework of nationalism in our
fundamental law (see Magallona, "Nationalism and its Subversion in the Constitution"). Through the
service contract, the 1973 Constitution had legitimized that which was prohibited under the 1935
constitution—the exploitation of the country's natural resources by foreign nationals. Through the
service contract, acts prohibited by the Anti-Dummy Law were recognized as legitimate arrangements.
Service contracts lodge exclusive management and control of the enterprise to the service contractor, not
unlike the old concession regime where the concessionaire had complete control over the country's
natural resources, having been given exclusive and plenary rights to exploit a particular resource and, in
effect, having been assured of ownership of that resource at the point of extraction (see Agabin, "Service
Contracts: Old Wine in New Bottles"). Service contracts, hence, are antithetical to the principle of
sovereignty over our natural resources, as well as the constitutional provision on nationalization or
Filipinization of the exploitation of our natural resources.

Under the proposed provision, only technical assistance or financial assistance agreements may be
entered into, and only for large-scale activities. These are contract forms which recognize and assert our
sovereignty and ownership over natural resources since the foreign entity is just a pure contractor and
not a beneficial owner of our economic resources. The proposal recognizes the need for capital and
technology to develop our natural resources without sacrificing our sovereignty and control over such
resources by the safeguard of a special law which requires two-thirds vote of all the members of the
Legislature. This will ensure that such agreements will be debated upon exhaustively and thoroughly in
the National Assembly to avert prejudice to the nation.249 [Emphasis supplied.]

The U.P. Law draft proponents viewed service contracts under the 1973 Constitution as grants of
beneficial ownership of the country's natural resources to foreign owned corporations. While, in theory,
the State owns these natural resources – and Filipino citizens, their beneficiaries – service contracts
actually vested foreigners with the right to dispose, explore for, develop, exploit, and utilize the same.
Foreigners, not Filipinos, became the beneficiaries of Philippine natural resources. This arrangement is
clearly incompatible with the constitutional ideal of nationalization of natural resources, with the
Regalian doctrine, and on a broader perspective, with Philippine sovereignty.

The proponents nevertheless acknowledged the need for capital and technical know-how in the large-
scale exploitation, development and utilization of natural resources – the second paragraph of the
proposed draft itself being an admission of such scarcity. Hence, they recommended a compromise to
reconcile the nationalistic provisions dating back to the 1935 Constitution, which reserved all natural
resources exclusively to Filipinos, and the more liberal 1973 Constitution, which allowed foreigners to
participate in these resources through service contracts. Such a compromise called for the adoption of a
new system in the exploration, development, and utilization of natural resources in the form of technical
agreements or financial agreements which, necessarily, are distinct concepts from service contracts.

The replacement of "service contracts" with "agreements… involving either technical or financial
assistance," as well as the deletion of the phrase "management or other forms of assistance," assumes
greater significance when note is taken that the U.P. Law draft proposed other equally crucial changes
that were obviously heeded by the CONCOM. These include the abrogation of the concession system and
the adoption of new "options" for the State in the exploration, development, and utilization of natural
resources. The proponents deemed these changes to be more consistent with the State's ownership of,
and its "full control and supervision" (a phrase also employed by the framers) over, such resources. The
Project explained:

3. In line with the State ownership of natural resources, the State should take a more active role in the
exploration, development, and utilization of natural resources, than the present practice of granting
licenses, concessions, or leases – hence the provision that said activities shall be under the full control
and supervision of the State. There are three major schemes by which the State could undertake these
activities: first, directly by itself; second, by virtue of co-production, joint venture, production sharing
agreements with Filipino citizens or corporations or associations sixty per cent (60%) of the voting stock
or controlling interests of which are owned by such citizens; or third, with a foreign-owned corporation,
in cases of large-scale exploration, development, or utilization of natural resources through agreements
involving either technical or financial assistance only. x x x.

At present, under the licensing concession or lease schemes, the government benefits from such benefits
only through fees, charges, ad valorem taxes and income taxes of the exploiters of our natural resources.
Such benefits are very minimal compared with the enormous profits reaped by theses licensees, grantees,
concessionaires. Moreover, some of them disregard the conservation of natural resources and do not
protect the environment from degradation. The proposed role of the State will enable it to a greater share
in the profits – it can also actively husband its natural resources and engage in developmental programs
that will be beneficial to them.

4. Aside from the three major schemes for the exploration, development, and utilization of our natural
resources, the State may, by law, allow Filipino citizens to explore, develop, utilize natural resources in
small-scale. This is in recognition of the plight of marginal fishermen, forest dwellers, gold panners, and
others similarly situated who exploit our natural resources for their daily sustenance and survival.250

Professor Agabin, in particular, after taking pains to illustrate the similarities between the two systems,
concluded that the service contract regime was but a "rehash" of the concession system. "Old wine in new
bottles," as he put it. The rejection of the service contract regime, therefore, is in consonance with the
abolition of the concession system.

In light of the deliberations of the CONCOM, the text of the Constitution, and the adoption of other
proposed changes, there is no doubt that the framers considered and shared the intent of the U.P. Law
proponents in employing the phrase "agreements . . . involving either technical or financial assistance."

While certain commissioners may have mentioned the term "service contracts" during the CONCOM
deliberations, they may not have been necessarily referring to the concept of service contracts under the
1973 Constitution. As noted earlier, "service contracts" is a term that assumes different meanings to
different people.251 The commissioners may have been using the term loosely, and not in its technical and
legal sense, to refer, in general, to agreements concerning natural resources entered into by the
Government with foreign corporations. These loose statements do not necessarily translate to the
adoption of the 1973 Constitution provision allowing service contracts.

It is true that, as shown in the earlier quoted portions of the proceedings in CONCOM, in response to Sr.
Tan's question, Commissioner Villegas commented that, other than congressional notification, the only
difference between "future" and "past" "service contracts" is the requirement of a general law as there
were no laws previously authorizing the same.252 However, such remark is far outweighed by his more
categorical statement in his exchange with Commissioner Quesada that the draft article "does not permit
foreign investors to participate" in the nation's natural resources – which was exactly what service
contracts did – except to provide "technical or financial assistance."253

In the case of the other commissioners, Commissioner Nolledo himself clarified in his work that the
present charter prohibits service contracts.254 Commissioner Gascon was not totally averse to foreign
participation, but favored stricter restrictions in the form of majority congressional concurrence.255 On
the other hand, Commissioners Garcia and Tadeo may have veered to the extreme side of the spectrum
and their objections may be interpreted as votes against any foreign participation in our natural
resources whatsoever.

WMCP cites Opinion No. 75, s. 1987,256 and Opinion No. 175, s. 1990257 of the Secretary of Justice,
expressing the view that a financial or technical assistance agreement "is no different in concept" from
the service contract allowed under the 1973 Constitution. This Court is not, however, bound by this
interpretation. When an administrative or executive agency renders an opinion or issues a statement of
policy, it merely interprets a pre-existing law; and the administrative interpretation of the law is at best
advisory, for it is the courts that finally determine what the law means.258

In any case, the constitutional provision allowing the President to enter into FTAAs with foreign-owned
corporations is an exception to the rule that participation in the nation's natural resources is reserved
exclusively to Filipinos. Accordingly, such provision must be construed strictly against their enjoyment by
non-Filipinos. As Commissioner Villegas emphasized, the provision is "very restrictive."259 Commissioner
Nolledo also remarked that "entering into service contracts is an exception to the rule on protection of
natural resources for the interest of the nation and, therefore, being an exception, it should be subject,
whenever possible, to stringent rules."260 Indeed, exceptions should be strictly but reasonably construed;
they extend only so far as their language fairly warrants and all doubts should be resolved in favor of the
general provision rather than the exception.261

With the foregoing discussion in mind, this Court finds that R.A. No. 7942 is invalid insofar as said Act
authorizes service contracts. Although the statute employs the phrase "financial and technical
agreements" in accordance with the 1987 Constitution, it actually treats these agreements as service
contracts that grant beneficial ownership to foreign contractors contrary to the fundamental law.

Section 33, which is found under Chapter VI (Financial or Technical Assistance Agreement) of R.A. No.
7942 states:

SEC. 33. Eligibility.—Any qualified person with technical and financial capability to undertake large-scale
exploration, development, and utilization of mineral resources in the Philippines may enter into a
financial or technical assistance agreement directly with the Government through the Department.
[Emphasis supplied.]

"Exploration," as defined by R.A. No. 7942,

means the searching or prospecting for mineral resources by geological, geochemical or geophysical
surveys, remote sensing, test pitting, trending, drilling, shaft sinking, tunneling or any other means for the
purpose of determining the existence, extent, quantity and quality thereof and the feasibility of mining
them for profit.262

A legally organized foreign-owned corporation may be granted an exploration permit,263 which vests it
with the right to conduct exploration for all minerals in specified areas, 264 i.e., to enter, occupy and
explore the same.265Eventually, the foreign-owned corporation, as such permittee, may apply for a
financial and technical assistance agreement.266

"Development" is the work undertaken to explore and prepare an ore body or a mineral deposit for
mining, including the construction of necessary infrastructure and related facilities.267

"Utilization" "means the extraction or disposition of minerals."268 A stipulation that the proponent shall
dispose of the minerals and byproducts produced at the highest price and more advantageous terms and
conditions as provided for under the implementing rules and regulations is required to be incorporated
in every FTAA.269
A foreign-owned/-controlled corporation may likewise be granted a mineral processing
permit.270 "Mineral processing" is the milling, beneficiation or upgrading of ores or minerals and rocks or
by similar means to convert the same into marketable products.271

An FTAA contractor makes a warranty that the mining operations shall be conducted in accordance with
the provisions of R.A. No. 7942 and its implementing rules272 and for work programs and minimum
expenditures and commitments.273 And it obliges itself to furnish the Government records of geologic,
accounting, and other relevant data for its mining operation.274

"Mining operation," as the law defines it, means mining activities involving exploration, feasibility,
development, utilization, and processing.275

The underlying assumption in all these provisions is that the foreign contractor manages the mineral
resources, just like the foreign contractor in a service contract.

Furthermore, Chapter XII of the Act grants foreign contractors in FTAAs the same auxiliary mining rights
that it grants contractors in mineral agreements (MPSA, CA and JV). 276 Parenthetically, Sections 72 to 75
use the term "contractor," without distinguishing between FTAA and mineral agreement contractors. And
so does "holders of mining rights" in Section 76. A foreign contractor may even convert its FTAA into a
mineral agreement if the economic viability of the contract area is found to be inadequate to justify large-
scale mining operations,277 provided that it reduces its equity in the corporation, partnership, association
or cooperative to forty percent (40%).278

Finally, under the Act, an FTAA contractor warrants that it "has or has access to all the financing,
managerial, and technical expertise. . . ."279 This suggests that an FTAA contractor is bound to provide
some management assistance – a form of assistance that has been eliminated and, therefore, proscribed
by the present Charter.

By allowing foreign contractors to manage or operate all the aspects of the mining operation, the above-
cited provisions of R.A. No. 7942 have in effect conveyed beneficial ownership over the nation's mineral
resources to these contractors, leaving the State with nothing but bare title thereto.

Moreover, the same provisions, whether by design or inadvertence, permit a circumvention of the
constitutionally ordained 60%-40% capitalization requirement for corporations or associations engaged
in the exploitation, development and utilization of Philippine natural resources.

In sum, the Court finds the following provisions of R.A. No. 7942 to be violative of Section 2, Article XII of
the Constitution:

(1) The proviso in Section 3 (aq), which defines "qualified person," to wit:

Provided, That a legally organized foreign-owned corporation shall be deemed a qualified person
for purposes of granting an exploration permit, financial or technical assistance agreement or
mineral processing permit.

(2) Section 23,280 which specifies the rights and obligations of an exploration permittee, insofar as
said section applies to a financial or technical assistance agreement,

(3) Section 33, which prescribes the eligibility of a contractor in a financial or technical assistance
agreement;

(4) Section 35,281 which enumerates the terms and conditions for every financial or technical
assistance agreement;
 (5) Section 39,282 which allows the contractor in a financial and technical assistance agreement to
convert the same into a mineral production-sharing agreement;

(6) Section 56,283 which authorizes the issuance of a mineral processing permit to a contractor in a
financial and technical assistance agreement;

The following provisions of the same Act are likewise void as they are dependent on the foregoing
provisions and cannot stand on their own:

(1) Section 3 (g),284 which defines the term "contractor," insofar as it applies to a financial or
technical assistance agreement.

Section 34,285 which prescribes the maximum contract area in a financial or technical assistance
agreements;

Section 36,286 which allows negotiations for financial or technical assistance agreements;

Section 37,287 which prescribes the procedure for filing and evaluation of financial or technical
assistance agreement proposals;

Section 38,288 which limits the term of financial or technical assistance agreements;

Section 40,289 which allows the assignment or transfer of financial or technical assistance
agreements;

Section 41,290 which allows the withdrawal of the contractor in an FTAA;

The second and third paragraphs of Section 81,291 which provide for the Government's share in a
financial and technical assistance agreement; and

Section 90,292 which provides for incentives to contractors in FTAAs insofar as it applies to said
contractors;

When the parts of the statute are so mutually dependent and connected as conditions, considerations,
inducements, or compensations for each other, as to warrant a belief that the legislature intended them
as a whole, and that if all could not be carried into effect, the legislature would not pass the residue
independently, then, if some parts are unconstitutional, all the provisions which are thus dependent,
conditional, or connected, must fall with them.293

There can be little doubt that the WMCP FTAA itself is a service contract.

Section 1.3 of the WMCP FTAA grants WMCP "the exclusive right to explore, exploit, utilise[,] process and
dispose of all Minerals products and by-products thereof that may be produced from the Contract
Area."294 The FTAA also imbues WMCP with the following rights:

(b) to extract and carry away any Mineral samples from the Contract area for the purpose of
conducting tests and studies in respect thereof;

(c) to determine the mining and treatment processes to be utilised during the
Development/Operating Period and the project facilities to be constructed during the
Development and Construction Period;

(d) have the right of possession of the Contract Area, with full right of ingress and egress and the
right to occupy the same, subject to the provisions of Presidential Decree No. 512 (if applicable)
 and not be prevented from entry into private ands by surface owners and/or occupants thereof
when prospecting, exploring and exploiting for minerals therein;

xxx

(f) to construct roadways, mining, drainage, power generation and transmission facilities and all
other types of works on the Contract Area;

(g) to erect, install or place any type of improvements, supplies, machinery and other equipment
relating to the Mining Operations and to use, sell or otherwise dispose of, modify, remove or
diminish any and all parts thereof;

(h) enjoy, subject to pertinent laws, rules and regulations and the rights of third Parties, easement
rights and the use of timber, sand, clay, stone, water and other natural resources in the Contract
Area without cost for the purposes of the Mining Operations;

xxx

(i) have the right to mortgage, charge or encumber all or part of its interest and obligations under
this Agreement, the plant, equipment and infrastructure and the Minerals produced from the
Mining Operations;

x x x. 295

All materials, equipment, plant and other installations erected or placed on the Contract Area remain the
property of WMCP, which has the right to deal with and remove such items within twelve months from
the termination of the FTAA.296

Pursuant to Section 1.2 of the FTAA, WMCP shall provide "[all] financing, technology, management and
personnel necessary for the Mining Operations." The mining company binds itself to "perform all Mining
Operations . . . providing all necessary services, technology and financing in connection therewith," 297 and
to "furnish all materials, labour, equipment and other installations that may be required for carrying on
all Mining Operations."298> WMCP may make expansions, improvements and replacements of the mining
facilities and may add such new facilities as it considers necessary for the mining operations.299

These contractual stipulations, taken together, grant WMCP beneficial ownership over natural resources
that properly belong to the State and are intended for the benefit of its citizens. These stipulations are
abhorrent to the 1987 Constitution. They are precisely the vices that the fundamental law seeks to avoid,
the evils that it aims to suppress. Consequently, the contract from which they spring must be struck down.

In arguing against the annulment of the FTAA, WMCP invokes the Agreement on the Promotion and
Protection of Investments between the Philippine and Australian Governments, which was signed in
Manila on January 25, 1995 and which entered into force on December 8, 1995.

x x x. Article 2 (1) of said treaty states that it applies to investments whenever made and thus the fact that
[WMCP's] FTAA was entered into prior to the entry into force of the treaty does not preclude the
Philippine Government from protecting [WMCP's] investment in [that] FTAA. Likewise, Article 3 (1) of
the treaty provides that "Each Party shall encourage and promote investments in its area by investors of
the other Party and shall [admit] such investments in accordance with its Constitution, Laws, regulations
and investment policies" and in Article 3 (2), it states that "Each Party shall ensure that investments are
accorded fair and equitable treatment." The latter stipulation indicates that it was intended to impose an
obligation upon a Party to afford fair and equitable treatment to the investments of the other Party and
that a failure to provide such treatment by or under the laws of the Party may constitute a breach of the
treaty. Simply stated, the Philippines could not, under said treaty, rely upon the inadequacies of its own
laws to deprive an Australian investor (like [WMCP]) of fair and equitable treatment by invalidating
[WMCP's] FTAA without likewise nullifying the service contracts entered into before the enactment of RA
7942 such as those mentioned in PD 87 or EO 279.

This becomes more significant in the light of the fact that [WMCP's] FTAA was executed not by a mere
Filipino citizen, but by the Philippine Government itself, through its President no less, which, in entering
into said treaty is assumed to be aware of the existing Philippine laws on service contracts over the
exploration, development and utilization of natural resources. The execution of the FTAA by the
Philippine Government assures the Australian Government that the FTAA is in accordance with existing
Philippine laws.300 [Emphasis and italics by private respondents.]

The invalidation of the subject FTAA, it is argued, would constitute a breach of said treaty which, in turn,
would amount to a violation of Section 3, Article II of the Constitution adopting the generally accepted
principles of international law as part of the law of the land. One of these generally accepted principles is
pacta sunt servanda, which requires the performance in good faith of treaty obligations.

Even assuming arguendo that WMCP is correct in its interpretation of the treaty and its assertion that
"the Philippines could not . . . deprive an Australian investor (like [WMCP]) of fair and equitable
treatment by invalidating [WMCP's] FTAA without likewise nullifying the service contracts entered into
before the enactment of RA 7942 . . .," the annulment of the FTAA would not constitute a breach of the
treaty invoked. For this decision herein invalidating the subject FTAA forms part of the legal system of
the Philippines.301 The equal protection clause302 guarantees that such decision shall apply to all
contracts belonging to the same class, hence, upholding rather than violating, the "fair and equitable
treatment" stipulation in said treaty.

One other matter requires clarification. Petitioners contend that, consistent with the provisions of Section
2, Article XII of the Constitution, the President may enter into agreements involving "either technical or
financial assistance" only. The agreement in question, however, is a technical and financial assistance
agreement.

Petitioners' contention does not lie. To adhere to the literal language of the Constitution would lead to
absurd consequences.303 As WMCP correctly put it:

x x x such a theory of petitioners would compel the government (through the President) to enter into
contract with two (2) foreign-owned corporations, one for financial assistance agreement and with the
other, for technical assistance over one and the same mining area or land; or to execute two (2) contracts
with only one foreign-owned corporation which has the capability to provide both financial and technical
assistance, one for financial assistance and another for technical assistance, over the same mining area.
Such an absurd result is definitely not sanctioned under the canons of constitutional
construction.304 [Underscoring in the original.]

Surely, the framers of the 1987 Charter did not contemplate such an absurd result from their use of
"either/or." A constitution is not to be interpreted as demanding the impossible or the impracticable; and
unreasonable or absurd consequences, if possible, should be avoided.305 Courts are not to give words a
meaning that would lead to absurd or unreasonable consequences and a literal interpretation is to be
rejected if it would be unjust or lead to absurd results.306 That is a strong argument against its
adoption.307 Accordingly, petitioners' interpretation must be rejected.

The foregoing discussion has rendered unnecessary the resolution of the other issues raised by the
petition.

WHEREFORE, the petition is GRANTED. The Court hereby declares unconstitutional and void:

(1) The following provisions of Republic Act No. 7942:

(a) The proviso in Section 3 (aq),

 (b) Section 23,

(c) Section 33 to 41,

(d) Section 56,

(e) The second and third paragraphs of Section 81, and

(f) Section 90.

(2) All provisions of Department of Environment and Natural Resources Administrative Order 96-
40, s. 1996 which are not in conformity with this Decision, and

(3) The Financial and Technical Assistance Agreement between the Government of the Republic of
the Philippines and WMC Philippines, Inc.

SO ORDERED.

G.R. No. 133250 July 9, 2002

FRANCISCO I. CHAVEZ, petitioner,

vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.

CARPIO, J.:

This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a
temporary restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for brevity)
to disclose all facts on PEA's then on-going renegotiations with Amari Coastal Bay and Development
Corporation ("AMARI" for brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin
PEA from signing a new agreement with AMARI involving such reclamation.

The Facts

On November 20, 1973, the government, through the Commissioner of Public Highways, signed a
contract with the Construction and Development Corporation of the Philippines ("CDCP" for brevity) to
reclaim certain foreshore and offshore areas of Manila Bay. The contract also included the construction of
Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry out all the works in
consideration of fifty percent of the total reclaimed land.

On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084 creating
PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged areas," and "to
develop, improve, acquire, x x x lease and sell any and all kinds of lands." 1 On the same date, then
President Marcos issued Presidential Decree No. 1085 transferring to PEA the "lands reclaimed in the
foreshore and offshore of the Manila Bay"2 under the Manila-Cavite Coastal Road and Reclamation Project
(MCCRRP).

On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its
contract with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by PEA."
Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December 29, 1981, which
stated:

"(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP as
may be agreed upon by the parties, to be paid according to progress of works on a unit price/lump
 sum basis for items of work to be agreed upon, subject to price escalation, retention and other
terms and conditions provided for in Presidential Decree No. 1594. All the financing required for
such works shall be provided by PEA.

xxx

(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in
favor of PEA, all of the rights, title, interest and participation of CDCP in and to all the areas of land
reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have not yet been sold,
transferred or otherwise disposed of by CDCP as of said date, which areas consist of
approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473) square meters in the
Financial Center Area covered by land pledge No. 5 and approximately Three Million Three
Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of
reclaimed areas at varying elevations above Mean Low Water Level located outside the Financial
Center Area and the First Neighborhood Unit."3

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting and
transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road and
Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand eight
hundred ninety four (1,915,894) square meters." Subsequently, on April 9, 1988, the Register of Deeds of
the Municipality of Parañaque issued Transfer Certificates of Title Nos. 7309, 7311, and 7312, in the
name of PEA, covering the three reclaimed islands known as the "Freedom Islands" located at the
southern portion of the Manila-Cavite Coastal Road, Parañaque City. The Freedom Islands have a total
land area of One Million Five Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441)
square meters or 157.841 hectares.

On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a private
corporation, to develop the Freedom Islands. The JVA also required the reclamation of an additional 250
hectares of submerged areas surrounding these islands to complete the configuration in the Master
Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA
through negotiation without public bidding.4 On April 28, 1995, the Board of Directors of PEA, in its
Resolution No. 1245, confirmed the JVA.5 On June 8, 1995, then President Fidel V. Ramos, through then
Executive Secretary Ruben Torres, approved the JVA.6

On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the Senate
and denounced the JVA as the "grandmother of all scams." As a result, the Senate Committee on
Government Corporations and Public Enterprises, and the Committee on Accountability of Public Officers
and Investigations, conducted a joint investigation. The Senate Committees reported the results of their
investigation in Senate Committee Report No. 560 dated September 16, 1997. 7 Among the conclusions of
their report are: (1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the
public domain which the government has not classified as alienable lands and therefore PEA cannot
alienate these lands; (2) the certificates of title covering the Freedom Islands are thus void, and (3) the
JVA itself is illegal.

On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No. 365
creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate Committee
Report No. 560. The members of the Legal Task Force were the Secretary of Justice,8 the Chief
Presidential Legal Counsel,9 and the Government Corporate Counsel.10 The Legal Task Force upheld the
legality of the JVA, contrary to the conclusions reached by the Senate Committees.11

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were on-
going renegotiations between PEA and AMARI under an order issued by then President Fidel V. Ramos.
According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy
Officer Sergio Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for
the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed as G.R. No. 132994
seeking to nullify the JVA. The Court dismissed the petition "for unwarranted disregard of judicial
hierarchy, without prejudice to the refiling of the case before the proper court."12

On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the
instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and
Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos in the
sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the terms of any
renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987 Constitution
on the right of the people to information on matters of public concern. Petitioner assails the sale to
AMARI of lands of the public domain as a blatant violation of Section 3, Article XII of the 1987
Constitution prohibiting the sale of alienable lands of the public domain to private corporations. Finally,
petitioner asserts that he seeks to enjoin the loss of billions of pesos in properties of the State that are of
public dominion.

After several motions for extension of time,13 PEA and AMARI filed their Comments on October 19, 1998
and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion:
(a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract; (b) for issuance of a
temporary restraining order; and (c) to set the case for hearing on oral argument. Petitioner filed a
Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the Court denied in a Resolution
dated June 22, 1999.

In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the parties
to file their respective memoranda.

On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended JVA," for
brevity). On May 28, 1999, the Office of the President under the administration of then President Joseph E.
Estrada approved the Amended JVA.

Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on
"constitutional and statutory grounds the renegotiated contract be declared null and void."14

The Issues

The issues raised by petitioner, PEA15 and AMARI16 are as follows:

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND
ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;

II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLE
GOVERNING THE HIERARCHY OF COURTS;

III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF ADMINISTRATIVE

REMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL

INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;

VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE
TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE
THE 1987 CONSTITUTION; AND
 VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER THE
AMENDED JOINT VENTURE AGREEMENT IS GROSSLY DISADVANTAGEOUS TO THE
GOVERNMENT.

The Court's Ruling

First issue: whether the principal reliefs prayed for in the petition are moot and academic because of
subsequent events.

The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations for a
new agreement." The petition also prays that the Court enjoin PEA from "privately entering into,
perfecting and/or executing any new agreement with AMARI."

PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on
June 21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed upon in the
renegotiations. Thus, PEA has satisfied petitioner's prayer for a public disclosure of the renegotiations.
Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now moot because PEA and
AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the Office of the President
has approved the Amended JVA on May 28, 1999.

Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking the
signing and approval of the Amended JVA before the Court could act on the issue. Presidential approval
does not resolve the constitutional issue or remove it from the ambit of judicial review.

We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President cannot
operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still to
implement the Amended JVA. The prayer to enjoin the signing of the Amended JVA on constitutional
grounds necessarily includes preventing its implementation if in the meantime PEA and AMARI have
signed one in violation of the Constitution. Petitioner's principal basis in assailing the renegotiation of the
JVA is its violation of Section 3, Article XII of the Constitution, which prohibits the government from
alienating lands of the public domain to private corporations. If the Amended JVA indeed violates the
Constitution, it is the duty of the Court to enjoin its implementation, and if already implemented, to annul
the effects of such unconstitutional contract.

The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and
ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a single
private corporation. It now becomes more compelling for the Court to resolve the issue to insure the
government itself does not violate a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental, cannot prevent the Court from
rendering a decision if there is a grave violation of the Constitution. In the instant case, if the Amended
JVA runs counter to the Constitution, the Court can still prevent the transfer of title and ownership of
alienable lands of the public domain in the name of AMARI. Even in cases where supervening events had
made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to
formulate controlling principles to guide the bench, bar, and the public.17

Also, the instant petition is a case of first impression. All previous decisions of the Court involving Section
3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural lands sold to private corporations which acquired the lands from
private parties. The transferors of the private corporations claimed or could claim the right to judicial
confirmation of their imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. 141" for
brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and
submerged areas for non-agricultural purposes by purchase under PD No. 1084 (charter of PEA)
and Title III of CA No. 141. Certain undertakings by AMARI under the Amended JVA constitute the
consideration for the purchase. Neither AMARI nor PEA can claim judicial confirmation of their titles
because the lands covered by the Amended JVA are newly reclaimed or still to be reclaimed. Judicial
confirmation of imperfect title requires open, continuous, exclusive and notorious occupation of
agricultural lands of the public domain for at least thirty years since June 12, 1945 or earlier. Besides, the
deadline for filing applications for judicial confirmation of imperfect title expired on December 31,
1987.20

Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because of
the possible transfer at any time by PEA to AMARI of title and ownership to portions of the reclaimed
lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy percent
proportionate share in the reclaimed areas as the reclamation progresses. The Amended JVA even allows
AMARI to mortgage at any time the entire reclaimed area to raise financing for the reclamation project.21

Second issue: whether the petition merits dismissal for failing to observe the principle governing the
hierarchy of courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court.
The principle of hierarchy of courts applies generally to cases involving factual questions. As it is not a
trier of facts, the Court cannot entertain cases involving factual issues. The instant case, however, raises
constitutional issues of transcendental importance to the public.22 The Court can resolve this case
without determining any factual issue related to the case. Also, the instant case is a petition for
mandamus which falls under the original jurisdiction of the Court under Section 5, Article VIII of the
Constitution. We resolve to exercise primary jurisdiction over the instant case.

Third issue: whether the petition merits dismissal for non-exhaustion of administrative remedies.

PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain
information without first asking PEA the needed information. PEA claims petitioner's direct resort to the
Court violates the principle of exhaustion of administrative remedies. It also violates the rule that
mandamus may issue only if there is no other plain, speedy and adequate remedy in the ordinary course
of law.

PEA distinguishes the instant case from Tañada v. Tuvera23 where the Court granted the petition for
mandamus even if the petitioners there did not initially demand from the Office of the President the
publication of the presidential decrees. PEA points out that in Tañada, the Executive Department had
an affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of Commonwealth Act No.
63825 to publish the presidential decrees. There was, therefore, no need for the petitioners in Tañada to
make an initial demand from the Office of the President. In the instant case, PEA claims it has no
affirmative statutory duty to disclose publicly information about its renegotiation of the JVA. Thus, PEA
asserts that the Court must apply the principle of exhaustion of administrative remedies to the instant
case in view of the failure of petitioner here to demand initially from PEA the needed information.

The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation. Under
Section 79 of the Government Auditing Code,26 the disposition of government lands to private parties
requires public bidding. PEA was under a positive legal duty to disclose to the public the terms and
conditions for the sale of its lands. The law obligated PEA to make this public disclosure even without
demand from petitioner or from anyone. PEA failed to make this public disclosure because the original
JVA, like the Amended JVA, was the result of a negotiated contract, not of a public bidding. Considering
that PEA had an affirmative statutory duty to make the public disclosure, and was even in breach of this
legal duty, petitioner had the right to seek direct judicial intervention.

Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative
remedies does not apply when the issue involved is a purely legal or constitutional question. 27 The
principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of the
constitutional ban prohibiting the alienation of lands of the public domain to private corporations. We
rule that the principle of exhaustion of administrative remedies does not apply in the instant case.

Fourth issue: whether petitioner has locus standi to bring this suit

PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his
constitutional right to information without a showing that PEA refused to perform an affirmative duty
imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he will suffer any
concrete injury because of the signing or implementation of the Amended JVA. Thus, there is no actual
controversy requiring the exercise of the power of judicial review.

The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to
comply with its constitutional duties. There are two constitutional issues involved here. First is the right
of citizens to information on matters of public concern. Second is the application of a constitutional
provision intended to insure the equitable distribution of alienable lands of the public domain among
Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly information on the sale
of government lands worth billions of pesos, information which the Constitution and statutory law
mandate PEA to disclose. The thrust of the second issue is to prevent PEA from alienating hundreds of
hectares of alienable lands of the public domain in violation of the Constitution, compelling PEA to
comply with a constitutional duty to the nation.

Moreover, the petition raises matters of transcendental importance to the public. In Chavez v.
PCGG,28 the Court upheld the right of a citizen to bring a taxpayer's suit on matters of transcendental
importance to the public, thus -

"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the Marcoses is
an issue of 'transcendental importance to the public.' He asserts that ordinary taxpayers have a
right to initiate and prosecute actions questioning the validity of acts or orders of government
agencies or instrumentalities, if the issues raised are of 'paramount public interest,' and if they
'immediately affect the social, economic and moral well being of the people.'

Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when the
proceeding involves the assertion of a public right, such as in this case. He invokes several
decisions of this Court which have set aside the procedural matter of locus standi, when the
subject of the case involved public interest.

xxx

In Tañada v. Tuvera, the Court asserted that when the issue concerns a public right and the object
of mandamus is to obtain the enforcement of a public duty, the people are regarded as the real
parties in interest; and because it is sufficient that petitioner is a citizen and as such is interested
in the execution of the laws, he need not show that he has any legal or special interest in the result
of the action. In the aforesaid case, the petitioners sought to enforce their right to be informed on
matters of public concern, a right then recognized in Section 6, Article IV of the 1973 Constitution,
in connection with the rule that laws in order to be valid and enforceable must be published in the
Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing,
the Court declared that the right they sought to be enforced 'is a public right recognized by no less
than the fundamental law of the land.'

Legaspi v. Civil Service Commission, while reiterating Tañada, further declared that 'when a
mandamus proceeding involves the assertion of a public right, the requirement of personal
interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the general
'public' which possesses the right.'
 Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been
involved under the questioned contract for the development, management and operation of the
Manila International Container Terminal, 'public interest [was] definitely involved considering the
important role [of the subject contract] . . . in the economic development of the country and the
magnitude of the financial consideration involved.' We concluded that, as a consequence, the
disclosure provision in the Constitution would constitute sufficient authority for upholding the
petitioner's standing.

Similarly, the instant petition is anchored on the right of the people to information and access to
official records, documents and papers — a right guaranteed under Section 7, Article III of the
1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of the
satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's legal
standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we rule that
the petition at bar should be allowed."

We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional
rights - to information and to the equitable diffusion of natural resources - matters of transcendental
public importance, the petitioner has the requisite locus standi.

Fifth issue: whether the constitutional right to information includes official information on on-going
negotiations before a final agreement.

Section 7, Article III of the Constitution explains the people's right to information on matters of public
concern in this manner:

"Sec. 7. The right of the people to information on matters of public concern shall be recognized.
Access to official records, and to documents, and papers pertaining to official acts,
transactions, or decisions, as well as to government research data used as basis for policy
development, shall be afforded the citizen, subject to such limitations as may be provided by law."
(Emphasis supplied)

The State policy of full transparency in all transactions involving public interest reinforces the people's
right to information on matters of public concern. This State policy is expressed in Section 28, Article II of
the Constitution, thus:

"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements
a policy of full public disclosure of all its transactions involving public interest." (Emphasis
supplied)

These twin provisions of the Constitution seek to promote transparency in policy-making and in the
operations of the government, as well as provide the people sufficient information to exercise effectively
other constitutional rights. These twin provisions are essential to the exercise of freedom of expression. If
the government does not disclose its official acts, transactions and decisions to citizens, whatever citizens
say, even if expressed without any restraint, will be speculative and amount to nothing. These twin
provisions are also essential to hold public officials "at all times x x x accountable to the people," 29 for
unless citizens have the proper information, they cannot hold public officials accountable for anything.
Armed with the right information, citizens can participate in public discussions leading to the formulation
of government policies and their effective implementation. An informed citizenry is essential to the
existence and proper functioning of any democracy. As explained by the Court in Valmonte v. Belmonte,
Jr.30 –

"An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive
 and be responsive to the people's will. Yet, this open dialogue can be effective only to the extent
that the citizenry is informed and thus able to formulate its will intelligently. Only when the
participants in the discussion are aware of the issues and have access to information relating
thereto can such bear fruit."

PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information is
limited to "definite propositions of the government." PEA maintains the right does not include access to
"intra-agency or inter-agency recommendations or communications during the stage when common
assertions are still in the process of being formulated or are in the 'exploratory stage'."

Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the
closing of the transaction. To support its contention, AMARI cites the following discussion in the 1986
Constitutional Commission:

"Mr. Suarez. And when we say 'transactions' which should be distinguished from contracts,
agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the
consummation of the contract, or does he refer to the contract itself?

Mr. Ople: The 'transactions' used here, I suppose is generic and therefore, it can cover both
steps leading to a contract and already a consummated contract, Mr. Presiding Officer.

Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the
transaction.

Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.

Mr. Suarez: Thank you."32 (Emphasis supplied)

AMARI argues there must first be a consummated contract before petitioner can invoke the right.
Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade the
quality of decision-making in government agencies. Government officials will hesitate to express their
real sentiments during deliberations if there is immediate public dissemination of their discussions,
putting them under all kinds of pressure before they decide.

We must first distinguish between information the law on public bidding requires PEA to disclose
publicly, and information the constitutional right to information requires PEA to release to the public.
Before the consummation of the contract, PEA must, on its own and without demand from anyone,
disclose to the public matters relating to the disposition of its property. These include the size, location,
technical description and nature of the property being disposed of, the terms and conditions of the
disposition, the parties qualified to bid, the minimum price and similar information. PEA must prepare all
these data and disclose them to the public at the start of the disposition process, long before the
consummation of the contract, because the Government Auditing Code requires public bidding. If PEA
fails to make this disclosure, any citizen can demand from PEA this information at any time during the
bidding process.

Information, however, on on-going evaluation or review of bids or proposals being undertaken by the
bidding or review committee is not immediately accessible under the right to information. While the
evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on the bids or
proposals. However, once the committee makes its official recommendation, there arises a "definite
proposition" on the part of the government. From this moment, the public's right to information attaches,
and any citizen can access all the non-proprietary information leading to such definite proposition.
In Chavez v. PCGG,33 the Court ruled as follows:

"Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the
PCGG and its officers, as well as other government representatives, to disclose sufficient public
 information on any proposed settlement they have decided to take up with the ostensible owners
and holders of ill-gotten wealth. Such information, though, must pertain to definite propositions
of the government, not necessarily to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in the process of being
formulated or are in the "exploratory" stage. There is need, of course, to observe the same
restrictions on disclosure of information in general, as discussed earlier – such as on matters
involving national security, diplomatic or foreign relations, intelligence and other classified
information." (Emphasis supplied)

Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission understood
that the right to information "contemplates inclusion of negotiations leading to the consummation of
the transaction."Certainly, a consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract is consummated, and if one
is consummated, it may be too late for the public to expose its defects.1âwphi1.nêt

Requiring a consummated contract will keep the public in the dark until the contract, which may be
grossly disadvantageous to the government or even illegal, becomes a fait accompli. This negates the
State policy of full transparency on matters of public concern, a situation which the framers of the
Constitution could not have intended. Such a requirement will prevent the citizenry from participating in
the public discussion of any proposed contract, effectively truncating a basic right enshrined in the Bill of
Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the State of its
avowed "policy of full disclosure of all its transactions involving public interest."

The right covers three categories of information which are "matters of public concern," namely: (1)
official records; (2) documents and papers pertaining to official acts, transactions and decisions; and (3)
government research data used in formulating policies. The first category refers to any document that is
part of the public records in the custody of government agencies or officials. The second category refers
to documents and papers recording, evidencing, establishing, confirming, supporting, justifying or
explaining official acts, transactions or decisions of government agencies or officials. The third category
refers to research data, whether raw, collated or processed, owned by the government and used in
formulating government policies.

The information that petitioner may access on the renegotiation of the JVA includes evaluation reports,
recommendations, legal and expert opinions, minutes of meetings, terms of reference and other
documents attached to such reports or minutes, all relating to the JVA. However, the right to information
does not compel PEA to prepare lists, abstracts, summaries and the like relating to the renegotiation of
the JVA.34 The right only affords access to records, documents and papers, which means the opportunity
to inspect and copy them. One who exercises the right must copy the records, documents and papers at
his expense. The exercise of the right is also subject to reasonable regulations to protect the integrity of
the public records and to minimize disruption to government operations, like rules specifying when and
how to conduct the inspection and copying.35

The right to information, however, does not extend to matters recognized as privileged information
under the separation of powers.36 The right does not also apply to information on military and diplomatic
secrets, information affecting national security, and information on investigations of crimes by law
enforcement agencies before the prosecution of the accused, which courts have long recognized as
confidential.37 The right may also be subject to other limitations that Congress may impose by law.

There is no claim by PEA that the information demanded by petitioner is privileged information rooted in
the separation of powers. The information does not cover Presidential conversations, correspondences,
or discussions during closed-door Cabinet meetings which, like internal deliberations of the Supreme
Court and other collegiate courts, or executive sessions of either house of Congress, 38 are recognized as
confidential. This kind of information cannot be pried open by a co-equal branch of government. 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-making of those tasked to exercise
Presidential, Legislative and Judicial power.39 This is not the situation in the instant case.

We rule, therefore, that the constitutional right to information includes official information on on-going
negotiationsbefore a final contract. The information, however, must constitute definite 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. 40 Congress has also
prescribed other limitations on the right to information in several legislations.41

Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed or
to be reclaimed, violate the Constitution.

The Regalian Doctrine

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine
which holds that the State owns all lands and waters of the public domain. Upon the Spanish conquest of
the Philippines, ownership of all "lands, territories and possessions" in the Philippines passed to the
Spanish Crown.42 The King, as the sovereign ruler and representative of the people, acquired and owned
all lands and territories in the Philippines except those he disposed of by grant or sale to private
individuals.

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the State, in
lieu of the King, as the owner of all lands and waters of the public domain. The Regalian doctrine is the
foundation of the time-honored principle of land ownership that "all lands that were not acquired from
the Government, either by purchase or by grant, belong to the public domain."43 Article 339 of the Civil
Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian doctrine.

Ownership and Disposition of Reclaimed Lands

The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition
of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission enacted Act No. 1654
which provided for the lease, but not the sale, of reclaimed lands of the government to corporations
and individuals. Later, on November 29, 1919, the Philippine Legislature approved Act No. 2874, the
Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. On November 7, 1936, the National Assembly passed Commonwealth Act
No. 141, also known as the Public Land Act, which authorized the lease, but not the sale, of reclaimed
lands of the government to corporations and individuals. CA No. 141 continues to this day as the
general law governing the classification and disposition of lands of the public domain.

The Spanish Law of Waters of 1866 and the Civil Code of 1889

Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the
maritime zone of the Spanish territory belonged to the public domain for public use. 44 The Spanish Law
of Waters of 1866 allowed the reclamation of the sea under Article 5, which provided as follows:

"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by
the provinces, pueblos or private persons, with proper permission, shall become the property of
the party constructing such works, unless otherwise provided by the terms of the grant of
authority."

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the
reclamation, provided the government issued the necessary permit and did not reserve ownership of the
reclaimed land to the State.

Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
 "Art. 339. Property of public dominion is –

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed
by the State, riverbanks, shores, roadsteads, and that of a similar character;

2. That belonging exclusively to the State which, without being of general public use, is employed
in some public service, or in the development of the national wealth, such as walls, fortresses, and
other works for the defense of the territory, and mines, until granted to private individuals."

Property devoted to public use referred to property open for use by the public. In contrast, property
devoted to public service referred to property used for some specific public service and open only to
those authorized to use the property.

Property of public dominion referred not only to property devoted to public use, but also to property not
so used but employed to develop the national wealth. This class of property constituted property of
public dominion although employed for some economic or commercial activity to increase the national
wealth.

Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into
private property, to wit:

"Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of
the territory, shall become a part of the private property of the State."

This provision, however, was not self-executing. The legislature, or the executive department pursuant to
law, must declare the property no longer needed for public use or territorial defense before the
government could lease or alienate the property to private parties.45

Act No. 1654 of the Philippine Commission

On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed
and foreshore lands. The salient provisions of this law were as follows:

"Section 1. The control and disposition of the foreshore as defined in existing law, and the title to
all Government or public lands made or reclaimed by the Government by dredging or
filling or otherwise throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to rights conceded to the
City of Manila in the Luneta Extension.

Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or
reclaimed by the Government by dredging or filling or otherwise to be divided into lots or blocks,
with the necessary streets and alleyways located thereon, and shall cause plats and plans of such
surveys to be prepared and filed with the Bureau of Lands.

(b) Upon completion of such plats and plans the Governor-General shall give notice to the public
that such parts of the lands so made or reclaimed as are not needed for public purposes will
be leased for commercial and business purposes, x x x.

xxx

(e) The leases above provided for shall be disposed of to the highest and best bidder therefore,
subject to such regulations and safeguards as the Governor-General may by executive order
prescribe." (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government. The Act also vested in the government control and disposition of foreshore lands. Private
parties could lease lands reclaimed by the government only if these lands were no longer needed for
public purpose. Act No. 1654 mandated public bidding in the lease of government reclaimed lands. Act
No. 1654 made government reclaimed lands sui generis in that unlike other public lands which the
government could sell to private parties, these reclaimed lands were available only for lease to private
parties.

Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did
not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters.
Lands reclaimed from the sea by private parties with government permission remained private lands.

Act No. 2874 of the Philippine Legislature

On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act. 46 The
salient provisions of Act No. 2874, on reclaimed lands, were as follows:

"Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and
Natural Resources, shall from time to time classify the lands of the public domain into –

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands, x x x.

Sec. 7. For the purposes of the government and disposition of alienable or disposable public
lands, the Governor-General, upon recommendation by the Secretary of Agriculture and
Natural Resources, shall from time to time declare what lands are open to disposition or
concession under this Act."

Sec. 8. Only those lands shall be declared open to disposition or concession which have been
officially delimited or classified x x x.

xxx

Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall
be classified as suitable for residential purposes or for commercial, industrial, or other
productive purposes other than agricultural purposes, and shall be open to disposition or
concession, shall be disposed of under the provisions of this chapter, and not otherwise.

Sec. 56. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;

(d) Lands not included in any of the foregoing classes.

x x x.
 Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of
to private parties by lease only and not otherwise, as soon as the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural Resources, shall declare that
the same are not necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or lease under the
provisions of this Act." (Emphasis supplied)

Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain into x x
x alienable or disposable"47 lands. Section 7 of the Act empowered the Governor-General to "declare what
lands are open to disposition or concession." Section 8 of the Act limited alienable or disposable lands
only to those lands which have been "officially delimited and classified."

Section 56 of Act No. 2874 stated that lands "disposable under this title 48 shall be classified" as
government reclaimed, foreshore and marshy lands, as well as other lands. All these lands, however, must
be suitable for residential, commercial, industrial or other productive non-agricultural purposes. These
provisions vested upon the Governor-General the power to classify inalienable lands of the public domain
into disposable lands of the public domain. These provisions also empowered the Governor-General to
classify further such disposable lands of the public domain into government reclaimed, foreshore or
marshy lands of the public domain, as well as other non-agricultural lands.

Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain classified as
government reclaimed, foreshore and marshy lands "shall be disposed of to private parties by lease
only and not otherwise." The Governor-General, before allowing the lease of these lands to private
parties, must formally declare that the lands were "not necessary for the public service." Act No. 2874
reiterated the State policy to lease and not to sell government reclaimed, foreshore and marshy lands of
the public domain, a policy first enunciated in 1907 in Act No. 1654. Government reclaimed, foreshore
and marshy lands remained sui generis, as the only alienable or disposable lands of the public domain
that the government could not sell to private parties.

The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy public
lands for non-agricultural purposes retain their inherent potential as areas for public service. This is the
reason the government prohibited the sale, and only allowed the lease, of these lands to private parties.
The State always reserved these lands for some future public service.

Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy lands
into other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were the only
lands for non-agricultural purposes the government could sell to private parties. Thus, under Act No.
2874, the government could not sell government reclaimed, foreshore and marshy lands to private
parties, unless the legislature passed a law allowing their sale.49

Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of the
Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with government
permission remained private lands.

Dispositions under the 1935 Constitution

On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The 1935
Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that –

"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease,
 or concession at the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land, shall not be
alienated, and no license, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-five years, renewable
for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases beneficial use may be
the measure and limit of the grant." (Emphasis supplied)

The 1935 Constitution barred the alienation of all natural resources except public agricultural lands,
which were the only natural resources the State could alienate. Thus, foreshore lands, considered part of
the State's natural resources, became inalienable by constitutional fiat, available only for lease for 25
years, renewable for another 25 years. The government could alienate foreshore lands only after these
lands were reclaimed and classified as alienable agricultural lands of the public domain. Government
reclaimed and marshy lands of the public domain, being neither timber nor mineral lands, fell under the
classification of public agricultural lands.50 However, government reclaimed and marshy lands, although
subject to classification as disposable public agricultural lands, could only be leased and not sold to
private parties because of Act No. 2874.

The prohibition on private parties from acquiring ownership of government reclaimed and marshy lands
of the public domain was only a statutory prohibition and the legislature could therefore remove such
prohibition. The 1935 Constitution did not prohibit individuals and corporations from acquiring
government reclaimed and marshy lands of the public domain that were classified as agricultural lands
under existing public land laws. Section 2, Article XIII of the 1935 Constitution provided as follows:

"Section 2. No private corporation or association may acquire, lease, or hold public

agricultural lands in excess of one thousand and twenty four hectares, nor may any
individual acquire such lands by purchase in excess of one hundred and forty hectares, or by
lease in excess of one thousand and twenty-four hectares, or by homestead in excess of twenty-
four hectares. Lands adapted to grazing, not exceeding two thousand hectares, may be leased to an
individual, private corporation, or association." (Emphasis supplied)

Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No. 2874
to open for sale to private parties government reclaimed and marshy lands of the public domain. On the
contrary, the legislature continued the long established State policy of retaining for the government title
and ownership of government reclaimed and marshy lands of the public domain.

Commonwealth Act No. 141 of the Philippine National Assembly

On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the
Public Land Act, which compiled the then existing laws on lands of the public domain. CA No. 141, as
amended, remains to this day the existing general law governing the classification and disposition of
lands of the public domain other than timber and mineral lands.51

Section 6 of CA No. 141 empowers the President to classify lands of the public domain into "alienable or
disposable"52 lands of the public domain, which prior to such classification are inalienable and outside
the commerce of man. Section 7 of CA No. 141 authorizes the President to "declare what lands are open to
disposition or concession." Section 8 of CA No. 141 states that the government can declare open for
disposition or concession only lands that are "officially delimited and classified." Sections 6, 7 and 8 of CA
No. 141 read as follows:

"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into –

(a) Alienable or disposable,

 (b) Timber, and

(c) Mineral lands,

and may at any time and in like manner transfer such lands from one class to another, 53 for the
purpose of their administration and disposition.

Sec. 7. For the purposes of the administration and disposition of alienable or disposable public
lands, the President, upon recommendation by the Secretary of Agriculture and Commerce,
shall from time to time declare what lands are open to disposition or concession under this Act.

Sec. 8. Only those lands shall be declared open to disposition or concession which have been
officially delimited and classified and, when practicable, surveyed, and which have not been
reserved for public or quasi-public uses, nor appropriated by the Government, nor in any
manner become private property, nor those on which a private right authorized and recognized by
this Act or any other valid law may be claimed, or which, having been reserved or appropriated,
have ceased to be so. x x x."

Thus, before the government could alienate or dispose of lands of the public domain, the President must
first officially classify these lands as alienable or disposable, and then declare them open to disposition or
concession. There must be no law reserving these lands for public or quasi-public uses.

The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public
domain, are as follows:

"Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land,
is intended to be used for residential purposes or for commercial, industrial, or other
productive purposes other than agricultural, and is open to disposition or concession, shall be
disposed of under the provisions of this chapter and not otherwise.

Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;

(d) Lands not included in any of the foregoing classes.

Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to
any person, corporation, or association authorized to purchase or lease public lands for
agricultural purposes. x x x.

Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of
to private parties by lease only and not otherwise, as soon as the President, upon
recommendation by the Secretary of Agriculture, shall declare that the same are not necessary
for the public service and are open to disposition under this chapter. The lands included in class
(d) may be disposed of by sale or lease under the provisions of this Act." (Emphasis supplied)

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No.
2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of the public
domain. All these lands are intended for residential, commercial, industrial or other non-agricultural
purposes. As before, Section 61 allowed only the lease of such lands to private parties. The government
could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or those lands for non-
agricultural purposes not classified as government reclaimed, foreshore and marshy disposable lands of
the public domain. Foreshore lands, however, became inalienable under the 1935 Constitution which
only allowed the lease of these lands to qualified private parties.

Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for
residential, commercial, industrial or other productive purposes other than agricultural "shall be
disposed of under the provisions of this chapter and not otherwise." Under Section 10 of CA No. 141,
the term "disposition" includes lease of the land. Any disposition of government reclaimed, foreshore and
marshy disposable lands for non-agricultural purposes must comply with Chapter IX, Title III of CA No.
141,54 unless a subsequent law amended or repealed these provisions.

In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of
Appeals,55Justice Reynato S. Puno summarized succinctly the law on this matter, as follows:

"Foreshore lands are lands of public dominion intended for public use. So too are lands reclaimed
by the government by dredging, filling, or other means. Act 1654 mandated that the control and
disposition of the foreshore and lands under water remained in the national government. Said law
allowed only the 'leasing' of reclaimed land. The Public Land Acts of 1919 and 1936 also declared
that the foreshore and lands reclaimed by the government were to be "disposed of to private
parties by lease only and not otherwise." Before leasing, however, the Governor-General, upon
recommendation of the Secretary of Agriculture and Natural Resources, had first to determine that
the land reclaimed was not necessary for the public service. This requisite must have been met
before the land could be disposed of. But even then, the foreshore and lands under water were
not to be alienated and sold to private parties. The disposition of the reclaimed land was only
by lease. The land remained property of the State." (Emphasis supplied)

As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained in
effect at present."

The State policy prohibiting the sale to private parties of government reclaimed, foreshore and marshy
alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after
the 1935 Constitution took effect. The prohibition on the sale of foreshore lands, however, became a
constitutional edict under the 1935 Constitution. Foreshore lands became inalienable as natural
resources of the State, unless reclaimed by the government and classified as agricultural lands of the
public domain, in which case they would fall under the classification of government reclaimed lands.

After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the
public domain continued to be only leased and not sold to private parties. 56 These lands remained sui
generis, as the only alienable or disposable lands of the public domain the government could not sell to
private parties.

Since then and until now, the only way the government can sell to private parties government reclaimed
and marshy disposable lands of the public domain is for the legislature to pass a law authorizing such sale.
CA No. 141 does not authorize the President to reclassify government reclaimed and marshy lands into
other non-agricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the only
alienable or disposable lands for non-agricultural purposes that the government could sell to private
parties.

Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under
Section 59 that the government previously transferred to government units or entities could be sold to
private parties. Section 60 of CA No. 141 declares that –
 "Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary of
Agriculture and Natural Resources, be reasonably necessary for the purposes for which such sale
or lease is requested, and shall not exceed one hundred and forty-four hectares: Provided,
however, That this limitation shall not apply to grants, donations, or transfers made to a province,
municipality or branch or subdivision of the Government for the purposes deemed by said entities
conducive to the public interest; but the land so granted, donated, or transferred to a province,
municipality or branch or subdivision of the Government shall not be alienated, encumbered,
or otherwise disposed of in a manner affecting its title, except when authorized by Congress: x
x x." (Emphasis supplied)

The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority
required in Section 56 of Act No. 2874.

One reason for the congressional authority is that Section 60 of CA No. 141 exempted government units
and entities from the maximum area of public lands that could be acquired from the State. These
government units and entities should not just turn around and sell these lands to private parties in
violation of constitutional or statutory limitations. Otherwise, the transfer of lands for non-agricultural
purposes to government units and entities could be used to circumvent constitutional limitations on
ownership of alienable or disposable lands of the public domain. In the same manner, such transfers
could also be used to evade the statutory prohibition in CA No. 141 on the sale of government reclaimed
and marshy lands of the public domain to private parties. Section 60 of CA No. 141 constitutes by
operation of law a lien on these lands.57

In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No. 141,
Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as follows:

"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now the
Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of such
authority, the Director of Lands shall give notice by public advertisement in the same manner as in
the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to the
highest bidder. x x x." (Emphasis supplied)

Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable or
disposable lands of the public domain.58

Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish Law of
Waters of 1866. Private parties could still reclaim portions of the sea with government permission.
However, the reclaimed land could become private land only if classified as alienable agricultural
land of the public domain open to disposition under CA No. 141. The 1935 Constitution prohibited the
alienation of all natural resources except public agricultural lands.

The Civil Code of 1950

The Civil Code of 1950 readopted substantially the definition of property of public dominion found in the
Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that –

"Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
 (2) Those which belong to the State, without being for public use, and are intended for some
public service or for the development of the national wealth.

x x x.

Art. 422. Property of public dominion, when no longer intended for public use or for public service,
shall form part of the patrimonial property of the State."

Again, the government must formally declare that the property of public dominion is no longer needed
for public use or public service, before the same could be classified as patrimonial property of the
State.59 In the case of government reclaimed and marshy lands of the public domain, the declaration of
their being disposable, as well as the manner of their disposition, is governed by the applicable
provisions of CA No. 141.

Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those
properties of the State which, without being for public use, are intended for public service or the
"development of the national wealth." Thus, government reclaimed and marshy lands of the State, even
if not employed for public use or public service, if developed to enhance the national wealth, are classified
as property of public dominion.

Dispositions under the 1973 Constitution

The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian doctrine.
Section 8, Article XIV of the 1973 Constitution stated that –

"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong
to the State. With the exception of agricultural, industrial or commercial, residential, and
resettlement lands of the public domain, natural resources shall not be alienated, and no
license, concession, or lease for the exploration, development, exploitation, or utilization of any of
the natural resources shall be granted for a period exceeding twenty-five years, renewable for not
more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases, beneficial use may be
the measure and the limit of the grant." (Emphasis supplied)

The 1973 Constitution prohibited the alienation of all natural resources with the exception of
"agricultural, industrial or commercial, residential, and resettlement lands of the public domain." In
contrast, the 1935 Constitution barred the alienation of all natural resources except "public agricultural
lands." However, the term "public agricultural lands" in the 1935 Constitution encompassed industrial,
commercial, residential and resettlement lands of the public domain.60 If the land of public domain were
neither timber nor mineral land, it would fall under the classification of agricultural land of the public
domain. Both the 1935 and 1973 Constitutions, therefore, prohibited the alienation of all natural
resources except agricultural lands of the public domain.

The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals who
were citizens of the Philippines. Private corporations, even if wholly owned by Philippine citizens, were
no longer allowed to acquire alienable lands of the public domain unlike in the 1935 Constitution. Section
11, Article XIV of the 1973 Constitution declared that –

"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and development
requirements of the natural resources, shall determine by law the size of land of the public domain
which may be developed, held or acquired by, or leased to, any qualified individual, corporation,
or association, and the conditions therefor. No private corporation or association may hold
alienable lands of the public domain except by lease not to exceed one thousand hectares in
 area nor may any citizen hold such lands by lease in excess of five hundred hectares or acquire by
purchase, homestead or grant, in excess of twenty-four hectares. No private corporation or
association may hold by lease, concession, license or permit, timber or forest lands and other
timber or forest resources in excess of one hundred thousand hectares. However, such area may
be increased by the Batasang Pambansa upon recommendation of the National Economic and
Development Authority." (Emphasis supplied)

Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public domain
only through lease. Only individuals could now acquire alienable lands of the public domain, and private
corporations became absolutely barred from acquiring any kind of alienable land of the public
domain. The constitutional ban extended to all kinds of alienable lands of the public domain, while the
statutory ban under CA No. 141 applied only to government reclaimed, foreshore and marshy alienable
lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 creating PEA,
a wholly government owned and controlled corporation with a special charter. Sections 4 and 8 of PD No.
1084, vests PEA with the following purposes and powers:

"Sec. 4. Purpose. The Authority is hereby created for the following purposes:

(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other
means, or to acquire reclaimed land;

(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and
all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled
and/or operated by the government;

(c) To provide for, operate or administer such service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.

Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for
which it is created, have the following powers and functions:

(a)To prescribe its by-laws.

xxx

(i) To hold lands of the public domain in excess of the area permitted to private corporations by
statute.

(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal,
ditch, flume x x x.

xxx

(o) To perform such acts and exercise such functions as may be necessary for the attainment of
the purposes and objectives herein specified." (Emphasis supplied)

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.
Foreshore areas are those covered and uncovered by the ebb and flow of the tide. 61 Submerged areas are
those permanently under water regardless of the ebb and flow of the tide. 62 Foreshore and submerged
areas indisputably belong to the public domain63 and are inalienable unless reclaimed, classified as
alienable lands open to disposition, and further declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public
domain did not apply to PEA since it was then, and until today, a fully owned government corporation.
The constitutional ban applied then, as it still applies now, only to "private corporations and
associations." PD No. 1084 expressly empowers PEA "to hold lands of the public domain" even "in
excess of the area permitted to private corporations by statute." Thus, PEA can hold title to private
lands, as well as title to lands of the public domain.

In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there
must be legislative authority empowering PEA to sell these lands. This legislative authority is necessary
in view of Section 60 of CA No.141, which states –

"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or
branch or subdivision of the Government shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by Congress; x x x." (Emphasis
supplied)

Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and
submerged alienable lands of the public domain. Nevertheless, any legislative authority granted to PEA to
sell its reclaimed alienable lands of the public domain would be subject to the constitutional ban on
private corporations from acquiring alienable lands of the public domain. Hence, such legislative
authority could only benefit private individuals.

Dispositions under the 1987 Constitution

The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine.
The 1987 Constitution declares that all natural resources are "owned by the State," and except for
alienable agricultural lands of the public domain, natural resources cannot be alienated. Sections 2 and 3,
Article XII of the 1987 Constitution state that –

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils,
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration, development, and utilization of
natural resources shall be under the full control and supervision of the State. x x x.

Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
lands, and national parks. Agricultural lands of the public domain may be further classified by law
according to the uses which they may be devoted. Alienable lands of the public domain shall be
limited to agricultural lands. Private corporations or associations may not hold such
alienable lands of the public domain except by lease, for a period not exceeding twenty-five
years, renewable for not more than twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or
acquire not more than twelve hectares thereof by purchase, homestead, or grant.

Taking into account the requirements of conservation, ecology, and development, and subject to
the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the
public domain which may be acquired, developed, held, or leased and the conditions therefor."
(Emphasis supplied)

The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations
from acquiring any kind of alienable land of the public domain. Like the 1973 Constitution, the 1987
Constitution allows private corporations to hold alienable lands of the public domain only through lease.
As in the 1935 and 1973 Constitutions, the general law governing the lease to private corporations of
reclaimed, foreshore and marshy alienable lands of the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban

The rationale behind the constitutional ban on corporations from acquiring, except through lease,
alienable lands of the public domain is not well understood. During the deliberations of the 1986
Constitutional Commission, the commissioners probed the rationale behind this ban, thus:

"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says:

`No private corporation or association may hold alienable lands of the public domain except by
lease, not to exceed one thousand hectares in area.'

If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in
the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable public
lands. But it has not been very clear in jurisprudence what the reason for this is. In some of the
cases decided in 1982 and 1983, it was indicated that the purpose of this is to prevent large
landholdings. Is that the intent of this provision?

MR. VILLEGAS: I think that is the spirit of the provision.

FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the
Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a chapel stood
because the Supreme Court said it would be in violation of this." (Emphasis supplied)

In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:

"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural
lands by private corporations is to equitably diffuse land ownership or to encourage 'owner-
cultivatorship and the economic family-size farm' and to prevent a recurrence of cases like the
instant case. Huge landholdings by corporations or private persons had spawned social unrest."

However, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply
limited the size of alienable lands of the public domain that corporations could acquire. The Constitution
could have followed the limitations on individuals, who could acquire not more than 24 hectares of
alienable lands of the public domain under the 1973 Constitution, and not more than 12 hectares under
the 1987 Constitution.

If the constitutional intent is to encourage economic family-size farms, placing the land in the name of a
corporation would be more effective in preventing the break-up of farmlands. If the farmland is
registered in the name of a corporation, upon the death of the owner, his heirs would inherit shares in the
corporation instead of subdivided parcels of the farmland. This would prevent the continuing break-up of
farmlands into smaller and smaller plots from one generation to the next.

In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from
acquiring more than the allowed area of alienable lands of the public domain. Without the constitutional
ban, individuals who already acquired the maximum area of alienable lands of the public domain could
easily set up corporations to acquire more alienable public lands. An individual could own as many
corporations as his means would allow him. An individual could even hide his ownership of a corporation
by putting his nominees as stockholders of the corporation. The corporation is a convenient vehicle to
circumvent the constitutional limitation on acquisition by individuals of alienable lands of the public
domain.

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a
limited area of alienable land of the public domain to a qualified individual. This constitutional intent is
safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public
domain, since the vehicle to circumvent the constitutional intent is removed. The available alienable
public lands are gradually decreasing in the face of an ever-growing population. The most effective way
to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the public
domain only to individuals. This, it would seem, is the practical benefit arising from the constitutional ban.

The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three
properties, namely:

1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard
in Paranaque and Las Pinas, Metro Manila, with a combined titled area of 1,578,441 square
meters;"

2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and

3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to regularize
the configuration of the reclaimed area."65

PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further
reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim
another 350 hectares x x x."66

In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750-
hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are still
submerged areas forming part of Manila Bay.

Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's "actual cost"
in partially reclaiming the Freedom Islands. AMARI will also complete, at its own expense, the
reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation costs of all the other
areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will share, in the proportion of 70
percent and 30 percent, respectively, the total net usable area which is defined in the Amended JVA as the
total reclaimed area less 30 percent earmarked for common areas. Title to AMARI's share in the net
usable area, totaling 367.5 hectares, will be issued in the name of AMARI. Section 5.2 (c) of the Amended
JVA provides that –

"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's Land share based on the Land Allocation Plan. PEA,
when requested in writing by AMARI, shall then cause the issuance and delivery of the proper
certificates of title covering AMARI's Land Share in the name of AMARI, x x x; provided, that if
more than seventy percent (70%) of the titled area at any given time pertains to AMARI, PEA shall
deliver to AMARI only seventy percent (70%) of the titles pertaining to AMARI, until such time
when a corresponding proportionate area of additional land pertaining to PEA has been titled."
(Emphasis supplied)

Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of
reclaimed land which will be titled in its name.

To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture PEA's
statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila Bay.
Section 3.2.a of the Amended JVA states that –

"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby granting
the Joint Venture the full and exclusive right, authority and privilege to undertake the Project in
accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its
supplemental agreement dated August 9, 1995.

The Threshold Issue

The threshold issue is whether AMARI, a private corporation, can acquire and own under the Amended
JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of Sections 2 and 3,
Article XII of the 1987 Constitution which state that:

"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of agricultural lands, all other
natural resources shall not be alienated. x x x.

xxx

Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public domain except
by lease, x x x."(Emphasis supplied)

Classification of Reclaimed Foreshore and Submerged Areas

PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are
alienable or disposable lands of the public domain. In its Memorandum,67 PEA admits that –

"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable
and disposable lands of the public domain:

'Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the government by dredging, filling, or other means;

x x x.'" (Emphasis supplied)

Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365 admitted in
its Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands are classified as
alienable and disposable lands of the public domain."69 The Legal Task Force concluded that –

"D. Conclusion

Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of
ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of which
PEA, as owner, may validly convey the same to any qualified person without violating the
Constitution or any statute.

The constitutional provision prohibiting private corporations from holding public land, except by
lease (Sec. 3, Art. XVII,70 1987 Constitution), does not apply to reclaimed lands whose ownership
has passed on to PEA by statutory grant."

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila Bay
are part of the "lands of the public domain, waters x x x and other natural resources" and consequently
"owned by the State." As such, foreshore and submerged areas "shall not be alienated," unless they are
classified as "agricultural lands" of the public domain. The mere reclamation of these areas by PEA does
not convert these inalienable natural resources of the State into alienable or disposable lands of the
public domain. There must be a law or presidential proclamation officially classifying these reclaimed
lands as alienable or disposable and open to disposition or concession. Moreover, these reclaimed lands
cannot be classified as alienable or disposable if the law has reserved them for some public or quasi-
public use.71

Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or
concession which have been officially delimited and classified."72 The President has the authority to
classify inalienable lands of the public domain into alienable or disposable lands of the public domain,
pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department attempted to sell the
Roppongi property in Tokyo, Japan, which was acquired by the Philippine Government for use as the
Chancery of the Philippine Embassy. Although the Chancery had transferred to another location thirteen
years earlier, the Court still ruled that, under Article 42274 of the Civil Code, a property of public
dominion retains such character until formally declared otherwise. The Court ruled that –

"The fact that the Roppongi site has not been used for a long time for actual Embassy service does
not automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481
[1975]. A property continues to be part of the public domain, not available for private
appropriation or ownership 'until there is a formal declaration on the part of the government
to withdraw it from being such' (Ignacio v. Director of Lands, 108 Phil. 335 [1960]." (Emphasis
supplied)

PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands
reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then
President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the 157.84 hectares
comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the Register of Deeds
of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEA pursuant to
Section 103 of PD No. 1529 authorizing the issuance of certificates of title corresponding to land patents.
To this day, these certificates of title are still in the name of PEA.

PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the Freedom
Islands, is equivalent to an official proclamation classifying the Freedom Islands as alienable or
disposable lands of the public domain. PD No. 1085 and President Aquino's issuance of a land patent also
constitute a declaration that the Freedom Islands are no longer needed for public service. The Freedom
Islands are thus alienable or disposable lands of the public domain, open to disposition or
concession to qualified parties.

At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the
Freedom Islands although subsequently there were partial erosions on some areas. The government had
also completed the necessary surveys on these islands. Thus, the Freedom Islands were no longer part of
Manila Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the
public domain into "agricultural, forest or timber, mineral lands, and national parks." Being neither
timber, mineral, nor national park lands, the reclaimed Freedom Islands necessarily fall under the
classification of agricultural lands of the public domain. Under the 1987 Constitution, agricultural lands of
the public domain are the only natural resources that the State may alienate to qualified private parties.
All other natural resources, such as the seas or bays, are "waters x x x owned by the State" forming part of
the public domain, and are inalienable pursuant to Section 2, Article XII of the 1987 Constitution.

AMARI claims that the Freedom Islands are private lands because CDCP, then a private corporation,
reclaimed the islands under a contract dated November 20, 1973 with the Commissioner of Public
Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866, argues that "if the ownership of
reclaimed lands may be given to the party constructing the works, then it cannot be said that reclaimed
lands are lands of the public domain which the State may not alienate."75 Article 5 of the Spanish Law of
Waters reads as follows:
 "Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by
the provinces, pueblos or private persons, with proper permission, shall become the property of
the party constructing such works, unless otherwise provided by the terms of the grant of
authority." (Emphasis supplied)

Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only
with "proper permission" from the State. Private parties could own the reclaimed land only if not
"otherwise provided by the terms of the grant of authority." This clearly meant that no one could reclaim
from the sea without permission from the State because the sea is property of public dominion. It also
meant that the State could grant or withhold ownership of the reclaimed land because any reclaimed land,
like the sea from which it emerged, belonged to the State. Thus, a private person reclaiming from the sea
without permission from the State could not acquire ownership of the reclaimed land which would
remain property of public dominion like the sea it replaced.76 Article 5 of the Spanish Law of Waters of
1866 adopted the time-honored principle of land ownership that "all lands that were not acquired from
the government, either by purchase or by grant, belong to the public domain."77

Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the
disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must first be
classified as alienable or disposable before the government can alienate them. These lands must not be
reserved for public or quasi-public purposes.78 Moreover, the contract between CDCP and the
government was executed after the effectivity of the 1973 Constitution which barred private
corporations from acquiring any kind of alienable land of the public domain. This contract could not have
converted the Freedom Islands into private lands of a private corporation.

Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the reclamation of
areas under water and revested solely in the National Government the power to reclaim lands. Section 1
of PD No. 3-A declared that –

"The provisions of any law to the contrary notwithstanding, the reclamation of areas under
water, whether foreshore or inland, shall be limited to the National Government or any person
authorized by it under a proper contract. (Emphasis supplied)

x x x."

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas under
water could now be undertaken only by the National Government or by a person contracted by the
National Government. Private parties may reclaim from the sea only under a contract with the National
Government, and no longer by grant or permission as provided in Section 5 of the Spanish Law of Waters
of 1866.

Executive Order No. 525, issued on February 14, 1979, designated PEA as the National Government's
implementing arm to undertake "all reclamation projects of the government," which "shall be
undertaken by the PEA or through a proper contract executed by it with any person or entity." Under
such contract, a private party receives compensation for reclamation services rendered to PEA. Payment
to the contractor may be in cash, or in kind consisting of portions of the reclaimed land, subject to the
constitutional ban on private corporations from acquiring alienable lands of the public domain. The
reclaimed land can be used as payment in kind only if the reclaimed land is first classified as alienable or
disposable land open to disposition, and then declared no longer needed for public service.

The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are
still submerged and forming part of Manila Bay. There is no legislative or Presidential act classifying
these submerged areas as alienable or disposable lands of the public domain open to disposition.
These submerged areas are not covered by any patent or certificate of title. There can be no dispute that
these submerged areas form part of the public domain, and in their present state are inalienable and
outside the commerce of man. Until reclaimed from the sea, these submerged areas are, under the
Constitution, "waters x x x owned by the State," forming part of the public domain and consequently
inalienable. Only when actually reclaimed from the sea can these submerged areas be classified as public
agricultural lands, which under the Constitution are the only natural resources that the State may
alienate. Once reclaimed and transformed into public agricultural lands, the government may then
officially classify these lands as alienable or disposable lands open to disposition. Thereafter, the
government may declare these lands no longer needed for public service. Only then can these reclaimed
lands be considered alienable or disposable lands of the public domain and within the commerce of man.

The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable lands
open to disposition is necessary because PEA is tasked under its charter to undertake public services that
require the use of lands of the public domain. Under Section 5 of PD No. 1084, the functions of PEA
include the following: "[T]o own or operate railroads, tramways and other kinds of land transportation, x
x x; [T]o construct, maintain and operate such systems of sanitary sewers as may be necessary; [T]o
construct, maintain and operate such storm drains as may be necessary." PEA is empowered to issue
"rules and regulations as may be necessary for the proper use by private parties of any or all of the
highways, roads, utilities, buildings and/or any of its properties and to impose or collect fees or tolls
for their use." Thus, part of the reclaimed foreshore and submerged lands held by the PEA would actually
be needed for public use or service since many of the functions imposed on PEA by its charter constitute
essential public services.

Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of the National
Government." The same section also states that "[A]ll reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation to PD No. 3-A
and PD No.1084, PEA became the primary implementing agency of the National Government to reclaim
foreshore and submerged lands of the public domain. EO No. 525 recognized PEA as the government
entity "to undertake the reclamation of lands and ensure their maximum utilization in promoting public
welfare and interests."79 Since large portions of these reclaimed lands would obviously be needed for
public service, there must be a formal declaration segregating reclaimed lands no longer needed for
public service from those still needed for public service.1âwphi1.nêt

Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned by the
PEA," could not automatically operate to classify inalienable lands into alienable or disposable lands of
the public domain. Otherwise, reclaimed foreshore and submerged lands of the public domain would
automatically become alienable once reclaimed by PEA, whether or not classified as alienable or
disposable.

The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests in the
Department of Environment and Natural Resources ("DENR" for brevity) the following powers and
functions:

"Sec. 4. Powers and Functions. The Department shall:

(1) x x x

xxx

(4) Exercise supervision and control over forest lands, alienable and disposable public lands,
mineral resources and, in the process of exercising such control, impose appropriate taxes, fees,
charges, rentals and any such form of levy and collect such revenues for the exploration,
development, utilization or gathering of such resources;
 xxx

(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits,
concessions, lease agreements and such other privileges concerning the development,
exploration and utilization of the country's marine, freshwater, and brackish water and over
all aquatic resources of the country and shall continue to oversee, supervise and police our
natural resources; cancel or cause to cancel such privileges upon failure, non-compliance or
violations of any regulation, order, and for all other causes which are in furtherance of the
conservation of natural resources and supportive of the national interest;

(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the
public domain and serve as the sole agency responsible for classification, sub-classification,
surveying and titling of lands in consultation with appropriate agencies."80 (Emphasis supplied)

As manager, conservator and overseer of the natural resources of the State, DENR exercises "supervision
and control over alienable and disposable public lands." DENR also exercises "exclusive jurisdiction on
the management and disposition of all lands of the public domain." Thus, DENR decides whether areas
under water, like foreshore or submerged areas of Manila Bay, should be reclaimed or not. This means
that PEA needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay,
or in any part of the country.

DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. Hence,
DENR decides whether reclaimed lands of PEA should be classified as alienable under Sections 6 81 and
782 of CA No. 141. Once DENR decides that the reclaimed lands should be so classified, it then
recommends to the President the issuance of a proclamation classifying the lands as alienable or
disposable lands of the public domain open to disposition. We note that then DENR Secretary Fulgencio S.
Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the Revised Administrative Code
and Sections 6 and 7 of CA No. 141.

In short, DENR is vested with the power to authorize the reclamation of areas under water, while PEA is
vested with the power to undertake the physical reclamation of areas under water, whether directly or
through private contractors. DENR is also empowered to classify lands of the public domain into
alienable or disposable lands subject to the approval of the President. On the other hand, PEA is tasked to
develop, sell or lease the reclaimed alienable lands of the public domain.

Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not make the
reclaimed lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA.
Likewise, the mere transfer by the National Government of lands of the public domain to PEA does not
make the lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA.

Absent two official acts – a classification that these lands are alienable or disposable and open to
disposition and a declaration that these lands are not needed for public service, lands reclaimed by PEA
remain inalienable lands of the public domain. Only such an official classification and formal declaration
can convert reclaimed lands into alienable or disposable lands of the public domain, open to disposition
under the Constitution, Title I and Title III83 of CA No. 141 and other applicable laws.84

PEA's Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain, the
reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA, citing
Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or subdivision of the
government "shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its
title, except when authorized by Congress: x x x."85 (Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, which
states that –

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be executed in
behalf of the government by the following: x x x."

Thus, the Court concluded that a law is needed to convey any real property belonging to the Government.
The Court declared that -

"It is not for the President to convey real property of the government on his or her own sole
will. Any such conveyance must be authorized and approved by a law enacted by the Congress.
It requires executive and legislative concurrence." (Emphasis supplied)

PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to sell its
reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that –

"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the contract
for the reclamation and construction of the Manila-Cavite Coastal Road Project between the
Republic of the Philippines and the Construction and Development Corporation of the Philippines
dated November 20, 1973 and/or any other contract or reclamation covering the same area is
hereby transferred, conveyed and assigned to the ownership and administration of the Public
Estates Authority established pursuant to PD No. 1084; Provided, however, That the rights and
interests of the Construction and Development Corporation of the Philippines pursuant to the
aforesaid contract shall be recognized and respected.

Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations of the
Republic of the Philippines (Department of Public Highways) arising from, or incident to, the
aforesaid contract between the Republic of the Philippines and the Construction and Development
Corporation of the Philippines.

In consideration of the foregoing transfer and assignment, the Public Estates Authority shall issue
in favor of the Republic of the Philippines the corresponding shares of stock in said entity with an
issued value of said shares of stock (which) shall be deemed fully paid and non-assessable.

The Secretary of Public Highways and the General Manager of the Public Estates Authority shall
execute such contracts or agreements, including appropriate agreements with the Construction
and Development Corporation of the Philippines, as may be necessary to implement the above.

Special land patent/patents shall be issued by the Secretary of Natural Resources in favor of
the Public Estates Authority without prejudice to the subsequent transfer to the contractor or
his assignees of such portion or portions of the land reclaimed or to be reclaimed as provided
for in the above-mentioned contract. On the basis of such patents, the Land Registration
Commission shall issue the corresponding certificate of title." (Emphasis supplied)

On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -

"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be
responsible for its administration, development, utilization or disposition in accordance with the
provisions of Presidential Decree No. 1084. Any and all income that the PEA may derive from the
sale, lease or use of reclaimed lands shall be used in accordance with the provisions of Presidential
Decree No. 1084."

There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed lands.
PD No. 1085 merely transferred "ownership and administration" of lands reclaimed from Manila Bay to
PEA, while EO No. 525 declared that lands reclaimed by PEA "shall belong to or be owned by PEA." EO No.
525 expressly states that PEA should dispose of its reclaimed lands "in accordance with the provisions of
Presidential Decree No. 1084," the charter of PEA.

PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in, subdivide,
dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled and/or operated by
the government."87(Emphasis supplied) There is, therefore, legislative authority granted to PEA to sell
its lands, whether patrimonial or alienable lands of the public domain. PEA may sell to private parties
its patrimonial propertiesin accordance with the PEA charter free from constitutional limitations. The
constitutional ban on private corporations from acquiring alienable lands of the public domain does not
apply to the sale of PEA's patrimonial lands.

PEA may also sell its alienable or disposable lands of the public domain to private individuals since,
with the legislative authority, there is no longer any statutory prohibition against such sales and the
constitutional ban does not apply to individuals. PEA, however, cannot sell any of its alienable or
disposable lands of the public domain to private corporations since Section 3, Article XII of the 1987
Constitution expressly prohibits such sales. The legislative authority benefits only individuals. Private
corporations remain barred from acquiring any kind of alienable land of the public domain, including
government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to
the "contractor or his assignees" (Emphasis supplied) would not apply to private corporations but only to
individuals because of the constitutional ban. Otherwise, the provisions of PD No. 1085 would violate
both the 1973 and 1987 Constitutions.

The requirement of public auction in the sale of reclaimed lands

Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition,
and further declared no longer needed for public service, PEA would have to conduct a public bidding in
selling or leasing these lands. PEA must observe the provisions of Sections 63 and 67 of CA No. 141
requiring public auction, in the absence of a law exempting PEA from holding a public auction. 88 Special
Patent No. 3517 expressly states that the patent is issued by authority of the Constitution and PD No.
1084, "supplemented by Commonwealth Act No. 141, as amended." This is an acknowledgment that the
provisions of CA No. 141 apply to the disposition of reclaimed alienable lands of the public domain unless
otherwise provided by law. Executive Order No. 654,89 which authorizes PEA "to determine the kind and
manner of payment for the transfer" of its assets and properties, does not exempt PEA from the
requirement of public auction. EO No. 654 merely authorizes PEA to decide the mode of payment,
whether in kind and in installment, but does not authorize PEA to dispense with public auction.

Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code, the
government is required to sell valuable government property through public bidding. Section 79 of PD No.
1445 mandates that –

"Section 79. When government property has become unserviceable for any cause, or is no longer
needed, it shall, upon application of the officer accountable therefor, be inspected by the head of
the agency or his duly authorized representative in the presence of the auditor concerned and, if
found to be valueless or unsaleable, it may be destroyed in their presence. If found to be valuable,
it may be sold at public auction to the highest bidder under the supervision of the proper
committee on award or similar body in the presence of the auditor concerned or other authorized
representative of the Commission, after advertising by printed notice in the Official Gazette, or
for not less than three consecutive days in any newspaper of general circulation, or where the
value of the property does not warrant the expense of publication, by notices posted for a like
period in at least three public places in the locality where the property is to be sold. In the event
 that the public auction fails, the property may be sold at a private sale at such price as may be
fixed by the same committee or body concerned and approved by the Commission."

It is only when the public auction fails that a negotiated sale is allowed, in which case the Commission on
Audit must approve the selling price.90 The Commission on Audit implements Section 79 of the
Government Auditing Code through Circular No. 89-29691 dated January 27, 1989. This circular
emphasizes that government assets must be disposed of only through public auction, and a negotiated
sale can be resorted to only in case of "failure of public auction."

At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore and
submerged alienable lands of the public domain. Private corporations are barred from bidding at the
auction sale of any kind of alienable land of the public domain.

PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA imposed a
condition that the winning bidder should reclaim another 250 hectares of submerged areas to regularize
the shape of the Freedom Islands, under a 60-40 sharing of the additional reclaimed areas in favor of the
winning bidder.92 No one, however, submitted a bid. On December 23, 1994, the Government Corporate
Counsel advised PEA it could sell the Freedom Islands through negotiation, without need of another
public bidding, because of the failure of the public bidding on December 10, 1991.93

However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the additional
250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim another 350 hectares.
The original JVA, a negotiated contract, enlarged the reclamation area to 750 hectares.94 The failure of
public bidding on December 10, 1991, involving only 407.84 hectares, 95 is not a valid justification for a
negotiated sale of 750 hectares, almost double the area publicly auctioned. Besides, the failure of public
bidding happened on December 10, 1991, more than three years before the signing of the original JVA on
April 25, 1995. The economic situation in the country had greatly improved during the intervening
period.

Reclamation under the BOT Law and the Local Government Code

The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear:
"Private corporations or associations may not hold such alienable lands of the public domain except by
lease, x x x." Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and AMARI as legislative
authority to sell reclaimed lands to private parties, recognizes the constitutional ban. Section 6 of RA No.
6957 states –

"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance of any
infrastructure projects undertaken through the build-operate-and-transfer arrangement or any of
its variations pursuant to the provisions of this Act, the project proponent x x x may likewise be
repaid in the form of a share in the revenue of the project or other non-monetary payments, such
as, but not limited to, the grant of a portion or percentage of the reclaimed land, subject to the
constitutional requirements with respect to the ownership of the land: x x x." (Emphasis
supplied)

A private corporation, even one that undertakes the physical reclamation of a government BOT project,
cannot acquire reclaimed alienable lands of the public domain in view of the constitutional ban.

Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local
governments in land reclamation projects to pay the contractor or developer in kind consisting of a
percentage of the reclaimed land, to wit:

"Section 302. Financing, Construction, Maintenance, Operation, and Management of Infrastructure

Projects by the Private Sector. x x x
 xxx

In case of land reclamation or construction of industrial estates, the repayment plan may consist
of the grant of a portion or percentage of the reclaimed land or the industrial estate constructed."

Although Section 302 of the Local Government Code does not contain a proviso similar to that of the BOT
Law, the constitutional restrictions on land ownership automatically apply even though not expressly
mentioned in the Local Government Code.

Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a
corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the contractor or
developer is an individual, portions of the reclaimed land, not exceeding 12 hectares96 of non-agricultural
lands, may be conveyed to him in ownership in view of the legislative authority allowing such conveyance.
This is the only way these provisions of the BOT Law and the Local Government Code can avoid a direct
collision with Section 3, Article XII of the 1987 Constitution.

Registration of lands of the public domain

Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public
respondent PEA transformed such lands of the public domain to private lands." This theory is echoed by
AMARI which maintains that the "issuance of the special patent leading to the eventual issuance of title
takes the subject land away from the land of public domain and converts the property into patrimonial or
private property." In short, PEA and AMARI contend that with the issuance of Special Patent No. 3517 and
the corresponding certificates of titles, the 157.84 hectares comprising the Freedom Islands have become
private lands of PEA. In support of their theory, PEA and AMARI cite the following rulings of the Court:

1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –

"Once the patent was granted and the corresponding certificate of title was issued, the land ceased
to be part of the public domain and became private property over which the Director of Lands has
neither control nor jurisdiction."

2. Lee Hong Hok v. David,98 where the Court declared -

"After the registration and issuance of the certificate and duplicate certificate of title based on a
public land patent, the land covered thereby automatically comes under the operation of Republic
Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio Tengco v. Heirs of Jose
Aliwalas,99 where the Court ruled -

"While the Director of Lands has the power to review homestead patents, he may do so only so
long as the land remains part of the public domain and continues to be under his exclusive control;
but once the patent is registered and a certificate of title is issued, the land ceases to be part of the
public domain and becomes private property over which the Director of Lands has neither control
nor jurisdiction."

4. Manalo v. Intermediate Appellate Court,100 where the Court held –

"When the lots in dispute were certified as disposable on May 19, 1971, and free patents were
issued covering the same in favor of the private respondents, the said lots ceased to be part of the
public domain and, therefore, the Director of Lands lost jurisdiction over the same."

5.Republic v. Court of Appeals,101 where the Court stated –

"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a land grant
to the Mindanao Medical Center, Bureau of Medical Services, Department of Health, of the whole
 lot, validly sufficient for initial registration under the Land Registration Act. Such land grant is
constitutive of a 'fee simple' title or absolute title in favor of petitioner Mindanao Medical Center.
Thus, Section 122 of the Act, which governs the registration of grants or patents involving public
lands, provides that 'Whenever public lands in the Philippine Islands belonging to the Government
of the United States or to the Government of the Philippines are alienated, granted or conveyed to
persons or to public or private corporations, the same shall be brought forthwith under the
operation of this Act (Land Registration Act, Act 496) and shall become registered lands.'"

The first four cases cited involve petitions to cancel the land patents and the corresponding certificates of
titles issued to private parties. These four cases uniformly hold that the Director of Lands has no
jurisdiction over private lands or that upon issuance of the certificate of title the land automatically
comes under the Torrens System. The fifth case cited involves the registration under the Torrens System
of a 12.8-hectare public land granted by the National Government to Mindanao Medical Center, a
government unit under the Department of Health. The National Government transferred the 12.8-hectare
public land to serve as the site for the hospital buildings and other facilities of Mindanao Medical Center,
which performed a public service. The Court affirmed the registration of the 12.8-hectare public land in
the name of Mindanao Medical Center under Section 122 of Act No. 496. This fifth case is an example of a
public land being registered under Act No. 496 without the land losing its character as a property of
public dominion.

In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly
government owned corporation performing public as well as proprietary functions. No patent or
certificate of title has been issued to any private party. No one is asking the Director of Lands to cancel
PEA's patent or certificates of title. In fact, the thrust of the instant petition is that PEA's certificates of
title should remain with PEA, and the land covered by these certificates, being alienable lands of the
public domain, should not be sold to a private corporation.

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or public
ownership of the land. Registration is not a mode of acquiring ownership but is merely evidence of
ownership previously conferred by any of the recognized modes of acquiring ownership. Registration
does not give the registrant a better right than what the registrant had prior to the registration. 102 The
registration of lands of the public domain under the Torrens system, by itself, cannot convert public lands
into private lands.103

Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the alienable
land of the public domain automatically becomes private land cannot apply to government units and
entities like PEA. The transfer of the Freedom Islands to PEA was made subject to the provisions of CA No.
141 as expressly stated in Special Patent No. 3517 issued by then President Aquino, to wit:

"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in
conformity with the provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto the Public
Estates Authority the aforesaid tracts of land containing a total area of one million nine hundred
fifteen thousand eight hundred ninety four (1,915,894) square meters; the technical description of
which are hereto attached and made an integral part hereof." (Emphasis supplied)

Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No. 1084.
Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of alienable lands of
the public domain that are transferred to government units or entities. Section 60 of CA No. 141
constitutes, under Section 44 of PD No. 1529, a "statutory lien affecting title" of the registered land even if
not annotated on the certificate of title.104Alienable lands of the public domain held by government
entities under Section 60 of CA No. 141 remain public lands because they cannot be alienated or
encumbered unless Congress passes a law authorizing their disposition. Congress, however, cannot
authorize the sale to private corporations of reclaimed alienable lands of the public domain because of
the constitutional ban. Only individuals can benefit from such law.

The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141 does not
automatically convert alienable lands of the public domain into private or patrimonial lands. The
alienable lands of the public domain must be transferred to qualified private parties, or to government
entities not tasked to dispose of public lands, before these lands can become private or patrimonial lands.
Otherwise, the constitutional ban will become illusory if Congress can declare lands of the public domain
as private or patrimonial lands in the hands of a government agency tasked to dispose of public lands.
This will allow private corporations to acquire directly from government agencies limitless areas of lands
which, prior to such law, are concededly public lands.

Under EO No. 525, PEA became the central implementing agency of the National Government to reclaim
foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that –

"EXECUTIVE ORDER NO. 525

Designating the Public Estates Authority as the Agency Primarily Responsible for all Reclamation
Projects

Whereas, there are several reclamation projects which are ongoing or being proposed to be
undertaken in various parts of the country which need to be evaluated for consistency with
national programs;

Whereas, there is a need to give further institutional support to the Government's declared policy
to provide for a coordinated, economical and efficient reclamation of lands;

Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited to the
National Government or any person authorized by it under proper contract;

Whereas, a central authority is needed to act on behalf of the National Government which
shall ensure a coordinated and integrated approach in the reclamation of lands;

Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a government
corporation to undertake reclamation of lands and ensure their maximum utilization in
promoting public welfare and interests; and

Whereas, Presidential Decree No. 1416 provides the President with continuing authority to
reorganize the national government including the transfer, abolition, or merger of functions and
offices.

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

powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416, do hereby
order and direct the following:

Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the National
Government. All reclamation projects shall be approved by the President upon recommendation
of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with
any person or entity; Provided, that, reclamation projects of any national government agency or
entity authorized under its charter shall be undertaken in consultation with the PEA upon
approval of the President.

x x x ."
As the central implementing agency tasked to undertake reclamation projects nationwide, with authority
to sell reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or
selling reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA are not
private lands, in the same manner that DENR, when it disposes of other alienable lands, does not dispose
of private lands but alienable lands of the public domain. Only when qualified private parties acquire
these lands will the lands become private lands. In the hands of the government agency tasked and
authorized to dispose of alienable of disposable lands of the public domain, these lands are still
public, not private lands.

Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as well as
"any and all kinds of lands." PEA can hold both lands of the public domain and private lands. Thus, the
mere fact that alienable lands of the public domain like the Freedom Islands are transferred to PEA and
issued land patents or certificates of title in PEA's name does not automatically make such lands private.

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will
sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of
alienable land of the public domain. PEA will simply turn around, as PEA has now done under the
Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed
lands to a single private corporation in only one transaction. This scheme will effectively nullify the
constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse
equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80
million strong.

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since
PEA can "acquire x x x any and all kinds of lands." This will open the floodgates to corporations and even
individuals acquiring hundreds of hectares of alienable lands of the public domain under the guise that in
the hands of PEA these lands are private lands. This will result in corporations amassing huge
landholdings never before seen in this country - creating the very evil that the constitutional ban was
designed to prevent. This will completely reverse the clear direction of constitutional development in this
country. The 1935 Constitution allowed private corporations to acquire not more than 1,024 hectares of
public lands.105 The 1973 Constitution prohibited private corporations from acquiring any kind of public
land, and the 1987 Constitution has unequivocally reiterated this prohibition.

The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No. 1529,
automatically become private lands is contrary to existing laws. Several laws authorize lands of the public
domain to be registered under the Torrens System or Act No. 496, now PD No. 1529, without losing their
character as public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529, respectively,
provide as follows:

Act No. 496

"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of
the Philippine Islands are alienated, granted, or conveyed to persons or the public or private
corporations, the same shall be brought forthwith under the operation of this Act and shall
become registered lands."

PD No. 1529

"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government alienated,
granted or conveyed to any person, the same shall be brought forthwith under the operation of
this Decree." (Emphasis supplied)

Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529
includes conveyances of public lands to public corporations.
Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or
branch or subdivision of the Government," as provided in Section 60 of CA No. 141, may be registered
under the Torrens System pursuant to Section 103 of PD No. 1529. Such registration, however, is
expressly subject to the condition in Section 60 of CA No. 141 that the land "shall not be alienated,
encumbered or otherwise disposed of in a manner affecting its title, except when authorized by
Congress." This provision refers to government reclaimed, foreshore and marshy lands of the public
domain that have been titled but still cannot be alienated or encumbered unless expressly authorized by
Congress. The need for legislative authority prevents the registered land of the public domain from
becoming private land that can be disposed of to qualified private parties.

The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be
registered under the Torrens System. Section 48, Chapter 12, Book I of the Code states –

"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government
is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the
government by the following:

(1) x x x

(2) For property belonging to the Republic of the Philippines, but titled in the name of any
political subdivision or of any corporate agency or instrumentality, by the executive head of
the agency or instrumentality." (Emphasis supplied)

Thus, private property purchased by the National Government for expansion of a public wharf may be
titled in the name of a government corporation regulating port operations in the country. Private
property purchased by the National Government for expansion of an airport may also be titled in the
name of the government agency tasked to administer the airport. Private property donated to a
municipality for use as a town plaza or public school site may likewise be titled in the name of the
municipality.106 All these properties become properties of the public domain, and if already registered
under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or provision in any
existing law for the de-registration of land from the Torrens System.

Private lands taken by the Government for public use under its power of eminent domain become
unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the
Register of Deeds to issue in the name of the National Government new certificates of title covering such
expropriated lands. Section 85 of PD No. 1529 states –

"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is
expropriated or taken by eminent domain, the National Government, province, city or
municipality, or any other agency or instrumentality exercising such right shall file for registration
in the proper Registry a certified copy of the judgment which shall state definitely by an adequate
description, the particular property or interest expropriated, the number of the certificate of title,
and the nature of the public use. A memorandum of the right or interest taken shall be made on
each certificate of title by the Register of Deeds, and where the fee simple is taken, a new
certificate shall be issued in favor of the National Government, province, city, municipality, or
any other agency or instrumentality exercising such right for the land so taken. The legal expenses
incident to the memorandum of registration or issuance of a new certificate of title shall be for the
account of the authority taking the land or interest therein." (Emphasis supplied)

Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or
patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.

AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of
the lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the Amended JVA
"is not a sale but a joint venture with a stipulation for reimbursement of the original cost incurred by PEA
for the earlier reclamation and construction works performed by the CDCP under its 1973 contract with
the Republic." Whether the Amended JVA is a sale or a joint venture, the fact remains that the Amended
JVA requires PEA to "cause the issuance and delivery of the certificates of title conveying AMARI's Land
Share in the name of AMARI."107

This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that
private corporations "shall not hold such alienable lands of the public domain except by lease." The
transfer of title and ownership to AMARI clearly means that AMARI will "hold" the reclaimed lands other
than by lease. The transfer of title and ownership is a "disposition" of the reclaimed lands, a transaction
considered a sale or alienation under CA No. 141,108 the Government Auditing Code,109 and Section 3,
Article XII of the 1987 Constitution.

The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas form part
of the public domain and are inalienable. Lands reclaimed from foreshore and submerged areas also form
part of the public domain and are also inalienable, unless converted pursuant to law into alienable or
disposable lands of the public domain. Historically, lands reclaimed by the government are sui generis,
not available for sale to private parties unlike other alienable public lands. Reclaimed lands retain their
inherent potential as areas for public use or public service. Alienable lands of the public domain,
increasingly becoming scarce natural resources, are to be distributed equitably among our ever-growing
population. To insure such equitable distribution, the 1973 and 1987 Constitutions have barred private
corporations from acquiring any kind of alienable land of the public domain. Those who attempt to
dispose of inalienable natural resources of the State, or seek to circumvent the constitutional ban on
alienation of lands of the public domain to private corporations, do so at their own risk.

We can now summarize our conclusions as follows:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease
these lands to private corporations but may not sell or transfer ownership of these lands to
private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership
limitations in the 1987 Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of
the public domain until classified as alienable or disposable lands open to disposition and declared
no longer needed for public service. The government can make such classification and declaration
only after PEA has reclaimed these submerged areas. Only then can these lands qualify as
agricultural lands of the public domain, which are the only natural resources the government can
alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and
outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34
hectares110of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII
of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable
land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares 111 of still
submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of
the 1987 Constitution which prohibits the alienation of natural resources other than agricultural
lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government
can classify the reclaimed lands as alienable or disposable, and further declare them no longer
needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain
to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits
private corporations from acquiring any kind of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under
Article 1409112 of the Civil Code, contracts whose "object or purpose is contrary to law," or whose "object
is outside the commerce of men," are "inexistent and void from the beginning." The Court must perform
its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and void ab
initio.

Seventh issue: whether the Court is the proper forum to raise the issue of whether the Amended JVA
is grossly disadvantageous to the government.

Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last issue.
Besides, the Court is not a trier of facts, and this last issue involves a determination of factual matters.

WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay
Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint
Venture Agreement which is hereby declared NULL and VOID ab initio.

SO ORDERED.

G.R. No. L-25843 July 25, 1974

MELCHORA CABANAS, plaintiff-appellee,

vs.
FRANCISCO PILAPIL, defendant-appellant.

Seno, Mendoza & Associates for plaintiff-appellee.

Emilio Benitez, Jr. for defendant-appellant.

FERNANDO, J.:p

The disputants in this appeal from a question of law from a lower court decision are the mother and the
uncle of a minor beneficiary of the proceeds of an insurance policy issued on the life of her deceased
father. The dispute centers as to who of them should be entitled to act as trustee thereof. The lower court
applying the appropriate Civil Code provisions decided in favor of the mother, the plaintiff in this case.
Defendant uncle appealed. As noted, the lower court acted the way it did following the specific mandate
of the law. In addition, it must have taken into account the principle that in cases of this nature the
welfare of the child is the paramount consideration. It is not an unreasonable assumption that between a
mother and an uncle, the former is likely to lavish more care on and pay greater attention to her. This is
all the more likely considering that the child is with the mother. There are no circumstances then that did
militate against what conforms to the natural order of things, even if the language of the law were not as
clear. It is not to be lost sight of either that the judiciary pursuant to its role as an agency of the State
as parens patriae, with an even greater stress on family unity under the present Constitution, did weigh in
the balance the opposing claims and did come to the conclusion that the welfare of the child called for the
mother to be entrusted with such responsibility. We have to affirm.

The appealed decision made clear: "There is no controversy as to the facts. "1 The insured, Florentino
Pilapil had a child, Millian Pilapil, with a married woman, the plaintiff, Melchora Cabanas. She was ten
years old at the time the complaint was filed on October 10, 1964. The defendant, Francisco Pilapil, is the
brother of the deceased. The deceased insured himself and instituted as beneficiary, his child, with his
brother to act as trustee during her minority. Upon his death, the proceeds were paid to him. Hence this
complaint by the mother, with whom the child is living, seeking the delivery of such sum. She filed the
bond required by the Civil Code. Defendant would justify his claim to the retention of the amount in
question by invoking the terms of the insurance policy.2
After trial duly had, the lower court in a decision of May 10, 1965, rendered judgment ordering the
defendant to deliver the proceeds of the policy in question to plaintiff. Its main reliance was on Articles
320 and 321 of the Civil Code. The former provides: "The father, or in his absence the mother, is the legal
administrator of the property pertaining to the child under parental authority. If the property is worth
more than two thousand pesos, the father or mother shall give a bond subject to the approval of the Court
of First Instance."3 The latter states: "The property which the unemancipated child has acquired or may
acquire with his work or industry, or by any lucrative title, belongs to the child in ownership, and in
usufruct to the father or mother under whom he is under parental authority and whose company he
lives; ...4

Conformity to such explicit codal norm is apparent in this portion of the appealed decision: "The
insurance proceeds belong to the beneficiary. The beneficiary is a minor under the custody and parental
authority of the plaintiff, her mother. The said minor lives with plaintiff or lives in the company of the
plaintiff. The said minor acquired this property by lucrative title. Said property, therefore, belongs to the
minor child in ownership, and in usufruct to the plaintiff, her mother. Since under our law the
usufructuary is entitled to possession, the plaintiff is entitled to possession of the insurance proceeds.
The trust, insofar as it is in conflict with the above quoted provision of law, is pro tanto null and void. In
order, however, to protect the rights of the minor, Millian Pilapil, the plaintiff should file an additional
bond in the guardianship proceedings, Sp. Proc. No. 2418-R of this Court to raise her bond therein to the
total amount of P5,000.00."5

It is very clear, therefore, considering the above, that unless the applicability of the two cited Civil Code
provisions can be disputed, the decision must stand. There is no ambiguity in the language employed. The
words are rather clear. Their meaning is unequivocal. Time and time again, this Court has left no doubt
that where codal or statutory norms are cast in categorical language, the task before it is not one of
interpretation but of application.6 So it must be in this case. So it was in the appealed decision.

1. It would take more than just two paragraphs as found in the brief for the defendant-appellant7 to blunt
the force of legal commands that speak so plainly and so unqualifiedly. Even if it were a question of policy,
the conclusion will remain unaltered. What is paramount, as mentioned at the outset, is the welfare of the
child. It is in consonance with such primordial end that Articles 320 and 321 have been worded. There is
recognition in the law of the deep ties that bind parent and child. In the event that there is less than full
measure of concern for the offspring, the protection is supplied by the bond required. With the added
circumstance that the child stays with the mother, not the uncle, without any evidence of lack of maternal
care, the decision arrived at can stand the test of the strictest scrutiny. It is further fortified by the
assumption, both logical and natural, that infidelity to the trust imposed by the deceased is much less in
the case of a mother than in the case of an uncle. Manresa, commenting on Article 159 of the Civil Code of
Spain, the source of Article 320 of the Civil Code, was of that view: Thus "El derecho y la obligacion de
administrar el Patrimonio de los hijos es una consecuencia natural y lógica de la patria potestad y de la
presunción de que nadie cuidará de los bienes de acquéllos con mas cariño y solicitude que los padres. En
nuestro Derecho antiguo puede decirse que se hallaba reconocida de una manera indirecta aquelia
doctrina, y asi se desprende de la sentencia del Tribunal Supremeo de 30 de diciembre de 1864, que se
refiere a la ley 24, tit. XIII de la Partida 5. De la propia suerte aceptan en general dicho principio los
Codigos extranjeros, con las limitaciones y requisitos de que trataremos mis adelante."8

2. The appealed decision is supported by another cogent consideration. It is buttressed by its adherence
to the concept that the judiciary, as an agency of the State acting as parens patriae, is called upon
whenever a pending suit of litigation affects one who is a minor to accord priority to his best interest. It
may happen, as it did occur here, that family relations may press their respective claims. It would be
more in consonance not only with the natural order of things but the tradition of the country for a parent
to be preferred. it could have been different if the conflict were between father and mother. Such is not
the case at all. It is a mother asserting priority. Certainly the judiciary as the instrumentality of the State
in its role of parens patriae, cannot remain insensible to the validity of her plea. In a recent case, 9 there is
this quotation from an opinion of the United States Supreme Court: "This prerogative of parens patriae is
inherent in the supreme power of every State, whether that power is lodged in a royal person or in the
legislature, and has no affinity to those arbitrary powers which are sometimes exerted by irresponsible
monarchs to the great detriment of the people and the destruction of their liberties." What is more, there
is this constitutional provision vitalizing this concept. It reads: "The State shall strengthen the family as a
basic social institution." 10 If, as the Constitution so wisely dictates, it is the family as a unit that has to be
strengthened, it does not admit of doubt that even if a stronger case were presented for the uncle, still
deference to a constitutional mandate would have led the lower court to decide as it did.

WHEREFORE, the decision of May 10, 1965 is affirmed. Costs against defendant-appellant.

G.R. No. 80391 February 28, 1989

SULTAN ALIMBUSAR P. LIMBONA, petitioner,

vs.
CONTE MANGELIN, SALIC ALI, SALINDATO ALI, PILIMPINAS CONDING, ACMAD TOMAWIS, GERRY
TOMAWIS, JESUS ORTIZ, ANTONIO DELA FUENTE, DIEGO PALOMARES, JR., RAUL DAGALANGIT, and
BIMBO SINSUAT, respondents.

Ambrosio Padilla, Mempin & Reyes Law Offices for petitioner petitioner.

Makabangkit B. Lanto for respondents.

SARMIENTO, J.:

The acts of the Sangguniang Pampook of Region XII are assailed in this petition. The antecedent facts are
as follows:

1. On September 24, 1986, petitioner Sultan Alimbusar Limbona was appointed as a

member of the Sangguniang Pampook, Regional Autonomous Government, Region XII,
representing Lanao del Sur.

2. On March 12, 1987 petitioner was elected Speaker of the Regional Legislative Assembly
or Batasang Pampook of Central Mindanao (Assembly for brevity).

3. Said Assembly is composed of eighteen (18) members. Two of said members,

respondents Acmad Tomawis and Pakil Dagalangit, filed on March 23, 1987 with the
Commission on Elections their respective certificates of candidacy in the May 11, 1987
congressional elections for the district of Lanao del Sur but they later withdrew from the
aforesaid election and thereafter resumed again their positions as members of the
Assembly.

4. On October 21, 1987 Congressman Datu Guimid Matalam, Chairman of the Committee on
Muslim Affairs of the House of Representatives, invited Mr. Xavier Razul, Pampook Speaker
of Region XI, Zamboanga City and the petitioner in his capacity as Speaker of the Assembly,
Region XII, in a letter which reads:

The Committee on Muslim Affairs well undertake consultations and

dialogues with local government officials, civic, religious organizations and
traditional leaders on the recent and present political developments and
other issues affecting Regions IX and XII.

The result of the conference, consultations and dialogues would hopefully

chart the autonomous governments of the two regions as envisioned and
 may prod the President to constitute immediately the Regional Consultative
Commission as mandated by the Commission.

You are requested to invite some members of the Pampook Assembly of your
respective assembly on November 1 to 15, 1987, with venue at the Congress
of the Philippines. Your presence, unstinted support and cooperation is (sic)
indispensable.

5. Consistent with the said invitation, petitioner sent a telegram to Acting Secretary Johnny
Alimbuyao of the Assembly to wire all Assemblymen that there shall be no session in
November as "our presence in the house committee hearing of Congress take (sic)
precedence over any pending business in batasang pampook ... ."

6. In compliance with the aforesaid instruction of the petitioner, Acting Secretary

Alimbuyao sent to the members of the Assembly the following telegram:

TRANSMITTING FOR YOUR INFORMATION AND GUIDANCE TELEGRAM

RECEIVED FROM SPEAKER LIMBONA QUOTE CONGRESSMAN JIMMY
MATALAM CHAIRMAN OF THE HOUSE COMMITTEE ON MUSLIM AFFAIRS
REQUESTED ME TO ASSIST SAID COMMITTEE IN THE DISCUSSION OF THE
PROPOSED AUTONOMY ORGANIC NOV. 1ST TO 15. HENCE WERE ALL
ASSEMBLYMEN THAT THERE SHALL BE NO SESSION IN NOVEMBER AS OUR
PRESENCE IN THE HOUSE COMMITTEE HEARING OF CONGRESS TAKE
PRECEDENCE OVER ANY PENDING BUSINESS IN BATASANG PAMPOOK OF
MATALAM FOLLOWS UNQUOTE REGARDS.

7. On November 2, 1987, the Assembly held session in defiance of petitioner's advice, with
the following assemblymen present:

1. Sali, Salic

2. Conding, Pilipinas (sic)

3. Dagalangit, Rakil

4. Dela Fuente, Antonio

5. Mangelen, Conte

6. Ortiz, Jesus

7. Palomares, Diego

8. Sinsuat, Bimbo

9. Tomawis, Acmad

10. Tomawis, Jerry

After declaring the presence of a quorum, the Speaker Pro-Tempore was authorized to
preside in the session. On Motion to declare the seat of the Speaker vacant, all
Assemblymen in attendance voted in the affirmative, hence, the chair declared said seat of
the Speaker vacant. 8. On November 5, 1987, the session of the Assembly resumed with the
following Assemblymen present:
 1. Mangelen Conte-Presiding Officer

2. Ali Salic

3. Ali Salindatu

4. Aratuc, Malik

5. Cajelo, Rene

6. Conding, Pilipinas (sic)

7. Dagalangit, Rakil

8. Dela Fuente, Antonio

9. Ortiz, Jesus

10 Palomares, Diego

11. Quijano, Jesus

12. Sinsuat, Bimbo

13. Tomawis, Acmad

14. Tomawis, Jerry

An excerpt from the debates and proceeding of said session reads:

HON. DAGALANGIT: Mr. Speaker, Honorable Members of the House, with the presence of
our colleagues who have come to attend the session today, I move to call the names of the
new comers in order for them to cast their votes on the previous motion to declare the
position of the Speaker vacant. But before doing so, I move also that the designation of
the Speaker Pro Tempore as the Presiding Officer and Mr. Johnny Evangelists as Acting
Secretary in the session last November 2, 1987 be reconfirmed in today's session.

HON. SALIC ALI: I second the motions.

PRESIDING OFFICER: Any comment or objections on the two motions presented? Me chair
hears none and the said motions are approved. ...

Twelve (12) members voted in favor of the motion to declare the seat of the Speaker vacant;
one abstained and none voted against. 1

Accordingly, the petitioner prays for judgment as follows:

WHEREFORE, petitioner respectfully prays that-

(a) This Petition be given due course;

(b) Pending hearing, a restraining order or writ of preliminary injunction be issued

enjoining respondents from proceeding with their session to be held on November 5, 1987,
and on any day thereafter;
 (c) After hearing, judgment be rendered declaring the proceedings held by respondents of
their session on November 2, 1987 as null and void;

(d) Holding the election of petitioner as Speaker of said Legislative Assembly or Batasan
Pampook, Region XII held on March 12, 1987 valid and subsisting, and

(e) Making the injunction permanent.

Petitioner likewise prays for such other relief as may be just and equitable. 2

Pending further proceedings, this Court, on January 19, 1988, received a resolution filed by the
Sangguniang Pampook, "EXPECTING ALIMBUSAR P. LIMBONA FROM MEMBERSHIP OF THE
SANGGUNIANG PAMPOOK AUTONOMOUS REGION XII," 3 on the grounds, among other things, that the
petitioner "had caused to be prepared and signed by him paying [sic] the salaries and emoluments of
Odin Abdula, who was considered resigned after filing his Certificate of Candidacy for Congressmen for
the First District of Maguindanao in the last May 11, elections. . . and nothing in the record of the
Assembly will show that any request for reinstatement by Abdula was ever made . . ." 4 and that "such
action of Mr. Lim bona in paying Abdula his salaries and emoluments without authority from the
Assembly . . . constituted a usurpation of the power of the Assembly," 5 that the petitioner "had recently
caused withdrawal of so much amount of cash from the Assembly resulting to the non-payment of the
salaries and emoluments of some Assembly [sic]," 6 and that he had "filed a case before the Supreme
Court against some members of the Assembly on question which should have been resolved within the
confines of the Assembly," 7 for which the respondents now submit that the petition had become "moot
and academic". 8

The first question, evidently, is whether or not the expulsion of the petitioner (pending litigation) has
made the case moot and academic.

We do not agree that the case has been rendered moot and academic by reason simply of the expulsion
resolution so issued. For, if the petitioner's expulsion was done purposely to make this petition moot and
academic, and to preempt the Court, it will not make it academic.

On the ground of the immutable principle of due process alone, we hold that the expulsion in question is
of no force and effect. In the first place, there is no showing that the Sanggunian had conducted an
investigation, and whether or not the petitioner had been heard in his defense, assuming that there was
an investigation, or otherwise given the opportunity to do so. On the other hand, what appears in the
records is an admission by the Assembly (at least, the respondents) that "since November, 1987 up to
this writing, the petitioner has not set foot at the Sangguniang Pampook." 9 "To be sure, the private
respondents aver that "[t]he Assemblymen, in a conciliatory gesture, wanted him to come to Cotabato
City," 10 but that was "so that their differences could be threshed out and settled." 11Certainly, that
avowed wanting or desire to thresh out and settle, no matter how conciliatory it may be cannot be a
substitute for the notice and hearing contemplated by law.

While we have held that due process, as the term is known in administrative law, does not absolutely
require notice and that a party need only be given the opportunity to be heard, 12 it does not appear
herein that the petitioner had, to begin with, been made aware that he had in fact stood charged of graft
and corruption before his collegues. It cannot be said therefore that he was accorded any opportunity to
rebut their accusations. As it stands, then, the charges now levelled amount to mere accusations that
cannot warrant expulsion.

In the second place, (the resolution) appears strongly to be a bare act of vendetta by the other
Assemblymen against the petitioner arising from what the former perceive to be abduracy on the part of
the latter. Indeed, it (the resolution) speaks of "a case [having been filed] [by the petitioner] before the
Supreme Court . . . on question which should have been resolved within the confines of the Assemblyman
act which some members claimed unnecessarily and unduly assails their integrity and character as
representative of the people" 13 an act that cannot possibly justify expulsion. Access to judicial remedies
is guaranteed by the Constitution, 14 and, unless the recourse amounts to malicious prosecution, no one
may be punished for seeking redress in the courts.

We therefore order reinstatement, with the caution that should the past acts of the petitioner indeed
warrant his removal, the Assembly is enjoined, should it still be so minded, to commence proper
proceedings therefor in line with the most elementary requirements of due process. And while it is within
the discretion of the members of the Sanggunian to punish their erring colleagues, their acts are
nonetheless subject to the moderating band of this Court in the event that such discretion is exercised
with grave abuse.

It is, to be sure, said that precisely because the Sangguniang Pampook(s) are "autonomous," the courts
may not rightfully intervene in their affairs, much less strike down their acts. We come, therefore, to the
second issue: Are the so-called autonomous governments of Mindanao, as they are now constituted,
subject to the jurisdiction of the national courts? In other words, what is the extent of self-government
given to the two autonomous governments of Region IX and XII?

The autonomous governments of Mindanao were organized in Regions IX and XII by Presidential Decree
No. 1618 15 promulgated on July 25, 1979. Among other things, the Decree established "internal
autonomy" 16 in the two regions "[w]ithin the framework of the national sovereignty and territorial
integrity of the Republic of the Philippines and its Constitution," 17 with legislative and executive
machinery to exercise the powers and responsibilities 18specified therein.

It requires the autonomous regional governments to "undertake all internal administrative matters for
the respective regions," 19 except to "act on matters which are within the jurisdiction and competence of
the National Government," 20 "which include, but are not limited to, the following:

(1) National defense and security;

(2) Foreign relations;

(3) Foreign trade;

(4) Currency, monetary affairs, foreign exchange, banking and quasi-banking, and external
borrowing,

(5) Disposition, exploration, development, exploitation or utilization of all natural

resources;

(6) Air and sea transport

(7) Postal matters and telecommunications;

(8) Customs and quarantine;

(9) Immigration and deportation;

(10) Citizenship and naturalization;

(11) National economic, social and educational planning; and

(12) General auditing. 21

In relation to the central government, it provides that "[t]he President shall have the power of general
supervision and control over the Autonomous Regions ..." 22

Now, autonomy is either decentralization of administration or decentralization of power. There is

decentralization of administration when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power and in the process to make local
governments "more responsive and accountable," 23 "and ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national development and social
progress." 24 At the same time, it relieves the central government of the burden of managing local affairs
and enables it to concentrate on national concerns. The President exercises "general supervision" 25 over
them, but only to "ensure that local affairs are administered according to law." 26 He has no control over
their acts in the sense that he can substitute their judgments with his own. 27

Decentralization of power, on the other hand, involves an abdication of political power in the favor of
local governments units declare to be autonomous . In that case, the autonomous government is free to
chart its own destiny and shape its future with minimum intervention from central authorities. According
to a constitutional author, decentralization of power amounts to "self-immolation," since in that event,
the autonomous government becomes accountable not to the central authorities but to its
constituency. 28

But the question of whether or not the grant of autonomy Muslim Mindanao under the 1987 Constitution
involves, truly, an effort to decentralize power rather than mere administration is a question foreign to
this petition, since what is involved herein is a local government unit constituted prior to the ratification
of the present Constitution. Hence, the Court will not resolve that controversy now, in this case, since no
controversy in fact exists. We will resolve it at the proper time and in the proper case.

Under the 1987 Constitution, local government units enjoy autonomy in these two senses, thus:

Section 1. The territorial and political subdivisions of the Republic of the Philippines are
the provinces, cities, municipalities, and barangays. Here shall be autonomous regions in
Muslim Mindanao ,and the Cordilleras as hereinafter provided. 29

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy. 30

xxx xxx xxx

See. 15. Mere shall be created autonomous regions in Muslim Mindanao and in the
Cordilleras consisting of provinces, cities, municipalities, and geographical areas sharing
common and distinctive historical and cultural heritage, economic and social structures,
and other relevant characteristics within the framework of this Constitution and the
national sovereignty as well as territorial integrity of the Republic of the Philippines. 31

An autonomous government that enjoys autonomy of the latter category [CONST. (1987), art. X, sec. 15.]
is subject alone to the decree of the organic act creating it and accepted principles on the effects and
limits of "autonomy." On the other hand, an autonomous government of the former class is, as we noted,
under the supervision of the national government acting through the President (and the Department of
Local Government). 32 If the Sangguniang Pampook (of Region XII), then, is autonomous in the latter
sense, its acts are, debatably beyond the domain of this Court in perhaps the same way that
the internal acts, say, of the Congress of the Philippines are beyond our jurisdiction. But if it is
autonomous in the former category only, it comes unarguably under our jurisdiction. An examination of
the very Presidential Decree creating the autonomous governments of Mindanao persuades us that they
were never meant to exercise autonomy in the second sense, that is, in which the central government
commits an act of self-immolation. Presidential Decree No. 1618, in the first place, mandates that "[t]he
President shall have the power of general supervision and control over Autonomous Regions."33 In the
second place, the Sangguniang Pampook, their legislative arm, is made to discharge chiefly administrative
services, thus:

SEC. 7. Powers of the Sangguniang Pampook. The Sangguniang Pampook shall exercise local
legislative powers over regional affairs within the framework of national development
plans, policies and goals, in the following areas:

(1) Organization of regional administrative system;

(2) Economic, social and cultural development of the Autonomous Region;

(3) Agricultural, commercial and industrial programs for the Autonomous Region;

(4) Infrastructure development for the Autonomous Region;

(5) Urban and rural planning for the Autonomous Region;

(6) Taxation and other revenue-raising measures as provided for in this Decree;

(7) Maintenance, operation and administration of schools established by the Autonomous

Region;

(8) Establishment, operation and maintenance of health, welfare and other social services,
programs and facilities;

(9) Preservation and development of customs, traditions, languages and culture indigenous
to the Autonomous Region; and

(10) Such other matters as may be authorized by law,including the enactment of such
measures as may be necessary for the promotion of the general welfare of the people in the
Autonomous Region.

The President shall exercise such powers as may be necessary to assure that enactment
and acts of the Sangguniang Pampook and the Lupong Tagapagpaganap ng Pook are in
compliance with this Decree, national legislation, policies, plans and programs.

The Sangguniang Pampook shall maintain liaison with the Batasang Pambansa. 34

Hence, we assume jurisdiction. And if we can make an inquiry in the validity of the expulsion in question,
with more reason can we review the petitioner's removal as Speaker.

Briefly, the petitioner assails the legality of his ouster as Speaker on the grounds that: (1) the Sanggunian,
in convening on November 2 and 5, 1987 (for the sole purpose of declaring the office of the Speaker
vacant), did so in violation of the Rules of the Sangguniang Pampook since the Assembly was then on
recess; and (2) assuming that it was valid, his ouster was ineffective nevertheless for lack of quorum.

Upon the facts presented, we hold that the November 2 and 5, 1987 sessions were invalid. It is true that
under Section 31 of the Region XII Sanggunian Rules, "[s]essions shall not be suspended or adjourned
except by direction of the Sangguniang Pampook," 35 but it provides likewise that "the Speaker may, on
[sic] his discretion, declare a recess of "short intervals." 36 Of course, there is disagreement between the
protagonists as to whether or not the recess called by the petitioner effective November 1 through 15,
1987 is the "recess of short intervals" referred to; the petitioner says that it is while the respondents
insist that, to all intents and purposes, it was an adjournment and that "recess" as used by their Rules
only refers to "a recess when arguments get heated up so that protagonists in a debate can talk things out
informally and obviate dissenssion [sic] and disunity. 37 The Court agrees with the respondents on this
regard, since clearly, the Rules speak of "short intervals." Secondly, the Court likewise agrees that the
Speaker could not have validly called a recess since the Assembly had yet to convene on November 1, the
date session opens under the same Rules. 38 Hence, there can be no recess to speak of that could possibly
interrupt any session. But while this opinion is in accord with the respondents' own, we still invalidate
the twin sessions in question, since at the time the petitioner called the "recess," it was not a settled
matter whether or not he could. do so. In the second place, the invitation tendered by the Committee on
Muslim Affairs of the House of Representatives provided a plausible reason for the intermission sought.
Thirdly, assuming that a valid recess could not be called, it does not appear that the respondents called
his attention to this mistake. What appears is that instead, they opened the sessions themselves behind
his back in an apparent act of mutiny. Under the circumstances, we find equity on his side. For this reason,
we uphold the "recess" called on the ground of good faith.

It does not appear to us, moreover, that the petitioner had resorted to the aforesaid "recess" in order to
forestall the Assembly from bringing about his ouster. This is not apparent from the pleadings before us.
We are convinced that the invitation was what precipitated it.

In holding that the "recess" in question is valid, we are not to be taken as establishing a precedent, since,
as we said, a recess can not be validly declared without a session having been first opened. In upholding
the petitioner herein, we are not giving him a carte blanche to order recesses in the future in violation of
the Rules, or otherwise to prevent the lawful meetings thereof.

Neither are we, by this disposition, discouraging the Sanggunian from reorganizing itself pursuant to its
lawful prerogatives. Certainly, it can do so at the proper time. In the event that be petitioner should
initiate obstructive moves, the Court is certain that it is armed with enough coercive remedies to thwart
them. 39

In view hereof, we find no need in dwelling on the issue of quorum.

WHEREFORE, premises considered, the petition is GRANTED. The Sangguniang Pampook, Region XII, is
ENJOINED to (1) REINSTATE the petitioner as Member, Sangguniang Pampook, Region XII; and (2)
REINSTATE him as Speaker thereof. No costs.

SO ORDERED.

G.R. No. 91649 May 14, 1991

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND LORENZO

SANCHEZ,petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.

H.B. Basco & Associates for petitioners.

Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.

PARAS, J.:

A TV ad proudly announces:

"The new PAGCOR — responding through responsible gaming."

But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the
Philippine Amusement and Gaming Corporation (PAGCOR) Charter — PD 1869, because it is allegedly
contrary to morals, public policy and order, and because —

A. It constitutes a waiver of a right prejudicial to a third person with a right recognized by law. It
waived the Manila City government's right to impose taxes and license fees, which is recognized
by law;

B. For the same reason stated in the immediately preceding paragraph, the law has intruded into
the local government's right to impose local taxes and license fees. This, in contravention of the
constitutionally enshrined principle of local autonomy;

C. It violates the equal protection clause of the constitution in that it legalizes PAGCOR —
conducted gambling, while most other forms of gambling are outlawed, together with prostitution,
drug trafficking and other vices;

D. It violates the avowed trend of the Cory government away from monopolistic and crony
economy, and toward free enterprise and privatization. (p. 2, Amended Petition; p. 7, Rollo)

In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the declared national
policy of the "new restored democracy" and the people's will as expressed in the 1987 Constitution. The
decree is said to have a "gambling objective" and therefore is contrary to Sections 11, 12 and 13 of Article
II, Sec. 1 of Article VIII and Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended
Petition; p. 21, Rollo).

The procedural issue is whether petitioners, as taxpayers and practicing lawyers (petitioner Basco being
also the Chairman of the Committee on Laws of the City Council of Manila), can question and seek the
annulment of PD 1869 on the alleged grounds mentioned above.

The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of P.D. 1067-A
dated January 1, 1977 and was granted a franchise under P.D. 1067-B also dated January 1, 1977 "to
establish, operate and maintain gambling casinos on land or water within the territorial jurisdiction of
the Philippines." Its operation was originally conducted in the well known floating casino "Philippine
Tourist." The operation was considered a success for it proved to be a potential source of revenue to fund
infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978 for PAGCOR to
fully attain this objective.

Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the Government to
regulate and centralize all games of chance authorized by existing franchise or permitted by law, under
the following declared policy —

Sec. 1. Declaration of Policy. — It is hereby declared to be the policy of the State to centralize and
integrate all games of chance not heretofore authorized by existing franchises or permitted by law
in order to attain the following objectives:

(a) To centralize and integrate the right and authority to operate and conduct games of chance
into one corporate entity to be controlled, administered and supervised by the Government.

(b) To establish and operate clubs and casinos, for amusement and recreation, including sports
gaming pools, (basketball, football, lotteries, etc.) and such other forms of amusement and
recreation including games of chance, which may be allowed by law within the territorial
jurisdiction of the Philippines and which will: (1) generate sources of additional revenue to fund
infrastructure and socio-civic projects, such as flood control programs, beautification, sewerage
and sewage projects, Tulungan ng Bayan Centers, Nutritional Programs, Population Control and
such other essential public services; (2) create recreation and integrated facilities which will
 expand and improve the country's existing tourist attractions; and (3) minimize, if not totally
eradicate, all the evils, malpractices and corruptions that are normally prevalent on the conduct
and operation of gambling clubs and casinos without direct government involvement. (Section 1,
P.D. 1869)

To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. Under its
Charter's repealing clause, all laws, decrees, executive orders, rules and regulations, inconsistent
therewith, are accordingly repealed, amended or modified.

It is reported that PAGCOR is the third largest source of government revenue, next to the Bureau of
Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR earned P3.43 Billion, and directly
remitted to the National Government a total of P2.5 Billion in form of franchise tax, government's income
share, the President's Social Fund and Host Cities' share. In addition, PAGCOR sponsored other socio-
cultural and charitable projects on its own or in cooperation with various governmental agencies, and
other private associations and organizations. In its 3 1/2 years of operation under the present
administration, PAGCOR remitted to the government a total of P6.2 Billion. As of December 31, 1989,
PAGCOR was employing 4,494 employees in its nine (9) casinos nationwide, directly supporting the
livelihood of Four Thousand Four Hundred Ninety-Four (4,494) families.

But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the same is "null and
void" for being "contrary to morals, public policy and public order," monopolistic and tends toward
"crony economy", and is violative of the equal protection clause and local autonomy as well as for running
counter to the state policies enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family)
and 13 (Role of Youth) of Article II, Section 1 (Social Justice) of Article XIII and Section 2 (Educational
Values) of Article XIV of the 1987 Constitution.

This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the most deliberate
consideration by the Court, involving as it does the exercise of what has been described as "the highest
and most delicate function which belongs to the judicial department of the government." (State v. Manuel,
20 N.C. 144; Lozano v. Martinez, 146 SCRA 323).

As We enter upon the task of passing on the validity of an act of a co-equal and coordinate branch of the
government We need not be reminded of the time-honored principle, deeply ingrained in our
jurisprudence, that a statute is presumed to be valid. Every presumption must be indulged in favor of its
constitutionality. This is not to say that We approach Our task with diffidence or timidity. Where it is
clear that the legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily, as fall it must, on the
offending statute (Lozano v. Martinez, supra).

In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr. Justice Zaldivar
underscored the —

. . . thoroughly established principle which must be followed in all cases where questions of
constitutionality as obtain in the instant cases are involved. All presumptions are indulged in favor
of constitutionality; one who attacks a statute alleging unconstitutionality must prove its invalidity
beyond a reasonable doubt; that a law may work hardship does not render it unconstitutional;
that if any reasonable basis may be conceived which supports the statute, it will be upheld and the
challenger must negate all possible basis; that the courts are not concerned with the wisdom,
justice, policy or expediency of a statute and that a liberal interpretation of the constitution in
favor of the constitutionality of legislation should be adopted. (Danner v. Hass, 194 N.W. 2nd534,
539; Spurbeck v. Statton, 106 N.W. 2nd 660, 663; 59 SCRA 66; see also e.g. Salas v. Jarencio, 46
SCRA 734, 739 [1970]; Peralta v. Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of
Ordona v. Reyes, 125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer Protection
v. Energy Regulatory Board, 162 SCRA 521, 540)
Of course, there is first, the procedural issue. The respondents are questioning the legal personality of
petitioners to file the instant petition.

Considering however the importance to the public of the case at bar, and in keeping with the Court's duty,
under the 1987 Constitution, to determine whether or not the other branches of government have kept
themselves within the limits of the Constitution and the laws and that they have not abused the
discretion given to them, the Court has brushed aside technicalities of procedure and has taken
cognizance of this petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan, 163
SCRA 371)

With particular regard to the requirement of proper party as applied in the cases before us, We
hold that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. And even if, strictly speaking they are not covered by the definition, it is still within
the wide discretion of the Court to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions raised.

In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to question
the constitutionality of several executive orders issued by President Quirino although they were
involving only an indirect and general interest shared in common with the public. The Court
dismissed the objection that they were not proper parties and ruled that "the transcendental
importance to the public of these cases demands that they be settled promptly and definitely,
brushing aside, if we must technicalities of procedure." We have since then applied the exception
in many other cases. (Association of Small Landowners in the Philippines, Inc. v. Sec. of Agrarian
Reform, 175 SCRA 343).

Having disposed of the procedural issue, We will now discuss the substantive issues raised.

Gambling in all its forms, unless allowed by law, is generally prohibited. But the prohibition of gambling
does not mean that the Government cannot regulate it in the exercise of its police power.

The concept of police power is well-established in this jurisdiction. It has been defined as the "state
authority to enact legislation that may interfere with personal liberty or property in order to promote the
general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As defined, it consists of (1) an imposition or restraint
upon liberty or property, (2) in order to foster the common good. It is not capable of an exact definition
but has been, purposely, veiled in general terms to underscore its all-comprehensive embrace.
(Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).

Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could
be done, provides enough room for an efficient and flexible response to conditions and circumstances
thus assuming the greatest benefits. (Edu v. Ericta, supra)

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the charter.
Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and
sovereignty. It is a fundamental attribute of government that has enabled it to perform the most vital
functions of governance. Marshall, to whom the expression has been credited, refers to it succinctly as the
plenary power of the state "to govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The
police power of the State is a power co-extensive with self-protection and is most aptly termed the "law
of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39 Phil. 660, 708) It is "the most
essential, insistent, and illimitable of powers." (Smith Bell & Co. v. National, 40 Phil. 136) It is a dynamic
force that enables the state to meet the agencies of the winds of change.

What was the reason behind the enactment of P.D. 1869?

P.D. 1869 was enacted pursuant to the policy of the government to "regulate and centralize thru an
appropriate institution all games of chance authorized by existing franchise or permitted by law" (1st
whereas clause, PD 1869). As was subsequently proved, regulating and centralizing gambling operations
in one corporate entity — the PAGCOR, was beneficial not just to the Government but to society in
general. It is a reliable source of much needed revenue for the cash strapped Government. It provided
funds for social impact projects and subjected gambling to "close scrutiny, regulation, supervision and
control of the Government" (4th Whereas Clause, PD 1869). With the creation of PAGCOR and the direct
intervention of the Government, the evil practices and corruptions that go with gambling will be
minimized if not totally eradicated. Public welfare, then, lies at the bottom of the enactment of PD 1896.

Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila to impose taxes
and legal fees; that the exemption clause in P.D. 1869 is violative of the principle of local autonomy. They
must be referring to Section 13 par. (2) of P.D. 1869 which exempts PAGCOR, as the franchise holder from
paying any "tax of any kind or form, income or otherwise, as well as fees, charges or levies of whatever
nature, whether National or Local."

(2) Income and other taxes. — a) Franchise Holder: No tax of any kind or form, income or
otherwise as well as fees, charges or levies of whatever nature, whether National or Local, shall be
assessed and collected under this franchise from the Corporation; nor shall any form or tax or
charge attach in any way to the earnings of the Corporation, except a franchise tax of five (5%)
percent of the gross revenues or earnings derived by the Corporation from its operations under
this franchise. Such tax shall be due and payable quarterly to the National Government and shall
be in lieu of all kinds of taxes, levies, fees or assessments of any kind, nature or description, levied,
established or collected by any municipal, provincial or national government authority (Section 13
[2]).

Their contention stated hereinabove is without merit for the following reasons:

(a) The City of Manila, being a mere Municipal corporation has no inherent right to impose taxes (Icard v.
City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil. 337; Santos v. Municipality of Caloocan, 7
SCRA 643). Thus, "the Charter or statute must plainly show an intent to confer that power or the
municipality cannot assume it" (Medina v. City of Baguio, 12 SCRA 62). Its "power to tax" therefore must
always yield to a legislative act which is superior having been passed upon by the state itself which has
the "inherent power to tax" (Bernas, the Revised [1973] Philippine Constitution, Vol. 1, 1983 ed. p. 445).

(b) The Charter of the City of Manila is subject to control by Congress. It should be stressed that
"municipal corporations are mere creatures of Congress" (Unson v. Lacson, G.R. No. 7909, January 18,
1957) which has the power to "create and abolish municipal corporations" due to its "general legislative
powers" (Asuncion v. Yriantes, 28 Phil. 67; Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has
the power of control over Local governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And if
Congress can grant the City of Manila the power to tax certain matters, it can also provide for exemptions
or even take back the power.

(c) The City of Manila's power to impose license fees on gambling, has long been revoked. As early as
1975, the power of local governments to regulate gambling thru the grant of "franchise, licenses or
permits" was withdrawn by P.D. No. 771 and was vested exclusively on the National Government, thus:

Sec. 1. Any provision of law to the contrary notwithstanding, the authority of chartered cities and
other local governments to issue license, permit or other form of franchise to operate, maintain
and establish horse and dog race tracks, jai-alai and other forms of gambling is hereby revoked.

Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish, horse and dog race
tracks, jai-alai and other forms of gambling shall be issued by the national government upon
proper application and verification of the qualification of the applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits" for the operation of
gambling. Necessarily, the power to demand or collect license fees which is a consequence of the issuance
of "licenses or permits" is no longer vested in the City of Manila.

(d) Local governments have no power to tax instrumentalities of the National Government. PAGCOR is a
government owned or controlled corporation with an original charter, PD 1869. All of its shares of stocks
are owned by the National Government. In addition to its corporate powers (Sec. 3, Title II, PD 1869) it
also exercises regulatory powers thus:

Sec. 9. Regulatory Power. — The Corporation shall maintain a Registry of the affiliated entities, and
shall exercise all the powers, authority and the responsibilities vested in the Securities and
Exchange Commission over such affiliating entities mentioned under the preceding section,
including, but not limited to amendments of Articles of Incorporation and By-Laws, changes in
corporate term, structure, capitalization and other matters concerning the operation of the
affiliated entities, the provisions of the Corporation Code of the Philippines to the contrary
notwithstanding, except only with respect to original incorporation.

PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is governmental,
which places it in the category of an agency or instrumentality of the Government. Being an
instrumentality of the Government, PAGCOR should be and actually is exempt from local taxes. Otherwise,
its operation might be burdened, impeded or subjected to control by a mere Local government.

The states have no power by taxation or otherwise, to retard, impede, burden or in any manner
control the operation of constitutional laws enacted by Congress to carry into execution the
powers vested in the federal government. (MC Culloch v. Marland, 4 Wheat 316, 4 L Ed. 579)

This doctrine emanates from the "supremacy" of the National Government over local governments.

Justice Holmes, speaking for the Supreme Court, made reference to the entire absence of power on
the part of the States to touch, in that way (taxation) at least, the instrumentalities of the United
States (Johnson v. Maryland, 254 US 51) and it can be agreed that no state or political subdivision
can regulate a federal instrumentality in such a way as to prevent it from consummating its federal
responsibilities, or even to seriously burden it in the accomplishment of them. (Antieau, Modern
Constitutional Law, Vol. 2, p. 140, emphasis supplied)

Otherwise, mere creatures of the State can defeat National policies thru extermination of what local
authorities may perceive to be undesirable activities or enterprise using the power to tax as "a tool for
regulation" (U.S. v. Sanchez, 340 US 42).

The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity which has
the inherent power to wield it.

(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D. 1869.
This is a pointless argument. Article X of the 1987 Constitution (on Local Autonomy) provides:

Sec. 5. Each local government unit shall have the power to create its own source of revenue and to
levy taxes, fees, and other charges subject to such guidelines and limitation as the congress may
provide, consistent with the basic policy on local autonomy. Such taxes, fees and charges shall
accrue exclusively to the local government. (emphasis supplied)

The power of local government to "impose taxes and fees" is always subject to "limitations" which
Congress may provide by law. Since PD 1869 remains an "operative" law until "amended, repealed or
revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its "exemption clause" remains as an exception to the
exercise of the power of local governments to impose taxes and fees. It cannot therefore be violative but
rather is consistent with the principle of local autonomy.

Besides, the principle of local autonomy under the 1987 Constitution simply means "decentralization" (III
Records of the 1987 Constitutional Commission, pp. 435-436, as cited in Bernas, The Constitution of the
Republic of the Philippines, Vol. II, First Ed., 1988, p. 374). It does not make local governments sovereign
within the state or an "imperium in imperio."

Local Government has been described as a political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs. In a unitary system of government,
such as the government under the Philippine Constitution, local governments can only be an intra
sovereign subdivision of one sovereign nation, it cannot be an imperium in imperio. Local
government in such a system can only mean a measure of decentralization of the function of
government. (emphasis supplied)

As to what state powers should be "decentralized" and what may be delegated to local government units
remains a matter of policy, which concerns wisdom. It is therefore a political question. (Citizens Alliance
for Consumer Protection v. Energy Regulatory Board, 162 SCRA 539).

What is settled is that the matter of regulating, taxing or otherwise dealing with gambling is a State
concern and hence, it is the sole prerogative of the State to retain it or delegate it to local governments.

As gambling is usually an offense against the State, legislative grant or express charter power is
generally necessary to empower the local corporation to deal with the subject. . . . In the absence of
express grant of power to enact, ordinance provisions on this subject which are inconsistent with the
state laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9, Cals. 440, 27 PAC
757 following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St. Rep. 280, 11 LRA 480, as cited in Mc
Quinllan Vol. 3 Ibid, p. 548, emphasis supplied)

Petitioners next contend that P.D. 1869 violates the equal protection clause of the Constitution, because
"it legalized PAGCOR — conducted gambling, while most gambling are outlawed together with
prostitution, drug trafficking and other vices" (p. 82, Rollo).

We, likewise, find no valid ground to sustain this contention. The petitioners' posture ignores the well-
accepted meaning of the clause "equal protection of the laws." The clause does not preclude classification
of individuals who may be accorded different treatment under the law as long as the classification is not
unreasonable or arbitrary (Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal
force on all persons or things to be conformable to Article III, Section 1 of the Constitution (DECS v. San
Diego, G.R. No. 89572, December 21, 1989).

The "equal protection clause" does not prohibit the Legislature from establishing classes of individuals or
objects upon which different rules shall operate (Laurel v. Misa, 43 O.G. 2847). The Constitution does not
require situations which are different in fact or opinion to be treated in law as though they were the same
(Gomez v. Palomar, 25 SCRA 827).

Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal protection is not
clearly explained in the petition. The mere fact that some gambling activities like cockfighting (P.D 449)
horse racing (R.A. 306 as amended by RA 983), sweepstakes, lotteries and races (RA 1169 as amended by
B.P. 42) are legalized under certain conditions, while others are prohibited, does not render the
applicable laws, P.D. 1869 for one, unconstitutional.

If the law presumably hits the evil where it is most felt, it is not to be overthrown because there
are other instances to which it might have been applied. (Gomez v. Palomar, 25 SCRA 827)
 The equal protection clause of the 14th Amendment does not mean that all occupations called by
the same name must be treated the same way; the state may do what it can to prevent which is
deemed as evil and stop short of those cases in which harm to the few concerned is not less than
the harm to the public that would insure if the rule laid down were made mathematically exact.
(Dominican Hotel v. Arizona, 249 US 2651).

Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory Government away
from monopolies and crony economy and toward free enterprise and privatization" suffice it to state that
this is not a ground for this Court to nullify P.D. 1869. If, indeed, PD 1869 runs counter to the
government's policies then it is for the Executive Department to recommend to Congress its repeal or
amendment.

The judiciary does not settle policy issues. The Court can only declare what the law is and not
what the law should be.1âwphi1 Under our system of government, policy issues are within the
domain of the political branches of government and of the people themselves as the repository of
all state power. (Valmonte v. Belmonte, Jr., 170 SCRA 256).

On the issue of "monopoly," however, the Constitution provides that:

Sec. 19. The State shall regulate or prohibit monopolies when public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed. (Art. XII, National
Economy and Patrimony)

It should be noted that, as the provision is worded, monopolies are not necessarily prohibited by the
Constitution. The state must still decide whether public interest demands that monopolies be regulated
or prohibited. Again, this is a matter of policy for the Legislature to decide.

On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12 (Family) and 13
(Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and Section 2 (Educational Values) of
Article XIV of the 1987 Constitution, suffice it to state also that these are merely statements of principles
and, policies. As such, they are basically not self-executing, meaning a law should be passed by Congress
to clearly define and effectuate such principles.

In general, therefore, the 1935 provisions were not intended to be self-executing principles ready
for enforcement through the courts. They were rather directives addressed to the executive and
the legislature. If the executive and the legislature failed to heed the directives of the articles the
available remedy was not judicial or political. The electorate could express their displeasure with
the failure of the executive and the legislature through the language of the ballot. (Bernas, Vol. II, p.
2)

Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad, 47 Phil. 387;
Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v. Comelec, 179 SCRA 287).
Therefore, for PD 1869 to be nullified, it must be shown that there is a clear and unequivocal breach of
the Constitution, not merely a doubtful and equivocal one. In other words, the grounds for nullity must be
clear and beyond reasonable doubt. (Peralta v. Comelec, supra) Those who petition this Court to declare a
law, or parts thereof, unconstitutional must clearly establish the basis for such a declaration. Otherwise,
their petition must fail. Based on the grounds raised by petitioners to challenge the constitutionality of
P.D. 1869, the Court finds that petitioners have failed to overcome the presumption. The dismissal of this
petition is therefore, inevitable. But as to whether P.D. 1869 remains a wise legislation considering the
issues of "morality, monopoly, trend to free enterprise, privatization as well as the state principles on
social justice, role of youth and educational values" being raised, is up for Congress to determine.

As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board, 162 SCRA 521
—
 Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in any case, in its favor
the presumption of validity and constitutionality which petitioners Valmonte and the KMU have
not overturned. Petitioners have not undertaken to identify the provisions in the Constitution
which they claim to have been violated by that statute. This Court, however, is not compelled to
speculate and to imagine how the assailed legislation may possibly offend some provision of the
Constitution. The Court notes, further, in this respect that petitioners have in the main put in
question the wisdom, justice and expediency of the establishment of the OPSF, issues which are
not properly addressed to this Court and which this Court may not constitutionally pass upon.
Those issues should be addressed rather to the political departments of government: the
President and the Congress.

Parenthetically, We wish to state that gambling is generally immoral, and this is precisely so when the
gambling resorted to is excessive. This excessiveness necessarily depends not only on the financial
resources of the gambler and his family but also on his mental, social, and spiritual outlook on life.
However, the mere fact that some persons may have lost their material fortunes, mental control, physical
health, or even their lives does not necessarily mean that the same are directly attributable to
gambling. Gambling may have been the antecedent, but certainly not necessarily the cause. For the same
consequences could have been preceded by an overdose of food, drink, exercise, work, and even sex.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.

[G.R. No. 149848. November 25, 2004]

ARSADI M. DISOMANGCOP and RAMIR M. DIMALOTANG, petitioners, vs. THE SECRETARY OF THE
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS SIMEON A. DATUMANONG and THE
SECRETARY OF BUDGET and MANAGEMENT EMILIA T. BONCODIN, respondents.

DECISION
TINGA, J.:

At stake in the present case is the fate of regional autonomy for Muslim Mindanao which is the epoch-
making, Constitution-based project for achieving national unity in diversity.
Challenged in the instant petition for certiorari, prohibition and mandamus with prayer for a
temporary restraining order and/or writ of preliminary injunction[1] (Petition) are the constitutionality
and validity of Republic Act No. 8999 (R.A. 8999),[2] entitled An Act Establishing An Engineering District in
the First District of the Province of Lanao del Sur and Appropriating Funds Therefor,and Department of
Public Works and Highways (DPWH) Department Order No. 119 (D.O. 119) [3] on the subject, Creation of
Marawi Sub-District Engineering Office.
The Background
The uncontested legal and factual antecedents of the case follow.
For the first time in its history after three Constitutions, the Philippines ordained the establishment
of regional autonomy with the adoption of the 1987 Constitution. Sections 1[4] and 15, Article X mandate
the creation of autonomous regions in Muslim Mindanao and in the Cordilleras. Section 15 specifically
provides that [t]here shall be created autonomous regions in Muslim Mindanao and in the Cordilleras
consisting of provinces, cities, municipalities, and geographical areas sharing common and distinctive
historical and cultural heritage, economic and social structures, and other relevant characteristics within
the framework of this Constitution and the national sovereignty as well as territorial integrity of the
Republic of the Philippines. To effectuate this mandate, the Charter devotes a number of provisions under
Article X.[5]
Pursuant to the constitutional mandate, Republic Act No. 6734 (R.A. 6734), entitled An Act Providing
for An Organic Act for the Autonomous Region in Muslim Mindanao, was enacted and signed into law on 1
August 1989. The law called for the holding of a plebiscite in the provinces of Basilan, Cotabato, Davao del
Sur, Lanao del Norte, Lanao del Sur, Maguindanao, Palawan, South Cotabato, Sultan Kudarat, Sulu, Tawi-
Tawi, Zamboanga del Norte, and Zamboanga del Sur, and the cities of Cotabato, Dapitan, Dipolog, General
Santos, Iligan, Marawi, Pagadian, Puerto Princesa and Zamboanga. [6] In the ensuing plebiscite held on 19
November 1989, only four (4) provinces voted for the creation of an autonomous region, namely: Lanao
del Sur, Maguindanao, Sulu and Tawi-Tawi. These provinces became the Autonomous Region in Muslim
Mindanao (ARMM).[7] The law contains elaborate provisions on the powers of the Regional Government
and the areas of jurisdiction which are reserved for the National Government.[8]
In accordance with R.A. 6734, then President Corazon C. Aquino issued on 12 October 1990,
Executive Order No. 426 (E.O. 426), entitled Placing the Control and Supervision of the Offices of the
Department of Public Works and Highways within the Autonomous Region in Muslim Mindanao under the
Autonomous Regional Government, and for other purposes. Sections 1 to 3[9] of the Executive Order are its
operative provisions.
ARMM was formally organized on 6 November 1990. President Corazon C. Aquino flew to Cotabato,
the seat of the Regional Government, for the inauguration. At that point, she had already signed seven (7)
Executive Orders devolving to ARMM the powers of seven (7) cabinet departments, namely: (1) local
government; (2) labor and employment; (3) science and technology; (4) public works and highways; (5)
social welfare and development; (6) tourism; and (7) environment and national resources.[10]
Nearly nine (9) years later, on 20 May 1999, then Department of Public Works and Highways (DPWH)
Secretary Gregorio R. Vigilar issued D.O. 119 which reads, thus:

Subject: Creation of Marawi Sub-District Engineering Office

Pursuant to Sections 6 and 25 of Executive Order No. 124 dated 30 January 1987, there is hereby
created a DPWH Marawi Sub-District Engineering Office which shall have jurisdiction over all
national infrastructure projects and facilities under the DPWH within Marawi City and the
province of Lanao del Sur. The headquarters of the Marawi Sub-District Engineering Office shall be at
the former quarters of the Marawi City Engineering Office.

Personnel of the above-mentioned Sub-District Engineering Office shall be made up of employees of the
National Government Section of the former Marawi City Engineering Office who are now assigned with
the Iligan City Sub-District Engineering Office as may be determined by the DPWH Region XII Regional
Director. (Emphasis supplied)

Almost two (2) years later, on 17 January 2001, then President Joseph E. Estrada approved and
signed into law R.A. 8999. The text of the law reads:

AN ACT ESTABLISHING AN ENGINEERING DISTRICT IN THE FIRST DISTRICT OF THE PROVINCE OF

LANAO DEL SUR AND APPROPRIATING FUNDS THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. The City of Marawi and the municipalities comprising the First District of the Province of
Lanao del Sur are hereby constituted into an engineering district to be known as the First Engineering
District of the Province of Lanao del Sur.

SEC. 2. The office of the engineering district hereby created shall be established in Marawi City, Province
of Lanao del Sur.
SEC. 3. The amount necessary to carry out the provisions of this Act shall be included in the
General Appropriations Act of the year following its enactment into law. Thereafter, such sums as
may be necessary for the maintenance and continued operation of the engineering district office
shall be included in the annual General Appropriations Act.

SEC. 4. This Act shall take effect upon its approval. (Emphasis supplied)

Congress later passed Republic Act No. 9054 (R.A. 9054), entitled An Act to Strengthen and Expand
the Organic Act for the Autonomous Region in Muslim Mindanao, Amending for the Purpose Republic Act
No. 6734, entitled An Act Providing for the Autonomous Region in Muslim Mindanao, as Amended. Like
its forerunner, R.A. 9054 contains detailed provisions on the powers of the Regional Government and the
retained areas of governance of the National Government.[11]
R.A. 9054 lapsed into law[12] on 31 March 2001. It was ratified in a plebiscite held on 14 August 2001.
The province of Basilan and the City of Marawi also voted to join ARMM on the same date. R.A. 6734 and
R.A. 9054 are collectively referred to as the ARMM Organic Acts.
On 23 July 2001, petitioners Arsadi M. Disomangcop (Disomangcop) and Ramir M. Dimalotang
(Dimalotang) addressed a petition to then DPWH Secretary Simeon A. Datumanong, seeking the
revocation of D.O. 119 and the non-implementation of R.A. 8999. No action, however, was taken on the
petition.[13]
Consequently, petitioners Disomangcop and Dimalotang filed the instant petition, in their capacity as
Officer-in-Charge and District Engineer/Engineer II, respectively, of the First Engineering District of the
Department of Public Works and Highways, Autonomous Region in Muslim Mindanao (DPWH-ARMM) in
Lanao del Sur.
Petitioners seek the following principal reliefs: (1) to annul and set aside D.O. 119; (2) to prohibit
respondent DPWH Secretary from implementing D.O. 119 and R.A. 8999 and releasing funds for public
works projects intended for Lanao del Sur and Marawi City to the Marawi Sub-District Engineering Office
and other administrative regions of DPWH; and (3) to compel the Secretary of the Department of Budget
and Management (DBM) to release all funds for public works projects intended for Marawi City and the
First District of Lanao del Sur to the DPWH-ARMM First Engineering District in Lanao del Sur only; and to
compel respondent DPWH Secretary to let the DPWH-ARMM First Engineering District in Lanao del Sur
implement all public works projects within its jurisdictional area.[14]
The petition includes an urgent application for the issuance of a temporary restraining order (TRO)
and, after hearing, a writ of preliminary injunction, to enjoin respondent DBM Secretary from releasing
funds for public works projects in Lanao del Sur to entities other than the DPWH-ARMM First
Engineering District in Lanao del Sur, and also to restrain the DPWH Secretary from allowing others
besides the DPWH-ARMM First Engineering District in Lanao del Sur to implement public works projects
in Lanao del Sur.[15]
To support their petition, petitioners allege that D.O. 119 was issued with grave abuse of discretion
and that it violates the constitutional autonomy of the ARMM. They point out that the challenged
Department Order has tasked the Marawi Sub-District Engineering Office with functions that have
already been devolved to the DPWH-ARMM First Engineering District in Lanao del Sur.[16]
Petitioners also contend that R.A. 8999 is a piece of legislation that was not intelligently and
thoroughly studied, and that the explanatory note to House Bill No. 995 (H.B. 995) from which the law
originated is questionable. Petitioners assert as well that prior to the sponsorship of the law, no public
hearing nor consultation with the DPWH-ARMM was made. The House Committee on Public Works and
Highways (Committee) failed to invite a single official from the affected agency. Finally, petitioners argue
that the law was skillfully timed for signature by former President Joseph E. Estrada during the pendency
of the impeachment proceedings.[17]
 In its resolution of 8 October 2001, the Court required respondents to file their comment.[18] In
compliance, respondents DPWH Secretary and DBM Secretary, through the Solicitor General, filed on 7
January 2002, their Comment.
In their Comment,[19] respondents, through the Office of the Solicitor General, maintain the validity of
D.O. 119, arguing that it was issued in accordance with Executive Order No. 124 (E.O. 124).[20] In defense
of the constitutionality of R.A. 8999, they submit that the powers of the autonomous regions did not
diminish the legislative power of Congress.[21] Respondents also contend that the petitioners have
no locus standi or legal standing to assail the constitutionality of the law and the department order. They
note that petitioners have no personal stake in the outcome of the controversy.[22]
Asserting their locus standi, petitioners in their Memorandum[23] point out that they will suffer actual
injury as a result of the enactments complained of.[24]
Jurisdictional Considerations
First, the jurisdictional predicates.
The 1987 Constitution is explicit in defining the scope of judicial power. It establishes the authority
of the courts to determine in an appropriate action the validity of acts of the political departments. It
speaks of judicial prerogative in terms of duty.[25]
Jurisprudence has laid down the following requisites for the exercise of judicial power: First, there
must be before the Court an actual case calling for the exercise of judicial review. Second, the question
before the Court must be ripe for adjudication. Third, the person challenging the validity of the act must
have standing to challenge. Fourth, the question of constitutionality must have been raised at the earliest
opportunity. Fifth, the issue of constitutionality must be the very lis mota of the case.[26]
In seeking to nullify acts of the legislature and the executive department on the ground that they
contravene the Constitution, the petition no doubt raises a justiciable controversy. As held in Taada v.
Angara,[27] where an action of the legislative branch is seriously alleged to have infringed the Constitution,
it becomes not only the right but in fact the duty of the judiciary to settle the dispute. But in deciding to
take jurisdiction over this petition questioning acts of the political departments of government, the Court
will not review the wisdom, merits, or propriety thereof, but will strike them down only on either of two
grounds: (1) unconstitutionality or illegality and (2) grave abuse of discretion.[28]
For an abuse to be grave, the power must be exercised in an arbitrary or despotic manner by reason
of passion or personal hostility. The abuse of discretion must be patent and gross as to amount to an
evasion of a positive duty, or a virtual refusal to perform the duty enjoined or to act in contemplation of
law. There is grave abuse of discretion when respondent acts in a capricious or whimsical manner in the
exercise of its judgment as to be equivalent to lack of jurisdiction.[29]
The challenge to the legal standing of petitioners cannot succeed. Legal standing or locus standi is
defined as a personal and substantial interest in the case such that the party has sustained or will sustain
direct injury as a result of the governmental act that is being challenged. The term interest means a
material interest, an interest in issue affected by the decree, as distinguished from a mere interest in the
question involved, or a mere incidental interest.[30]
A party challenging the constitutionality of a law, act, or statute must show not only that the law is
invalid, but also that he has sustained or is in immediate, or imminent danger of sustaining some direct
injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. He
must show that he has been, or is about to be, denied some right or privilege to which he is lawfully
entitled, or that he is about to be subjected to some burdens or penalties by reason of the statute
complained of.[31]
But following the new trend, this Court is inclined to take cognizance of a suit although it does not
satisfy the requirement of legal standing when paramount interests are involved. In several cases, the
Court has adopted a liberal stance on the locus standi of a petitioner where the petitioner is able to craft
an issue of transcendental significance to the people.[32]
 In the instant case, petitioner Disomangcop holds the position of Engineer IV. When he filed this
petition, he was the Officer-in-Charge, Office of the District Engineer of the First Engineering District of
DPWH-ARMM, Lanao del Sur. On the other hand, petitioner Dimalotang is an Engineer II and President of
the rank and file employees also of the First Engineering District of DPWH-ARMM in Lanao del Sur. Both
are charged with the duty and responsibility of supervising and implementing all public works projects to
be undertaken and being undertaken in Lanao del Sur which is the area of their jurisdiction.[33]
It is thus not far-fetched that the creation of the Marawi Sub-District Engineering Office under D.O.
119 and the creation of and appropriation of funds to the First Engineering District of Lanao del Sur as
directed under R.A. 8999 will affect the powers, functions and responsibilities of the petitioners and the
DPWH-ARMM. As the two offices have apparently been endowed with functions almost identical to those
of DPWH-ARMM First Engineering District in Lanao del Sur, it is likely that petitioners are in imminent
danger of being eased out of their duties and, not remotely, even their jobs. Their material and substantial
interests will definitely be prejudiced by the enforcement of D.O. 119 and R.A. 8999. Such injury is direct
and immediate. Thus, they can legitimately challenge the validity of the enactments subject of the instant
case.
Points of Contention
In the petition before us, petitioners contend that R.A. 8999 and D.O. 119 are unconstitutional and
were issued with grave abuse of discretion.
We agree in part.
Republic Act No. 8999
At the outset, let it be made clear that it is not necessary to declare R.A. No. 8999 unconstitutional for
the adjudication of this case. The accepted rule is that the Court will not resolve a constitutional question
unless it is the lis mota of the case, or if the case can be disposed of or settled on other grounds.[34]
The plain truth is the challenged law never became operative and was superseded or repealed by a
subsequent enactment.
The ARMM Organic Acts are deemed a part of the regional autonomy scheme. While they are
classified as statutes, the Organic Acts are more than ordinary statutes because they enjoy affirmation by
a plebiscite.[35] Hence, the provisions thereof cannot be amended by an ordinary statute, such as R.A.
8999 in this case. The amendatory law has to be submitted to a plebiscite.
We quote excerpts of the deliberations of the Constitutional Commission:

FR. BERNAS. Yes, that is the reason I am bringing this up. This thing involves some rather far-reaching
consequences also in relation to the issue raised by Commissioner Romulo with respect to federalism.
Are we, in effect, creating new categories of laws? Generally, we have statutes and constitutional
provisions. Is this organic act equivalent to a constitutional provision? If it is going to be equivalent to a
constitutional provision, it would seem to me that the formulation of the provisions of the organic act will
have to be done by the legislature, acting as a constituent assembly, and therefore, subject to the
provisions of the Article on Amendments. That is the point that I am trying to bring up. In effect, if we opt
for federalism, it would really involve an act of the National Assembly or Congress acting as a constituent
assembly and present amendments to this Constitution, and the end product itself would be a
constitutional provision which would only be amendable according to the processes indicated in the
Constitution.

MR. OPLE. Madam President, may I express my personal opinion in this respect.

I think to require Congress to act as a constituent body before enacting an organic act would be to raise
an autonomous region to the same level as the sovereign people of the whole country. And I think the
powers of the Congress should be quite sufficient in enacting a law, even if it is now exalted to the level of
an organic act for the purpose of providing a basic law for an autonomous region without having to
transform itself into a constituent assembly. We are dealing still with one subordinate subdivision of the
State even if it is now vested with certain autonomous powers on which its own legislature can pass laws.

FR. BERNAS. So the questions I have raised so far with respect to this organic act are: What segment of
the population will participate in the plebiscite? In what capacity would the legislature be acting when it
passes this? Will it be a constituent assembly or merely a legislative body? What is the nature, therefore,
of this organic act in relation to ordinary statutes and the Constitution? Finally, if we are going to amend
this organic act, what process will be followed?

MR. NOLLEDO. May I answer that, please, in the light of what is now appearing in our report.

First, only the people who are residing in the units composing the regions should be allowed to
participate in the plebiscite. Second, the organic act has the character of a charter passed by the Congress,
not as a constituent assembly, but as an ordinary legislature and, therefore, the organic act will still be
subject to amendments in the ordinary legislative process as now constituted, unless the Gentlemen has
another purpose.

FR. BERNAS. But with plebiscite again.

MR. NOLLEDO. Those who will participate in the plebiscite are those who are directly affected, the
inhabitants of the units constitutive of the region. (Emphasis supplied)[36]

Although R.A. 9054 was enacted later, it reaffirmed the imperativeness of the plebiscite
requirement.[37] In fact, R.A. 9054 itself, being the second or later ARMM Organic Act, was subjected to
and ratified in a plebiscite.
The first ARMM Organic Act, R.A. 6074, as implemented by E.O. 426, devolved the functions of the
DPWH in the ARMM which includes Lanao del Sur (minus Marawi City at the time) [38] to the Regional
Government. By creating an office with previously devolved functions, R.A. 8999, in essence, sought to
amend R.A. 6074. The amendatory law should therefore first obtain the approval of the people of the
ARMM before it could validly take effect. Absent compliance with this requirement, R.A. 8999 has not
even become operative.
From another perspective, R.A. 8999 was repealed and superseded by R.A. 9054. Where a statute of
later date clearly reveals an intention on the part of the legislature to abrogate a prior act on the subject,
that intention must be given effect.
Of course, the intention to repeal must be clear and manifest. [39] Implied repeal by irreconcilable
inconsistency takes place when the two statutes cover the same subject matter; they are clearly
inconsistent and incompatible with each other that they cannot be reconciled or harmonized; and both
cannot be given effect, that is, that one law cannot be enforced without nullifying the other.[40]
The Court has also held that statutes should be construed in light of the objective to be achieved and
the evil or mischief to be suppressed, and they should be given such construction as will advance the
object, suppress the mischief and secure the benefits intended.[41]
R.A. 9054 is anchored on the 1987 Constitution. It advances the constitutional grant of autonomy by
detailing the powers of the ARG covering, among others, Lanao del Sur and Marawi City, one of which is
its jurisdiction over regional urban and rural planning. R.A. 8999, however, ventures to reestablish the
National Governments jurisdiction over infrastructure programs in Lanao del Sur. R.A. 8999 is patently
inconsistent with R.A. 9054, and it destroys the latter laws objective.
Clearly, R.A. 8999 is antagonistic to and cannot be reconciled with both ARMM Organic Acts, R.A.
6734 and R.A. 9054. The kernel of the antagonism and disharmony lies in the regional autonomy which
the ARMM Organic Acts ordain pursuant to the Constitution. On the other hand, R.A. 8999 contravenes
true decentralization which is the essence of regional autonomy.
Regional Autonomy Under
R.A. 6734 and R.A. 9054
The 1987 Constitution mandates regional autonomy to give a bold and unequivocal answer to the cry
for a meaningful, effective and forceful autonomy.[42] According to Commissioner Jose Nolledo, Chairman
of the Committee which drafted the provisions, it is an indictment against the status quo of a unitary
system that, to my mind, has ineluctably tied the hands of progress in our country . . . our varying regional
characteristics are factors to capitalize on to attain national strength through decentralization.[43]
The idea behind the Constitutional provisions for autonomous regions is to allow the separate
development of peoples with distinctive cultures and traditions. [44] These cultures, as a matter of right,
must be allowed to flourish.[45]
Autonomy, as a national policy, recognizes the wholeness of the Philippine society in its
ethnolinguistic, cultural, and even religious diversities. It strives to free Philippine society of the strain
and wastage caused by the assimilationist approach.[46] Policies emanating from the legislature are
invariably assimilationist in character despite channels being open for minority representation. As a
result, democracy becomes an irony to the minority group.[47]
Several commissioners echoed the pervasive sentiment in the plenary sessions in their own
inimitable way. Thus, Commissioner Blas Ople referred to the recognition that the Muslim Mindanao and
the Cordilleras do not belong to the dominant national community as the justification for conferring on
them a measure of legal self-sufficiency, meaning self-government, so that they will flourish politically,
economically and culturally, with the hope that after achieving parity with the rest of the country they
would give up their own autonomous region in favor of joining the national mainstream. [48] For his part,
the Muslim delegate, Commissioner Ahmad Alonto, spoke of the diversity of cultures as the framework
for nation-building.[49] Finally, excerpts of the poignant plea of Commissioner Ponciano Bennagen
deserve to be quoted verbatim:

. . . They see regional autonomy as the answer to their centuries of struggle against oppression and
exploitation. For so long, their names and identities have been debased. Their ancestral lands have been
ransacked for their treasures, for their wealth. Their cultures have been defiled, their very lives
threatened, and worse, extinguished, all in the name of national development; all in the name of public
interest; all in the name of common good; all in the name of the right to property; all in the name of
Regalian Doctrine; all in the name of national security. These phrases have meant nothing to our
indigenous communities, except for the violation of their human rights.

...

Honorable Commissioners, we wish to impress upon you the gravity of the decision to be made by every
single one of us in this Commission. We have the overwhelming support of the Bangsa Moro and the
Cordillera Constitution. By this we mean meaningful and authentic regional autonomy. We propose that
we have a separate Article on the autonomous regions for the Bangsa Moro and Cordillera people clearly
spelled out in this Constitution, instead of prolonging the agony of their vigil and their struggle. This, too
is a plea for national peace. Let us not pass the buck to the Congress to decide on this. Let us not wash our
hands of our responsibility to attain national unity and peace and to settle this problem and rectify past
injustices, once and for all.[50]

The need for regional autonomy is more pressing in the case of the Filipino Muslims and the
Cordillera people who have been fighting for it. Their political struggle highlights their unique cultures
and the unresponsiveness of the unitary system to their aspirations.[51] The Moros struggle for self-
determination dates as far back as the Spanish conquest in the Philippines. Even at present, the struggle
goes on.[52]
Perforce, regional autonomy is also a means towards solving existing serious peace and order
problems and secessionist movements. Parenthetically, autonomy, decentralization and regionalization,
in international law, have become politically acceptable answers to intractable problems of nationalism,
separatism, ethnic conflict and threat of secession.[53]
However, the creation of autonomous regions does not signify the establishment of a sovereignty
distinct from that of the Republic, as it can be installed only within the framework of this Constitution and
the national sovereignty as well as territorial integrity of the Republic of the Philippines.[54]
Regional autonomy is the degree of self-determination exercised by the local government unit vis--
vis the central government.
In international law, the right to self-determination need not be understood as a right to political
separation, but rather as a complex net of legal-political relations between a certain people and the state
authorities. It ensures the right of peoples to the necessary level of autonomy that would guarantee the
support of their own cultural identity, the establishment of priorities by the communitys internal
decision-making processes and the management of collective matters by themselves.[55]
If self-determination is viewed as an end in itself reflecting a preference for homogeneous,
independent nation-states, it is incapable of universal application without massive disruption. However,
if self-determination is viewed as a means to an endthat end being a democratic, participatory political
and economic system in which the rights of individuals and the identity of minority communities are
protectedits continuing validity is more easily perceived.[56]
Regional autonomy refers to the granting of basic internal government powers to the people of a
particular area or region with least control and supervision from the central government.[57]
The objective of the autonomy system is to permit determined groups, with a common tradition and
shared social-cultural characteristics, to develop freely their ways of life and heritage, exercise their
rights, and be in charge of their own business. This is achieved through the establishment of a special
governance regime for certain member communities who choose their own authorities from within the
community and exercise the jurisdictional authority legally accorded to them to decide internal
community affairs.[58]
In the Philippine setting, regional autonomy implies the cultivation of more positive means for
national integration. It would remove the wariness among the Muslims, increase their trust in the
government and pave the way for the unhampered implementation of the development programs in the
region.[59] Again, even a glimpse of the deliberations of the Constitutional Commission could lend a sense
of the urgency and the inexorable appeal of true decentralization:

MR. OPLE. . . . We are writing a Constitution, of course, for generations to come, not only for the present
but for our posterity. There is no harm in recognizing certain vital pragmatic needs for national peace and
solidarity, and the writing of this Constitution just happens at a time when it is possible for this
Commission to help the cause of peace and reconciliation in Mindanao and the Cordilleras, by taking
advantage of a heaven-sent opportunity. . . . [60]

...

MR. ABUBAKAR. . . . So in order to foreclose and convince the rest of the of the Philippines that Mindanao
autonomy will be granted to them as soon as possible, more or less, to dissuade these armed men from
going outside while Mindanao will be under the control of the national government, let us establish an
autonomous Mindanao within our effort and capacity to do so within the shortest possible time. This will
be an answer to the Misuari clamor, not only for autonomy but for independence.[61]

...

MR. OPLE. . . . The reason for this abbreviation of the period for the consideration of the Congress of the
organic acts and their passage is that we live in abnormal times. In the case of Muslim Mindanao and the
Cordilleras, we know that we deal with questions of war and peace. These are momentous issues in
which the territorial integrity and the solidarity of this country are being put at stake, in a manner of
speaking.

We are writing a peace Constitution. We hope that the Article on Social Justice can contribute to a climate
of peace so that any civil strife in the countryside can be more quickly and more justly resolved. We are
providing for autonomous regions so that we give constitutional permanence to the just demands and
grievances of our own fellow countrymen in the Cordilleras and in Mindanao. One hundred thousand
lives were lost in that struggle in Mindanao, and to this day, the Cordilleras is being shaken by an armed
struggle as well as a peaceful and militant struggle.

...

Rather than give opportunity to foreign bodies, no matter how sympathetic to the Philippines, to
contribute to the settlement of this issue, I think the Constitutional Commission ought not to forego the
opportunity to put the stamp of this Commission through definitive action on the settlement of the
problems that have nagged us and our forefathers for so long.[62]

A necessary prerequisite of autonomy is decentralization.[63]

Decentralization is a decision by the central government authorizing its subordinates, whether
geographically or functionally defined, to exercise authority in certain areas. It involves decision-making
by subnational units. It is typically a delegated power, wherein a larger government chooses to delegate
certain authority to more local governments. Federalism implies some measure of decentralization, but
unitary systems may also decentralize. Decentralization differs intrinsically from federalism in that the
sub-units that have been authorized to act (by delegation) do not possess any claim of right against the
central government.[64]
Decentralization comes in two formsdeconcentration and devolution. Deconcentration is
administrative in nature; it involves the transfer of functions or the delegation of authority and
responsibility from the national office to the regional and local offices. This mode of decentralization is
also referred to as administrative decentralization.[65]
Devolution, on the other hand, connotes political decentralization, or the transfer of powers,
responsibilities, and resources for the performance of certain functions from the central government to
local government units.[66] This is a more liberal form of decentralization since there is an actual transfer
of powers and responsibilities.[67] It aims to grant greater autonomy to local government units in
cognizance of their right to self-government, to make them self-reliant, and to improve their
administrative and technical capabilities.[68]
This Court elucidated the concept of autonomy in Limbona v. Mangelin,[69] thus:

Autonomy is either decentralization of administration or decentralization of power. There is

decentralization of administration when the central government delegates administrative powers to
political subdivisions in order to broaden the base of government power and in the process to make local
governments more responsive and accountable, and ensure their fullest development as self-reliant
communities and make them more effective partners in the pursuit of national development and social
progress. At the same time, it relieves the central government of the burden of managing local affairs and
enables it to concentrate on national concerns. The President exercises general supervision over them,
but only to ensure that local affairs are administered according to law. He has no control over their acts in
the sense that he can substitute their judgments with his own.

Decentralization of power, on the other hand, involves an abdication of political power in the favor of
local government units declared to be autonomous. In that case, the autonomous government is free to
chart its own destiny and shape its future with minimum intervention from central authorities. According
to a constitutional author, decentralization of power amounts to self-immolation, since in that event the
autonomous government becomes accountable not to the central authorities but to its constituency.
 In the case, the Court reviewed the expulsion of a member from the Sangguniang Pampook,
Autonomous Region. It held that the Court may assume jurisdiction as the local government unit,
organized before 1987, enjoys autonomy of the former category. It refused, though, to resolve whether
the grant of autonomy to Muslim Mindanao under the 1987 Constitution involves, truly, an effort to
decentralize power rather than mere administration.[70]
A year later, in Cordillera Broad Coalition v. Commission on Audit,[71] the Court, with the same
composition, ruled without any dissent that the creation of autonomous regions contemplates the grant
of political autonomyan autonomy which is greater than the administrative autonomy granted to local
government units. It held that the constitutional guarantee of local autonomy in the Constitution (Art. X,
Sec. 2) refers to administrative autonomy of local government units or, cast in more technical language,
the decentralization of government authority. On the other hand, the creation of autonomous regions
in Muslim Mindanao and the Cordilleras, which is peculiar to the 1987 Constitution, contemplates
the grant of political autonomy and not just administrative autonomy to these regions.[72]
And by regional autonomy, the framers intended it to mean meaningful and authentic regional
autonomy.[73] As articulated by a Muslim author, substantial and meaningful autonomy is the kind of local
self-government which allows the people of the region or area the power to determine what is best for
their growth and development without undue interference or dictation from the central government.[74]
To this end, Section 16, Article X[75] limits the power of the President over autonomous regions.[76] In
essence, the provision also curtails the power of Congress over autonomous regions. [77]Consequently,
Congress will have to re-examine national laws and make sure that they reflect the Constitutions
adherence to local autonomy. And in case of conflicts, the underlying spirit which should guide its
resolution is the Constitutions desire for genuine local autonomy.[78]
The diminution of Congress powers over autonomous regions was confirmed in Ganzon v. Court of
Appeals,[79] wherein this Court held that the omission (of as may be provided by law) signifies nothing
more than to underscore local governments autonomy from Congress and to break Congress control over
local government affairs.
This is true to subjects over which autonomous regions have powers, as specified in Sections 18 and
20, Article X of the 1987 Constitution. Expressly not included therein are powers over certain
areas. Worthy of note is that the area of public works is not excluded and neither is it reserved for
the National Government. The key provisions read, thus:

SEC. 18. The Congress shall enact an organic act for each autonomous region with the assistance and
participation of the regional consultative commission composed of representatives appointed by the
President from a list of nominees from multisectoral bodies. The organic act shall define the basic
structure of government for the region consisting of the executive department and legislative
assembly, both of which shall be elective and representative of the constituent political units. The
organic acts shall likewise provide for special courts with personal, family and property law jurisdiction
consistent with the provisions of the Constitution and national laws.

The creation of the autonomous region shall be effective when approved by majority of the votes cast by
the constituent units in a plebiscite called for the purpose, provided that only provinces, cities, and
geographic areas voting favorably in such plebiscite shall be included in the autonomous region.

SEC. 20. Within its territorial jurisdiction and subject to the provisions of this Constitution and national
laws, the organic act of autonomous regions shall provide for legislative powers over:

(1) Administrative organization;

(2) Creation of sources of revenues;

(3) Ancestral domain and natural resources;

(4) Personal, family and property relations;

(5) Regional urban and rural planning development;

(6) Economic, social, and tourism development;

(7) Educational policies;

(8) Preservation and development of the cultural heritage; and

(9) Such other matters as may be authorized by law for the promotion of general welfare of the
people of the region. (Emphasis supplied)

E.O. 426 officially devolved the powers and functions of the DPWH in ARMM to the Autonomous
Regional Government (ARG). Sections 1 and 2 of E.O. 426 provide:

SECTION 1. Transfer of Control and Supervision. The offices of the Department of Public Works and
Highways (DPWH) within the Autonomous Region in Muslim Mindanao (ARMM) including their
functions, powers and responsibilities, personnel, equipment, properties, budgets and liabilities
are hereby placed under the control and supervision of the Autonomous Regional Government.

In particular, these offices are identified as the four (4) District Engineering Offices (DEO) in each
of the four provinces respectively and the three (3) Area Equipment Services (AES) located in
Tawi-Tawi, Sulu and Maguindanao (Municipality of Sultan Kudarat).

SEC. 2. Functions Transferred. The Autonomous Regional Government shall be responsible for highways,
flood control and water resource development systems, and other public works within the ARMM and
shall exercise the following functions:

1. Undertake and evaluate the planning, design, construction and works supervision for the
infrastructure projects whose location and impact are confined within the ARMM;

2. Undertake the maintenance of infrastructure facilities within the ARMM and supervise the
maintenance of such local roads and other infrastructure facilities receiving financial assistance
from the National Government;

3. Ensure the implementation of laws, policies, programs, rules and regulations regarding
infrastructure projects as well as all public and private physical structures within the ARMM;

4. Provide technical assistance related to their functions to other agencies within the ARMM,
especially the local government units;

5. Coordinate with other national and regional government departments, agencies, institutions
and organizations, especially the local government units within the ARMM in the planning and
implementation of infrastructure projects;

6. Conduct continuing consultations with the local communities, take appropriate measures to
make the services of the Autonomous Regional Government responsive to the needs of the
general public and recommend such appropriate actions as may be necessary; and

7. Perform such other related duties and responsibilities within the ARMM as may be assigned or
delegated by the Regional Governor or as may be provided by law. (Emphasis supplied)
 More importantly, Congress itself through R.A. 9054 transferred and devolved the administrative and
fiscal management of public works and funds for public works to the ARG. Section 20, Article VI of R.A.
9054 provides:

ARTICLE VI

THE LEGISLATIVE DEPARTMENT

SEC. 20. Annual Budget and Infrastructure Funds. The annual budget of the Regional Government shall be
enacted by Regional Assembly. Funds for infrastructure in the autonomous region allocated by the
central government or national government shall be appropriated through a Regional Assembly Public
Works Act.

Unless approved by the Regional Assembly, no public works funds allocated by the central government or
national government for the Regional Government or allocated by the Regional Government from its own
revenues may be disbursed, distributed, realigned, or used in any manner.

The aim of the Constitution is to extend to the autonomous peoples, the people of Muslim Mindanao
in this case, the right to self-determinationa right to choose their own path of development; the right to
determine the political, cultural and economic content of their development path within the framework
of the sovereignty and territorial integrity of the Philippine Republic.[80] Self-determination refers to the
need for a political structure that will respect the autonomous peoples uniqueness and grant them
sufficient room for self-expression and self-construction.[81]
In treading their chosen path of development, the Muslims in Mindanao are to be given freedom and
independence with minimum interference from the National Government. This necessarily includes the
freedom to decide on, build, supervise and maintain the public works and infrastructure projects within
the autonomous region. The devolution of the powers and functions of the DPWH in the ARMM and
transfer of the administrative and fiscal management of public works and funds to the ARG are meant to
be true, meaningful and unfettered. This unassailable conclusion is grounded on a clear consensus,
reached at the Constitutional Commission and ratified by the entire Filipino electorate, on the centrality
of decentralization of power as the appropriate vessel of deliverance for Muslim Filipinos and the
ultimate unity of Muslims and Christians in this country.
With R.A. 8999, however, this freedom is taken away, and the National Government takes control
again. The hands, once more, of the autonomous peoples are reined in and tied up.
The challenged law creates an office with functions and powers which, by virtue of E.O. 426, have
been previously devolved to the DPWH-ARMM, First Engineering District in Lanao del Sur.
E.O. 426 clearly ordains the transfer of the control and supervision of the offices of the DPWH within
the ARMM, including their functions, powers and responsibilities, personnel, equipment, properties, and
budgets to the ARG. Among its other functions, the DPWH-ARMM, under the control of the Regional
Government shall be responsible for highways, flood control and water resource development systems,
and other public works within the ARMM. Its scope of power includes the planning, design, construction
and supervision of public works. According to R.A. 9054, the reach of the Regional Government enables it
to appropriate, manage and disburse all public work funds allocated for the region by the central
government.
The use of the word powers in E.O. 426 manifests an unmistakable case of devolution.
In this regard, it is not amiss to cite Opinion No. 120, S. 1991[82] of the Secretary of Justice on whether
the national departments or their counterpart departments in the ARG are responsible for
implementation of roads, rural water supply, health, education, women in development, agricultural
extension and watershed management. Referring to Section 2, Article V of R.A. 6734 which enumerates
the powers of the ARG, he states:
It is clear from the foregoing provision of law that except for the areas of executive power mentioned
therein, all other such areas shall be exercised by the Autonomous Regional Government (ARG) of the
Autonomous Region in Muslim Mindanao. It is noted that programs relative to infrastructure facilities,
health, education, women in development, agricultural extension and watershed management do not fall
under any of the exempted areas listed in the abovequoted provision of law. Thus, the inevitable
conclusion is that all these spheres of executive responsibility have been transferred to the ARG.

Reinforcing the aboveview (sic) are the various executive orders issued by the President providing for
the devolution of the powers and functions of specified executive departments of the National
Government to the ARG. These are E.O. Nos. 425 (Department of Labor and Employment, Local
Government, Tourism, Environment and Natural Resources, Social Welfare and Development and Science
and Technology), 426 (Department of Public Works and Highways), 459 (Department of Education,
Culture and Sports) and 460 (Department of Agriculture). The execution of projects on infrastructure,
education, women, agricultural extension and watershed management within the Autonomous Region of
Muslim Mindanao normally fall within the responsibility of one of the aforementioned executive
departments of the National Government, but by virtue of the aforestated EOs, such responsibility has
been transferred to the ARG.

E.O. 426 was issued to implement the provisions of the first ARMM Organic Act, R.A. 6734the validity
of which this Court upheld in the case of Abbas v. Commission on Elections.[83] In Section 4, Article XVIII of
said Act, central government or national government offices and agencies in the autonomous region
which are not excluded under Section 3, Article IV[84] of this Organic Act, shall be placed under the control
and supervision of the Regional Government pursuant to a schedule prescribed by the oversight
committee.
Evidently, the intention is to cede some, if not most, of the powers of the national government to the
autonomous government in order to effectuate a veritable autonomy. The continued enforcement of R.A.
8999, therefore, runs afoul of the ARMM Organic Acts and results in the recall of powers which have
previously been handed over. This should not be sanctioned, elsewise the Organic Acts desire for greater
autonomy for the ARMM in accordance with the Constitution would be quelled. It bears stressing that
national laws are subject to the Constitution one of whose state policies is to ensure the autonomy of
autonomous regions. Section 25, Article II of the 1987 Constitution states:

Sec. 25. The State shall ensure the autonomy of local governments.

R.A. 8999 has made the DPWH-ARMM effete and rendered regional autonomy illusory with respect
to infrastructure projects. The Congressional Record shows, on the other hand, that the lack of an
implementing and monitoring body within the area has hindered the speedy implementation, of
infrastructure projects.[85] Apparently, in the legislatures estimation, the existing DPWH-ARMM
engineering districts failed to measure up to the task. But if it was indeed the case, the problem could not
be solved through the simple legislative creation of an incongruous engineering district for the central
government in the ARMM. As it was, House Bill No. 995 which ultimately became R.A. 8999 was passed in
record time on second reading (not more than 10 minutes), absolutely without the usual sponsorship
speech and debates.[86] The precipitate speed which characterized the passage of R.A. 8999 is difficult to
comprehend since R.A. 8999 could have resulted in the amendment of the first ARMM Organic Act and,
therefore, could not take effect without first being ratified in a plebiscite. What is more baffling is that in
March 2001, or barely two (2) months after it enacted R.A. 8999 in January 2001, Congress passed R.A.
9054, the second ARMM Organic Act, where it reaffirmed the devolution of the DPWH in ARMM, including
Lanao del Sur and Marawi City, to the Regional Government and effectively repealed R.A. 8999.
DPWH Department Order No. 119
Now, the question directly related to D.O. 119.
D.O. 119 creating the Marawi Sub-District Engineering Office which has jurisdiction over
infrastructure projects within Marawi City and Lanao del Sur is violative of the provisions of E.O. 426. The
Executive Order was issued pursuant to R.A. 6734which initiated the creation of the constitutionally-
mandated autonomous region[87] and which defined the basic structure of the autonomous
government.[88] E.O. 426 sought to implement the transfer of the control and supervision of the DPWH
within the ARMM to the Autonomous Regional Government. In particular, it identified four (4) District
Engineering Offices in each of the four (4) provinces, namely: Lanao del Sur, Maguindanao, Sulu and
Tawi-Tawi.[89] Accordingly, the First Engineering District of the DPWH-ARMM in Lanao del Sur has
jurisdiction over the public works within the province.
The office created under D.O. 119, having essentially the same powers, is a duplication of the DPWH-
ARMM First Engineering District in Lanao del Sur formed under the aegis of E.O. 426. The department
order, in effect, takes back powers which have been previously devolved under the said executive order.
D.O. 119 runs counter to the provisions of E.O. 426. The DPWHs order, like spring water, cannot rise
higher than its source of powerthe Executive.
The fact that the department order was issued pursuant to E.O. 124signed and approved by President
Aquino in her residual legislative powersis of no moment. It is a finely-imbedded principle in statutory
construction that a special provision or law prevails over a general one. [90] Lex specialis derogant
generali. As this Court expressed in the case of Leveriza v. Intermediate Appellate Court,[91] another basic
principle of statutory construction mandates that general legislation must give way to special legislation
on the same subject, and generally be so interpreted as to embrace only cases in which the special
provisions are not applicable, that specific statute prevails over a general statute and that where two
statutes are of equal theoretical application to a particular case, the one designed therefor specially
should prevail.
E.O. No. 124, upon which D.O. 119 is based, is a general law reorganizing the Ministry of Public Works
and Highways while E.O. 426 is a special law transferring the control and supervision of the DPWH offices
within ARMM to the Autonomous Regional Government. The latter statute specifically applies to DPWH-
ARMM offices. E.O. 124 should therefore give way to E.O. 426 in the instant case.
In any event, the ARMM Organic Acts and their ratification in a plebiscite in effect superseded E.O.
124. In case of an irreconcilable conflict between two laws of different vintages, the later enactment
prevails because it is the later legislative will.[92]
Further, in its repealing clause, R.A. 9054 states that all laws, decrees, orders, rules and regulations,
and other issuances or parts thereof, which are inconsistent with this Organic Act, are hereby repealed or
modified accordingly.[93] With the repeal of E.O. 124 which is the basis of D.O. 119, it necessarily follows
that D.O. 119 was also rendered functus officio by the ARMM Organic Acts.
Grave abuse of discretion
Without doubt, respondents committed grave abuse of discretion. They implemented R.A. 8999
despite its inoperativeness and repeal. They also put in place and maintained the DPWH Marawi Sub-
District Engineering Office in accordance with D.O. 119 which has been rendered functus officio by the
ARMM Organic Acts.
Still, on the issue of grave abuse of discretion, this Court, however, cannot uphold petitioners
argument that R.A. 8999 was signed into law under suspicious circumstances to support the assertion
that there was a capricious and whimsical exercise of legislative authority. Once more, this Court cannot
inquire into the wisdom, merits, propriety or expediency of the acts of the legislative branch.
Likewise, the alleged lack of consultation or public hearing with the affected agency during the
inception of the law does not render the law infirm. This Court holds that the Congress did not transgress
the Constitution nor any statute or House Rule in failing to invite a resource person from the DPWH-
ARMM during the Committee meeting. Section 27, Rule VII of the Rules of the House[94] only requires that
a written notice be given to all the members of a Committee seven (7) calendar days before a regularly
scheduled meeting, specifying the subject matter of the meeting and the names of the invited resource
persons. And it must be emphasized that the questions of who to invite and whether there is a need to
invite resource persons during Committee meetings should be addressed solely to Congress in its plenary
legislative powers.[95]
Conclusion
The repeal of R.A. 8999 and the functus officio state of D.O. 119 provide the necessary basis for the
grant of the writs of certiorari and prohibition sought by the petitioners. However, there is no similar
basis for the issuance of a writ of mandamus to compel respondent DBM Secretary to release funds
appropriated for public works projects in Marawi City and Lanao del Sur to the DPWH-ARMM First
Engineering District in Lanao del Sur and to compel respondent DPWH Secretary to allow the DPWH-
ARMM, First Engineering District in Lanao del Sur to implement all public works projects within its
jurisdictional area. Section 20, Article VI of R.A. 9054 clearly provides that (f)unds for infrastructure in
the autonomous region allocated by the central government or national government shall only be
appropriated through a Regional Assembly Public Works Act passed by the Regional Assembly. There is
no showing that such Regional Assembly Public Works Act has been enacted.
WHEREFORE, considering that Republic Act No. 9054 repealed Republic Act No. 8999 and rendered
DPWH Department Order No. 119 functus officio, the petition insofar as it seeks the writs of certiorari and
prohibition is GRANTED. Accordingly, let a writ of prohibition ISSUE commanding respondents to desist
from implementing R.A. 8999 and D.O. 119, and maintaining the DPWH Marawi Sub-District Engineering
Office and the First Engineering District of the Province of Lanao del Sur comprising the City of Marawi
and the municipalities within the First District of Lanao del Sur. However, the petition insofar as it seeks a
writ of mandamus against respondents is DENIED.
No costs.
SO ORDERED.