Constitutional Law 2 | Atty.

Renato Galeon | Case Digests | EQUAL PROTECTION

01 Quinto v. Commission on Elections, G.R. No. 189698 (Resolution), [February 22, 2010]
FACTS:
● The assailed Decision granted the Petition for Certiorari and Prohibition filed by Eleazar P. Quinto and Gerino A.
Tolentino, Jr. and declared as unconstitutional the second proviso in the third paragraph of Section 13 of Republic
Act No. 9369, Section 66 of the Omnibus Election Code and Section 4 (a) of COMELEC Resolution No. 8678,
mainly on the ground that they violate the equal protection clause of the Constitution and suffer from overbreadth.
The assailed Decision thus paved the way for public appointive officials to continue discharging the powers,
prerogatives and functions of their office notwithstanding their entry into the political arena.
● In support of their respective motions for reconsideration, respondent COMELEC and movants-intervenors submit
the following arguments:
1) The assailed Decision is contrary to, and/or violative of, the constitutional proscription against the
participation of public appointive officials and members of the military in partisan political activity;
2) The assailed provisions do not violate the equal protection clause when they accord differential treatment
to elective and appointive officials, because such differential treatment rests on material and substantial
distinctions and is germane to the purposes of the law;
3) The assailed provisions do not suffer from the infirmity of overbreadth; and
4) There is a compelling need to reverse the assailed Decision, as public safety and interest demand such
reversal.
The Court finds the foregoing arguments meritorious.

The assailed Decision struck down Section 4 (a) of Resolution 8678, the second proviso in the third paragraph of Section 13
of Republic Act (RA) 9369, and Section 66 of the Omnibus Election Code , on the following grounds:
1) They violate the equal protection clause of the Constitution because of the differential treatment of persons holding
appointive offices and those holding elective positions;
2) They are overbroad insofar as they prohibit the candidacy of all civil servants holding appointive posts:
(a) without distinction as to whether or not they occupy high/influential positions in the government, and
(b) they limit these civil servants' activity regardless of whether they be partisan or nonpartisan in
character, or whether they be in the national, municipal or barangay level; and
3) Congress has not shown a compelling state interest to restrict the fundamental right of these public appointive
officials.
FINAL: Section 4 (a) of Resolution 8678, Section 66 of the Omnibus Election Code, and the second proviso in the
third paragraph of Section 13 of RA 9369 are not unconstitutional,

HELD: (Explanations)

1. Constitutional ban on civil service officers and employees in the civil service engaging, directly or
indirectly, in any partisan political activity

Section 46 (b) (26), Chapter 7 Subtitle A, Title I, Book V of the Administrative Code of 1987
(b) The following shall be grounds for disciplinary action:
xxx xxx xxx
(26) Engaging directly or indirectly in partisan political activities by one holding a non-political office.

Section 55, Chapter 8 Subtitle A, Title I, Book V of the Administrative Code of 1987
Political Activity. — No officer or employee in the Civil Service including members of the Armed Forces, shall
engage directly or indirectly in any partisan political activity or take part in any election except to vote nor shall he
use his official authority or influence to coerce the political activity of any other person or body. Nothing herein
provided shall be understood to prevent any officer or employee from expressing his views on current political
problems or issues, or from mentioning the names of his candidates for public office whom he supports:
Provided, That public officers and employees holding political offices may take part in political and electoral
activities but it shall be unlawful for them to solicit contributions from their subordinates or subject them to any of
the acts involving subordinates prohibited in the Election Code .

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Constitutional Law 2 | Atty. Renato Galeon | Case Digests | EQUAL PROTECTION

Section 261 (i) of Batas Pambansa Blg. 881 (the Omnibus Election Code) further makes intervention by civil service
officers and employees in partisan political activities an election offense

- The intent of both Congress and the framers of our Constitution to limit the participation of civil service officers and
employees in partisan political activities is too plain to be mistaken.
- But Section 2 (4), Article IX-B of the 1987 Constitution and the implementing statutes apply only to civil servants
holding apolitical offices. Stated differently, the constitutional ban does not cover elected officials, notwithstanding
the fact that "[t]he civil service embraces all branches, subdivisions, instrumentalities, and agencies of the
Government, including government-owned or controlled corporations with original charters." This is because
elected public officials, by the very nature of their office, engage in partisan political activities almost all year round,
even outside of the campaign period. Political partisanship is the inevitable essence of a political office, elective
positions included
- However, civil service officers and employees are allowed to vote, as well as express their views on political issues,
or mention the names of certain candidates for public office whom they support

2. Section 4(a) of Resolution 8678, Section 13 of RA 9369 , and Section 66 of the Omnibus Election Code DO
NOT Violate the Equal Protection Clause

(Fariñas, et al. v. Executive Secretary, et al.) The equal protection of the law clause in the Constitution is not absolute,
but is subject to reasonable classification. If the groupings are characterized by substantial distinctions that make real
differences, one class may be treated and regulated differently from the other

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 it 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 exist for making a distinction between those who fall within such class
and those who do not.

Substantial distinctions clearly exist between elective officials and appointive officials.
1. Elective officials occupy their office by virtue of the mandate of the electorate. They are elected to an office for a
definite term and may be removed therefrom only upon stringent conditions. On the other hand, appointive
officials hold their office by virtue of their designation thereto by an appointing authority. Some appointive
officials hold their office in a permanent capacity and are entitled to security of tenure while others serve at the
pleasure of the appointing authority.
2. Under ​Section 55, Chapter 8, Title I, Subsection A. Civil Service Commission, Book V of the
Administrative Code of 1987 (Executive Order No. 292) ​, appointive officials, as officers and employees in the
civil service, are strictly prohibited from engaging in any partisan political activity or take (sic) part in any election
except to vote. Under the same provision, elective officials, or officers or employees holding political offices, are
obviously expressly allowed to take part in political and electoral activities.
The legislators deemed it proper to treat these two classes of officials differently with respect to the effect on their tenure
in the office of the filing of the certificates of candidacy for any position other than those occupied by them.

Since the classification justifying Section 14 of Rep. Act No. 9006, i .e., elected officials vis-à-vis appointive officials, is
anchored upon material and significant distinctions and all the persons belonging under the same classification are
similarly treated, the equal protection clause of the Constitution is, thus, not infringed
Equal protection clause does not require the universal application of the laws to all persons or things
without distinction. What it simply requires is equality among equals as determined according to a valid classification. 35 The
test developed by jurisprudence here and yonder is that of reasonableness, which has four requisites:
(1) The classification rests on substantial distinctions;
(2) It is germane to the purposes of the law;
(3) It is not limited to existing conditions only; and
(4) It applies equally to all members of the same class.

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Constitutional Law 2 | Atty. Renato Galeon | Case Digests | EQUAL PROTECTION

Applying ​stare decisis ​to the case at bar: (​Fariñas ruling)

First, third and fourth requirements are satisfied.
Classification Germane to the Purposes of the Law
- Any person who poses an equal protection challenge must convincingly show that the law creates a classification
that is "palpably arbitrary or capricious.”
- In the case at bar, the petitioners failed — and in fact did not even attempt — to discharge this heavy burden.

Prescinding from these premises, it is crystal clear that the provisions challenged in the case at bar, are not violative of the
equal protection clause. The deemed-resigned provisions substantially serve governmental interests (i .e., (i) efficient civil
service faithful to the government and the people rather than to party; (ii) avoidance of the appearance of "political justice" as
to policy; (iii) avoidance of the danger of a powerful political machine; and (iv) ensuring that employees achieve
advancement on their merits and that they be free from both coercion and the prospect of favor from political activity).These
are interests that are important enough to outweigh the non-fundamental right of appointive officials and employees to seek
elective office.

(Unfinished)

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Constitutional Law 2 | Atty. Renato Galeon | Case Digests | EQUAL PROTECTION

02 Rep. Lagman v. Executive Secretary Ochoa, G.R. No 193036 [December 7, 2010]

FACTS:

03 Coconut Oil Refiners Association, Inc. v. Torres, G.R. No. 132527, [July 29, 2005]
FACTS:
● (March 13, 1992) Republic Act No. 7227 was enacted, providing for, among other things, the sound and balanced
conversion of the Clark and Subic military reservations and their extensions into alternative productive uses in the
form of special economic zones in order to promote the economic and social development of Central Luzon in
particular and the country in general. Among the salient aprovisions are as follows:

SECTION 12. Subic Special Economic Zone

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

● (April 3, 1993) President Fidel V. Ramos issued ​Executive Order No. 80​, which declared, among others, that Clark
shall have all the applicable incentives granted to the Subic Special Economic and Free Port Zone under ​Republic
Act No. 7227

SECTION 5. of RA 7227 ​Investments Climate in the CSEZ. — Pursuant to Section 5(m) and Section 15 of RA 7227, the
BCDA shall promulgate all necessary policies, rules and regulations governing the CSEZ, including investment incentives,
in consultation with the local units and pertinent government departments for implementation by the CDC.

Among others, the CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone under
RA 7227 and those applicable incentives granted in the Export Processing Zones, the Omnibus Investments Code of
1987, the Foreign Investments Act of 1991 and new investments laws which may hereinafter be enacted.

The CSEZ Main Zone covering the Clark Air Base proper shall have all the aforecited investment incentives, while the
CSEZ Sub-Zone covering the rest of the CSEZ shall have limited incentives. The full incentives in the Clark SEZ Main
Zone and the limited incentives in the Clark SEZ Sub-Zone shall be determined by the BCDA.

● Pursuant to the directive under ​Executive Order No. 80​, the BCDA passed Board Resolution No. 93-05-034 on
(May 18, 1993), allowing the tax and duty-free sale at retail of consumer-goods imported via Clark for consumption
outside the CSEZ. It includes but not limited to: (a) Customs (b) Tax and duty-free purchase and consumption of
goods/articles (duty free shopping) within the CSEZ Main Zone. (c) For individuals, duty-free consumer goods may
be brought out of the CSEZ Main Zone into the Philippine Customs territory but not to exceed US$200.00 per
month per CDC-registered person, similar to the limits imposed in the Subic SEZ. This privilege shall be enjoyed
only once a month. Any excess shall be levied taxes and duties by the Bureau of Customs
● (June 10, 1993) the President issued Executive Order No. 97, "Clarifying the Tax and Duty Free Incentive Within
the Subic Special Economic Zone Pursuant to R.A. No. 7227 ."

SECTION 1. ​On Import Taxes and Duties — Tax and duty-free importations shall apply only to raw materials, capital
goods and equipment brought in by business enterprises into the SSEZ. Except for these items, importations of other
goods into the SSEZ, whether by business enterprises or resident individuals, are subject to taxes and duties under
relevant Philippine laws.

The exportation or removal of tax and duty-free goods from the territory of the SSEZ to other parts of the Philippine
territory shall be subject to duties and taxes under relevant Philippine laws.

● (June 19, 1993) ​Executive Order No. 97​- A was issued, "Further Clarifying the Tax and Duty-Free Privilege Within
the Subic Special Economic and Free Port Zone."

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Constitutional Law 2 | Atty. Renato Galeon | Case Digests | EQUAL PROTECTION

SECTION 1. The following guidelines shall govern the tax and duty-free privilege within the Secured Area of the Subic
Special Economic and Free Port Zone:
1.1.​The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the only completely
tax and duty-free area in the SSEFPZ. Business enterprises and individuals (Filipinos and foreigners) residing
within the Secured Area are free to import raw materials, capital goods, equipment, and consumer items tax and
duty-free. Consumption items, however, must be consumed within the Secured Area. Removal of raw materials,
capital goods, equipment and consumer items out of the Secured Area for sale to non-SSEFPZ registered
enterprises shall be subject to the usual taxes and duties, except as may be provided herein.
1.2​.Residents of the SSEFPZ living outside the Secured Area can enter the Secured Area and consume any
quantity of consumption items in hotels and restaurants within the Secured Area. However, these residents can
purchase and bring out of the Secured Area to other parts of the Philippine territory consumer items worth not
exceeding US$100 per month per person. Only residents age 15 and over are entitled to this privilege.
1.3​.Filipinos not residing within the SSEFPZ can enter the Secured Area and consume any quantity of
consumption items in hotels and restaurants within the Secured Area. However, they can purchase and bring out
[of] the Secured Area to other parts of the Philippine territory consumer items worth not exceeding US$200 per
year per person. Only Filipinos age 15 and over are entitled to this privilege.
- Petitioners assail the $100 monthly and $200 yearly tax-free shopping privileges granted by the aforecited
provisions respectively to SSEZ residents living outside the Secured Area of the SSEZ and to Filipinos aged 15 and
over residing outside the SSEZ.

● (February 23, 1998) petitioners thus filed the instant petition, seeking the declaration of nullity of the assailed
issuances
★ Assailed Issuances: (Executive Order No. 97- A; Section 5 of Executive Order No. 80; and Section 4 of
BCDA Board Resolution No. 93-05-034)
HELD:
1. ISSUE ON EXECUTIVE LEGISLATION
IN SUM, ​Republic Act No. 7227, specifically Section 12 (b) thereof, clearly provides that "exportation or removal of goods
from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs
duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines." Thus, the removal of
goods from the SSEZ to other parts of the Philippine territory without payment of said customs duties and taxes is not
authorized by the Act.
- Consequently, provisions found in the second sentences of paragraphs 1.2 and 1.3, Section 1 of Executive Order
No. 97 -A are null and void:
- To be discussed further

2. EQUAL PROTECTION

PETITIONERS ARGUE: ​EO No. 97- A is violative of their right to equal protection of the laws, as enshrined in Section 1,
Article III of the Constitution. To support this argument, they assert that private respondents operating inside the SSEZ
are not different from the retail establishments located outside, the products sold being essentially the same. The only
distinction, they claim, lies in the products' variety and source, and the fact that private respondents import their items
tax-free, to the prejudice of the retailers and manufacturers located outside the zone.
PETITIONER’S CONTENTION IS WRONG. IT CANNOT BE SUSTAINED.

It is an established principle of constitutional law that the guaranty of the equal protection of the laws is not violated by a
legislation based on a reasonable classification.

CLASSIFICATION TO BE VALID MUST:

(1) rest on substantial distinction,
(2) be germane to the purpose of the law,
(3) not be limited to existing conditions only, and
(4) apply equally to all members of the same class.

It is well-settled that the equal-protection guarantee does not require territorial uniformity of laws. As long as there are
actual and material differences between territories, there is no violation of the constitutional clause.

Application to the present case: (No violation of Equal Protection)

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Constitutional Law 2 | Atty. Renato Galeon | Case Digests | EQUAL PROTECTION

a) Contrary to petitioners' claim, ​substantial distinctions lie between the establishments inside and outside the
zone, justifying the difference in their treatment.
- A significant distinction between the two groups is that enterprises outside the zones maintain their businesses
within Philippine customs territory, while private respondents and the other duly-registered zone enterprises operate
within the so-called "separate customs territory." To grant the same tax incentives given to enterprises within the
zones to businesses operating outside the zones, as petitioners insist, would clearly defeat the statute's intent to
carve a territory out of the military reservations in Subic Bay where free flow of goods and capital is maintained. At
this time the business activities outside the "secured area" are not likely to have any impact in achieving the
purpose of the law, which is to turn the former military base to productive use for the benefit of the Philippine
economy.
b) Classification is germane to the purpose of the law, Republic Act No. 7227
- As held in Tiu, the real concern of Republic Act No. 7227 is to convert the lands formerly occupied by the US
military bases into economic or industrial areas. In furtherance of such objective, Congress deemed it necessary to
extend economic incentives to the establishments within the zone to attract and encourage foreign and local
investors. This is the very rationale behind Republic Act No. 7227 and other similar special economic zone laws
which grant a complete package of tax incentives and other benefits.
c) Classification, moreover, is not limited to the existing conditions when the law was promulgated, but to
future conditions as wel​l, - inasmuch as the law envisioned the former military reservation to ultimately develop
into a self-sustaining investment center.
d) Classification applies equally to all retailers found within the "secured area."
- As ruled in Tiu, the individuals and businesses within the "secured area," being in like circumstances or contributing
directly to the achievement of the end purpose of the law, are not categorized further. They are all similarly treated,
both in privileges granted and in obligations required.
With all the four requisites for a reasonable classification present, there is no ground to invalidate Executive Order
No. 97- A for being violative of the equal protection clause.

3. Prohibition against Unfair Competition and Practices in Restraint of Trade

PETITIONERS ARGUE that the grant of special tax exemptions and privileges gave the private respondents undue
advantage over local enterprises which do not operate inside the SSEZ, thereby creating unfair competition in violation of
the constitutional prohibition against unfair competition and practices in restraint of trade.

SUPREME COURT: ​The argument is without merit. Just how the assailed issuance is violative of the prohibition against
unfair competition and practices in restraint of trade is not clearly explained in the petition. Republic Act No. 7227, and
consequently Executive Order No. 97- A, cannot be said to be distinctively arbitrary against the welfare of businesses
outside the zones. The mere fact that incentives and privileges are granted to certain enterprises to the exclusion of
others does not render the issuance unconstitutional for espousing unfair competition. Said constitutional prohibition
cannot hinder the Legislature from using tax incentives as a tool to pursue its policies.

Congress had justifiable reasons in granting incentives to the private respondents, in accordance with ​Republic Act No.
7227​' s policy of developing the SSEZ into a self-sustaining entity that will generate employment and attract foreign and
local investment. If petitioners had wanted to avoid any alleged unfavorable consequences on their profits, they should
upgrade their standards of quality so as to effectively compete in the market. In the alternative, if petitioners really wanted
the preferential treatment accorded to the private respondents, they could have opted to register with SSEZ in order to
operate within the special economic zone.

4. Preferential Use of Filipino Labor, Domestic Materials and Locally Produced Goods

PETITIONERS CLAIM​ that the questioned issuance (Executive Order No. 97- A) openly violated the State policy of
promoting the preferential use of Filipino labor, domestic materials and locally produced goods and adopting measures to
help make them competitive.

SUPREME COURT: ​The argument lacks merit. This Court notes that petitioners failed to substantiate their sweeping
conclusion that the issuance has violated the State policy of giving preference to Filipino goods and labor. The mere fact
that said issuance authorizes the importation and trade of foreign goods does not suffice to declare it unconstitutional on
this ground.

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- This Court notes that the Executive Department, with its subsequent issuance of Executive Order Nos. 444 and
303, has provided certain measures to prevent unfair competition. In particular, Executive Order Nos. 444 and 303
have restricted the special shopping privileges to certain individuals. Executive Order No. 303 has limited the range
of items that may be sold in the duty-free outlets, and imposed sanctions to curb abuses of duty-free privileges. - -
With these measures, this Court finds no reason to strike down Executive Order No. 97 -A for allegedly being
prejudicial to Filipino labor, domestic materials and locally produced goods.
- [W]hile the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, at the
same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and
reciprocity and limits protection of Filipino enterprises only against foreign competition and trade practices that are
unfair. In other words, the Constitution did not intend to pursue an isolationist policy. It did not shut out foreign
investments, goods and services in the development of the Philippine economy. While the Constitution does not
encourage the unlimited entry of foreign goods, services and investments into the country, it does not prohibit them
either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning only on foreign competition
that is unfair . ​(In Tañada v. Angara , Court elaborated on the meaning of Section 12, Article XII of the Constitution)
-

WHEREFORE, the petition is PARTLY GRANTED. Section 5 of Executive Order No. 80 and Section 4 of BCDA Board
Resolution No. 93-05-034 are hereby declared NULL and VOID and are accordingly declared of no legal force and effect.
Respondents are hereby enjoined from implementing the aforesaid void provisions. All portions of Executive Order No 97-
A are valid and effective, except the second sentences in paragraphs 1.2 and 1.3 of said Executive Order, which are
hereby declared INVALID.

04 Tatad v. Secretary of the Department of Energy, G.R. Nos. 124360, 127867, [November 5, 1997]
FACTS:​The petitions at bar challenge the constitutionality of Republic Act No. 8180 entitled "An Act Deregulating the
Downstream Oil Industry and For Other Purposes." R.A. No. 8180 ends twenty six (26) years of government regulation of the
downstream oil industry.
● Prior to 1971, there was no government agency regulating the oil industry other than those dealing with ordinary
commodities. Oil companies were free to enter and exit the market without any government interference.
● In 1971, the country was driven to its knees by a crippling oil crisis. The government, realizing that petroleum and
its products are vital to national security and that their continued supply at reasonable prices is essential to the
general welfare, ​enacted the Oil Industry Commission Act.
- It created the Oil Industry Commission (OIC) to regulate the business of importing, exporting, re-exporting,
shipping, transporting, processing, refining, storing, distributing, marketing and selling crude oil, gasoline,
kerosene, gas and other refined petroleum products. The OIC was vested with the power to fix the market
prices of petroleum products, to regulate the capacities of refineries, to license new refineries and to
regulate the operations and trade practices of the industry.
● In addition to the creation of the OIC, the government saw the imperious need for a more active role of Filipinos in
the oil industry.
- Until the early seventies, the downstream oil industry was controlled by multinational companies. All the oil
refineries and marketing companies were owned by foreigners whose economic interests did not always
coincide with the interest of the Filipino. Crude oil was transported to the country by foreign-controlled
tankers. Crude processing was done locally by foreign-owned refineries and petroleum products were
marketed through foreign-owned retail outlets.
● November 9, 1973, President Ferdinand E. Marcos boldly created the Philippine National Oil Corporation (PNOC)
to break the control by foreigners of our oil industry
- PNOC engaged in the business of refining, marketing, shipping, transporting, and storing petroleum.
- For the first time, there was a Filipino presence in the Philippine oil market.
● In 1984, President Marcos through Section 8 of Presidential Decree No. 1956, created the Oil Price Stabilization
Fund (OPSF) - to cushion the effects of frequent changes in the price of oil caused by exchange rate adjustments
or increase in the world market prices of crude oil and imported petroleum products. The fund is used
1) to reimburse the oil companies for cost increases in crude oil and imported petroleum products resulting
from exchange rate adjustment and/or increase in world market prices of crude oil, and

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2) to reimburse oil companies for cost underrecovery incurred as a result of the reduction of domestic prices
of petroleum products.
● By 1985, only three (3) oil companies were operating in the country -- Caltex, Shell and the government-owned
PNOC.
● In May, 1987​, President Corazon signed ​Executive Order No. 172​ creating the Energy Regulatory Board to -
- regulate the business of importing, exporting, re-exporting, shipping, transporting, processing, refining,
marketing and distributing energy resources "when warranted and only when public necessity requires."
● December 9, 1992​, Congress enacted R.A. No. 7638 which created the Department of Energy to prepare,
integrate, coordinate, supervise and control all plans, programs, projects, and activities of the government in
relation to energy exploration, development, utilization, distribution and conservation.
● March 1996, Congress took the audacious step of deregulating the downstream oil industry. It enacted R.A. No.
8180, entitled the "Downstream Oil Industry Deregulation Act of 1996."
- Under the deregulated environment, "any person or entity may import or purchase any quantity of crude oil
and petroleum products from a foreign or domestic source, lease or own and operate refineries and other
downstream oil facilities and market such crude oil or use the same for his own requirement," subject only
to monitoring by the Department of Energy.
- The deregulation process has two phases: the transition phase and the full deregulation phase
During the transition phase, controls of the non-pricing aspects of the oil industry were to be lifted.
The following were to be accomplished: (1) liberalization of oil importation, exportation, manufacturing,
marketing and distribution, (2) implementation of an automatic pricing mechanism, (3) implementation of
an automatic formula to set margins of dealers and rates of haulers, water transport operators and pipeline
concessionaires, and (4) restructuring of oil taxes. Upon full deregulation, controls on the price of oil and
the foreign exchange cover were to be lifted and the OPSF was to be abolished.
● The first phase of deregulation commenced on August 12, 1996.
● On February 8, 1997, the President implemented the full deregulation of the Downstream Oil Industry through E.O.
No. 372.

The petitions at bar assail the constitutionality of various provisions of R.A. No. 8180 and E.O. No. 372.

G.R. No. 124360, petitioner Francisco S. Tatad seeks the annulment of section 5 (b) of R.A. No. 8180. Section 5 (b)
PETITIONER’S ARGUMENTS:
1. Imposition of different tariff rates on imported crude oil and imported refined petroleum products violates the
equal protection clause.
- the 3%-7% tariff differential unduly favors the three existing oil refineries and discriminates against
prospective investors in the downstream oil industry who do not have their own refineries and will have
to source refined petroleum products from abroad.

2. Imposition of different tariff rates does not deregulate the downstream oil industry but instead controls the oil
industry, contrary to the avowed policy of the law.
- the tariff differential between imported crude oil and imported refined petroleum products bars the entry
of other players in the oil industry because it effectively protects the interest of oil companies with
existing refineries. Thus, it runs counter to the objective of the law "to foster a truly competitive market.

3. Inclusion of the tariff provision in section 5(b) of R.A. No. 8180 violates Section 26(1) Article VI of the
Constitution requiring every law to have only one subject which shall be expressed in its title.
- the imposition of tariff rates in section 5(b) of R.A. No. 8180 is foreign to the subject of the law which is
the deregulation of the downstream oil industry.

G.R. No. 127867, petitioners Edcel C. Lagman, Joker P. Arroyo, Enrique Garcia, Wigberto Tanada, Flag Human
Rights Foundation, Inc., Freedom from Debt Coalition (FDC) and Sanlakas contest the constitutionality of section
15 of R.A. No. 8180 and E.O. No. 392.
PETITIONER’S ARGUMENTS:
1. Section 15 of R.A. No. 8180 constitutes an undue delegation of legislative power to the President and the
Secretary of Energy​ because it does not provide a determinate or determinable standard to guide the Executive
Branch in determining when to implement the full deregulation of the downstream oil industry.
- Petitioners contend that the law does not define when it is practicable for the Secretary of Energy to
recommend to the President the full deregulation of the downstream oil industry or when the President

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may consider it practicable to declare full deregulation. Also, the law does not provide any specific
standard to determine when the prices of crude oil in the world market are considered to be declining
nor when the exchange rate of the peso to the US dollar is considered stable.

2. E.O. No. 392 implementing the full deregulation of the downstream oil industry is arbitrary and unreasonable
because it was enacted due to the alleged depletion of the OPSF fund -- a condition not found in R.A. No. 8180

3. Section 15 of R.A. No. 8180 and E.O. No. 392 allow the formation of a de facto cartel among the three existing
oil companies -- Petron, Caltex and Shell -- in violation of the constitutional prohibition against monopolies,
combinations in restraint of trade and unfair competition.

RESPONDENTS:
- Not a justiciable controversy; petitioners have no legal standing

HELD:
1. R.A. No. 8180 which fixes the time frame for the full deregulation of the downstream oil industry
- There are two accepted tests to determine whether or not there is a valid delegation of legislative power,
viz: the completeness test and the sufficient standard test.
- Section 15 can hurdle both the completeness test and the sufficient standard test.
a. Law is complete on the question of the final date of deregulation.
- Congress expressly provided in R.A. No. 8180 that full deregulation will start at the end of March 1997, regardless
of the occurrence of any event. Full deregulation at the end of March 1997 is mandatory and the Executive has no
discretion to postpone it for any purported reason.
b. Sufficient Standards
- The discretion given to the President is to advance the date of full deregulation before the end of March 1997.
Section 15 lays down the standard to guide the judgment of the President --- he is to time it as far as practicable
when the prices of crude oil and petroleum products in the world market are declining and when the exchange rate
of the peso in relation to the US dollar is stable.

Section 15 of R.A. No. 8180 will readily reveal that it only enumerated two factors to be considered by the Department of
Energy and the Office of the President, viz.: (1) the time when the prices of crude oil and petroleum products in the world
market are declining, and (2) the time when the exchange rate of the peso in relation to the US dollar is stable. Section 15
did not mention the depletion of the OPSF fund as a factor to be given weight by the Executive before ordering full
deregulation.

2. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in
restraint of trade or unfair competition shall be allowed." (Section 19 of Article XII of the Constitution)
A monopoly is a privilege or peculiar advantage vested in one or more persons or companies, consisting in the exclusive
right or power to carry on a particular business or trade, manufacture a particular article, or control the sale or the whole
supply of a particular commodity.

A combination in restraint of trade is an agreement or understanding between two or more persons, in the form of a contract,
trust, pool, holding company, or other form of association, for the purpose of unduly restricting competition, monopolizing
trade and commerce in a certain commodity, controlling its production, distribution and price, or otherwise interfering with
freedom of trade without statutory authority.

Combination in restraint of trade refers to the means while monopoly refers to the end.
- RPC penalizes monopolization and creation of combinations in restraint of trade,
- New Civil Code makes any person who shall engage in unfair competition liable for damages.

Constitution embraced free enterprise as an economic creed, it did not prohibit per se the operation of monopolies which
can, however, be regulated in the public interest. Competition is thus the underlying principle of section 19, Article XII of our

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Constitution which cannot be violated by R.A. No. 8180. A market controlled by one player (monopoly) or dominated by a
handful of players (oligopoly) is hardly the market where honest-to-goodness competition will prevail.

Whether the provisions of R.A. No. 8180 on tariff differential, inventory reserves, and predatory prices imposed substantial
barriers to the entry and exit of new players in our downstream oil industry?
- As the dominant players, Petron, Shell and Caltex boast of existing refineries of various capacities. The tariff
differential of 4% therefore works to their immense benefit.
- It erects a high barrier to the entry of new players. New players that intend to equalize the market power of Petron,
Shell and Caltex by building refineries of their own will have to spend billions of pesos. Those who will not build
refineries but compete with them will suffer the huge disadvantage of increasing their product cost by 4%. They will
be competing on an uneven field. The argument that the 4% tariff differential is desirable because it will induce
prospective players to invest in refineries puts the cart before the horse.
- The first need is to attract new players and they cannot be attracted by burdening them with heavy disincentives.
Without new players belonging to the league of Petron, Shell and Caltex, competition in our downstream oil industry
is an idle dream.
- The construction cost of storage facilities and the cost of inventory can thus scare prospective players. Their net
effect is to further occlude the entry points of new players, dampen competition and enhance the control of the
market by the three (3) existing oil companies.
Predatory pricing - selling or offering to sell any product at a price unreasonably below the industry average cost so as to
attract customers to the detriment of competitors."

The 4% tariff differential and the inventory requirement are significant barriers which discourage new players to enter the
market. Considering these significant barriers established by R.A. No. 8180 and the lack of players with the comparable
clout of PETRON, SHELL and CALTEX, the temptation for a dominant player to engage in predatory pricing and succeed
is a chilling reality.

This separability clause notwithstanding, we hold that the offending provisions of R.A. No. 8180 so permeate its essence
that the entire law has to be struck down. The provisions on tariff differential, inventory and predatory pricing are among the
principal props of R.A. No. 8180. Congress could not have deregulated the downstream oil industry without these provisions.
Unfortunately, contrary to their intent, these provisions on tariff differential, inventory and predatory pricing inhibit fair
competition, encourage monopolistic power and interfere with the free interaction of market forces. R.A. No. 8180 needs
provisions to vouchsafe free and fair competition. The need for these vouchsafing provisions cannot be overstated.
- Before deregulation, PETRON, SHELL and CALTEX had no real competitors but did not have a free run of the
market because government controls both the pricing and non-pricing aspects of the oil industry. After deregulation,
PETRON, SHELL and CALTEX remain unthreatened by real competition yet are no longer subject to control by
government with respect to their pricing and non-pricing decisions. The aftermath of R.A. No. 8180 is a deregulated
market

CONCLUSION: ​RA 8180 MUST BE REPEALED COMPLETELY - ​Even if these new players will come in, they will still have
no chance to compete with the said three (3) existing big oil companies considering that there is an imposition of oil tariff
differential of 4% between importation of crude oil by the said oil refineries paying only 3% tariff rate for the said importation
and 7% tariff rate to be paid by businessmen who have no oil refineries in the Philippines but will import finished
petroleum/oil products which is being taxed with 7% tariff rates.

HELD:
G.R. No. 124360 - TATAD
1. “One subject, one title” Rule.
- A law having a single general subject indicated in the title may contain any number of provisions, no matter how
diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be
considered in furtherance of such subject by providing for the method and means of carrying out the general
subject.
2. Does not violate Equal Protection.

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- Section 5(b) providing for tariff differential is germane to the subject of R.A. No. 8180 which is the deregulation of
the downstream oil industry. The section is supposed to sway prospective investors to put up refineries in our
country and make them rely less on imported petroleum.

G.R. No. 127867 - LAGMAN et al

"Sec. 15​. Implementation of Full Deregulation. — Pursuant to section 5(e) of Republic Act No. 7638, the DOE shall,
upon approval of the President, implement the full deregulation of the downstream oil industry not later than March 1997.
As far as practicable​, the DOE shall time the full deregulation when the prices of crude oil and petroleum products in the
world market are declining and when the exchange rate of the peso in relation to the US dollar is stable . . ."
1. Two Tests of Valid Delegation:​ (1) Completeness Test (2) Sufficient Standard Test
- Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not allowed to
step into the shoes of the legislature and exercise a power essentially legislative.
- Section 15 can hurdle both the completeness test and the sufficient standard test.
a. COMPLETE ​Congress expressly provided in R.A. No. 8180 that full deregulation will start at the end of
March 1997, regardless of the occurrence of any event. Full deregulation at the end of March 1997 is
mandatory and the Executive has no discretion to postpone it for any purported reason. Thus, the law is
complete on the question of the final date of full deregulation.
b. SUFFICIENT STANDARD TEST ​Section 15 lays down the standard to guide the judgment of the
President — he is to time it as far as practicable when the prices of crude oil and petroleum products in the
world market are declining and when the exchange rate of the peso in relation to the US dollar is stable .

1. Does not violate Equal Protection

NOT VIOLATIVE OF THE EQUAL PROTECTION CLAUSE. — The assailed tariff differential is likewise not violative of the
equal protection clause of the Constitution. It is germane to the declared policy of Republic Act No. 8180 which is to achieve
(1) fair prices; and (2) adequate and continuous supply of environmentally-clean and high quality petroleum products. Said
adequate and continuous supply of petroleum products will be achieved if new investors or players are enticed to engage in
the business of refining crude oil in the country. Existing refining companies, are similarly encouraged to put up additional
refining companies. All of this can be made possible in view of the lower tariff duty on imported crude oil than that levied on
imported refined petroleum products. In effect, the lower tariff rates will enable the refiners to recoup their investments
considering that they will be investing billions of pesos in putting up their refineries in the Philippines. That incidentally the
existing refineries will be benefited by the tariff differential does not negate the fact that the intended effect of the law is really
to encourage the construction of new refineries, whether by existing players or by new players.

05 Chavez v. Presidential Commission on Good Government, G.R. No. 130716, [December 9, 1998]

06 Lacson v. Executive Secretary, G.R. No. 128096, [January 20, 1999], 361 PHIL 251-284
The constitutionality of Sections 4 and 7 of Republic Act No. 8249 – an act which further defines the jurisdiction of the
Sandiganbayan – is being challenged in this petition

FACTS:
● MAY 1995 ​Eleven (11) persons believed to be members of the Kuratong Baleleng gang, reportedly an organized
crime syndicate which had been involve in a spate of bank robberies in Metro Manila, were slain along
Commonwealth Avenue in Quezon City by elements of the Anti-Bank Robbery and Intelligence Task Group
(ABRITG) headed by Chief Superintendent Jewel Canson of the Philippine National Police , and others (PNP).
● Investigation was conducted. This panel later absolve from any criminal liability all the PNP officers and personnel
allegedly involved being a legitimate police investigation
● However, a review board led by Overall Deputy Ombudsman Francisco Villa modified the Blancaflor panel’s finding
and recommended the indictment for multiple murder against twenty-six (26) respondents, including herein
petitioner and intervenors.

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● Petitioner Panfilo Lacson was among those charged as principal in eleven (11) informations for murder before the
Sandiganbayan’s Second Division, while intervenors Romeo Acop and Francisco Zubia, Jr. (chief superintendant)
were among those charged in the same informations as accessories after-the-fact.
● The Ombudsman filed on March 1, 1996 eleven (11) amended informations before the Sandiganbayan, wherein
petitioner was charged only as an accessory, together with Romeo Acop and Francisco Zubia, Jr. and others
● All the accused filed separate motions questioning the jurisdiction of the Sandiganbayan, asserting that under the
amended informations, the cases fall within the jurisdiction of the Regional Trial Court pursuant to Section 2
(paragraphs a and c) of Republic Act No. 7975. They contend that the said law limited the jurisdiction of the
Sandiganbayan to cases where one or more of the "principal accused” are government officials with Salary Grade
(SG) 27 or higher, or PNP officials with the rank of Chief Superintendent (Brigadier General) or higher. The highest
ranking principal accused in the amended informations has the rank of only a Chief Inspector, and none has the
equivalent of at least SG 27.
● Sandiganbayan admitted the amended information and ordered the cases transferred to the Quezon City Regional
Trial Court which has original and exclusive jurisdiction under R.A. 7975, as none of the principal accused has the
rank of Chief Superintendent or higher.
● The Office of the Special Prosecutor moved for a reconsideration, insisting that the cases should remain with the
Sandiganbayan.
● While these motions for reconsideration were pending resolution, and even before the issue of jurisdiction cropped
up with the filing of the amended informations on March 1, 1996
- Pending this motion for recon, R.A. No. 8249 was enacted - amend the jurisdiction of the Sandiganbayan
by deleting the word “principal” from the phrase “principal accused” in Section 2 (paragraphs a and c) of
R.A. No. 7975.
● “Considering that three of the accused in each of these cases are PNP Chief Superintendents: namely, Jewel T.
Canson, Romeo M. Acop and Panfilo M. Lacson, and that trial has not yet begun in all these cases – in fact, no
order of arrest has been issued – this court has competence to take cognizance of these cases.

Petitioner now questions the constitutionality of Section 4 R.A. No. 8249, including Section 7 thereof which provides that
the said law “shall apply to all cases pending in any court over which trial has not begun as of the approval hereof.”

PETITIONERS ARGUMENTS:
1. Done in bad faith
2. Ex post facto law
3. Violating the one-title-one-subject requirement for the passage of statutes under Section 26(1), Article VI of the
Constitution.”

INTERVENORS’ ARGUMENTS
1. There is class legislation
2. It is an ex post facto law

HELD:
Section 5, Article XIII of the 1973 Constitution - Creation of Sandiganbayan
- Sandiganbayan, which shall have jurisdiction over criminal and civil cases involving graft and corrupt practices and
such other offenses committed by public officers and employees including those in government-owned or controlled
corporations, in relation to their office as may be determined by law."
Article XI, Section 4 1987 Constitution
- Section 4. The present anti-graft court known as the Sandiganbayan shall continue to function and exercise its
jurisdiction as now or hereafter may be provided by law.”
Sec 4 Jurisdiction – The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving:
xx
(e) Officers of the Philippine National Police while occupying th
- In cases where none of the accused are occupying positions corresponding to salary Grade ‘27’ or higher, as
prescribed in the said Republic Act 6758, or military and PNP officers mentioned above, exclusive original
jurisdiction thereof shall be vested in the proper regional trial court, metropolitan trial court, municipal trial court, and

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municipal circuit trial court, as the case may be, pursuant to their respective jurisdictions as provided in Batas
Pambansa Blg. 129, as amended.

Section 7 of R.A. No. 8249 states:

“SEC. 7. Transitory provision. – This act shall apply to all cases pending in any court over which trial has not begun as of the
approval hereof.” (Emphasis supplied)

Section 7 of R.A. No. 7975 reads:

“SEC. 7. Upon the effectivity of this Act, all criminal cases which trial has not begun in the Sandiganbayan shall be referred
to the proper courts.”

Under paragraphs a and c, Section 4 of R.A. 8249, the word “principal” before the word “accused” appearing in the
above-quoted Section 2 (paragraphs a and c) of R.A. 7975, was deleted​. It is due to this deletion of the word “principal”
that the parties herein are at loggerheads over the jurisdiction of the Sandiganbayan. Petitioner and intervenors, relying on
R.A. 7975, argue that the Regional Trial Court, not the Sandiganbayan, has jurisdiction over the Subject criminal cases since
none of the principal accused under the amended information has the rank of Superintendent or higher. On the other hand,
the Office of the Ombudsman, through the Special Prosecutor who is tasked to represent the People before the Supreme
Court except in certain cases, contends that the Sandiganbayan has jurisdiction
The offenses mentioned in paragraphs a, b and c of the same Section 4 do not make any reference to the criminal
participation of the accused public officer as to whether he is charged as a principal, accomplice or accessory. In enacting
R.A. 8249, the Congress simply restored the original provisions of P.D. 1606 which does not mention the criminal
participation of the public officer as a requisite to determine the jurisdiction of the Sandiganbayan.

EQUAL PROTECTION
1. Substantial distinction
- The classification between those pending cases involving the concerned public officials whose trial has not yet
commenced and whose cases could have been affected by the amendments of the Sandiganbayan jurisdiction
under R.A. 8249, as against those cases where trial had already started as of the approval of the law, rests on
substantial distinction that makes real differences.
- Precisely, paragraph a of Section 4 provides that it shall apply to “all cases involving" certain public officials and,
under the transitory provision in Section 7, to “all cases pending in any court.” Contrary to petitioner and intervenors’
arguments, the law is not particularly directed only to the Kuratong Baleleng cases. The transitory provision does
not only cover cases which are in the Sandiganbayan but also in “any court.”
2. It is germane to the purpose of the law
3. Must not be limited to existing conditions only,
4. Must apply equally to all members of the same class, pursuant to R.A. 8249.

NOT AN EX POST FACTO LAW

- EX POST FACTO LAW: which makes an act done criminal before the passing of the law and which was innocent
when committed, and punishes such action

Ex post facto law, generally, prohibits retrospectivity of penal laws.

- R.A. 8249 is not a penal law. It is a substantive law on jurisdiction which is not penal in character. Penal laws are
those acts of the Legislature which prohibit certain acts and establish penalties for their violations; or those that
define crimes, treat of their nature, and provide for their punishment. R.A. 7975, which amended P.D. 1606 as
regards the Sandiganbayan’s jurisdiction, its mode of appeal and other procedural matters, has been declared by
the Court as not a penal law, but clearly a procedural statute,
- Not being a penal law, the retroactive application of R.A. 8249 cannot be challenged as unconstitutional.
- The right to appeal is not a natural right but statutory in nature that can be regulated by law. R.A. 8249 pertains only
to matters of procedure, and being merely an amendatory statute it does not partake the nature of an ex post facto
law.

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The challenged law does not violate the one-title-one-subject provisions of the Constitution.
- There is here sufficient compliance with such requirement, since the title of R.A. 8249 expresses the general
subject (involving the jurisdiction of the Sandiganbayan and the amendment of P.D. 1606, as amended) and all the
provisions of the law are germane to that general subject

Whether the offense of multiple murder was committed in relation to the office of the accused PNP officers?
- Section 4 requires that the offense charged must be committed by the offender in relation to his office in order for
the Sandiganbayan to have jurisdiction over it.
- An offense is said to have been committed in relation to the office if it (the offense) is “intimately connected” with the
office of the offender and perpetrated while he was in the performance of his official functions. This intimate relation
between the offense charged and the discharge of official duties “must be alleged in the Information.”

In the present case, while information states that the above-named principal accused committed the crime of murder “in
relation to their public office, there is, however, no specific allegation of facts that the shooting of the victim by the said
principal accused was intimately related to the discharge of their official duties as police officers. Likewise, the amended
information does not indicate that the said accused arrested and investigated the victim and then killed the latter while in
their custody.

What determines jurisdiction of Sandiganbayan: is the specific factual allegations in the information that would indicate the
close intimacy between the discharge of the accused’s official duties and the commission of the offense charged, in order to
qualify the crime as having been committed in relation to public office.

CONCLUSION​: For failure to show in the amended informations that the charge of murder was intimately connected with the
discharge of official functions of the accused PNP officers, the offense charged in the subject criminal cases is plain murder
and, therefore, within the exclusive original jurisdiction of the Regional Trial Court, not the Sandiganbayan.

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